INDEX EXCHANGE LISTED SECURITIES TRUST, N-1A/A, 2000-04-12

INDEX EXCHANGE LISTED SECURITIES TRUST
N-1A/A, 2000-04-12

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<PAGE> 1
As filed with the Securities and Exchange Commission on April 12, 2000
Securities Act File No. 333-57793
Investment Company Act of 1940 File No. 811-08839

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. 1 /X/

And

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

Amendment No. 1 /X/

INDEX EXCHANGE LISTED SECURITIES TRUST
(Exact Name of Registrant as Specified in Charter)

225 Franklin Street
Boston, Massachusetts 02110
---------------
(Address of Principal Executive Offices)

Registrant's Telephone Number: (303) 623-2577

Michael E. Gillespie, Esq.
Vice President and Associate Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette, LLC4N
Boston, Massachusetts 02111
(Name and Address of Agent for Service)

Copies to:
Stuart M. Strauss, Esq.
Mayer Brown & Platt
1675 Broadway
New York, New York 10019

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
this Registration Statement is declared 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> 2

PROSPECTUS

THE SSgA DOW JONES U.S. LARGE CAP GROWTH INDEX FUND
THE SSgA DOW JONES U.S. LARGE CAP VALUE INDEX FUND
THE SSgA DOW JONES U.S. SMALL CAP GROWTH INDEX FUND
THE SSgA DOW JONES U.S. SMALL CAP VALUE INDEX FUND
THE SSgA DOW JONES GLOBAL TITANS INDEX FUND
THE SSgA WILSHIRE REIT INDEX FUND
THE SSgA MORGAN STANLEY HIGH TECH 35 INDEX FUND
THE SSgA MORGAN STANLEY INTERNET INDEX FUND

THE INDEX EXCHANGE LISTED SECURITIES TRUST

___________, 2000

The Index Exchange Listed Securities Trust is an "index fund" consisting of
eight separate investment portfolios (each a "Fund" and collectively the
"Funds"). The investment objective of each Fund is to provide investment results
that, before expenses, correspond generally to the total return of a particular
index (each an "Index"). State Street Bank and Trust Company, through its State
Street Global Advisors division, manages each Fund.

The Shares of each Fund will listed on a national securities exchange (the
"Exchange"). The Shares trade on the Exchange at market prices that may differ
to some degree from the Shares' net asset value. Each Fund issues and redeems
Shares on a continuous basis -- at net asset value -- only in a large specified
number of Shares called a "Creation Unit," principally in-kind for securities
included in the relevant Index. EXCEPT WHEN AGGREGATED IN CREATION UNITS, THE
SHARES ARE NOT REDEEMABLE SECURITIES OF THE FUNDS.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES IN EACH FUND ARE
NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER AGENCY OF THE U.S. GOVERNMENT, NOR ARE SHARES DEPOSITS OR OBLIGATIONS OF
ANY BANK. SUCH SHARES INVOLVE INVESTMENT RISKS, INCLUDING THE LOSS OF PRINCIPAL.

1
<PAGE> 3
TABLE OF CONTENTS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
THE INDEX EXCHANGE LISTED SECURITIES TRUST
- --------------------------------------------------------------------------------
Who Should Invest
- --------------------------------------------------------------------------------
The SSgA Dow Jones U.S. Large Cap Growth Index Fund
- --------------------------------------------------------------------------------
The SSgA Dow Jones U.S. Large Cap Value Index Fund
- --------------------------------------------------------------------------------
The SSgA Dow Jones U.S. Small Cap Growth Index Fund
- --------------------------------------------------------------------------------
The SSgA Dow Jones U.S. Small Cap Value Index Fund
- --------------------------------------------------------------------------------
The SSgA Dow Jones Global Titans Index Fund
- --------------------------------------------------------------------------------
The SSgA Wilshire REIT Index Fund
- --------------------------------------------------------------------------------
The SSgA Morgan Stanley High Tech 35 Index Fund
- --------------------------------------------------------------------------------
The SSgA Morgan Stanley Internet Index Fund
- --------------------------------------------------------------------------------
FEES AND EXPENSES
- --------------------------------------------------------------------------------
ADDITIONAL INVESTMENT STRATEGIES, RISKS AND OTHER CONSIDERATIONS
- --------------------------------------------------------------------------------
Additional Investment Strategies
- --------------------------------------------------------------------------------
Additional Risks
- --------------------------------------------------------------------------------
Other Considerations
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INDEX LICENSE
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
BUYING AND SELLING THE FUNDS
- --------------------------------------------------------------------------------
CREATION AND REDEMPTION OF CREATION UNITS
- --------------------------------------------------------------------------------
DISTRIBUTIONS
- --------------------------------------------------------------------------------
TAX MATTERS
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
THE INDEX EXCHANGE LISTED SECURITIES TRUST

The Index Exchange Listed Securities Trust (the "Trust") is an "index fund"
consisting of eight separate investment portfolios (each a "Fund" and
collectively the "Funds"). The Funds offered by this Prospectus are: The SSgA
Dow Jones U.S. Large-Cap Value Fund, The SSgA Dow Jones U.S. Large-Cap Growth
Fund, The SSgA Dow Jones U.S. Small-Cap Value Fund, The SSgA Dow Jones U.S.
Small-Cap Growth Fund, The SSgA Dow Jones Global Titans Index Fund, The SSgA
Wilshire REIT Index Fund, The SSgA Morgan Stanley High Tech 35 Index Fund and
The SSgA Morgan Stanley Internet Index Fund.

The investment objective of each Fund is to provide investment results that,
before expenses, correspond generally to the total return of a specified market
index (each an "Index"). State Street Bank and Trust Company, through its State
Street Global Advisors division (the "Adviser"), manages each Fund.

The Shares of each Fund will be listed on a national securities exchange (the
"Exchange"). The Shares trade on the Exchange at market prices that may differ
to some degree from the Shares' net asset value. Each Fund issues and redeems
Shares on a continuous basis -- at net asset value -- only in a large specified
number of Shares called a "Creation Unit," principally in-kind for securities
included in the relevant Index. EXCEPT WHEN AGGREGATED IN CREATION UNITS, THE
SHARES ARE NOT REDEEMABLE SECURITIES OF THE FUNDS.

WHO SHOULD INVEST

Each Fund is designed for investors who seek a relatively low-cost "passive"
approach for investing in a portfolio of equity securities of companies in a
specified Index. The Funds may be suitable for long-term investment in the
market represented in the relevant Index. Shares of each Fund may also be used
as an asset allocation tool or as a speculative trading instrument. Unlike many
conventional mutual funds which are only bought and sold at closing net asset
values, each Fund's Shares have been designed to be tradable in a secondary
market on the Exchange on an intraday basis and to be created and redeemed
principally in kind in Creation Units at each day's next calculated net asset
value. These arrangements are designed to protect ongoing shareholders from
adverse effects on the portfolio of a Fund that could arise from frequent cash
creation and redemption transactions that affect the net asset value of such
Fund. Moreover, in contrast to conventional mutual funds where redemptions can
have an adverse tax impact on taxable shareholders because of the need to sell
portfolio securities which, in turn, may generate taxable gain, the in-kind
redemption mechanism of the Funds generally will not lead to a tax event for
ongoing shareholders.

3
<PAGE> 5
THE SSgA DOW JONES U.S. LARGE CAP VALUE INDEX FUND

This section describes The SSgA Dow Jones U.S. Large Cap Value Index Fund's (the
"Large Cap Value Index Fund") investment objective, principal investment
strategies, risks and expenses.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Dow Jones Large Cap Value
Index (the "Large Cap Value Index" or the "Index"). There is no assurance that
the Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Large Cap Value Index. The Index
includes 100-250 common stocks, which are chosen by Dow Jones Company based upon
certain market capitalization and value characteristics.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Large Cap Value Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund generally will invest in all of the stocks comprising the Index in
proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all of those
stocks in those weightings. In those circumstances, the Fund may purchase a
sample of the stocks in the Index in proportions expected by the Adviser to
replicate generally the performance of the Index as a whole. There may also be
instances in which the Advisor may choose to overweight another stock in the
Index, purchase securities not in the Index which the Advisor believes are
appropriate to substitute for the Index Securities, or utilize various
combinations of other available investment techniques, in seeking to track
accurately the Index. In addition, from time to time stocks are added to or
removed from the Index. The Fund may sell stocks that are represented in the
Index, or purchase stocks that are not yet represented in the Index, in
anticipation of their removal from or addition to the Index.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

Unlike many investment companies, the Fund is not actively "managed." Therefore,
it would not sell a stock because the stock's issuer was in financial trouble,
unless that stock is removed from the Index. An investment in the Fund involves
risks similar to those of investing in any fund of equity securities traded on
exchanges, such as market fluctuations caused by such factors as economic and
political developments, changes in interest rates and perceived trends in stock
prices. You should anticipate that the value of

4
<PAGE> 6
the Shares will decline, more or less, in correspondence with any decline in
value of the Index.

- - Stock values could decline generally or could underperform other
investments.

- - Returns on investments in stocks of large U.S. companies could trail
the returns on investments in stocks of smaller companies.

- - The Fund's return may not match the return of the Index for a number of
reasons. For example, the Fund incurs a number of operating expenses
not applicable to the Index, and incurs costs in buying and selling
securities, especially when rebalancing the Fund's securities holdings
to reflect changes in the composition of the Index. The Fund may not
be fully invested at times, either as a result of cash flows into the
Fund or reserves of cash held by the Fund to meet redemptions. If the
Fund utilizes a sampling approach, or futures or other derivative
positions its return may not correlate as well with the return on the
Index, as would be the case if it purchased all of the stocks in the
Index.

THE FUND'S SHARES WILL CHANGE IN VALUE, AND YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. THE FUND MAY NOT ACHIEVE ITS OBJECTIVE. AN INVESTMENT IN THE FUND IS
NOT A DEPOSIT WITH A BANK AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Large Cap Value Index. The Large Cap Value Index is composed of between 100
- - 250 common stocks, which are chosen by Dow Jones Company (Dow), based upon
market capitalization and value characteristics. Each year, Dow selects the
largest US stocks by market capitalization in order to create the large cap
universe, which represents approximately 60% of the total US equity market.
After the initial list of eligible large cap stocks is determined, Dow uses a
proprietary model to identify the value stocks within the large cap universe.
Thus, the Large Cap Value Index is a subset representing anywhere between 30 to
70% of the large cap universe. The purpose of the Index is to provide an
effective representation of the US large cap value segment of the equity market.
The inclusion of a stock in the Index in no way implies that Dow believes the
stock to be an attractive investment, nor is Dow a sponsor or in any way
affiliated with the Fund. Most of the Index securities trade on the New York
Stock Exchange and NASDAQ, representing approximately 30 - 40% of the market
value of all US common stocks. Each stock in the Index is weighted by its market
capitalization. That is, each security is weighted by its market value relative
to the total market values of all the securities in the Index. The Index only
includes common stocks domiciled in the US and its territories.

Distribution Plan. The Board of Trustees has adopted, for the Fund, a
distribution plan pursuant to Rule 12b-1 of the 1940 Act. The Fund is
authorized, under the plan, to pay up to __% of its average daily net assets for
certain distribution related activities. Because these fees are paid out of the
Fund's assets, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.

5
<PAGE> 7
Changes in policies. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Large Cap Value Index Fund.

[TABLE]

EXAMPLE

The Large Cap Value Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

6
<PAGE> 8
FUND DETAILS -
THE SSgA DOW JONES U.S. LARGE CAP GROWTH INDEX FUND

This section describes the SSgA Dow Jones Large Cap Growth Index Fund's goals,
principal investment strategies, risks and expenses.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Dow Jones Large Cap Growth
Index (the "Large Cap Growth Index" or the "Index"). There is no assurance that
the Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Large Cap Growth Index. The Index
includes 100-250 common stocks, which are chosen by Dow Jones Company based upon
certain market capitalization and growth characteristics.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Large Cap Growth Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

7
<PAGE> 9
the Shares will decline, more or less, in correspondence with any decline in
value of the Index.

- - Stock values could decline generally or could underperform other
investments.

- - Returns on investments in stocks of large U.S. companies could trail
the returns on investments in stocks of smaller companies.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Large Cap Growth Index. The Large Cap Growth Index is composed of between
100 - 250 common stocks, which are chosen by Dow Jones Company (Dow), based upon
market capitalization and growth characteristics. Each year, Dow selects the
largest US stocks by market capitalization in order to create the large cap
universe, which represents approximately 60% of the total US equity market.
After the initial list of eligible large cap stocks is determined, Dow uses a
proprietary model to identify the growth stocks within the large cap universe.
Thus, the Large Cap Growth Index is a subset representing anywhere between 30 to
70% of the large cap universe. The purpose of the Index is to provide an
effective representation of the US large cap growth segment of the equity
market. The inclusion of a stock in the Index in no way implies that Dow
believes the stock to be an attractive investment, nor is Dow a sponsor or in
any way affiliated with the Fund. Most of the Index securities trade on the New
York Stock Exchange and NASDAQ, representing approximately 30 - 40% of the
market value of all US common stocks. Each stock in the Index is weighted by its
market capitalization. That is, each security is weighted by its market value
relative to the total market values of all the securities in the Index. The
Index only includes common stocks domiciled in the US and its territories.

8
<PAGE> 10
Changes in policies. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Large Cap Growth Index Fund.

[TABLE]

EXAMPLE

The Large Cap Growth Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

9
<PAGE> 11
FUND DETAILS -
THE SSgA DOW JONES U.S. SMALL CAP VALUE INDEX FUND

This section describes the SSgA Dow Jones Small Cap Value Index Fund's goals,
principal investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Dow Jones Small Cap Value
Index (the "Small Cap Value Index" or the "Index"). There is no assurance that
the Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Small Cap Value Index. The Index
includes 350-700 common stocks, which are chosen by Dow Jones Company based upon
certain market capitalization and value characteristics.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Small Cap Value Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

10
<PAGE> 12
the Shares will decline, more or less, in correspondence with any decline in
value of the Index.

- - Stock values could decline generally, or could underperform other
investments.

- - Returns on investments in stocks of small U.S. companies could trail
the returns on investments in stocks of larger companies.

- - Small companies may be more likely than mid-cap and large-cap companies to
have relatively limited product lines, markets or financial resources, or
depend on a few key employees.

- - The Fund's return may not match the return of the Index for a number of
reasons. For example, the return on the securities and other
investments selected by the Adviser may not correlate precisely with
the return on the Index. The Fund incurs a number of operating
expenses not applicable to the Index, and incurs costs in buying and
selling securities, especially when rebalancing the Fund's securities
holdings to reflect changes in the composition of the Index. The Fund
may not be fully invested at times, either as a result of cash flows
into the Fund or reserves of cash held by the Fund to meet
redemptions. If the Fund utilizes a sampling approach, or futures or
other derivative positions its return may not correlate as well with
the return on the Index, as would be the case if it purchased all of
the stocks in the Index.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Small Cap Value Index. The Small Cap Value Index is composed of between 300-
750 common stocks, which are chosen by Dow Jones Company (Dow), based upon
market capitalization and value characteristics. Each year, Dow selects the
smallest US stocks by market capitalization in order to create the small cap
universe, which represents approximately 8-10% of the total US equity market.
After the initial list of eligible small cap stocks is determined, Dow uses a
proprietary model to identify value stocks within the small cap universe. Thus,
the Small Cap Value Index is a subset representing anywhere between 30 to 70% of
the small cap universe. The purpose of the Index is to provide an effective
representation of the US small cap value segment of the equity market. The
inclusion of a stock in the Index in no way implies that Dow believes the stock
to be an attractive investment, nor is Dow a sponsor or in any way affiliated
with the Fund. Most of the Index securities trade on the New York Stock Exchange
and NASDAQ, representing approximately 4-6% of the market value of all US common
stocks. Each stock in the Index is weighted by its market capitalization. That
is, each security is weighted by its market value relative to the total market
values of all the securities in the Index. The Index only includes common stocks
domiciled in the US and its territories.

11
<PAGE> 13
Distribution Plan. The Board of Trustees has adopted, for the Fund, a
distribution plan pursuant to Rule 12b-1 of the 1940 Act. The Fund is
authorized, under the plan, to pay up to __% of its average daily net assets for
certain distribution related activities. Because these fees are paid out of the
Fund's assets, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.

Changes in policies. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Small Cap Value Index Fund.

[TABLE]

EXAMPLE

The Small Cap Value Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $

12
<PAGE> 14
10 $

13
<PAGE> 15
FUND DETAILS -
THE SSgA DOW JONES U.S. SMALL CAP GROWTH INDEX FUND

This section describes the SSgA Dow Jones Small Cap Growth Index Fund's goals,
principal investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Dow Jones Small Cap Growth
Index (the "Small Cap Growth Index" or the "Index"). There is no assurance that
the Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Small Cap Growth Index. The Index
includes 350-700 common stocks, which are chosen by Dow Jones Company based upon
certain market capitalization and growth characteristics.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

14
<PAGE> 16
the Shares will decline, more or less, in correspondence with any decline in
value of the Index.

