CDC MPT FUNDS, N-1A/A, 1999-05-06

CDC MPT FUNDS
N-1A/A, 1999-05-06

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<PAGE>

As filed with the U.S. Securities and Exchange Commission
on May 6, 1999

Securities Act File No. 333-66279
Investment Company Act File No. 811-09083

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]

Pre-Effective Amendment No. 2 [x]

Post-Effective Amendment No. [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [x]

Amendment No. 2 [x]
(Check appropriate box or boxes)

CDC MPT+ FUNDS
.......................................
(Exact Name of Registrant as Specified in Charter)
9 West 57th Street, 35th Floor
New York, New York 10019
........................................................
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 891-0667

Bluford H. Putnam
President and Chief Investment Officer
9 West 57th Street, 35th Floor
New York, New York 10019
......................................
(Name and Address of Agent for Service)

Copy to:

Daniel Schloendorn, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099

<PAGE>

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

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, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.

<PAGE>

CDC MPT+ FUNDS

FORM N-1A

CROSS REFERENCE SHEET

Part A
Item No. Prospectus Heading
- -------- ------------------
<S> <C>
1. Front and Back Cover Page........................ Front Cover Page; Back
Cover Page

2. Risk/Return Summary:
Investments, Risks,
and Performance................................ Risk/Return Summary -- "Investment Goals and
Principal Strategies" and "A Word About Risk"

3. Risk/Return Summary:
Fee Table...................................... Risk/Return Summary -- "Investor Expenses"

4. Investment Objectives,
Principal Investment Strategies,
and Related Risks.............................. Risk/Return Summary; U.S. Core Equity Fund;
Aggressive Equity Fund; Global Independence
Fund; Common Investment Strategies For:
Aggressive Equity Fund and Global Independence
Fund; More About Risk

5. Management's Discussion of
Fund Performance............................... Not Applicable

6. Management, Organization, and
Capital Structure................................ Management; Fund Details -- "Multi-Class
Structure"

7. Shareholder Information.......................... Account Policies; Shareholder Services;
Distribution Policies and Taxes; Fund Details

8. Distribution Arrangements........................ Fund Details

<PAGE>

9. Financial Highlights Information................. Not Applicable

Part B
Item No.
- --------

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

11. Fund History..................................... Organization of the Funds

12. Description of the Fund and its
Investments and Risks.......................... Organization of the Funds; Investment
Objectives and Policies; See Prospectus --
"Risk/Return Summary;" U.S. Core Equity Fund;
Aggressive Equity Fund; Global Independence
Fund; "Common Investment Strategies For:
Aggressive Equity Fund and Global Independence
Fund," and "More About Risk"

13. Management of the Fund........................... Management of the Funds

14. Control Persons and Principal
Holders of Securities.......................... Management of the Funds -- "Control Persons and
Principal Stockholders"

15. Investment Advisory and
Other Services................................. Management of the Funds; See Prospectus -
"Management"

16. Brokerage Allocation
and Other Practices............................ Investment Objectives and Policies --
"Portfolio Transactions"

17. Capital Stock and Other
Securities..................................... Organization of the Funds; Management of the
Funds -- "Capital Stock"

<PAGE>

18. Purchase, Redemption and Pricing
of Shares...................................... Investment Objectives and Policies --
"Portfolio Valuation"; Additional Purchase and
Redemption Information; Exchange Privilege; See
Prospectus -- "Account Policies" and
"Shareholder Services"

19. Taxation of the Fund............................. Additional Information Concerning Taxes

20. Underwriters..................................... Management of the Funds; See Prospectus - "Fund
Details"

21. Calculation of Performance Data.................. Determination of Performance

22. Financial Statements............................. Financial Statements; Report of Deloitte &
Touche LLP
</TABLE>

Part C
- ------
Information required to be included in Part C is set forth after the appropriate
item, so numbered, in Part C to this Registration Statement.

<PAGE>

The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any State where the offer or sale is not permitted.