- - Stock values could decline generally, or could underperform other
investments.

- - Returns on investments in stocks of small U.S. companies could trail
the returns on investments in stocks of larger companies.

- - Small companies may be more likely than mid-cap and large-cap companies to
have relatively limited product lines, markets or financial resources, or
depend on a few key employees.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Small Cap Growth Index. The Small Cap Growth Index is composed of between
300 - 750 common stocks, which are chosen by Dow Jones Company (Dow), based upon
market capitalization and growth characteristics. Each year, Dow selects the
smallest US stocks by market capitalization in order to create the small cap
universe, which represents approximately 8-10% of the total US equity market.
After the initial list of eligible small cap stocks is determined, Dow uses a
proprietary model to identify growth stocks within the small cap universe. Thus,
the Small Cap Growth Index is a subset representing anywhere between 30 to 70%
of the small cap universe. The purpose of the Index is to provide an effective
representation of the US small cap growth segment of the equity market. The
inclusion of a stock in the Index in no way implies that Dow believes the stock
to be an attractive investment, nor is Dow a sponsor or in any way affiliated
with the Fund. Most of the Index securities trade on the New York Stock Exchange
and NASDAQ, representing approximately 4-6% of the market value of all US common
stocks. Each stock in the Index is weighted by its market capitalization. That
is, each security is weighted by its market value relative to the total market
values of all the securities in the Index. The Index only includes common stocks
domiciled in the US and its territories.

15
<PAGE> 17
Distribution Plan. The Board of Trustees has adopted, for the Fund, a
distribution plan pursuant to Rule 12b-1 of the 1940 Act. The Fund is
authorized, under the plan, to pay up to __% of its average daily net assets for
certain distribution related activities. Because these fees are paid out of the
Fund's assets, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Small Cap Growth Index Fund.

[TABLE]

EXAMPLE

The Small Cap Growth Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

16
<PAGE> 18
THE SSgA DOW JONES GLOBAL TITANS INDEX FUND

This section describes the SSgA Dow Jones Global Titans Index Fund's goals,
principal investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Dow Jones Global Titans
Index (the "Global Titans Index" or the "Index"). There is no assurance that the
Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Global Titans Index. The Index includes
50 common stocks, which are chosen by Dow Jones Company based on the combination
of market data, fundamental data and foreign sales data.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Global Titans Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

17
<PAGE> 19
the Shares will decline, more or less, in correspondence with any decline in
value of the Index.

- - Stock values could decline generally or could underperform other
investments.

- - Returns on investments in foreign stocks could be more volatile than,
or trail the returns on, investments in U.S. stocks.

- - Returns on investments in stocks of large companies could trail the
returns on investments in stocks of smaller companies.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Global Titans Index. The Global Titans Index is composed of 50 common
stocks, which are chosen by Dow Jones Company (Dow). The stock must, in the
opinion of Dow, meet all four of the following criteria to qualify as a
candidate for the index: (1) It must be a well established company with a solid
financial situation and a broad client base; (2) It must be well known to global
investors for either its long history of success or its widely used products or
services; (3) It must be a market leader in its industry with either a dominant
position or a competitive advantage; (4) It must be among the largest of
blue-chip companies in the global arena. In constructing the Global Titans
Index, a unique multi-factor methodology is adopted. First the 3,000 stocks of
the Dow Jones Global Indexes are used as the Initial Pool with a view towards
ensuring that all candidates are investable, liquid and representative of the
global markets. Market capitalization is then used as the first screen to create
the Final Pool by selecting the top 100 companies. Dow's rationale for this step
is that market value is a universal measurement across industries, and also that
its use is most appropriate for an index built for investment purposes. The next
step in index construction is to equally combine the Final Pool components'
market capitalization rankings with their rankings according to four other
indicators of size and leadership. These four indicators, two from the balance
sheet and two from the income statement, are assets, book value, sales/revenue,
and net profit. The combined rankings of these five factors, together with
foreign sales rankings, are used as the basis for selecting the index
components. The inclusion of a stock in the Index in no way implies that Dow
believes the stock to be an attractive investment, nor is Dow a sponsor or in
any way affiliated with the Fund.

18
<PAGE> 20
Foreign Securities. The Fund will invest in foreign securities, including
non-U.S. dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include investments such as American Depository Receipts
("ADRs") which are U.S. dollar-denominated receipts representing shares of
foreign-based corporations. ADRs are issued by U.S. banks or trust companies,
and entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares.

Foreign securities involve special risks and costs. Investment in foreign
securities may involve higher costs than investment in U.S. securities,
including higher transaction and custody costs as well as the imposition of
additional taxes by foreign governments. Foreign investments may also involve
risks associated with the level of currency exchange rates, less complete
financial information about the issuers, less market liquidity, more market
volatility and political instability. Future political and economic
developments, the possible imposition of withholding taxes on dividend income,
the possible seizure or nationalization of foreign holdings, the possible
establishment of exchange controls or freezes on the convertibility of currency,
or the adoption of other governmental restrictions might adversely affect an
investment in foreign securities. Additionally, foreign issuers may be subject
to less stringent regulation, and to different accounting, auditing and
recordkeeping requirements.

Forward Currency Exchange Contracts. The Fund may enter into forward currency
exchange contracts for hedging purposes to help reduce the risks and volatility
caused by changes in foreign currency exchange rates. Foreign currency exchange
contracts will be used at the discretion of the advisor, and the Fund is not
required to hedge it foreign currency positions. A forward currency contract is
an obligation to exchange one currency for another on a future date at a
specified exchange. Forward currency contracts are privately negotiated
transactions, and can have substantial price volatility. When used for hedging
purposes, they tend to limit any potential gain that may be realized if the
value of the Fund's foreign holdings increases because of currency fluctuations.

INVESTOR EXPENSES

19
<PAGE> 21
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Global Titans Index Fund.

[TABLE]

EXAMPLE

The Global Titans Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

20
<PAGE> 22
FUND DETAILS - THE SSgA WILSHIRE REIT INDEX FUND

This section describes the SSgA Wilshire REIT Index Fund's goals, principal
investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Wilshire REIT Index (the
"Wilshire REIT Index" or the "Index"). There is no assurance that the Fund will
achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Wilshire REIT Index. The Index is a
market capitalization weighted index of publicly traded Real Estate Investment
Trusts ("REITs"). The Index is comprised of companies whose charters are the
equity ownership and operation of commercial real estate. As of September 30,
1999, the Index was composed of 108 REITs.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Wilshire REIT Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund generally will invest in all of the REITs comprising the Index in
proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all of those
REITs in those weightings. In those circumstances, the Fund may purchase a
sample of the stocks in the Index in proportions expected by the Adviser to
replicate generally the performance of the Index as a whole. There may also be
instances in which the Advisor may choose to overweight another stock in the
Index, purchase securities not in the Index which the Advisor believes are
appropriate to substitute for the Index Securities, or utilize various
combinations of other available investment techniques, in seeking to track
accurately the Index. In addition, from time to time stocks are added to or
removed from the Index. The Fund may sell stocks that are represented in the
Index, or purchase stocks that are not yet represented in the Index, in
anticipation of their removal from or addition to the Index.

The Fund will normally invest at least 95% of its total assets in REITs that
comprise the Index.

Principal risks of investing in the Fund

21
<PAGE> 23
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in stock prices. You should
anticipate that the value of the Shares will decline, more or less, in
correspondence with any decline in value of the Index.

- - The Fund will concentrate its investments in the real estate industry
sector. Adverse economic, business or political developments affecting
that industry sector could have a major effect on the value of the Fund's
investments.

- - Investment in REITs may subject the Fund to risks associated with the
direct ownership of real estate, such as decreases in real estate values,
overbuilding, increased competition and other risks related to local or
general economic conditions, increases in operating costs and property
taxes, changes in zoning laws, casualty or condemnation losses, possible
environmental liabilities, regulatory limitations on rent and fluctuations
in rental income. Equity REITs generally experience these risks directly
through fee or leasehold interests, whereas mortgage REITs generally
experience these risks indirectly through mortgage interests, unless the
mortgage REIT forecloses on the underlying real estate.

- - Changes in interest rates may also affect the value of the Fund's
investment in REITs. For instance, during periods of declining interest
rates, certain mortgage REITs may hold mortgages that the mortgagors elect
to prepay, which prepayment may diminish the yield on securities issued by
those REITs.

- - Certain REITs have relatively small market capitalization, which may tend
to increase the volatility of the market price of their securities.

- - REITs are dependent upon specialized management skills, have limited
diversification and are, therefore, subject to risks inherent in operating
and financing a limited number of projects.

- - REITs are also subject to heavy cash flow dependency, defaults by
borrowers and the possibility of failing to qualify for tax-free
pass-through of income under the Internal Revenue Code of 1986, as amended
(the "Code") and to maintain exemption from the registration requirements
of the 1940 Act.

- - The Fund's return may not match the return of the Index for a number of
reasons. For example, the return on the securities and other investments
selected by the Adviser may not correlate precisely with the return on the
Index. The Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially
when rebalancing the Fund's securities holdings to reflect changes in the
composition of the Index. The Fund may not be fully invested at times,
either as a result of cash flows into the Fund or reserves of cash held by
the Fund to meet redemptions. If the Fund utilizes a sampling approach, or
futures or other derivative positions its return may not correlate as well
with the return on the Index, as would be the case if it purchased all of
the stocks in the Index.

22
<PAGE> 24
OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Wilshire REIT Index. The Wilshire REIT Index is comprised of companies whose
charters are the equity ownership and operation of commercial real estate. The
Index was composed of 108 components with a total market capitalization of $106
billion as of September 30, 1999. The Index is rebalanced monthly, and returns
are calculated on a buy hold basis. The inclusion of a REIT in the Index in no
way implies that Wilshire Associates believes the stock to be an attractive
investment, nor is Wilshire Associates a sponsor or in any way affiliated with
the Fund. Each REIT in the Index is weighted by its market capitalization. That
is, each security is weighted by its market value relative to the total market
values of all the securities in the Index.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the SSgA Wilshire REIT Index Fund.

[TABLE]

EXAMPLE

The SSgA Wilshire REIT Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

23
<PAGE> 25
1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

24
<PAGE> 26
FUND DETAILS - THE SSgA MORGAN STANLEY HIGH-TECH 35 INDEX FUND

This section describes the SSgA Morgan Stanley High-Tech 35 Index Fund's goals,
principal investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Morgan Stanley High-Tech 35
Index (the "High-Tech 35 Index" or the "Index"). There is no assurance that the
Fund will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the High-Tech 35 Index. The Index is
composed of 35 electronics-based technology companies chosen by Morgan Stanley
Capital International.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the High-Tech 35 Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index; a figure of 1.00 would represent perfect correlation.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

25
<PAGE> 27
- - Stock values could decline generally, or could underperform other
investments.

- - The Fund will concentrate in the technology industry. Market or economic
factors impacting that industry sector could have a major effect on the
value of the Fund's investments. The value of stocks of technology
companies is particularly vulnerable to rapid changes in technology
product cycles, government regulation and competition. Technology stocks,
especially those of smaller, less-seasoned companies, tend to be more
volatile than the overall market.

- - The Fund's return may not match the return of the Index for a number of
reasons. For example, the return on the securities and other investments
selected by the Adviser may not correlate precisely with the return on the
Index. The Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially
when rebalancing the Fund's securities holdings to reflect changes in the
composition of the Index. The Fund may not be fully invested at times,
either as a result of cash flows into the Fund or reserves of cash held by
the Fund to meet redemptions. If the Fund utilizes a sampling approach, or
futures or other derivative positions its return may not correlate as well
with the return on the Index, as would be the case if it purchased all of
the stocks in the Index.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Morgan Stanley High-Tech 35 Index. The Index is composed purely of
electronics-based technology companies. The Index was the first listed
broad-market technology barometer dedicated exclusively to the electronics-based
technology industry. The Index comprises American companies drawn from the
following 11 technology sub-sectors: computer & business services; technical
software (CAD/CAM, EDA); enterprise software; Internet and PC software; telecom
equipment; wireline/wireless; data networking/data security; server & enterprise
hardware; PC hardware & data storage; connectors/electronics manufacturing
services; semi-conductor capital equipment; and semiconductors. The Index is
equal-dollar-weighted to ensure that each of its component securities is
represented in approximate equal dollar value. To ensure that each component
stock continues to represent approximate equal market value in the Index,
adjustments, if necessary, are made annually after the close of trading on the
third Friday of December. As of October 14, 1999, the Morgan Stanley High-Tech
35 Index consisted of 35 components with a total market capitalization of $2,439
billion.

26
<PAGE> 28
Changes in policies. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the High-Tech 35 Index Fund.

[TABLE]

EXAMPLE

The High Tech 35 Index Fund sells and redeems Shares in Creation Units
principally on an in-kind basis for portfolio securities of the relevant Index.
SHARES IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor
purchasing a Creation Unit on an in-kind basis would pay the following expenses
on a $10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

27
<PAGE> 29
FUND DETAILS - THE SSgA MORGAN STANLEY INTERNET INDEX FUND

This section describes the SSgA Morgan Stanley Internet Index Fund's goals,
principal investment strategies, risks, expenses and performance.

Investment Objective. The Fund's investment objective is to replicate as closely
as possible, before expenses, the performance of the Morgan Stanley Internet
Index (the "Internet Index" or the "Index"). There is no assurance that the Fund
will achieve its investment objective.

Principal Investment Strategies. The Fund uses a passive management strategy
designed to track the performance of the Internet Index. The Index is composed
of companies chosen by Morgan Stanley Capital International ("MSCI"), which it
believes are driving the growth of Internet usage.

The Fund, using an "indexing" investment approach, attempts to replicate, before
expenses, the performance of the Internet Index. The Adviser seeks a correlation
of 0.95 or better between the Fund's performance and the performance of the
Index; a figure of 1.00 would represent perfect correlation.

The Fund will normally invest at least 95% of its total assets in common stocks
that comprise the Index.

Principal risks of investing in the Fund

28
<PAGE> 30
- - Stock values could decline generally, or could underperform other
investments.

- - The Fund will invest primarily in companies engaged in Internet and
Intranet related activities. The value of such companies is particularly
vulnerable to rapidly changing technology, extensive government regulation
and relatively high risks of obsolescence caused by scientific and
technological advances. The value of the Fund's shares may fluctuate more
than shares of a fund investing in a broader range of industries.

- - The Fund's return may not match the return of the Index for a number of
reasons. For example, the return on the securities and other investments
selected by the Adviser may not correlate precisely with the return on the
Index. The Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially
when rebalancing the Fund's securities holdings to reflect changes in the
composition of the Index. The Fund may not be fully invested at times,
either as a result of cash flows into the Fund or reserves of cash held by
the Fund to meet redemptions. If the Fund utilizes a sampling approach, or
futures or other derivative positions its return may not correlate as well
with the return on the Index, as would be the case if it purchased all of
the stocks in the Index.

OTHER INVESTMENT CONSIDERATIONS AND RISKS

The Morgan Stanley Internet Index. The Index is composed of companies that MSCI
believes are driving the growth of Internet usage. The Index comprises American
companies drawn from seven Internet sub-sectors: Internet data services,
Internet infrastructure, Internet services/consulting, portals, vertical
portals, e-commerce and Internet investment companies. The companies are
selected based on a demonstration of current leadership, business momentum,
market share and market capitalization. The number of companies in the Index may
be increased as Internet-related businesses evolve. The Morgan Stanley Internet
Index is owned and maintained by Morgan Stanley Capital International (MSCI). In
selecting securities for the Index, MSCI will take into consideration proposals
from an advisory committee of individuals from Morgan Stanley Dean Witter's
Equity Research Department and its Institutional Equity Division (IED). The
Index is equal-dollar-weighted so that each of its component securities is
represented in approximate equal dollar value. To ensure that these weightings
remain equal, adjustments, if necessary, are made quarterly after the close of
trading on the third Friday of March, June, September, and December. As of
October 14, 1999, the Morgan Stanley Internet Index consisted of 25 components
with a total market capitalization of $1,300 billion.

29
<PAGE> 31
Distribution Plan. The Board of Trustees has adopted, for the Fund, a
distribution plan pursuant to Rule 12b-1 of the 1940 Act. The Fund is
authorized, under the plan, to pay up to __% of its average daily net assets for
certain distribution related activities. Because these fees are paid out of the
Fund's assets, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.

INVESTOR EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Internet Index Fund.