Subject to Completion, Dated May 6, 1999

PROSPECTUS

JUNE __, 1999

CDC MPT+ FUNDS

U.S. CORE EQUITY FUND

AGGRESSIVE EQUITY FUND

GLOBAL INDEPENDENCE FUND

The Securities and Exchange Commission has not approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.

<PAGE>

CONTENTS

<TABLE>
<S> <C>
RISK/RETURN SUMMARY................................................... 1

U.S. CORE EQUITY FUND................................................. 10

AGGRESSIVE EQUITY FUND................................................ 13

GLOBAL INDEPENDENCE FUND.............................................. 15

COMMON INVESTMENT STRATEGIES FOR: AGGRESSIVE EQUITY FUND
AND GLOBAL INDEPENDENCE FUND........................................ 17

MORE ABOUT RISK....................................................... 19

CERTAIN INVESTMENT PRACTICES.......................................... 22

MANAGEMENT............................................................ 24

ACCOUNT POLICIES...................................................... 30

SHAREHOLDER SERVICES.................................................. 32

DISTRIBUTION POLICIES AND TAXES....................................... 33

FUND DETAILS.......................................................... 35

ADDITIONAL INFORMATION................................................ 36
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

GENERAL

CDC MPT+ Funds is a newly organized no-load mutual fund complex with three
separate investment portfolios (each, a "fund"): the U.S. Core Equity Fund, the
Aggressive Equity Fund and the Global Independence Fund.

MULTI-CLASS STRUCTURE

Each of the funds offers two no-load classes of shares: Investor shares and
Institutional shares. Investor shares bear a shareholding service and
distribution fee of 0.25% of the shares' net asset value. Institutional shares
do not bear this fee. Whether an investor is eligible to purchase Investor
shares or Institutional shares generally depends on the amount invested in a
particular fund.

INVESTOR PROFILE

These funds are designed for investors who:

- - are investing for long-term goals that may include college or retirement,
with a time horizon of several years

- - are willing to assume the risk of losing money in exchange for attractive
potential long-term returns

- - are investing for total return greater than that of the S&P 500 Index, or,
in the case of the Global Independence Fund, are investing for total
return, on a risk adjusted basis, consistent with the preservation of
capital

They may NOT be appropriate if you:

- - are investing for a shorter time horizon, especially one of less than
several years

- - are uncomfortable with an investment that will fluctuate in value

- - are primarily looking for income or tax-free income

You should base your selection of a fund on your own goals, risk preferences and
time horizon.

INVESTMENT GOALS AND PRINCIPAL STRATEGIES

The U.S. Core Equity Fund is a diversified portfolio that seeks a total return
greater than that of the S&P 500 Index by investing primarily in common stocks
of U.S. issuers. The Aggressive Equity Fund is a non-diversified portfolio that
seeks a total return greater than that of the S&P 500 Index by investing
primarily in equity and equity-related securities and certain derivative
instruments, including U.S. dollar and non-U.S. dollar denominated fixed income
derivative instruments and currencies. The Global Independence Fund is a non-
diversified portfolio that seeks a total return, on a risk adjusted basis,
consistent with the preservation of capital by investing primarily in global
equity, global fixed income and currency markets. Each fund employs its own
strategy and has its own risk/reward profile. Because you can lose money by
investing in these funds, be sure to read all risk disclosures carefully before
investing.

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<PAGE>

<TABLE>
<CAPTION>
FUND/RISK FACTORS INVESTMENT GOAL PRINCIPAL STRATEGIES
- ----------------- --------------- --------------------
<S> <C> <C>
U.S. CORE EQUITY FUND Total return greater - Invests primarily in equity
than that of the S&P securities of U.S. companies
EQUITY RISK 500 Index - Looks for companies with
MARKET RISK attractive characteristics such
LEVERAGE RISK as increasing operating
EXPOSURE RISK profits, low relative valuation,
appropriate capital structures,
disciplined investment policies
and senior management incentive
compensation plans that align
management and shareholder
interests
- Implements both a fundamental and
quantitative approach to construct
a portfolio of securities that
creates shareholder value
</TABLE>