[TABLE]

EXAMPLE

The Internet Index Fund sells and redeems Shares in Creation Units principally
on an in-kind basis for portfolio securities of the relevant Index. SHARES IN
LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. An investor purchasing
a Creation Unit on an in-kind basis would pay the following expenses on a
$10,000 investment (payment with a deposit of securities included in the
relevant Index), assuming a 5% annual return and that the Funds' operating
expenses remain the same. INVESTORS SHOULD NOTE THAT THE PRESENTATION BELOW OF A
$10,000 INVESTMENT IN A CREATION UNIT IS FOR ILLUSTRATION PURPOSES ONLY, AS
SHARES WILL BE ISSUED BY THE FUNDS ONLY IN CREATION UNITS. FURTHER, THE RETURN
OF 5% AND ESTIMATED EXPENSES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT
BE CONSIDERED INDICATIONS OF EXPECTED FUND EXPENSES OR PERFORMANCE, WHICH MAY BE
GREATER OR LESSER THAN THE ESTIMATES.

YEAR

1 $
3 $
5 $
10 $

You would pay the following expenses if you did not redeem your shares:

1 $
3 $
5 $
10 $

30
<PAGE> 32
ADDITIONAL INVESTMENT STRATEGIES, RISKS AND OTHER CONSIDERATIONS

ADDITIONAL INVESTMENT STRATEGIES

Each Fund may invest its remaining assets in money market instruments including
repurchase agreements or funds which invest exclusively in money market
instruments (subject to applicable limitations under the 1940 Act), in
convertible securities, structured notes (notes on which the amount of principal
repayment and interest payments are based on the movement of one or more
specified factors such as the movement of a particular stock or stock index) and
in options and futures contracts. Options and futures contracts (and convertible
securities and structured notes) may be used by a Fund in seeking performance
that corresponds to its benchmark Index and in managing cash flows. The Funds
will not invest in money market instruments as part of a temporary defensive
strategy to protect against potential stock market declines. The Adviser
anticipates that it will take approximately three business days for additions
and deletions to the Index to be reflected in the portfolio composition of each
Fund.

Borrowing Money. Each Fund may borrow money from a bank up to a limit of 10%
of the value of its assets, but only for temporary or emergency purposes.

ADDITIONAL RISKS

Lack of Diversification. Each Fund intends to maintain the required level of
diversification so as to qualify as a "regulated investment company" for
purposes of the Internal Revenue Code, in order to avoid liability for federal
income tax to the extent that its earnings are distributed to shareholders.
Compliance with the diversification requirements of the Internal Revenue Code
could limit the investment flexibility of a Fund.

Trading Issues. Trading in Shares on the Exchange may be halted due to market
conditions or for reasons that, in the view of the Exchange, make trading in
Shares inadvisable. In addition, trading in Shares on the Exchange is subject to
trading halts caused by extraordinary market volatility pursuant to Exchange
"circuit breaker" rules. There can be no assurance that the requirements of the
Exchange necessary to maintain the listing of a Fund will continue to be met or
will remain unchanged.

Fluctuation of Net Asset Value. The net asset value of the Shares will fluctuate
with changes in the market value of a Fund's securities holdings. The market
prices of Shares will fluctuate in accordance with changes in net asset value
and supply and demand on the Exchange. The Adviser cannot predict whether Shares
will trade below, at or above their net asset value. Price differences may be
due, in large part, to the fact that supply and demand forces at work in the
secondary trading market for Shares will be closely related to, but not
identical to, the same forces influencing the prices of the stocks of the Index
trading individually or in the aggregate at any point in time. However, given
that

31
<PAGE> 33
Shares can be created and redeemed in Creation Units (unlike shares of many
closed-end funds, which frequently trade at appreciable discounts from, and
sometimes at premiums to, their net asset value), the Adviser believes that
large discounts or premiums to the net asset value of Shares should not be
sustained.

Lending of Securities. Although each Fund that may lend its portfolio Securities
will receive collateral in connection with all loans of its securities holdings,
a Fund would be exposed to a risk of loss should a borrower default on its
obligation to return the borrowed securities (e.g., the loaned securities may
have appreciated beyond the value of the collateral held by the Fund). In
addition, a Fund will bear the risk of loss of any cash collateral that it
invests.

MANAGEMENT

Adviser. State Street serves as the Adviser to each Fund and, subject to the
supervision of the Board of Trustees, is responsible for the investment
management of the Funds. As of December 31, 1999, the Adviser managed
approximately $667 billion in assets, including approximately $384 billion in
index funds. The Adviser's principal business address is 225 Franklin Street,
Boston, Massachusetts 02210.

For the services provided to the Funds under the Investment Advisory Agreement,
each Fund pays the Adviser monthly fees based on a percentage of each Fund's
average daily net assets at the annual rate of [ ]%. From time to time, the
Adviser may waive all or a portion of its fee. The Adviser pays all expenses of
each Fund other than the advisory fee, payments under the Fund's 12b-1 plan,
brokerage, taxes, interest, fees and expenses of the Independent Trustees
(including any Trustee's counsel fees), litigation expenses and other
extraordinary expenses.

Lending Agent. State Street may act as a lending agent for the Trust. For its
services, the lending agent would typically receive a portion of the net
investment income, if any, earned on the collateral for the securities loaned.

Distributor. ALPS Mutual Funds Services, Inc. is the Distributor of each
Fund's Shares. The Distributor will not distribute Shares in less than
Creation Units, and it does not maintain a secondary market in the Shares.
The Distributor may enter into selected dealer agreements with other
broker-dealers or other qualified financial institutions for the sale of
Creation Units of Shares.

DETERMINATION OF NET ASSET VALUE

Net asset value per Share for each Fund is computed by dividing the value of the
net assets of such Fund (i.e., the value of its total assets less total
liabilities) by its total number of Shares outstanding. Expenses and fees,
including the management and distribution fees, are accrued daily and taken into
account for purposes of determining net asset value. The net asset value of each
Fund is calculated by

32
<PAGE> 34
the Custodian and determined each business day at the close of regular trading
of the New York Stock Exchange ("NYSE") (ordinarily 4:00 p.m. New York time).

BUYING AND SELLING THE FUNDS

The Fund Shares are listed for secondary trading on the Exchange. If you buy or
sell Fund Shares in the secondary market, you will incur customary brokerage
commissions and charges and may pay some or all of the spread between the bid
and the offered price in the secondary market on each leg of a round trip
(purchase and sale) transaction. The Fund Shares will trade on the Exchange at
prices that may differ to varying degrees from the daily net asset values of the
Shares. Given, however, that Fund Shares can be issued and redeemed in Creation
Units, the Adviser believes that large discounts and premiums to net asset value
should not be sustained for very long.

CREATION AND REDEMPTION OF CREATION UNITS

Each Fund issues Shares (through the Distributor) and redeems Shares (through
the Transfer Agent) only in Creation Units (50,000 Shares per Creation Unit) at
their net asset value on a continuous basis. Set forth below is a brief
description of the procedures applicable to creation and redemption of Creation
Units. For more detailed information, see "CREATION AND REDEMPTION OF CREATION
UNITS" in the Statement of Additional Information.

Creation

In order to create (i.e., purchase) Creation Units of a Fund, an investor must
deposit a designated portfolio of equity securities constituting a substantial
replication, or a representation, of the stocks included in the relevant Fund's
Index (the "Deposit Securities") and generally make a small cash payment
referred to as the "Cash Component." The list of the names and the number of
shares of the Deposit Securities is made available by the Custodian through the
facilities of the NSCC immediately prior to the opening of business on the
Exchange. The Cash Component represents the difference between the net asset
value of a Creation Unit and the market value of the Deposit Securities.

Orders must be placed in proper form by or through either (i) a "Participating
Party", i.e., a broker-dealer or other participant in the clearing process of
the Continuous Net Settlement System of the NSCC (the "Clearing Process"); or
(ii) a DTC Participant, that, in either case, has entered into an agreement with
the Trust, the Distributor and the Transfer Agent, with respect to creations and
redemptions of Creation Units ("Participant Agreement"). Investors should
contact the Distributor for the names of Participating Parties and/or DTC
Participants that have signed a Participant Agreement. All orders must be placed
for one or more whole Creation Units of Shares of a Fund and must be received by
the Distributor in proper form no later than the close of regular trading on the
NYSE (ordinarily 4:00 p.m., New York time) ("Closing Time") in order to receive
that day's closing net asset value per Share.

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<PAGE> 35
Orders may be effected through the Clearing Process or outside the Clearing
Process. An order to create Creation Units through the Clearing Process (through
a Participating Party), or outside the Clearing Process (through a DTC
Participant), is considered received by the Distributor on the date transmitted
if the order is received by the Distributor no later than the Closing Time on
such date and all other procedures set forth in the Participant Agreement are
followed. However, in the case of orders effected outside the Clearing Process,
if the Custodian does not receive the requisite Deposit Securities and the Cash
Component by 11:00 a.m. and 2:00 p.m., New York time, respectively, on the next
business day immediately following the transmittal date, the order will be
canceled. Any order may be rejected under certain limited circumstances which
are specified in the Statement of Additional Information.

A fixed transaction fee of $_____ is applicable to each creation transaction
regardless of the number of Creation Units created in the transaction. An
additional charge of up to three (3) times the fixed transaction fee (for a
total charge of up to $____) may be imposed with respect to transactions
effected outside the Clearing Process (through a DTC Participant) and in the
limited circumstances specified in the Statement of Additional Information in
which any cash can be used in lieu of Deposit Securities to create Creation
Units. Shares may be issued in advance of receipt of Deposit Securities subject
to various conditions including a requirement to maintain on deposit with the
Trust cash at least equal to 115% of the market value of the missing Deposit
Securities. Any such transaction effected must be effected outside the Clearing
Process. See "CREATION AND REDEMPTION OF CREATION UNITS" in the Statement of
Additional Information.

Legal Restrictions on Transactions in Certain Stocks. An investor subject to a
legal restriction with respect to a particular stock required to be deposited in
connection with the creation of a Creation Unit may, at the Fund's discretion,
be permitted to deposit an equivalent amount of cash in substitution for any
stock which would otherwise be included in the Deposit Securities applicable to
the creation of a Creation Unit.

Redemption

Shares may be redeemed only in Creation Units at their net asset value and only
on a day the NYSE is open for business. The Custodian makes available
immediately prior to the opening of business on the Exchange, through the
facilities of the NSCC, the list of the names and the number of Shares of each
Fund's portfolio securities that will be applicable that day to redemption
requests in proper form ("Fund Securities"). Fund Securities received on
redemption may not be identical to Deposit Securities which are applicable to
creations of Creation Units. Unless cash redemptions are available or specified
for a particular Fund, the redemption proceeds consist of the Fund Securities,
plus cash in an amount equal to the difference between the net asset value of
the Shares being redeemed as next determined after receipt by the Transfer Agent
of a redemption request in proper form, and the value of the Fund Securities
(the "Cash Redemption Amount"), less the applicable redemption fee. Should the
Fund Securities have a value greater than the net

34
<PAGE> 36
asset value of the Shares, a compensating cash payment to the Trust equal to the
differential will be required to be arranged for by or on behalf of the
redeeming shareholder by the Participating Party or DTC Participant, as the case
may be. For more detail, see "CREATION AND REDEMPTION OF CREATION UNITS" in the
Statement of Additional Information.

Orders to redeem Creation Units of a Fund may only be effected by or through a
Participating Party (with respect to redemptions through the Clearing Process)
or a DTC Participant (with respect to redemptions outside the Clearing Process).
An order to redeem through the Clearing Process is deemed received on the date
of transmittal if such order is received by the Transfer Agent prior to the
Closing Time on the date of transmittal and all other procedures set forth in
the Participant Agreement are properly followed. An order to redeem outside the
Clearing Process is considered received by the Transfer Agent on the date of
transmittal if: (i) such order is received by the Transfer Agent no later than
the close of regular trading on the NYSE (ordinarily 4:00 p.m. New York time) on
the transmittal date; (ii) such order is accompanied or proceeded by the
requisite number of Shares specified in the order, which delivery must be made
through DTC to the Custodian no later than 11:00 a.m., New York time, on the
next business day after the transmittal date; and (iii) all other procedures set
forth in the Participant Agreement are followed.

A fixed transaction fee of $_____ is applicable to each redemption transaction
regardless of the number of Creation Units redeemed in the transaction. An
additional charge of up to three (3) times the fixed transaction fee (for a
total charge of up to $_____) may be charged with respect to transactions
effected outside the Clearing Process and in the limited circumstances specified
in the Statement of Additional Information in which any cash may be used in lieu
of securities to redeem Creation Units.

Legal Restrictions on Transactions in Certain Stocks. An investor subject to a
legal restriction with respect to a particular stock included in the Fund
Securities applicable to the redemption of a Creation Unit may be paid an
equivalent amount of cash.

DISTRIBUTIONS

Dividends and Capital Gains. As a Fund shareholder, you are entitled to your
share of the Fund's income and net realized gains on its investments. Each
Fund pays out substantially all of its net earnings to its shareholders as
"distributions."

Each Fund typically earns income dividends from stocks and interest from debt
securities. These amounts, net of expenses, are passed along to Fund
shareholders as "income dividend distributions." Each Fund realizes capital
gains or losses whenever it sells securities. Net long-term capital gains are
distributed to shareholders as "capital gain distributions."

Income dividend distributions, if any, are distributed to shareholders
quarterly. Net capital gains are distributed at least annually. Dividends may be
declared and paid more

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<PAGE> 37
frequently to improve Index tracking or to comply with the distribution
requirements of the Internal Revenue Code.

Distributions in cash may be reinvested automatically in additional whole Shares
only if the broker through which you purchased Shares makes such option
available.

TAX MATTERS

As with any investment, you should consider how your Fund investment will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in a Fund.

Unless your investment in a Fund is through a tax-exempt entity or
taxed-deferred retirement account, such as a 401(k) plan, you need to be aware
of the possible tax consequences when:

- - The Fund makes distributions,

- - You sell Shares listed on the Exchange, and

- - You create or redeem Creation Units.

Taxes on Distributions. Each Fund will distribute any net investment income
quarterly, and any net realized long-term or short-term capital gains annually.
Each Fund may also pay a special distribution at the end of the calendar year to
comply with federal tax requirements. In general, your distributions are subject
to federal income tax when they are paid, whether you take them in cash or
reinvest them in a Fund. Dividends paid out of a Fund's income and net
short-term gains, if any, are taxable as ordinary income. Distributions of net
long-term capital gains, if any, in excess of net short-term capital losses are
taxable as long-term capital gains, regardless of how long you have held the
Shares.

Distributions in excess of a Fund's current and accumulated earnings and profits
are treated as a tax-free return of capital to the extent of your basis in the
Shares, and as capital gain thereafter. A distribution will reduce a Fund's net
asset value per Share and may be taxable to you as ordinary income or capital
gain even though, from an investment standpoint, the distribution may constitute
a return of capital.

If you are not a citizen of the United States, or if you are a foreign entity or
if you are not a permanent resident of the United States, each Fund's ordinary
income dividends (which include distributions of net short-term capital gains)
will generally be subject to a 30% U.S. withholding tax, unless a lower treaty
rate applies.

Dividends and interest received by each Fund may give rise to withholding and
other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes.

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<PAGE> 38
By law, your Fund must withhold 31% of your distributions and proceeds if you
have not provided a taxpayer identification number or social security number.

Taxes on Exchange-Listed Share Sales. Currently, any capital gain or loss
realized upon a sale of Shares is generally treated as long-term capital gain or
loss if the Shares have been held for more than one year and as short-term
capital gain or loss if the Shares have been held for one year or less.

Taxes on Creations and Redemptions of Creation Units. A person who exchanges
equity securities for Creation Units generally will recognize a gain or loss.
The gain or loss will be equal to the difference between the market value of the
Creation Units at the time and the exchanger's aggregate basis in the securities
surrendered and the Cash Component paid. A person who exchanges Creation Units
for equity securities will generally recognize a gain or loss equal to the
difference between the exchanger's basis in the Creation Units and the aggregate
market value of the securities received and the Cash Redemption Amount. The
Internal Revenue Service, however, may assert that a loss realized upon an
exchange of securities for Creation Units cannot be deducted currently under the
rules governing "wash sales," or on the basis that there has been no significant
change in economic position. Persons exchanging securities should consult their
own tax advisor with respect to whether wash sale rules apply and when a loss
might be deductible.

Under current federal tax laws, any capital gain or loss realized upon a
redemption of Creation Units is generally treated as long-term capital gain or
loss if the Shares have been held for more than one year and as a short-term
capital gain or loss if the Shares have been held for one year or less.

If you create or redeem Creation Units, you will be sent a confirmation
statement showing how many Shares you purchased or sold and at what price.

The foregoing discussion summarizes some of the consequences under current
federal tax law of an investment in a Fund. It is not a substitute for personal
tax advice. Consult your personal tax adviser about the potential tax
consequences of an investment in a Fund under all applicable tax laws.