-2-

<PAGE>

<TABLE>
<CAPTION>
FUND/RISK FACTORS INVESTMENT GOAL PRINCIPAL STRATEGIES
- ----------------- --------------- --------------------
<S> <C> <C>
- - AGGRESSIVE EQUITY FUND Total return greater - Invests primarily in equity and
than that of the S&P equity-related investments, including
EQUITY RISK 500 Index common stocks, options on securities and
EXPOSURE RISK securities indices, convertible
FUTURES RISK securities, rights and warrants, equity
LEVERAGE RISK swaps, and S&P 500 index futures and
RISKS OF DERIVATIVE options thereon
INSTRUMENTS - To enhance return incrementally and
manage risk, invests in equity index and
MARKET RISK bond futures contracts and options thereon,
FOREIGN SECURITIES RISK currency spot and forward contracts,
INTEREST RATE RISK currency and interest rate futures contracts
NON-DIVERSIFICATION and options thereon, and equity and interest
RISK rate swap contracts
- Obtains exposure to the global equity,
global fixed income and currency
markets through the use of currency
forward contracts, options on
securities and securities indices,
futures contracts and options thereon,
swaps and other derivative instruments
- Uses unencumbered cash to invest in
money market instruments and short-term
obligations of high quality
- Seeks to replicate the S&P 500
Index and add incremental
return by combining the use of
quantitative tools and risk
management techniques to construct
a portfolio of securities and
derivative instruments that the
Adviser believes will take
advantage of future market shifts
or shifts in market fundamentals,
behavior or patterns while reducing
volatility and mitigating risk

</TABLE>

-3-

<PAGE>

<TABLE>
<CAPTION>
FUND/RISK FACTORS INVESTMENT GOAL PRINCIPAL STRATEGIES
- ----------------- --------------- --------------------
<S> <C> <C>
- - GLOBAL INDEPENDENCE Total return, on a - Invests primarily in global equity
FUND risk adjusted basis, indices, global fixed income and
consistent with the currency markets
EXPOSURE RISK preservation of - To enhance return incrementally and
FUTURES RISK capital manage risk, invests in common
LEVERAGE RISK stocks, corporate bonds, debentures
RISKS OF DERIVATIVE and notes, convertible securities,
INSTRUMENTS non-convertible debt instruments and
FOREIGN SECURITIES RISK preferred stocks, government, bank
INTEREST RATE RISK and commercial obligations, rights
MARKET RISK and warrants, depositary receipts,
NON-DIVERSIFICATION currency spot and forward contracts,
RISK options on securities and securities
indices, equity and interest rate
swap contracts; equity index and bond
futures and options thereon, and
currency and interest rate futures
contracts and options thereon
- Uses unencumbered cash to invest in
money market instruments and
short-term obligations of high
quality
- Combines the use of quantitative
tools and risk management techniques
to construct a portfolio of
derivative instruments that the
Adviser believes will take advantage
of future market shifts or shifts in
market fundamentals, behavior or
patterns while reducing volatility
and mitigating risk
</TABLE>

A WORD ABOUT RISK

INVESTMENT IN THE FUNDS INVOLVES SPECIAL RISKS, SOME NOT TYPICALLY ASSOCIATED
WITH MUTUAL FUNDS. INVESTORS SHOULD CAREFULLY REVIEW AND EVALUATE THESE RISKS
WHEN CONSIDERING AN INVESTMENT IN THE FUNDS. NONE OF THE FUNDS CONSTITUTES A
BALANCED INVESTMENT PLAN.

All investments involve some level of risk. Simply defined, risk is the
possibility that you will lose money and not make money.

The principal risks of investing in the funds are noted above and discussed more
fully in "More About Risk". Before you invest, please make sure you understand
the risks that apply to your fund. As with any mutual fund,

-4-

<PAGE>

there is no guarantee that you will make money over any period of time and you
could lose money by investing in a fund.

Investments in the funds are not bank deposits. They are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

-5-

<PAGE>

INVESTOR EXPENSES

The following tables describe the fees and expenses you may pay if you buy and
hold shares of a fund. Please note that the expenses of each fund include the
basic, maximum and minimum management fees payable to the Adviser.