GENERAL INFORMATION

The Trust was organized as a Massachusetts business trust on June 10, 1998. If
shareholders are required to vote on any matters, each Share outstanding would
be entitled to one vote. Annual meetings of shareholders will not be held except
as required by the 1940 Act and other applicable law. See the Statement of
Additional Information for more information concerning the Trust's form of
organization.

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<PAGE> 39
For purposes of the 1940 Act, Shares of the Funds are issued by the respective
Funds and the acquisition of Shares by investment companies is subject to the
restrictions of section 12(d)(1) of the Act.

From time to time, Funds advertise yield and total return figures. Yield is an
historical measure of dividend income, and total return is a measure of past
dividend income (assuming that it has been reinvested) plus capital
appreciation. Neither yield nor total return should be used to predict the
future performance of a Fund. For a more detailed description of how each Fund
computes its performance figures and how these numbers may be used in
advertisements, please consult the Statement of Additional Information.

[ ] serve as counsel to the Trust, including each Fund. [ ]
serves as independent accountants and will audit each Fund's financial statement
annually.

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<PAGE> 40
This Prospectus does not contain all the information included in the
Registration Statement filed with the SEC with respect to each Fund's Shares. A
Statement of Additional Information (dated _____________, 2000) and the annual
and semi-annual reports to shareholders, each of which will be filed with the
SEC, provide more information about each Fund. The Statement of Additional
Information and the financial statements included in the Trust's most recent
annual reports to shareholders are incorporated herein by reference (i.e., is
legally part of this Prospectus). These materials may be obtained without charge
by writing to the Distributor, ALPS Mutual Funds Services, Inc., at 370 17th
Street, Suite 3100, Denver, CO 80202, or by calling the following number:

Investor Information: [ ]

The Registration Statement, including this Prospectus, the Statement of
Additional Information, and the exhibits as well as the reports may be reviewed
and copied at the SEC's Public Reference Room (450 Fifth Street, N.W.,
Washington D.C. 20549) or on the EDGAR Database on the SEC's Web site
(http://www.sec.gov). Information on the operation of the public reference room
may be obtained by calling the SEC at 1-202-942-8090. You may get copies of this
and other information after paying a duplicating fee, by electronic request at
the following e-mail address: [email protected], or by writing the Public
Reference Section of the SEC, Washington, D.C. 20549-0102.

Shareholder inquiries may be directed to the Funds in writing to ALPS Mutual
Funds Services, Inc. at 370 17th Street, Suite 3100, Denver, CO 80202.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFER OF A FUND'S SHARES, AND, IF GIVEN OR MADE, THE INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR ANY FUND. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OF SHARES
SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE AFTER THE DATE OF THIS PROSPECTUS.

DEALERS EFFECTING TRANSACTIONS IN A FUND'S SHARES, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, ARE GENERALLY REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO ANY OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS.

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<PAGE> 41
THE INDEX EXCHANGE LISTED SECURITIES TRUST

STATEMENT OF ADDITIONAL INFORMATION

DATED ______________, 2000

This Statement of Additional Information is not a Prospectus. It should be read
in conjunction with the Prospectus dated ______________, 2000 (the "Prospectus")
for The Index Exchange Listed Securities Trust (the "Trust"), as it may be
revised from time to time. Capitalized terms used herein that are not defined
have the same meaning as in the Prospectus, unless otherwise noted. A copy of
the Prospectus for the Trust may be obtained without charge by writing to the
Trust's Distributor, ALPS Mutual Funds Services, Inc., at 370 17th Street, Suite
3100, Denver, CO 80202.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
General Description of the Trust.......................................
- -------------------------------------------------------------------------------
Investment Policies and Restrictions...................................
- -------------------------------------------------------------------------------
Special Considerations and Risks.......................................
- -------------------------------------------------------------------------------
Construction and Maintenance Standards for Underlying Indexes..........
- -------------------------------------------------------------------------------
Exchange Listing and Trading...........................................
- -------------------------------------------------------------------------------
Management of the Trust................................................
- -------------------------------------------------------------------------------
Brokerage Transactions.................................................
- -------------------------------------------------------------------------------
Book Entry Only System.................................................
- -------------------------------------------------------------------------------
Creation and Redemption of Creation Units..............................
- -------------------------------------------------------------------------------
Determination of Net Asset Value.......................................
- -------------------------------------------------------------------------------
Dividends and Distributions............................................
- -------------------------------------------------------------------------------
Taxes..................................................................
- -------------------------------------------------------------------------------
Capital Stock and Shareholder Reports..................................
- -------------------------------------------------------------------------------
Performance and Other Information......................................
- -------------------------------------------------------------------------------
Counsel and Independent Auditors.......................................
- -------------------------------------------------------------------------------
Report of Independent Accountants......................................
- -------------------------------------------------------------------------------
Exhibit A
- -------------------------------------------------------------------------------
</TABLE>

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<PAGE> 42
GENERAL DESCRIPTION OF THE TRUST

The Trust is an open-end management investment company. The Trust currently
consists of eight investment series (each a "Fund" and collectively the
"Funds"). The Trust was organized as a Massachusetts business trust on June 12,
1998. The shares of each Fund are referred to herein as "Shares." The Funds
offered by the Trust are: the SSgA Dow Jones U.S. Large Cap Value Index Fund,
the SSgA Dow Jones U.S. Large Cap Growth Index Fund, the SSgA Dow Jones U.S.
Small Cap Value Index Fund, the SSgA Dow Jones U.S. Small Cap Growth Index Fund,
the SSgA Dow Jones Global Titans Fund, the SSgA Wilshire REIT Index Fund, the
SSgA Morgan Stanley High-Tech 35 Index Fund and the SSgA Morgan Stanley Internet
Index Fund.

Each Fund offers and issues Shares at their net asset value only in aggregations
of a specified number of Shares (each, a "Creation Unit") generally in exchange
for a basket of equity securities included in its Index ("Deposit Securities")
together with the deposit of a specified cash payment ("Cash Component"). The
Shares have been approved for listing and secondary trading on a national
securities exchange (the "Exchange"), subject to notice of issuance. The Shares
will trade on the Exchange at market prices. These prices may differ from the
Shares' net asset value. The Shares are also redeemable only in Creation Unit
aggregations, and generally in exchange for portfolio securities and a specified
cash payment. A Creation Unit of each Fund consists of 50,000 Shares.

The Trust reserves the right to offer a "cash" option for creations and
redemptions of Shares (subject to applicable legal requirements) although it has
no current intention of doing so. Shares may be issued in advance of receipt of
Deposit Securities subject to various conditions including a requirement to
maintain on deposit with the Trust cash at least equal to 115% of the market
value of the missing Deposit Securities. See "CREATION AND REDEMPTION OF
CREATION UNITS." In each instance of such cash creations or redemptions, the
Trust may impose transaction fees that will be higher than the transaction fees
associated with in-kind creations or redemptions. In all cases, such fees will
be limited in accordance with the requirements of the Securities and Exchange
Commission (the "SEC") applicable to management investment companies offering
redeemable securities.

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<PAGE> 43
INVESTMENT POLICIES AND RESTRICTIONS

LENDING PORTFOLIO SECURITIES

Each Fund may lend portfolio securities to brokers, dealers and other financial
institutions needing to borrow securities to complete transactions and for other
purposes. Because the U.S. government securities or other assets that are
pledged as collateral to each Fund in connection with these loans generate
income, securities lending may enable a Fund to earn additional income that may
partially offset the expenses of such Fund, and thereby reduce the effect that
expenses have on such Fund's ability to provide investment results that
substantially correspond to the price and yield performance of its respective
Index.

Loans of portfolio securities may not exceed 33% of a Fund's total assets. The
documentation for these loans provides that a Fund will receive collateral equal
to at least 100% of the current market value of the loaned securities, as marked
to market each day that the net asset value of the Fund is determined. Each Fund
will pay reasonable administrative and custodial fees in connection with the
loan of securities and invests collateral in money market instruments or funds
which invest exclusively in money market instruments.

Each Fund will comply with the conditions for lending established by the SEC.
Although each Fund will receive collateral in connection with all loans of
portfolio securities, and such collateral will be marked to market, each Fund
will be exposed to the risk of loss should a borrower default on its obligation
to return the borrowed securities (e.g., the loaned securities may have
appreciated beyond the value of the collateral held by the Fund). In addition,
each Fund bears the risk of loss of any cash collateral that it invests in money
market instruments.

REPURCHASE AGREEMENTS

Each Fund may invest in repurchase agreements with commercial banks, brokers or
dealers to generate income from its excess cash balances and to invest
securities lending cash collateral. A repurchase agreement is an agreement under
which a Fund acquires a money market instrument (generally a security issued by
the U.S. Government or an agency thereof, a banker's acceptance or a certificate
of deposit) from a seller, subject to resale to the seller at an agreed upon
price and date (normally, the next business day). A repurchase agreement may be
considered a loan collateralized by securities. The resale price reflects an
agreed upon interest rate effective for the period the instrument is held by a
Fund and is unrelated to the interest rate on the underlying instrument.

In these repurchase agreement transactions, the securities acquired by a Fund
(including accrued interest earned thereon) must have a total value in excess of
the value of the repurchase agreement and are held by the Custodian until
repurchased. No more than an aggregate of 15% of each Fund's net assets will be
invested in illiquid securities, including repurchase agreements having
maturities longer than seven days and securities

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<PAGE> 44
subject to legal or contractual restrictions on resale, or for which there are
no readily available market quotations.

The use of repurchase agreements involves certain risks. For example, if the
other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, a
Fund may incur a loss upon disposition of the security. If the other party to
the agreement becomes insolvent and subject to liquidation or reorganization
under the U.S. Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by a Fund not within the control of
the Fund and, therefore, the Fund may not be able to substantiate its interest
in the underlying security and may be deemed an unsecured creditor of the other
party to the agreement.

OTHER MONEY MARKET INSTRUMENTS

In addition to repurchase agreements, other money market instruments in which
the Funds may invest are certificates of deposit of U.S. domestic banks with
assets of $1 billion or more, bankers' acceptances, time deposits, U.S.
Government and U.S. Government agency securities, or commercial paper rated
within the two highest grades by S&P or Moody's Investors Service, Inc., or, if
not rated, are of comparable quality as determined by the Adviser, and which
mature within one year from the date of purchase, and investment companies which
invest exclusively in such money market instruments (subject to applicable
limitations under Section 12(d)(1) of the Investment Company Act of 1940, as
amended ("1940 Act").

FUTURES CONTRACTS, OPTIONS AND SWAP AGREEMENTS

Each Fund may utilize exchange-traded futures and options contracts and swap
agreements.

FUTURES CONTRACTS AND OPTIONS

Futures contracts generally provide for the future sale by one party and
purchase by another party of a specified commodity at a specified future time
and at a specified price. Stock index futures contracts are settled daily with a
payment by one party to the other of a cash amount based on the difference
between the level of the stock index specified in the contract from one day to
the next. Futures contracts are standardized as to maturity date and underlying
instrument and are traded on futures exchanges.

Futures traders are required to make a good faith margin deposit in cash or U.S.
government securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure
completion of the contract (delivery or acceptance of the underlying commodity
or payment of the cash settlement amount) if it is not terminated prior to the
specified delivery date. Brokers may establish deposit requirements which are
higher than the exchange minimums. Futures contracts

4
<PAGE> 45
are customarily purchased and sold on margin deposits which may range upward
from less than 5% of the value of the contract being traded.

After a futures contract position is opened, the value of the contract is marked
to market daily. If the futures contract price changes to the extent that the
margin on deposit does not satisfy margin requirements, payment of additional
"variation" margin will be required. Conversely, change in the contract value
may reduce the required margin, resulting in a repayment of excess margin to the
contract holder. Variation margin payments are made to and from the futures
broker for as long as the contract remains open. In such case, a Fund would
expect to earn interest income on its margin deposits. Closing out an open
futures position is done by taking an opposite position ("buying" a contract
which has previously been "sold," or "selling" a contract previously
"purchased") in an identical contract to terminate the position. Brokerage
commissions are incurred when a futures contract position is opened or closed.

Each Fund may use exchange-traded futures and options, together with positions
in cash and money market instruments, to simulate full investment in the
underlying Index. Exchange-traded futures and options contracts are not
currently available for all of the Indexes. Under such circumstances, the
Adviser may seek to utilize other instruments that it believes to be correlated
to the underlying Index components or a subset of the components. The Exchange
currently anticipates that options on the Shares will be listed on the Exchange
at the same time that the Shares are available for trading although there is no
assurance in this regard.

RESTRICTIONS ON THE USE OF FUTURES AND OPTIONS

A Fund would not enter into futures contract transactions for purposes other
than hedging to the extent that, immediately thereafter, the sum of its initial
margin deposits on open contracts exceeds 5% of the market value of a Fund's
total assets after taking into account unrealized gains and unrealized losses on
such contracts it has entered into. Each Fund would take steps to prevent its
futures positions from "leveraging" its securities holdings. When it has a long
futures position, it will maintain with its custodian bank, cash or liquid
securities having a value equal to the notional value of the contract (less any
margin deposited in connection with the position). When it has a short futures
position, it will maintain with its custodian bank assets substantially
identical to those underlying the contract or cash and liquid securities (or a
combination of the foregoing) having a value equal to the net obligation of the
Fund under the contract (less the value of any margin deposits in connection
with the position).

SWAP AGREEMENTS

Swap agreements are contracts between parties in which one party agrees to make
payments to the other party based on the change in market value or level of a
specified rate, index or asset. In return, the other party agrees to make
payments to the first party based on the return of a different specified rate,
index or asset. Swap agreements will usually be done on a net basis, i.e., where
the two parties make net payments with the

5
<PAGE> 46
Fund receiving or paying, as the case may be, only the net amount of the two
payments. The net amount of the excess, if any, of a Fund's obligations over its
entitlements with respect to each swap is accrued on a daily basis and an amount
of cash or high liquid securities having an aggregate value at least equal to
the accrued excess is maintained in an account at the Trust's custodian bank.

INVESTMENT RESTRICTIONS

The Trust has adopted the following investment restrictions as fundamental
policies with respect to each Fund. These restrictions cannot be changed with
respect to a Fund without the approval of the holders of a majority of such
Fund's outstanding voting securities. For purposes of the 1940 Act, a majority
of the outstanding voting securities of a Fund means the vote, at an annual or a
special meeting of the security holders of the Trust, of the lesser of (1) 67%
or more of the voting securities of the Fund present at such meeting, if the
holders of more than 50% of the outstanding voting securities of such Fund are
present or represented by proxy, or (2) more than 50% of the outstanding voting
securities of the Fund. Except with the approval of a majority of the
outstanding voting securities, a Fund may not:

1. Change its investment objective;

2. Lend any funds or other assets except through the purchase of all or a
portion of an issue of securities or obligations of the type in which it is
permitted to invest (including participation interests in such securities or
obligations) and except that a Fund may lend its portfolio securities in an
amount not to exceed 33% of the value of its total assets;

3. Issue senior securities or borrow money, except borrowings from banks for
temporary or emergency purposes in an amount up to 10% of the value of the
Fund's total assets (including the amount borrowed), valued at market, less
liabilities (not including the amount borrowed) valued at the time the borrowing
is made, and the Fund will not purchase securities while borrowings in excess of
5% of the Fund's total assets are outstanding, provided, that for purposes of
this restriction, short-term credits necessary for the clearance of transactions
are not considered borrowings (this limitation on purchases does not apply to
acceptance by the Fund of a deposit principally of securities included in the
relevant Index for creation of Creation Units);

4. Pledge, hypothecate, mortgage or otherwise encumber its assets, except to
secure permitted borrowings. (The deposit of underlying securities and other
assets in escrow and collateral arrangements with respect to initial or
variation margin for futures contracts or options contracts will not be deemed
to be pledges of the Fund's assets);

5. Purchase, hold or deal in real estate, or oil, gas or mineral interests or
leases, but a Fund may purchase and sell securities that are issued by companies
that invest or deal in such assets;

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<PAGE> 47
6. Act as an underwriter of securities of other issuers, except to the extent
the Fund may be deemed an underwriter in connection with the sale of securities
in its portfolio;

7. Purchase securities on margin, except for such short-term credits as are
necessary for the clearance of transactions, except that a Fund may make margin
deposits in connection with transactions in options, futures and options on
futures;

8. Sell securities short; or

9. Invest in commodities or commodity contracts, except that a Fund may transact
in exchange traded futures contracts on securities, stock indexes and options on
such futures contracts and make margin deposits in connection with such
contracts.

In addition to the investment restrictions adopted as fundamental policies as
set forth above, each Fund observes the following restrictions, which may be
changed by the Board of Trustees without a shareholder vote. A Fund will not:

1. Invest in the securities of a company for the purpose of exercising
management or control, or in any event purchase and hold more than 10% of the
securities of a single issuer, provided that the Trust may vote the investment
securities owned by each Fund in accordance with its views; or

2. Hold illiquid assets in excess of 15% of its net assets. An illiquid asset is
any asset which may not be sold or disposed of in the ordinary course of
business within seven days at approximately the value at which the Fund has
valued the investment.

If a percentage limitation is adhered to at the time of investment or contract,
a later increase or decrease in percentage resulting from any change in value or
total or net assets will not result in a violation of such restriction, except
that the percentage limitations with respect to the borrowing of money and
illiquid securities will be observed continuously.

SPECIAL CONSIDERATIONS AND RISKS

A discussion of the risks associated with an investment in a Fund is contained
in the Prospectus under the heading "INVESTMENT CONSIDERATIONS AND RISKS." The
discussion below supplements, and should be read in conjunction with, such
section of the Prospectus.

GENERAL

Investment in a Fund should be made with an understanding that the value of a
Fund's portfolio securities may fluctuate in accordance with changes in the
financial condition of the issuers of the portfolio securities, the value of
common stocks generally and other factors.

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<PAGE> 48
An investment in a Fund should also be made with an understanding of the risks
inherent in an investment in equity securities, including the risk that the
financial condition of issuers may become impaired or that the general condition
of the stock market may deteriorate (either of which may cause a decrease in the
value of the portfolio securities and thus in the value of Shares). Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. These investor perceptions are based on various and
unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic and banking crises.

Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the issuer, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Further, unlike debt securities which typically have a
stated principal amount payable at maturity (whose value, however, will be
subject to market fluctuations prior thereto), or preferred stocks which
typically have a liquidation preference and which may have stated optional or
mandatory redemption provisions, common stocks have neither a fixed principal
amount nor a maturity. Common stock values are subject to market fluctuations as
long as the common stock remains outstanding.

Although most of the securities in the Indexes are listed on a national
securities exchange, the principal trading market for some may be in the
over-the-counter market. The existence of a liquid trading market for certain
securities may depend on whether dealers will make a market in such securities.
There can be no assurance that a market will be made or maintained or that any
such market will be or remain liquid. The price at which securities may be sold
and the value of a Fund's Shares will be adversely affected if trading markets
for a Fund's portfolio securities are limited or absent or if bid/ask spreads
are wide.

FUTURES AND OPTIONS TRANSACTIONS

Positions in futures contracts and options may be closed out only on an exchange
which provides a secondary market therefor. However, there can be no assurance
that a liquid secondary market will exist for any particular futures contract or
option at any specific time. Thus, it may not be possible to close a futures or
options position. In the event of adverse price movements, a Fund would continue
to be required to make daily cash payments to maintain its required margin. In
such situations, if a Fund has insufficient cash, it may have to sell portfolio
securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, a Fund may be required to make delivery
of the instruments underlying futures contracts it has sold.

A Fund will minimize the risk that it will be unable to close out a futures or
options contract by only entering into futures and options for which there
appears to be a liquid secondary market.

8
<PAGE> 49
The risk of loss in trading futures contracts or uncovered call options in some
strategies (e.g., selling uncovered stock index futures contracts) is
potentially unlimited. The Funds do not plan to use futures and options
contracts, when available, in this way. The risk of a futures position may still
be large as traditionally measured due to the low margin deposits required. In
many cases, a relatively small price movement in a futures contract may result
in immediate and substantial loss or gain to the investor relative to the size
of a required margin deposit. The Funds, however, intend to utilize futures and
options contracts in a manner designed to limit their risk exposure to that
which is comparable to what they would have incurred through direct investment
in stocks.

Utilization of futures transactions by a Fund involves the risk of imperfect or
even negative correlation to the benchmark Index if the index underlying the
futures contracts differs from the benchmark Index. There is also the risk of
loss by a Fund of margin deposits in the event of bankruptcy of a broker with
whom a Fund has an open position in the futures contract or option.

Certain financial futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of a trading session.
Once the daily limit has been reached in a particular type of contract, no
trades may be made on that day at a price beyond that limit. The daily limit
governs only price movement during a particular trading day and therefore does
not limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

RISKS OF SWAP AGREEMENTS

Swap agreements are subject to the risk that the swap counterparty will default
on its obligations. If such a default occurs, a Fund will have contractual
remedies pursuant to the agreements related to the transaction, but such
remedies may be subject to bankruptcy and insolvency laws which could affect
such Fund's rights as a creditor.

CONTINUOUS OFFERING

The method by which Creation Units of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
Shares are issued and sold by the Trust on an ongoing basis, at any point a
"distribution," as such term is used in the Securities Act of 1933 (the
"Securities Act"), may occur. Broker-dealers and other persons are cautioned
that some activities on their part may, depending on the circumstances, result
in their being deemed participants in a distribution in a manner which could
render them statutory underwriters and subject them to the prospectus delivery
and liability provisions of the Securities Act.

9
<PAGE> 50
For example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.

Broker-dealer firms should also note that dealers who are not "underwriters" but
are effecting transactions in Shares, whether or not participating in the
distribution of Shares, are generally required to deliver a prospectus. This is
because the prospectus delivery exemption in Section 4(3) of the Securities Act
is not available in respect of such transactions as a result of Section 24(d) of
the 1940 Act. Firms that incur a prospectus-delivery obligation with respect to
Shares of a Fund are reminded that under Securities Act Rule 153, a
prospectus-delivery obligation under Section 5(b)(2) of the Securities Act owed
to an exchange member in connection with a sale on the Exchange is satisfied by
the fact that such Fund's prospectus is available at the Exchange upon request.
The prospectus delivery mechanism provided in Rule 153 is only available with
respect to transactions on an exchange.

EXCHANGE LISTING AND TRADING

A discussion of exchange listing and trading matters associated with an
investment in the Funds is contained in the Prospectus under the "DETERMINATION
OF NET ASSET VALUE" and "BUYING AND SELLING." The discussion below supplements,
and should be read in conjunction with, such sections of the Prospectus.

The Shares of each Fund are approved for listing and trading on the Exchange,
subject to notice of issuance. The Shares trade on the Exchange at prices that
may differ to some degree from their net asset value. There can be no assurance
that the requirements of the Exchange necessary to maintain the listing of
Shares of any Fund will continue to be met.

The Exchange may but is not required to remove the Shares of a Fund from listing
if (1) following the initial twelve-month period beginning upon the commencement
of trading of a Fund, there are fewer than 50 beneficial holders of the Shares
for 30 or more consecutive trading days; (2) the value of the underlying Index
or portfolio of securities on which such Fund is based is no longer calculated
or available; or (3) such other event shall occur or condition exists that, in
the opinion of the Exchange, makes further dealings on the Exchange inadvisable.
In addition, the Exchange will remove the Shares from listing and trading upon
termination of the Trust.

As in the case of other stocks traded on the Exchange, brokers' commissions on
transactions will be based on negotiated commission rates at customary levels.

10
<PAGE> 51
MANAGEMENT OF THE TRUST

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "MANAGEMENT."

TRUSTEES AND OFFICERS OF THE TRUST

The Board has responsibility for the overall management and operations of the
Trust, including general supervision of the duties performed by the Adviser and
other service providers. The Board currently consists of [ ] Trustees, none of
whom is an "interested person" (as defined in the 1940 Act) of the Trust or any
of the Funds.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME/ADDRESS/AGE POSITION WITH THE TRUST PRINCIPAL OCCUPATIONS
DURING THE PAST FIVE YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>

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

- --------------------------------------------------------------------------------
</TABLE>

REMUNERATION OF TRUSTEES AND OFFICERS

The Trust pays each Trustee an annual fee of $[ ] plus a per meeting fee of $[ ]
for meetings of the Board of Trustees attended by the Trustee. The Trust also
reimburses each Trustee for travel and other out-of-pocket expenses incurred by
him/her in connection with attending such meetings.

Assuming that four (4) meetings of the Board of Trustees are held annually, it
is estimated that the compensation paid to each Trustee will be:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME OF TRUSTEE AGGREGATE COMPENSATION FROM TRUST
- --------------------------------------------------------------------------------
<S> <C>

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

- --------------------------------------------------------------------------------
</TABLE>

The following table sets forth the total (estimated) remuneration of Trustees
and officers of the Trust for the fiscal year ended [ ].

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME/ POSITION AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION FROM BENEFITS ACCRUED AS BENEFITS UPON FROM TRUST & TRUST
TRUST PART OF TRUST EXPENSES RETIREMENT COMPLEX PAID TO
TRUSTEES
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

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

- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

11
<PAGE> 52

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

No Trustee or officer is entitled to any pension or retirement benefits from the
Trust.

As of [ ], the Trustees and officers of the Trust as a group owned
less than 1% of the outstanding shares of each Fund.

THE INVESTMENT ADVISER

State Street, through its State Street Global Advisors division, acts as
investment adviser to the Trust and, subject to the supervision of the Board, is
responsible for the investment management of each Fund. State Street is a wholly
owned subsidiary of State Street Boston Corporation, a publicly held bank
holding company. State Street, with over $667 billion (U.S.) under management as
of December 31, 1999, provides complete global investment management services
from offices in the U.S., London, Sydney, Hong Kong, Tokyo, Toronto, Luxembourg,
Montreal, Paris, Dublin, Munich and Brussels.

The Adviser serves as investment adviser to each Fund pursuant to an Investment
Advisory Agreement between the Trust and the Adviser. Under the Investment
Advisory Agreement, the Adviser, subject to the supervision of the Board and in
conformity with the stated investment policies of each Fund, manages the
investment of each Fund's assets. The Adviser is responsible for placing
purchase and sale orders and providing continuous supervision of the investment
portfolio of each Fund.

Pursuant to the Investment Advisory Agreement, the Trust has agreed to indemnify
the Adviser for certain liabilities, including certain liabilities arising under
the federal securities laws, unless such loss or liability results from willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations and duties.

THE ADMINISTRATOR

In addition to serving as Adviser to each Fund, State Street, through its Global
Investors Services Group, serves as Administrator for the Trust pursuant to an
Administrative Services Agreement. Under the Administrative Services Agreement,
State Street is obligated on a continuous basis to provide such administrative
services as the Board of Trustees of the Trust reasonably deems necessary for
the proper administration of the Trust and each Fund. State Street will
generally assist in all aspects of the Trust's and the Funds' operations; supply
and maintain office facilities (which may be in State Street's own offices),
statistical and research data, data processing services, clerical, accounting,
bookkeeping and record keeping services (including without limitation the
maintenance of such books and records as are required under the 1940 Act and the
rules thereunder, except as maintained by other agents), internal auditing,
executive and administrative services, and stationery and office supplies;
prepare reports to shareholders or investors; prepare and file tax returns;
supply financial information and supporting data for reports to and filings with
the SEC and various state Blue Sky authorities; supply supporting

12
<PAGE> 53
documentation for meetings of the Board of Trustees; provide monitoring reports
and assistance regarding compliance with the Declaration of Trust, by-laws,
investment objectives and policies and with federal and state securities laws;
arrange for appropriate insurance coverage; and negotiate arrangements with, and
supervise and coordinate the activities of, agents and others to supply
services.

Pursuant to the Administrative Services Agreement, the Trust has agreed to
indemnify the Administrator for certain liabilities, including certain
liabilities arising under the federal securities laws, unless such loss or
liability results from gross negligence or willful misconduct in the performance
of its duties.

CUSTODIAN AND TRANSFER AGENT

State Street, 225 Franklin Street, Boston, Massachusetts 02110, also serves as
Custodian for the Funds pursuant to a Custodian Agreement. As Custodian, State
Street holds the Funds' assets, calculates the net asset value of the Shares and
calculates net income and realized capital gains or losses. State Street also
serves as Transfer Agent of the Funds pursuant to a Transfer Agency Agreement.
State Street may be reimbursed by the Funds for its out-of-pocket expenses.
State Street and the Trust will comply with the self-custodian provisions of
Rule 17f-2 under the 1940 Act.

Compensation. As compensation for its services under the Investment Advisory
Agreement, State Street is paid a monthly fee based on a percentage of each
Fund's average daily net assets at the annual rate of .[ ]%. From time to time,
the Adviser may waive all or a portion of its fee.

Term. The Investment Advisory Agreement with respect to each Fund continues in
effect for two years from its effective date, and thereafter is subject to
annual approval by (1) the Board of Trustees or (2) vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund, provided
that in either event such continuance also is approved by a majority of the
Board of Trustees who are not interested persons (as defined in the 1940 Act) of
the Trust by a vote cast in person at a meeting called for the purpose of voting
on such approval. The Investment Advisory Agreement with respect to each Fund is
terminable without penalty, on 60 days notice, by the Board of Trustees or by a
vote of the holders of a majority (as defined in the 1940 Act) of the applicable
Fund's outstanding voting securities. The Investment Advisory Agreement is also
terminable upon 60 days notice by the Adviser and will terminate automatically
in the event of its assignment (as defined in the 1940 Act).

THE DISTRIBUTOR

ALPS Mutual Funds Services, Inc. is the principal underwriter and Distributor of
Shares. Its principal address is 370 17th Street, Suite 3100, Denver, CO 80202.
Investor information can be obtained by calling 1-800-843-2639. The Distributor
has entered into a Distribution Agreement with the Trust pursuant to which it
distributes Shares of each Fund. The Distribution Agreement will continue for
two years from its effective date and

13
<PAGE> 54
is renewable annually thereafter. Shares will be continuously offered for sale
by the Trust through the Distributor only in Creation Units, as described in the
Prospectus and below under "CREATION AND REDEMPTION OF CREATION UNITS." Shares
in less than Creation Units are not distributed by the Distributor. The
Distributor will deliver the Prospectus and Statement of Additional Information
to persons purchasing Creation Units and will maintain records of both orders
placed with it and confirmations of acceptance furnished by it. The Distributor
is a broker-dealer registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of the National Association of Securities Dealers,
Inc. ("NASD"). The Distributor has no role in determining the investment
policies of the Trust or which securities are to be purchased or sold by the
Trust.

The Board of Trustees, consisting of Independent Trustees described below, has
adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act (each, a
"Plan") for each Fund. The terms of each Plan are described in the Prospectus.

Under its terms, each Fund's Plan remains in effect from year to year, provided
such continuance is approved annually by vote of the Board, including a majority
of the "Independent Trustees" (Trustees who are not interested persons of the
Fund (as defined in the 1940 Act) and have no direct or indirect financial
interest in the operation of the Plan or any agreement related to the Plan). The
Plan may not be amended to increase materially the amount to be spent for the
services provided by the Distributor without approval by the shareholders of the
Fund to which the Plan applies, and all material amendments of the Plan also
require Board approval (as described above). Each Plan may be terminated at any
time, without penalty, by vote of a majority of the Independent Trustees, or, by
a vote of a majority of the outstanding voting securities of such Fund (as such
vote is defined in the 1940 Act). Pursuant to the Distribution Agreement, the
Distributor will provide the Board with periodic reports of any amounts expended
under the Plan and the purpose for which such expenditures were made.

The Distribution Agreement provides that it may be terminated at any time,
without the payment of any penalty, as to each Fund: (i) by vote of a majority
of the Independent Trustees or (ii) by vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of the Fund, on at least 60 days
written notice to the Distributor. The Distribution Agreement is also terminable
upon 60 days notice by the Distributor and will terminate automatically in the
event of its assignment (as defined in the 1940 Act).

Pursuant to agreements entered into with such persons, the Distributor will make
payments under each Fund's Plan to certain broker-dealers or other persons
("Investor Services Organizations") that enter into agreements with the
Distributor in the form approved by the Board of Trustees to provide
distribution assistance and shareholder support, account maintenance and
educational and promotional services (which may include compensation and sales
incentives to the registered brokers or other sales personnel of the
broker-dealer or other financial entity that is a party to an investor services
agreement) ("Investor Services Agreements"). Each Investor Services Agreement
will be a "related agreement" under the Plan of the relevant Fund. No Investor

14
<PAGE> 55
Services Agreement will provide for annual fees of more than [ ]% of a Fund's
average daily net assets per annum attributable to Shares subject to such
agreement.

Subject to an aggregate limitation of 0.25% of a Fund's average net assets per
annum, the fees paid by a Fund under its Plan will be compensation for
distribution, investor services or marketing services for that Fund. To the
extent the Plan fees aggregate less than .25% per annum of the average daily net
assets of a Fund, each Fund may also reimburse the Distributor and other persons
for their respective costs incurred in printing prospectuses and producing
advertising or marketing material prepared at the request of the Fund. The
aggregate payments under each Plan will not exceed, on an annualized basis, .25%
of average daily net assets of any Fund.

The continuation of the Distribution Agreement, any Investor Services Agreements
and any other related agreements is subject to annual approval of the Board,
including by a majority of the Independent Trustees, as described above.