FEES AND EXPENSES OF THE INVESTOR SHARES

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
GLOBAL
U.S. CORE EQUITY FUND AGGRESSIVE EQUITY FUND INDEPENDENCE FUND
- ------------------------------------------------------------------------------------------------------------------------------
BASIC MAXIMUM MINIMUM BASIC MAXIMUM MINIMUM BASIC MAXIMUM MINIMUM
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER FEES
(paid directly from your
investment)
- ------------------------------------------------------------------------------------------------------------------------------
Sales charge "load" on
purchases None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Deferred sales charge
"load" None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Sales charge "load" on
reinvested distributions None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees (short-term
trading fees)(1) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING
EXPENSES (deducted from fund
assets)
- ------------------------------------------------------------------------------------------------------------------------------
Management fees(2) 1.00% 2.00% 0% 1.50% 3.00% 0% 1.75% 2.00% 1.50%
- ------------------------------------------------------------------------------------------------------------------------------
Distribution and
service (12b-1) fees 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------
Other expenses(3) 1.37% 1.37% 1.37% 1.36% 1.36% 1.36% 1.36% 1.36% 1.36%
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES 2.62% 3.62% 1.62% 3.11% 4.61% 1.61% 3.36% 3.61% 3.11%
- ------------------------------------------------------------------------------------------------------------------------------
Fee waivers and/or expense 1.02% 1.02% 1.02% 1.01% 1.01% 1.01% 1.01% 1.01% 1.01%
reimbursements(4)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING 1.60% 2.60% 0.60% 2.10% 3.60% 0.60% 2.35% 2.60% 2.10%
EXPENSES (AFTER FEE WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SEE NOTES ON THE FOLLOWING PAGES.

-6-

<PAGE>

FEES AND EXPENSES OF THE INSTITUTIONAL SHARES

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
GLOBAL
U.S. CORE EQUITY FUND AGGRESSIVE EQUITY FUND INDEPENDENCE FUND
- ------------------------------------------------------------------------------------------------------------------------------
BASIC MAXIMUM MINIMUM BASIC MAXIMUM MINIMUM BASIC MAXIMUM MINIMUM
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER FEES
(paid directly from your
investment)
- ------------------------------------------------------------------------------------------------------------------------------
Sales charge "load" on
purchases None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Deferred sales charge
"load" None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Sales charge "load" on
reinvested distributions None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Redemption fees 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
(short-term trading fees)(1)
- ------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING
EXPENSES (deducted from
fund assets)
- ------------------------------------------------------------------------------------------------------------------------------
Management fees(2) 1.00% 2.00% 0% 1.50% 3.00% 0% 1.75% 2.00% 1.50%
- ------------------------------------------------------------------------------------------------------------------------------
Distribution and
service (12b-1) fees None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------
Other expenses(3) 1.37% 1.37% 1.37% 1.36% 1.36% 1.36% 1.36% 1.36% 1.36%
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND 2.37% 3.37% 1.37% 2.86% 4.36% 1.36% 3.11% 3.36% 2.86%
OPERATING EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Fee waivers and/or expense 1.02% 1.02% 1.02% 1.01% 1.01% 1.01% 1.01% 1.01% 1.01%
reimbursements(4)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND 1.35% 2.35% 0.35% 1.85% 3.35% 0.35% 2.10% 2.35% 1.85%
OPERATING EXPENSES (AFTER
FEE WAIVERS AND/OR EXPENSE
REIMBURSEMENTS)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Each fund will deduct a short-term trading fee equal to 1.00% of the net
asset value of the shares from the redemption amount if you sell your
shares after holding them less than 90 days. This fee is paid to the fund
rather than the Adviser, and is designed to offset the brokerage
commissions, market impact and other costs associated with fluctuations in
fund asset levels and cash flow caused by short-term shareholder trading.
The short-term trading fee, if applicable, is charged on exchanges out of a
fund. If you bought shares on different days, the shares you held longest
will be redeemed first for

-7-

<PAGE>

purposes of determining whether the short-term trading fee applies. The
short-term trading fee does not apply to shares that were acquired through
reinvestment of distributions.

(2) The management fee paid to the Adviser for providing advisory services to
the funds consists of a basic fee and a performance adjustment calculated
by comparing the Fund's performance to a target. The basic fee for the U.S.
Core Equity Fund, the Aggressive Equity Fund and the Global Independence
Fund is 1.00%, 1.50% and 1.75% of the fund's average net assets,
respectively. The actual fees paid to the Adviser may be higher or lower
than the basic fee. The target for the U.S. Core Equity Fund and the
Aggressive Equity Fund is the investment record of the Standard & Poor's
500 Composite Price Index (the "S&P 500 Index"). The target for the Global
Independence Fund is the investment record of a composite benchmark, 50% of
which will be comprised of the Morgan Stanley Capital International World
Index (the "World Equity Index") and 50% of which will be comprised of the
J.P. Morgan Global Bond Index (the "Global Bond Index"). The S&P 500 Index
is an unmanaged index composed of 500 common stocks, most of which are
listed on the New York Stock Exchange. The S&P 500 Index assigns relative
percentage weights to the stocks included in the index, weighted according
to each stock's total market value relative to the total market value of
the other stocks in such index. The World Equity Index is a market
capitalization weighted equity index composed of a sample of companies from
twenty countries and includes at least 1,579 companies. The Global Bond
Index is a total return index that tracks the traded sovereign issues of
thirteen international markets. Each market is weighted according to its
traded market capitalization in U.S. dollar terms and all issues included
in the index are liquid with remaining maturities of greater than thirteen
months. See "Management--Management Fees" for additional information about
the fee calculation.

(3) Other expenses are based on estimated amounts for each fund's first full
fiscal year since the funds have not yet commenced operations.

(4) The Adviser has agreed, for the 12-month period commencing on the date of
this Prospectus, to reimburse expenses to each Fund if necessary so that
the Fund's "Other Expenses" (other than interest, taxes, brokerage and
extraordinary expenses including litigation expenses) do not exceed .35% of
the Fund's average net assets.

-8-

<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the funds
with the cost of investing in other mutual funds. However, it is only
hypothetical and your actual costs may be higher or lower.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses (other than the management fee) remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your cost would be:

INVESTOR SHARES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
- ---------------------------------------------------------------------------------------
basic maximum minimum basic maximum minimum
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. CORE EQUITY FUND $160 $260 $60 $708 $1,006 $404
- ---------------------------------------------------------------------------------------
AGGRESSIVE EQUITY FUND $210 $360 $60 $856 $1,297 $402
- ---------------------------------------------------------------------------------------
GLOBAL INDEPENDENCE FUND $235 $260 $210 $930 $1,004 $856
- ---------------------------------------------------------------------------------------
</TABLE>

INSTITUTIONAL SHARES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
- ---------------------------------------------------------------------------------------
basic maximum minimum basic maximum minimum
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. CORE EQUITY FUND $135 $235 $35 $633 $933 $327
- ---------------------------------------------------------------------------------------
AGGRESSIVE EQUITY FUND $185 $335 $35 $781 $1,224 $325
- ---------------------------------------------------------------------------------------
GLOBAL INDEPENDENCE FUND $210 $235 $185 $856 $930 $781
- ---------------------------------------------------------------------------------------
</TABLE>

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<PAGE>

U.S. CORE EQUITY FUND

GOAL AND STRATEGIES

The U.S. Core Equity Fund seeks a total return greater than that of the S&P 500
Index by providing investors with a professionally and actively managed
portfolio that aims to provide superior investment returns compared to those
otherwise achievable in the general U.S. equity market. The Fund will use both
a fundamental and quantitative approach to equity portfolio management that
emphasizes modern portfolio theory and other well-tested academic theories of
corporate finance moderated by consideration of the general economic environment
and practical financial market experience. The investment strategy will focus
on companies where management creates shareholder value by:

- - increasing operating profits

- - designing appropriate capital structures for the business risks being taken

- - adopting disciplined new project investment policies as well as acquisition
and divestiture policies that earn expected returns in excess of the risk-
adjusted cost of capital

- - designing senior management compensation plans that reward the creation of
shareholder value.