Each of the Investor Services Agreements will provide that it may be terminated
at any time, without the payment of any penalty, (i) by vote of a majority of
the Independent Trustees or (ii) by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the relevant Fund, on at least 60
days' written notice to the other party. Each of the Distribution Agreement and
the Investor Services Agreements is also terminable upon 60 days' notice by the
Distributor and will terminate automatically in the event of its assignment (as
defined in the 1940 Act). Each Investor Services Agreement is also terminable by
the applicable Investor Service Organization upon 60 days' notice to the other
party thereto.

The allocation among the Funds of fees and expenses payable under the
Distribution Agreement and the Investor Services Agreements will be made pro
rata in accordance with the daily net assets of the respective Funds.

The Distributor may also enter into agreements with securities dealers
("Soliciting Dealers") who will solicit purchases of Creation Unit aggregations
of Fund Shares. Such Soliciting Dealers may also be Participating Parties (as
defined below), DTC Participants (as defined below) and/or Investor Services
Organizations.

Pursuant to the Distribution Agreement, the Trust has agreed to indemnify the
Distributor, and may indemnify Soliciting Dealers entering into agreements with
the Distributor, for certain liabilities, including certain liabilities arising
under the federal securities laws, unless such loss or liability results from
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations and duties under the
Distribution Agreement or other agreement, as applicable.

BROKERAGE TRANSACTIONS

15
<PAGE> 56
The policy of the Trust regarding purchases and sales of securities for the
Funds is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Trust's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Trust believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Funds and the Adviser from obtaining a high quality of brokerage
and research services. In seeking to determine the reasonableness of brokerage
commissions paid in any transaction, the Adviser relies upon its experience and
knowledge regarding commissions generally charged by various brokers and on its
judgment in evaluating the brokerage and research services received from the
broker effecting the transaction. Such determinations are necessarily subjective
and imprecise, as in most cases an exact dollar value for those services is not
ascertainable.

In seeking to implement the Trust's policies, the Adviser effects transactions
with those brokers and dealers who the Adviser believes provides the most
favorable prices and are capable of providing efficient executions. If the
Adviser believes such price and execution are obtainable from more than one
broker or dealer, it may give consideration to placing portfolio transactions
with those brokers and dealers who also furnish research and other services to
the Funds or the Adviser. Such services may include, but are not limited to,
information as to the availability of securities for purchase or sale and
statistical information pertaining to corporate actions affecting stocks,
including but not limited to, stocks within one or more of the Indexes.

The Funds will not deal with affiliates in principal transactions unless
permitted by exemptive order or applicable rule or regulation.

The Adviser assumes general supervision over placing orders on behalf of the
Trust for the purchase or sale of portfolio securities. If purchases or sales of
portfolio securities of the Trust and one or more other investment companies or
clients supervised by the Adviser are considered at or about the same time,
transactions in such securities are allocated among the several investment
companies and clients in a manner deemed equitable to all by the Adviser. In
some cases, this procedure could have a detrimental effect on the price or
volume of the security so far as the Trust is concerned. However, in other
cases, it is possible that the ability to participate in volume transactions and
to negotiate lower brokerage commissions will be beneficial to the Trust. The
primary consideration is prompt execution of orders at the most favorable net
price.

Portfolio turnover may vary from year to year, as well as within a year. High
turnover rates are likely to result in comparatively greater brokerage expenses.
The portfolio turnover rate for each Fund is expected to be under 50%. See
"INVESTMENT POLICIES AND STRATEGIES" in the Prospectus. The overall
reasonableness of brokerage commissions is evaluated by the Adviser based upon
its knowledge of available information as to the general level of commissions
paid by other institutional investors for comparable services.

16
<PAGE> 57
BOOK ENTRY ONLY SYSTEM

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "BUYING AND SELLING."

DTC acts as securities depositary for the Shares. Shares of each Fund are
represented by securities registered in the name of DTC or its nominee and
deposited with, or on behalf of, DTC. Except in the limited circumstance
provided below, certificates will not be issued for Shares.

DTC, a limited-purpose trust company, was created to hold securities of its
participants (the "DTC Participants") and to facilitate the clearance and
settlement of securities transactions among the DTC Participants in such
securities through electronic book-entry changes in accounts of the DTC
Participants, thereby eliminating the need for physical movement of securities
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own DTC. More specifically, DTC is owned by
a number of its DTC Participants and by the New York Stock Exchange ("NYSE"),
the AMEX and the NASD. Access to the DTC system is also available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(the "Indirect Participants").

Beneficial ownership of Shares is limited to DTC Participants, Indirect
Participants and persons holding interests through DTC Participants and Indirect
Participants. Ownership of beneficial interests in Shares (owners of such
beneficial interests are referred to herein as "Beneficial Owners") is shown on,
and the transfer of ownership is effected only through, records maintained by
DTC (with respect to DTC Participants) and on the records of DTC Participants
(with respect to Indirect Participants and Beneficial Owners that are not DTC
Participants). Beneficial Owners will receive from or through the DTC
Participant a written confirmation relating to their purchase of Shares.

Conveyance of all notices, statements and other communications to Beneficial
Owners is effected as follows. Pursuant to the Depositary Agreement between the
Trust and DTC, DTC is required to make available to the Trust upon request and
for a fee to be charged to the Trust a listing of the Shares of each Fund held
by each DTC Participant. The Trust shall inquire of each such DTC Participant as
to the number of Beneficial Owners holding Shares, directly or indirectly,
through such DTC Participant. The Trust shall provide each such DTC Participant
with copies of such notice, statement or other communication, in such form,
number and at such place as such DTC Participant may reasonably request, in
order that such notice, statement or communication may be transmitted by such
DTC Participant, directly or indirectly, to such Beneficial Owners. In addition,
the Trust shall pay to each such DTC Participant a fair and reasonable amount as
reimbursement for the expenses attendant to such transmittal, all subject to
applicable statutory and regulatory requirements.

17
<PAGE> 58
Share distributions shall be made to DTC or its nominee, Cede & Co., as the
registered holder of all Shares. DTC or its nominee, upon receipt of any such
distributions, shall credit immediately DTC Participants' accounts with payments
in amounts proportionate to their respective beneficial interests in Shares of
each Fund as shown on the records of DTC or its nominee. Payments by DTC
Participants to Indirect Participants and Beneficial Owners of Shares held
through such DTC Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in a "street name," and will be the
responsibility of such DTC Participants.

The Trust has no responsibility or liability for any aspects of the records
relating to or notices to Beneficial Owners, or payments made on account of
beneficial ownership interests in such Shares, or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests or for
any other aspect of the relationship between DTC and the DTC Participants or the
relationship between such DTC Participants and the Indirect Participants and
Beneficial Owners owning through such DTC Participants.

DTC may determine to discontinue providing its service with respect to Shares at
any time by giving reasonable notice to the Trust and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Trust shall take action either to find a replacement for DTC
to perform its functions at a comparable cost or, if such a replacement is
unavailable, to issue and deliver printed certificates representing ownership of
Shares, unless the Trust makes other arrangements with respect thereto
satisfactory to the Exchange.

CREATION AND REDEMPTION OF CREATION UNITS

CREATION

The Trust issues and sells Shares of each Fund only in Creation Units on a
continuous basis through the Distributor, without a sales load, at their net
asset value next determined after receipt, on any Business Day (as defined
below), of an order in proper form.

A "Business Day" with respect to each Fund is any day on which the NYSE is open
for business. As of the date of the Prospectus, the NYSE observes the following
holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day
(Washington's Birthday), Good Friday, Memorial Day (observed), Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.

FUND DEPOSIT

The consideration for purchase of a Creation Unit of a Fund generally consists
of the in-kind deposit of a designated portfolio of equity securities -- the
"Deposit Securities" -- per each Creation Unit constituting a substantial
replication, or a representation, of the stocks included in the relevant Fund's
Index and an amount of cash -- the "Cash

18
<PAGE> 59
Component" --computed as described below. Together, the Deposit Securities and
the Cash Component constitute the "Fund Deposit," which represents the minimum
initial and subsequent investment amount for a Creation Unit of any Fund. The
Cash Component is an amount equal to the difference between the net asset value
of the Shares (per Creation Unit) and the market value of the Deposit
Securities. If the Cash Component is a positive number (i.e., the net asset
value per Creation Unit exceeds the market value of the Deposit Securities), the
Cash Component shall be such positive amount. If the Cash Component is a
negative number (i.e., the net asset value per Creation Unit is less than the
market value of the Deposit Securities), the Cash Component shall be such
negative amount and the creator will be entitled to receive cash in an amount
equal to the Cash Component. The Cash Component serves the function of
compensating for any differences between the net asset value per Creation Unit
and the market value of the Deposit Securities.

The Custodian, through the National Securities Clearing Corporation ("NSCC")
(discussed below), makes available on each Business Day, immediately prior to
the opening of business on the Exchange (currently 9:30 a.m., New York time),
the list of the names and the required number of shares of each Deposit Security
to be included in the current Fund Deposit (based on information at the end of
the previous Business Day) for each Fund. Such Fund Deposit is applicable,
subject to any adjustments as described below, in order to effect creations of
Creation Units of a given Fund until such time as the next-announced composition
of the Deposit Securities is made available.

The identity and number of shares of the Deposit Securities required for a Fund
Deposit for each Fund changes as rebalancing adjustments and corporate action
events are reflected from time to time by the Adviser with a view to the
investment objective of the Fund. The composition of the Deposit Securities may
also change in response to adjustments to the weighting or composition of the
Component Stocks of the relevant Index. In addition, the Trust reserves the
right to permit or require the substitution of an amount of cash -- i.e., a
"cash in lieu" amount -- to be added to the Cash Component to replace any
Deposit Security which may not be available in sufficient quantity for delivery
or which may not be eligible for transfer through the Clearing Process
(discussed below), or which may not be eligible for trading by an Authorized
Participant (as defined below) or the investor for which it is acting. Brokerage
commissions incurred in connection with acquisition of Deposit Securities not
eligible for transfer through the systems of DTC and hence not eligible for
transfer through the Clearing Process (discussed below) will be at the expense
of the Fund and will affect the value of all Shares; but the Adviser, subject to
the approval of the Board of Trustees, may adjust the transaction fee within the
parameters described above to protect ongoing shareholders. The adjustments
described above will reflect changes, known to the Adviser on the date of
announcement to be in effect by the time of delivery of the Fund Deposit, in the
composition of the subject Index being tracked by the relevant Fund or resulting
from certain corporate actions.

In addition to the list of names and numbers of securities constituting the
current Deposit Securities of a Fund Deposit, the Custodian, through the NSCC,
also makes available on

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<PAGE> 60
each Business Day, the estimated Cash Component, effective through and including
the previous Business Day, per outstanding Share of each Fund.

PROCEDURES FOR CREATION OF CREATION UNITS

To be eligible to place orders with the Distributor to create a Creation Unit of
a Fund, an entity must be (i) a "Participating Party", i.e., a broker-dealer or
other participant in the clearing process through the Continuous Net Settlement
System of the NSCC (the "Clearing Process"), a clearing agency that is
registered with the SEC; or (ii) a DTC Participant (see "BOOK ENTRY ONLY
SYSTEM"), and, in each case, must have executed an agreement with the Trust, the
Distributor and the Transfer Agent with respect to creations and redemptions of
Creation Units ("Participant Agreement") (discussed below). A Participating
Party and DTC Participant are collectively referred to as an "Authorized
Participant". Investors should contact the Distributor for the names of
Authorized Participants that have signed a Participant Agreement. All Shares of
Funds, however created, will be entered on the records of DTC in the name of
Cede & Co. for the account of a DTC Participant.

All orders to create Funds must be placed for one or more Creation Unit size
aggregations of Shares (50,000 in the case of each Fund). All orders to create
Creation Units, whether through the Clearing Process (through a Participating
Party) or outside the Clearing Process (through a DTC Participant), must be
received by the Distributor no later than the close of the regular trading
session on the NYSE (ordinarily 4:00 p.m. New York time)("Closing Time") in each
case on the date such order is placed in order for creation of Creation Units to
be effected based on the net asset value of Shares of each Fund as next
determined on such date after receipt of the order in proper form. The date on
which an order to create Creation Units (or an order to redeem Creation Units as
discussed below) is placed is referred to as the "Transmittal Date". Orders must
be transmitted by an Authorized Participant by telephone or other transmission
method acceptable to the Distributor pursuant to procedures set forth in the
Participant Agreement, as described below (see "Placement of Creation Orders
Using Clearing Process" and "Placement of Creation Orders Outside Clearing
Process"). Severe economic or market disruptions or changes, or telephone or
other communication failure, may impede the ability to reach the Distributor or
an Authorized Participant.

Orders to create Creation Units of Funds shall be placed with an Authorized
Participant, as applicable, in the form required by such Authorized Participant.
In addition, the Authorized Participant may request the investor to make certain
representations or enter into agreements with respect to the order, e.g., to
provide for payments of cash, when required. Investors should be aware that
their particular broker may not have executed a Participant Agreement, and that,
therefore, orders to create Creation Units of Funds have to be placed by the
investor's broker through an Authorized Participant that has executed a
Participant Agreement. At any given time there may be only a limited number of
broker-dealers that have executed a Participant Agreement. Those placing orders
for Creation Units through the Clearing Process should afford sufficient time to
permit

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<PAGE> 61
proper submission of the order to the Distributor prior to the Closing Time on
the Transmittal Date.

Orders for creation that are effected outside the Clearing Process are likely to
require transmittal by the DTC Participant earlier on the Transmittal Date than
orders effected using the Clearing Process. Those persons placing orders outside
the Clearing Process should ascertain the deadlines applicable to DTC and the
Federal Reserve Bank wire system by contacting the operations department of the
broker or depository institution effectuating such transfer of Deposit
Securities and Cash Component.

PLACEMENT OF CREATION ORDERS USING CLEARING PROCESS

The Clearing Process is the process of creating or redeeming Creation Units
through the Continuous Net Settlement System of the NSCC. Fund Deposits made
through the Clearing Process must be delivered through a Participating Party
that has executed a Participant Agreement. The Participant Agreement authorizes
the Distributor to transmit through the Transfer Agent to NSCC, on behalf of the
Participating Party, such trade instructions as are necessary to effect the
Participating Party's creation order. Pursuant to such trade instructions to
NSCC, the Participating Party agrees to deliver the requisite Deposit Securities
and the Cash Component to the Trust, together with such additional information
as may be required by the Distributor. An order to create Funds in Creation
Units through the Clearing Process is deemed received by the Distributor on the
Transmittal Date if (i) such order is received by the Distributor not later than
the Closing Time on such Transmittal Date and (ii) all other procedures set
forth in the Participant Agreement are properly followed.

PLACEMENT OF CREATION ORDERS OUTSIDE CLEARING PROCESS

Fund Deposits made outside the Clearing Process must be delivered through a DTC
Participant that has executed a Participant Agreement with the Trust, the
Distributor and the Transfer Agent. A DTC Participant who wishes to place an
order creating Creation Units to be effected outside the Clearing Process need
not be a Participating Party, but such orders must state that the DTC
Participant is not using the Clearing Process and that the creation of Creation
Units will instead be effected through a transfer of securities and cash
directly through DTC. The Fund Deposit transfer must be ordered by the DTC
Participant on the Transmittal Date in a timely fashion so as to ensure the
delivery of the requisite number of Deposit Securities through DTC to the
account of the Trust by no later than 11:00 a.m., New York time, of the next
Business Day immediately following the Transmittal Date. All questions as to the
number of Deposit Securities to be delivered, and the validity, form and
eligibility (including time of receipt) for the deposit of any tendered
securities, will be determined by the Trust, whose determination shall be final
and binding. The cash equal to the Cash Component must be transferred directly
to the Custodian through the Federal Reserve wire system in a timely manner so
as to be received by the Custodian no later than 2:00 p.m., New York time, on
the next Business Day immediately following such Transmittal Date. An order to
create Creation Units of Funds outside the Clearing Process is deemed received
by the Distributor on the

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<PAGE> 62
Transmittal Date if (i) such order is received by the Distributor not later than
the Closing Time on such Transmittal Date; and (ii) all other procedures set
forth in the Participant Agreement are properly followed. However, if the
Custodian does not receive both the requisite Deposit Securities and the Cash
Component by 11:00 a.m. and 2:00 p.m., respectively, on the next Business Day
immediately following the Transmittal Date, such order will be cancelled. Upon
written notice to the Distributor, such cancelled order may be resubmitted the
following Business Day using a Fund Deposit as newly constituted to reflect the
then current net asset value of the Fund. The delivery of Creation Units of
Funds so created will occur no later than the third (3rd) Business Day following
the day on which the purchase order is deemed received by the Distributor.

Creation Units of Funds may be created in advance of receipt by the Trust of all
or a portion of the applicable Deposit Securities as described below. In these
circumstances, the initial deposit will have a value greater than the net asset
value of the Shares on the date the order is placed in proper form since in
addition to available Deposit Securities, cash must be deposited in an amount
equal to the sum of (i) the Cash Component, plus (ii) 115% of the market value
of the undelivered Deposit Securities (the "Additional Cash Deposit"). The order
shall be deemed to be received on the Business Day on which the order is placed
provided that the order is placed in proper form prior to 4:00 p.m., New York
time, on such date and federal funds in the appropriate amount are deposited
with the Trust's Custodian by 11:00 a.m., New York time, the following Business
Day. If the order is not placed in proper form by 4:00 p.m. or federal funds in
the appropriate amount are not received by 11:00 a.m. the next Business Day,
then the order may be deemed to be rejected and the investor shall be liable to
the Trust for losses, if any, resulting therefrom. An additional amount of cash
shall be required to be deposited with the Trust, pending delivery of the
missing Deposit Securities to the extent necessary to maintain the Additional
Cash Deposit with the Trust in an amount at least equal to 115% of the daily
marked to market value of the missing Deposit Securities. To the extent that
missing Deposit Securities are not received by 1:00 p.m., New York time, on the
third Business Day following the day on which the purchase order is deemed
received by the Distributor or in the event a mark to market payment is not made
within one Business Day following notification by the Distributor that such a
payment is required, the Trust may use the cash on deposit to purchase the
missing Deposit Securities. Authorized Participants will be liable to the Trust
for the costs incurred by the Trust in connection with any such purchases. These
costs will be deemed to include the amount by which the actual purchase price of
the Deposit Securities exceeds the market value of such Deposit Securities on
the day the purchase order was deemed received by the Distributor plus the
brokerage and related transaction costs associated with such purchases. The
Trust will return any unused portion of the Additional Cash Deposit once all of
the missing Deposit Securities have been properly received by the Custodian or
purchased by the Trust and deposited into the Trust. In addition, a transaction
fee of $______ will be charged in all cases. The delivery of Creation Units of
Funds so created will occur no later than the third Business Day following the
day on which the purchase order is deemed received by the Distributor.

ACCEPTANCE OF ORDERS FOR CREATION UNITS

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<PAGE> 63
The Trust reserves the absolute right to reject a creation order transmitted to
it by the Distributor in respect of any Fund if (a) the order is not in proper
form; (b) the investor(s), upon obtaining the Shares ordered, would own 80% or
more of the currently outstanding Shares of any Fund; (c) the Deposit Securities
delivered are not as disseminated through the facilities of the Exchange for
that date by the Custodian, as described above; (d) acceptance of the Deposit
Securities would have certain adverse tax consequences to the Fund; (e) the
acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful;
(f) the acceptance of the Fund Deposit would otherwise, in the discretion of the
Trust or the Adviser, have an adverse effect on the Trust or the rights of
beneficial owners; or (g) in the event that circumstances outside the control of
the Trust, the Distributor and the Adviser make it for all practical purposes
impossible to process creation orders. Examples of such circumstances include
acts of God or public service or utility problems such as fires, floods, extreme
weather conditions and power outages resulting in telephone, telecopy and
computer failures; market conditions or activities causing trading halts;
systems failures involving computer or other information systems affecting the
Trust, the Adviser, the Distributor, DTC, NSCC or any other participant in the
creation process, and similar extraordinary events. The Distributor shall notify
a prospective creator of a Creation Unit and/or the Authorized Participant
acting on behalf of the creator of a Creation Unit of its rejection of the order
of such person. The Trust, the Transfer Agent, the Custodian and the Distributor
are under no duty, however, to give notification of any defects or
irregularities in the delivery of Fund Deposits nor shall either of them incur
any liability for the failure to give any such notification.

All questions as to the number of shares of each security in the Deposit
Securities and the validity, form, eligibility and acceptance for deposit of any
securities to be delivered shall be determined by the Trust, and the Trust's
determination shall be final and binding.

CREATION TRANSACTION FEE

To compensate the Trust for transfer and other transaction costs involved in
creation transactions, investors will be required to pay a fixed creation
transaction fee of $_____ payable to the Trust. An additional charge of up to
three (3) times the fixed transaction fee (expressed as a percentage of the
value of the Deposit Securities) may be imposed for (i) creations effected
outside the Clearing Process; and (ii) cash creations (to offset the Trust's
brokerage and other transaction costs associated with using cash to purchase the
requisite Deposit Securities), for a total charge of up to $_____. Investors are
responsible for the costs of transferring the securities constituting the
Deposit Securities to the account of the Trust.

REDEMPTION

Shares may be redeemed only in Creation Units at their net asset value next
determined after receipt of a redemption request in proper form by the Fund
through the Transfer Agent and only on a Business Day. THE TRUST WILL NOT REDEEM
SHARES IN AMOUNTS LESS THAN CREATION UNITS. Beneficial Owners must accumulate

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<PAGE> 64
enough Shares in the secondary market to constitute a Creation Unit in order to
have such Shares redeemed by the Trust. There can be no assurance, however, that
there will be sufficient liquidity in the public trading market at any time to
permit assembly of a Creation Unit. Investors should expect to incur brokerage
and other costs in connection with assembling a sufficient number of Shares to
constitute a redeemable Creation Unit. As of _________, 2000, the value of the
securities comprising a deposit of designated equity securities necessary for an
in-kind purchase of a Creation Unit for each Fund was as follows: [ ].

With respect to each Fund, the Custodian, through the NSCC, makes available
immediately prior to the opening of business on the Exchange (currently 9:30 am,
New York time) on each Business Day, the Fund Securities that will be applicable
(subject to possible amendment or correction) to redemption requests received in
proper form (as defined below) on that day. Fund Securities received on
redemption may not be identical to Deposit Securities which are applicable to
creations of Creation Units.

Unless cash redemptions are available or specified for a Fund, the redemption
proceeds for a Creation Unit generally consist of Fund Securities -- as
announced by the Custodian on the Business Day of the request for redemption
received in proper form -- plus cash in an amount equal to the difference
between the net asset value of the Shares being redeemed, as next determined
after a receipt of a request in proper form, and the value of the Fund
Securities (the "Cash Redemption Amount"), less a redemption transaction fee of
$_____. In the event that the Fund Securities have a value greater than the net
asset value of the Shares, a compensating cash payment equal to the differential
is required to be made by or through an Authorized Participant by the redeeming
shareholder.

REDEMPTION TRANSACTION FEE

A redemption transaction fee of $_____ is paid to the Trust to offset transfer
and other transaction costs that may be incurred in connection with the
redemption of Creation Units. The redemption transaction fee is the same no
matter how many Creation Units are being redeemed pursuant to any one redemption
request. The Funds, subject to approval by the Board of Trustees, may adjust the
fee from time to time based upon actual experience. An additional charge for
cash redemptions or partial cash redemptions (when cash redemptions are
available) for each Fund may be imposed. Investors who use the services of a
broker or other such intermediary in addition to an Authorized Participant to
effect a redemption of a Creation Unit may be charged a fee for such services.

PLACEMENT OF REDEMPTION ORDERS USING CLEARING PROCESS

Orders to redeem Creation Units of Funds through the Clearing Process must be
delivered through a Participating Party that has executed the Participant
Agreement. An order to redeem Creation Units of Funds using the Clearing Process
is deemed received on the Transmittal Date if (i) such order is received by the
Transfer Agent not later than 4:00 p.m., New York time, on such Transmittal
Date; and (ii) all other procedures set forth in the Participant Agreement are
properly followed; such order will be effected

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<PAGE> 65
based on the net asset value of the Fund as next determined. An order to redeem
Creation Units of a Fund using the Clearing Process made in proper form but
received by the Fund after 4:00 p.m., New York time, will be deemed received on
the next Business Day immediately following the Transmittal Date and will be
effected at the net asset value next determined on such Business Day. The
requisite Fund Securities and the Cash Redemption Amount will be transferred by
the third (3rd) NSCC Business Day following the date on which such request for
redemption is deemed received.

PLACEMENT OF REDEMPTION ORDERS OUTSIDE CLEARING PROCESS

Orders to redeem Creation Units of Funds outside the Clearing Process must be
delivered through a DTC Participant that has executed the Participant Agreement.
A DTC Participant who wishes to place an order for redemption of Creation Units
of Funds to be effected outside the Clearing Process need not be a Participating
Party, but such orders must state that the DTC Participant is not using the
Clearing Process and that redemption of Creation Units will instead be effected
through transfer of Shares directly through DTC. An order to redeem Creation
Units of Funds outside the Clearing Process is deemed received by the Transfer
Agent on the Transmittal Date if (i) such order is received by the Transfer
Agent not later than 4:00 p.m., New York time, on such Transmittal Date; (ii)
such order is accompanied or proceeded by the requisite number of Shares of
Funds specified in such order, which delivery must be made through DTC to the
Custodian no later than 11:00 a.m., New York time, on the next Business Day
following such Transmittal Date (the "DTC Cut-Off-Time"); and (iii) all other
procedures set forth in the Participant Agreement are properly followed.

After the Transfer Agent has deemed an order for redemption outside the Clearing
Process received, the Transfer Agent will initiate procedures to transfer the
requisite Fund Securities which are expected to be delivered within three
Business Days and the Cash Redemption Amount to the Authorized Participant on
behalf of the redeeming Beneficial Owner by the third Business Day following the
Transmittal Date on which such redemption order is deemed received by the
Transfer Agent.

The calculation of the value of the Fund Securities and the Cash Redemption
Amount to be delivered upon redemption will be made by the Custodian according
to the procedures set forth under "DETERMINATION OF NET ASSET VALUE" computed on
the Business Day on which a redemption order is deemed received by the Transfer
Agent. Therefore, if a redemption order in proper form is submitted to the
Transfer Agent by a DTC Participant not later than the Closing Time on the
Transmittal Date, and the requisite number of Shares of the relevant Fund are
delivered to the Custodian prior to the DTC Cut-Off-Time, then the value of the
Fund Securities and the Cash Redemption Amount to be delivered will be
determined by the Custodian on such Transmittal Date. If, however, a redemption
order is submitted to the Distributor by a DTC Participant not later than the
Closing Time on the Transmittal Date but either (1) the requisite number of
Shares of the relevant Fund are not delivered by the DTC Cut-Off-Time as
described above on the next Business Day following the Transmittal Date or (2)
the redemption order is not submitted in proper form, then the redemption order
will not be deemed

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<PAGE> 66
received as of the Transmittal Date. In such case, the value of the Fund
Securities and the Cash Redemption Amount to be delivered will be computed on
the Business Day that such order is deemed received by the Transfer Agent, i.e.,
the Business Day on which the Shares of the relevant Funds are delivered through
DTC to the Custodian by the DTC Cut-Off-Time on such Business Day pursuant to a
properly submitted redemption order.

If it is not possible to effect deliveries of the Fund Securities, the Trust may
in its discretion exercise its option to redeem such Shares in cash, and the
redeeming Beneficial Owner will be required to receive its redemption proceeds
in cash. In addition, an investor may request a redemption in cash which the
Fund may, in its sole discretion, permit. In either case, the investor will
receive a cash payment equal to the net asset value of its Shares based on the
net asset value of Shares of the relevant Fund next determined after the
redemption request is received in proper form (minus a redemption transaction
fee and additional charge for requested cash redemptions specified above, to
offset the Trust's brokerage and other transaction costs associated with the
disposition of Fund Securities). The Fund may also, in its sole discretion, upon
request of a shareholder, provide such redeemer a portfolio of securities which
differs from the exact composition of the Fund Securities but does not differ in
net asset value.

Redemptions of Shares for Fund Securities will be subject to compliance with
applicable federal and state securities laws and each Fund (whether or not it
otherwise permits cash redemptions) reserves the right to redeem Creation Units
for cash to the extent that the Fund could not lawfully deliver specific Fund
Securities upon redemptions or could not do so without first registering the
Fund Securities under such laws. An Authorized Participant or an investor for
which it is acting subject to a legal restriction with respect to a particular
stock included in the Fund Securities applicable to the redemption of a Creation
Unit may be paid an equivalent amount of cash. The Authorized Participant may
request the redeeming Beneficial Owner of the Shares to complete an order form
or to enter into agreements with respect to such matters as compensating cash
payment, beneficial ownership of Shares or delivery instructions.

The right of redemption may be suspended or the date of payment postponed with
respect to any Fund (1) for any period during which the NYSE is closed (other
than customary weekend and holiday closings); (2) for any period during which
trading on the NYSE is suspended or restricted; (3) for any period during which
an emergency exists as a result of which disposal of the Shares of the Fund or
determination of the Shares' net asset value is not reasonably practicable; or
(4) in such other circumstance as is permitted by the SEC.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "DETERMINATION OF NET ASSET VALUE."

Net asset value per Share for each Fund of the Trust is computed by dividing the
value of the net assets of such Fund (i.e., the value of its total assets less
total liabilities) by the

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<PAGE> 67
total number of Shares outstanding, rounded to the nearest cent. Expenses and
fees, including the management, administration and distribution fees, are
accrued daily and taken into account for purposes of determining net asset
value. The net asset value of each is calculated by the Custodian and determined
at the close of the regular trading session on the NYSE (ordinarily 4:00 p.m.
New York time) on each day that such exchange is open.

In computing a Fund's net asset value per Share, the Fund's securities holdings
are valued based on their last quoted current price. Price information on listed
securities is taken from the exchange where the security is primarily traded.
Securities regularly traded in an over-the-counter market are valued at the
latest quoted bid price in such market. Other portfolio securities and assets
for which market quotations are not readily available are valued based on fair
value as determined in good faith by the Adviser in accordance with procedures
adopted by the Board.

DIVIDENDS AND DISTRIBUTIONS

The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "DISTRIBUTIONS."

GENERAL POLICIES

Dividends from net investment income, if any, are declared and paid quarterly by
each Fund. Distributions of net realized securities gains, if any, generally are
declared and paid once a year, but the Trust may make distributions on a more
frequent basis for certain Funds to improve index tracking or to comply with the
distribution requirements of the Internal Revenue Code, in all events in a
manner consistent with the provisions of the 1940 Act.

Dividends and other distributions on Shares are distributed, as described below,
on a pro rata basis to Beneficial Owners of such Shares. Dividend payments are
made through DTC Participants and Indirect Participants to Beneficial Owners
then of record with proceeds received from the Trust.

The Trust makes additional distributions to the extent necessary (i) to
distribute the entire annual taxable income of the Trust, plus any net capital
gains and (ii) to avoid imposition of the excise tax imposed by Section 4982 of
the Internal Revenue Code. Management of the Trust reserves the right to declare
special dividends if, in its reasonable discretion, such action is necessary or
advisable to preserve the status of each Fund as a regulated investment company
("RIC") or to avoid imposition of income or excise taxes on undistributed
income.

DIVIDEND REINVESTMENT SERVICE

Broker-dealers may make available the DTC book-entry Dividend Reinvestment
Service for use by Beneficial Owners of Funds through DTC Participants for
reinvestment of their dividend distributions. If this service is available and
used, dividend distributions of

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<PAGE> 68
both income and realized gains will be automatically reinvested in additional
whole Shares purchased in the secondary market of the same Fund.

TAXES

The following information also supplements and should be read in conjunction
with the section in the Prospectus entitled "TAX MATTERS."

Each Fund intends to qualify for and to elect treatment as a separate RIC under
Subchapter M of the Internal Revenue Code. To qualify for treatment as a RIC, a
company must annually distribute at least 90% of its net investment company
taxable income (which includes dividends, interest and net short-term capital
gains) and meet several other requirements.

Each Fund is treated as a separate corporation for federal income tax purposes.
Each Fund therefore is considered to be a separate entity in determining its
treatment under the rules for RICs described herein and in the Prospectus.
Losses in one Fund do not offset gains in another and the requirements (other
than certain organizational requirements) for qualifying RIC status are
determined at the Fund level rather than at the Trust level.

A Fund will be subject to a 4% excise tax on certain undistributed income if it
does not distribute to its shareholders in each calendar year at least 98% of
its ordinary income for the calendar year plus 98% of its capital gain net
income for the twelve months ended September 30 of such year. Each Fund intends
to declare and distribute dividends and distributions in the amounts and at the
times necessary to avoid the application of this 4% excise tax.

As a result of tax requirements, the Trust on behalf of each Fund has the right
to reject an order to purchase Shares if the purchaser (or group of purchasers)
would, upon obtaining the Shares so ordered, own 80% or more of the outstanding
Shares of a given Fund and if, pursuant to section 351 of the Internal Revenue
Code, the respective Fund would have a basis in the Deposit Securities different
from the market value of such securities on the date of deposit. The Trust also
has the right to require information necessary to determine beneficial share
ownership for purposes of the 80% determination. See "CREATION AND REDEMPTION OF
CREATION UNITS."

Dividends and interest received by a Fund may give rise to withholding and other
taxes imposed by foreign countries. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes.

Each Fund will report to shareholders annually the amounts of dividends received
from ordinary income, the amount of distributions received from capital gains
and the portion of dividends which may qualify for the dividends received
deduction.