The Fund will use time-tested quantitative systems for identifying overvalued
and undervalued common stocks. These quantitative tools will focus on a number
of analytical topics, including:

- - earnings growth, earnings surprises and earnings estimate revisions

- - price momentum of stocks

- - valuation analysis

- - merger and acquisition arbitrage analysis

- - seasonal market factors

- - analyzing secondary public offerings and stock buy-backs

The Adviser will manage the Fund with a controlled and disciplined approach to
risk-taking with the objective of earning superior returns to the S&P 500 Index
from careful stock selection. The Adviser will use quantitative tools to
measure and limit portfolio risk, including market timing risk and industry risk
in particular, as well as economic risk, financial risk and stock specific risk.
When necessary to conserve the Fund's capital, the Adviser may permit some
market directional risk to protect the Fund against market downturns through the
use of futures, options on futures or short sales.

The Fund does not focus on one source of shareholder value, but seeks a deeper
understanding of the many sources from which shareholder value can be created.
The guiding principles of modern portfolio theory, corporate finance theory and
economic value-added analysis(1) and the disciplined use of quantitative and
risk management tools are intended to produce a diversified and balanced
portfolio that can earn returns superior to the S&P 500 Index without taking
unnecessary risk. As such, the Fund is a risk-managed portfolio seeking equity
returns from diversified sources and not merely a value or growth fund.

- --------------------------------
(1) EVA-Registered Trademark- is a registered trademark of Stern Stewart & Co.

-10-

<PAGE>

Securities and industry concentration will be limited by the desire to maintain
a reasonable risk level relative to the S&P 500 Index.

S&P Index futures may be used to manage cash flows, invest excess cash, control
risk or incrementally enhance return.

PORTFOLIO INVESTMENTS

Under normal market conditions, this Fund invests at least 65% of its assets in
equity securities, including:

- - common stocks of U.S. issuers

- - securities convertible into common stocks

- - securities such as rights and warrants, whose values are based on common
stocks

- - dollar-denominated American Depositary Receipts ("ADRs")

The Fund may also invest in preferred stocks and non-convertible debt securities
such as bonds, debentures and notes. The cash portion of this Fund will have a
duration of less than 3 years and will consist of investment grade fixed-income
securities.

The Fund may gain exposure to stocks through:

- - common and convertible shares

- - short sales

- - purchases on margin

- - writing put and call options

- - initial public offerings

Exposures to the U.S. stock market may also be acquired by:

- - stock market and industry specific index commodity futures contracts

- - options contracts

- - options on futures contracts

- - exchange-traded options on individuals stocks

The Fund may also engage in:

- - arbitrage activities

- - repurchase agreements

- - reverse repurchase agreements

- - forward delivery contracts

-11-
<PAGE>

For liquidity and flexibility, the Fund may invest a portion of its assets in
money market instruments and short-term obligations of high quality, including
U.S. Government securities, bank obligations, repurchase and reverse repurchase
agreements, commercial paper and other investment-grade debt securities. As a
defensive tactic in unusual market conditions, the Fund may temporarily invest
without limit in these money market and short-term obligations. This could
potentially keep the Fund from achieving its objective.

RISK FACTORS

This Fund's principal risk factors are:

- - equity risk

- - market risk

- - leverage risk

- - exposure risk

- - risks of derivative instruments

The value of your investment will fluctuate in response to stock market
movements. To a limited extent, the Fund may also engage in other investment
practices, including the purchase of foreign securities. International investing
is associated with additional risks, including currency, information and
political risks. The Fund may use structured securities and other instruments
(such as swaps) to gain access to the performance of a benchmark asset such as
an index or selected stocks where the Fund's direct investment in the benchmark
asset is restricted. These types of investments carry a number of additional
risks such as access, credit, currency, exposure, information, interest rate,
liquidity, market, political and valuation risks. In addition, the Fund may be
subject to interest rate risk to the extent it invests in fixed- income
securities and engages in futures and options on futures transactions. These
risks are defined in "More About Risk."