A loss realized on a sale or exchange of Shares of a Fund may be disallowed if
other Fund Shares are acquired (whether through the automatic reinvestment of
dividends or

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<PAGE> 69
otherwise) within a sixty-one (61) day period beginning thirty (30) days before
and ending thirty (30) days after the date that the Shares are disposed of. In
such a case, the basis of the Shares acquired will be adjusted to reflect the
disallowed loss. Any loss upon the sale or exchange of Shares held for six (6)
months or less will be treated as long-term capital loss to the extent of any
capital gain dividends received by the shareholders.

Distribution of ordinary income and capital gains may also be subject to state
and local taxes.

Distributions reinvested in additional Shares of a Fund through the means of the
service (see "DIVIDEND REINVESTMENT SERVICE") will nevertheless be taxable
dividends to Beneficial Owners acquiring such additional Shares to the same
extent as if such dividends had been received in cash.

Distributions of ordinary income paid to shareholders who are nonresident aliens
or foreign entities will be subject to a 30% United States withholding tax
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law. Nonresident shareholders are urged to consult their
own tax advisors concerning the applicability of the United States withholding
tax.

Some shareholders may be subject to a 31% withholding tax on distributions of
ordinary income, capital gains and any cash received on redemption of Creation
Units ("backup withholding"). Generally, shareholders subject to backup
withholding will be those for whom no certified taxpayer identification number
is on file with the Fund or who, to the Fund's knowledge, have furnished an
incorrect number. When establishing an account, an investor must certify under
penalty of perjury that such number is correct and that such investor is not
otherwise subject to backup withholding.

The foregoing discussion is a summary only and is not intended as a substitute
for careful tax planning. Purchasers of Shares of the Trust should consult their
own tax advisors as to the tax consequences of investing in such shares,
including under state, local and other tax laws. Finally, the foregoing
discussion is based on applicable provisions of the Internal Revenue Code,
regulations, judicial authority and administrative interpretations in effect on
the date hereof. Changes in applicable authority could materially affect the
conclusions discussed above, and such changes often occur.

FEDERAL TAX TREATMENT OF FUTURES AND OPTIONS CONTRACTS

Each Fund is required for federal income tax purposes to mark to market and
recognize as income for each taxable year its net unrealized gains and losses on
certain futures contracts as of the end of the year as well as those actually
realized during the year. Gain or loss from futures and options contracts on
broad-based indexes required to be marked to market will be 60% long-term and
40% short-term capital gain or loss. Application of this rule may alter the
timing and character of distributions to shareholders. A Fund may be required to
defer the recognition of losses on futures contracts, option contracts and swaps
to the extent of any unrecognized gains on offsetting positions held by the
Fund.

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<PAGE> 70
In order for a Fund to continue to qualify for federal income tax treatment as a
regulated investment company, at least 90% of its gross income for a taxable
year must be derived from qualifying income, i.e., dividends, interest, income
derived from loans of securities, gains from the sale of securities or of
foreign currencies or other income derived with respect to the Fund's business
of investing in securities. It is anticipated that any net gain realized from
the closing out of futures or options contracts will be considered gain from the
sale of securities and therefore will be qualifying income for purposes of the
90% requirement.

Each Fund distributes to shareholders annually any net capital gains which have
been recognized for federal income tax purposes (including unrealized gains at
the end of the Fund's fiscal year) on futures or options transactions. Such
distributions are combined with distributions of capital gains realized on the
Fund's other investments and shareholders are advised on the nature of the
distributions.

CAPITAL STOCK AND SHAREHOLDER REPORTS

The Trust currently is comprised of eight Funds. Each Fund issues shares of
beneficial interest, par value $.001 per Share. The Board of Trustees may
designate additional Funds.

Each Share issued by the Trust has a pro rata interest in the assets of the
corresponding Fund. Shares have no preemptive, exchange, subscription or
conversion rights and are freely transferable. Each Share is entitled to
participate equally in dividends and distributions declared by the Board with
respect to the relevant Fund, and in the net distributable assets of such Fund
on liquidation.

Each Share has one vote with respect to matters upon which a shareholder vote is
required consistent with the requirements of the 1940 Act and the rules
promulgated thereunder. Shares of all Funds vote together as a single class
except that if the matter being voted on affects only a particular Fund it will
be voted on only by that Fund and if a matter affects a particular Fund
differently from other Funds, that Fund will vote separately on such matter.
Under Massachusetts law, the Trust is not required to hold an annual meeting of
shareholders unless required to do so under the 1940 Act. The policy of the
Trust is not to hold an annual meeting of shareholders unless required to do so
under the 1940 Act. All Shares of the Trust (regardless of the Fund) have
noncumulative voting rights for the election of Trustees. Under Massachusetts
law, Trustees of the Trust may be removed by vote of the shareholders.

Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for obligations of the
Trust. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Trust, requires that Trust
obligations include such disclaimer, and provides for indemnification and
reimbursement of expenses out of the Trust's property for any shareholder held
personally liable for the obligations of the Trust. Thus, the risk

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of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of each Fund's assets and operations, the risk to shareholders of
personal liability is believed to be remote.

Shareholder inquiries may be made by writing to the Trust, c/o the Distributor,
ALPS Mutual Funds Services, Inc., at 370 17th Street, Suite 3100, Denver, CO
80202.

PERFORMANCE AND OTHER INFORMATION

The performance of a Fund may be quoted in advertisements, sales literature or
reports to shareholders in terms of average annual total return, cumulative
total return and yield.

Quotations of average annual total return are expressed in terms of the average
annual rate of return of a hypothetical investment in a Fund over periods of 1,
5 and 10 years (or the life of a Fund, if shorter). Such total return figures
will reflect the deduction of a proportional share of such Fund's expenses on an
annual basis, and will assume that all dividends and distributions are
reinvested when paid.

Total return is calculated according to the following formula: P(1 + T)(n) = ERV
(where P = a hypothetical initial payment of $_____, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $_____ payment made at the beginning of the 1, 5 or 10 year
period).

Quotations of a cumulative total return will be calculated for any specified
period by assuming a hypothetical investment in a Fund on the date of the
commencement of the period and will assume that all dividends and distributions
are reinvested on ex date. The net increase or decrease in the value of the
investment over the period will be divided by its beginning value to arrive at
cumulative total return. Total return calculated in this manner will differ from
the calculation of average annual total return in that it is not expressed in
terms of an average rate of return.

The yield of a Fund is the net annualized yield based on a specified 30-day (or
one month) period assuming a semiannual compounding of income. Included in net
investment income is the amortization of market premium or accretion of market
and original issue discount on bonds. Yield is calculated by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula: YIELD = (a-b) divided by 2[(cd + 1)(6)-1] (where a = dividends and
interest earned during the period, b = expenses accrued for the period (net of
reimbursements), c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and d = the maximum offering
price per share on the last day of the period).

Quotations of cumulative total return, average annual total return or yield
reflect only the performance of a hypothetical investment in a Fund during the
particular time period on which the calculations are based. Such quotations for
a Fund will vary based on changes

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in market conditions and the level of such Fund's expenses, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.

The cumulative and average total returns and yields do not take into account
federal or state income taxes which may be payable by shareholders; total
returns and yields would, of course, be lower if such charges were taken into
account.

A comparison of the quoted non-standard performance offered for various
investments is valid only if performance is calculated in the same manner. Since
there are different methods for calculating performance, investors should
consider the effects of the methods used to calculate performance when comparing
performance of the Funds with performance quoted with respect to other
investment companies or types of investments.

From time to time, in advertising and marketing literature, the Funds'
performance may be compared to the performance of broad groups of open-end and
closed-end investment companies with similar investment goals, as tracked by
independent organizations such as Investment Company Data, Inc., Lipper
Analytical Services, Inc., CDA Investment Technologies, Inc., Morningstar, Inc.,
Value Line Mutual Fund Survey and other independent organizations. When these
organizations' tracking results are used, the Funds will be compared to the
appropriate fund category, that is, by fund objective and portfolio holdings, or
to the appropriate volatility grouping, where volatility is a measure of a
fund's risk.

Information may be provided to investors regarding capital gains distributions
by one or more Funds. Comparisons between the Funds and other investment
vehicles such as conventional mutual funds may be made regarding such capital
gains distributions, as well as relative tax efficiencies between the Funds and
such other investment vehicles (e.g., realization of capital gains or losses to
a Fund and to such other investment vehicles in connection with redemption of
their respective securities).

Investors may be informed that, while no unequivocal statement can be made as to
the net tax impact on a mutual fund resulting from the purchases and sales of
its portfolio stocks over a period of time, conventional mutual funds that have
accumulated substantial unrealized capital gains, if they experience net
redemptions and do not have sufficient available cash, may be required to sell
appreciated securities and make taxable capital gains distributions that are
generated by changes in such fund's portfolio. In contrast to conventional
mutual funds where redemption transactions that effect an adverse tax impact on
taxable shareholders because of the need to sell portfolio securities which, in
turn, may generate taxable gain, the in-kind redemption mechanism of the Funds
generally will not lead to a tax event for ongoing shareholders. Since
shareholders are generally required to pay tax on capital gains distributions,
the smaller the amount of such distributions, the less taxes that are payable
currently. To the extent that a Fund is not required to recognize capital gains,
a shareholder of such Fund is able, in effect, to defer tax on such gains until
he sells or otherwise disposes of his shares. If such holder

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retains his shares until his death, under current law the tax basis of such
shares would be adjusted to their then fair market value.

In addition, in connection with the communication of the performance of the
Funds to current or prospective shareholders, the Trust also may compare those
figures to the performance of certain unmanaged indexes which may assume the
reinvestment of dividends or interest but generally do not reflect deductions
for administrative and management costs. Examples of such indexes include, but
are not limited to the following: Dow Jones Industrial Average; Consumer Price
Index; Standard & Poor's 500 Composite Stock Price Index (S&P 500); Russell 1000
& NASDAQ non-financial 100 and their subsidiary sector indexes.

Performance of an index is historical and does not represent performance of the
Trust, and is not a guarantee of future results.

In addition, information may be presented to current or prospective shareholders
regarding the purchase of Funds in the secondary market, such as margin
requirements, types of orders that may be entered and information concerning
short sales.

Evaluation of each Fund's performance or other relevant statistical information
made by independent sources may also be used in advertisements and sales
literature concerning the Trust, including reprints of, or selections from,
editorials or articles about the Trust. Sources for Trust performance
information and articles about the Trust include, but are not limited to, the
following: American Association of Individual Investors' Journal, a monthly
publication of the AAII that includes articles on investment analysis
techniques; Barron's, a Dow Jones and Company, Inc. business and financial
weekly that periodically reviews investment company performance data; Business
Week, a national business weekly that periodically reports the performance
rankings of investment companies; CDA Investment Technologies, an organization
that provides performance and ranking information through examining the dollar
results of hypothetical mutual fund investments and comparing these results
against appropriate indexes; Forbes, a national business publication that from
time to time reports the performance of specific investment companies; Fortune,
a national business publication that periodically rates the performance of a
variety of investment companies; The Frank Russell Company, a West-Coast
investment management firm that periodically evaluates international stock
markets and compares foreign equity market performance to U.S. stock market
performance; Ibbotson Associates, Inc., a company specializing in investment
research and data; Investment Company Data, Inc., an independent organization
that provides performance ranking information for broad classes of mutual funds;
Investor's Business Daily, a daily newspaper that features financial, economic,
and business news; Kiplinger's Personal Finance Magazine, a monthly investment
advisory publication that periodically features the performance of a variety of
securities; Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis,
a weekly publication of industry-wide mutual fund averages by type of fund;
Money, a monthly magazine that from time to time features both specific funds
and the mutual fund industry as a whole; The New York Times, a nationally
distributed newspaper that regularly covers financial news;

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Smart Money, a national personal finance magazine published monthly by Dow Jones
& Company, Inc. and The Hearst Corporation that focuses on ideas for investing,
spending and saving; Value Line Mutual Fund Survey, an independent publication
that provides biweekly performance and other information on mutual funds; The
Wall Street Journal, a Dow Jones and Company, Inc. newspaper that regularly
covers financial news; Wiesenberger Investment Companies Services, an annual
compendium of information about mutual funds and other investment companies,
including comparative data on funds' backgrounds, management policies, salient
features, management results, income and dividend records and price ranges;
Worth, a national publication distributed ten times per year by Capital
Publishing Company that focuses on personal finance.

COUNSEL AND INDEPENDENT AUDITORS

[ ] serves as counsel to the Trust. [ ] serves
as the independent auditors of the Trust.

FINANCIAL STATEMENTS

The Reports of Independent Accountants, financial highlights, and financial
statements in respect of the ... are incorporated by reference into this
Statement of Additional Information.

<PAGE> 75
PART C
OTHER INFORMATION

ITEM 23. Exhibits

(a) Declaration of Trust was filed on June 28, 1998 and incorporated
herein by reference.

(b) Bylaws of the Trust.*

(d) Investment Management Agreement between the Trust and State Street
Bank and Trust Company.*

(e) Distribution Agreement between the Trust and ALPS Mutual Fund
Services, Inc.*

(f) Not applicable

(g) Custodian and Accounting Services Agreement*

(h) (i) Lending Agreement*

(ii) Administration Agreement.*

(iii) Transfer Agency Services Agreement.*

(iv) License Agreements*

(v) Form of Participant Agreement*

(vi) Form of Sales and Investor Services Agreement.*

(i) Opinion and Consent of Mayer Brown & Platt*

(j) Consent of ________________.*

(k) Not applicable.

(l) Subscription Agreement(s) between the Trust and ALPS Mutual Funds
Services, Inc.*

(m) Form of 12b-1 Plan.*

(n) Not Applicable.*

(p) Code of Ethics.*

* To be filed by Amendment.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Immediately prior to the contemplated public offering of the Trust Shares, the
following persons may be deemed individually to control the Fund of the Trust:

[To be completed by amendment]

ITEM 25. INDEMNIFICATION

[To be completed by amendment.]
<PAGE> 76
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

See "Management" in the STATEMENT OF ADDITIONAL INFORMATION as to the directors
and officers of the Adviser is included in its Form ADV filed with the SEC and
is incorporated herein by reference thereto.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) ALPS Mutual Funds Services, Inc. is the Trust's principal underwriter. ALPS
also acts as a principal underwriter, depositor, or investment adviser for the
following other investment companies:

(b) The following is a list of the executive officers, directors and partners of
ALPS Mutual Funds Services, Inc.:

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules thereunder will be maintained at the offices
of State Street Bank and Trust Company, 2 Avenue de Lafayette, LLC 4, Boston,
Massachusetts 02111.

ITEM 29. MANAGEMENT SERVICES

Not applicable.

ITEM 30. UNDERTAKINGS

The Trust hereby undertakes that it will file an amendment to the registration
statement with certified financial statements showing the initial capital
received before accepting subscriptions from any persons in excess of 25 if the
Trust proposes to raise its initial capital pursuant to Section 14(a)(3) of the
1940 Act (15 U.S.C. 80a-14(a)(3)).
<PAGE> 77
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this amendment to the registration statement to be signed on its behalf
by the undersigned, duly authorized, in the City of Boston and the Commonwealth
of Massachusetts, on the 12th day of April, 2000.

INDEX EXCHANGE LISTED SECURITIES TRUST

By: * /s/ Kathleen C. Cuocolo
-------------------------
Kathleen C. Cuocolo *
President

* By: /s/ Michael E. Gillespie
------------------------
Michael E. Gillespie
As Attorney-in-Fact

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below by the
following person in the capacities and on the date indicated:

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Edmund J. Burke Treasurer and Sole Trustee April 12, 2000
- -------------------
Edmund J. Burke
</TABLE>

<PAGE> 78

EXHIBIT INDEX

Power of Attorney

<PAGE> 1

POWER OF ATTORNEY

I, the undersigned President, of Index Exchange Listed Securities Trust
(the "Trust"), a Massachusetts business trust, do hereby constitute and appoint
Michael E. Gillespie and Stephanie M. Nichols to be my true, sufficient and
lawful attorney, with full power to sign for me, in my name and capacity as
President, the Registration Statement of the Trust on Form N-1A, and any and all
amendments thereto to be filed by the Trust under the Investment Company Act of
1940, as amended, and under the Securities Act of 1933, as amended, with respect
to the offering of its shares of beneficial interest, and any and all other
documents and papers relating thereto; and said attorney shall have full power
of substitution; and such attorney shall have full power to do all such things
in my name and on behalf of me in the capacities indicated to enable the Trust
to comply with the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended, and thereunder, hereby ratifying and
confirming my signature as it may be signed by said attorney to any and all
amendments to such Registration Statement.

IN WITNESS WHEREOF, I have hereunder set my hand on this 11th day of
April 2000.

/s/ Kathleen C. Cuocolo
-----------------------
Kathleen C. Cuocolo