Although the Fund may hedge its portfolio to reduce investment risk, the Fund is
not obligated to pursue any hedging strategy. In addition, hedging practices may
not be available, may be too costly to be used effectively or may be unable to
be used for other reasons.

To the extent that it invests in certain securities or other instruments, the
Fund may be affected by additional risks. These risks are defined in "More About
Risk." That section also details other investment practices the Fund may use.
Please read "More About Risk" carefully before you invest.

-12-

<PAGE>

AGGRESSIVE EQUITY FUND

GOAL AND STRATEGIES

The Aggressive Equity Fund seeks a total return greater than that of the S&P 500
Index by investing primarily in the U.S. equity market, as well as the global
equity, global fixed income and currency markets. The Fund's investments outside
the United States will generally be limited to developed countries. The Fund may
use certain derivative instruments to enhance its return incrementally as well
as to manage portfolio risk.

The Fund will apply the Adviser's Global Dynamic Asset Allocation Strategy
("GDAA") which balances the goal of high performance with the appropriate risk.
The GDAA Strategy seeks to control the effect of shifts in market volatility in
the liquid equity and fixed-income markets of developed economies. In addition,
the strategy uses short-term currency forward contracts for sufficiently liquid
currency markets. Furthermore, the GDAA Strategy seeks to exploit consistent
(although evolving) patterns in the relationships of fundamental economic and
financial variables to the underlying equity, bond and currency markets. It uses
a mixture of fundamental judgment and sophisticated quantitative tools, which
simultaneously estimate predictive expected asset returns with asset risks and
correlations to achieve a stream of portfolio returns which effectively balance
a reasonable range of risk against return.

PORTFOLIO INVESTMENTS

Under normal market conditions, the Fund will invest at least 65% of its assets
in equity and equity-related securities and derivative instruments of U.S.
issuers including:

- - common stocks

- - options on securities and securities indices

- - securities convertible into common stocks

- - rights and warrants, whose values are based on common stocks

- - equity swap contracts

- - S&P 500 index futures contracts and options thereon

To enhance its investment returns incrementally and to manage risk, the Fund may
also enter into:

- - equity index and bond futures contracts and options thereon

- - currency spot and forward contracts

- - currency and interest rate futures contracts and options thereon

- - equity and interest rate swap contracts

To a lesser extent, the Fund may also purchase or sell contracts relating to the
future delivery of precious metals.

The Fund may also invest directly in long-term U.S. and foreign government
securities. For liquidity and flexibility, the Fund intends to place its
remaining assets in money market instruments and short-term obligations of high
quality, including U.S. Government securities, bank obligations, repurchase and
reverse repurchase agreements, commercial paper and other investment-grade debt
securities. As a defensive tactic in unusual market

-13-

<PAGE>

conditions, the Fund may temporarily invest without limit in these money market
and short-term obligations. This could potentially keep the Fund from achieving
its goal.

The Fund may also invest in preferred stocks and non-convertible debt securities
such as bonds, debentures and notes.

RISK FACTORS

This Fund's principal risk factors are:

- - equity risk

- - exposure risk

- - futures risk

- - leverage risk

- - risks of derivative instruments

- - foreign securities risk

- - market risk

- - interest rate risk

- - non-diversification risk

The value of your investment will fluctuate in response to global stock market
movements, as well as global bond market movements. In addition, because the
Fund invests globally, it will be exposed to currency, information, political
and, possibly, natural event risks. To the extent that the Fund's foreign
investments at any given time are focused in one particular country or target a
single region, the Fund may be more volatile than a more geographically
diversified fund.

The Fund's transactions in leveraged derivative instruments, such as options on
securities and indices, futures contracts and related options, and transactions
in currency contracts, carry additional risks, such as correlation, liquidity,
credit, opportunity and regulatory risks. The Fund may also use structured
securities and other instruments (such as swaps) to gain access to the
performance of a benchmark asset such as an index or selected stocks where the
Fund's direct investment in the benchmark asset is restricted. These types of
investments carry a number of additional risks such as access, credit, currency,
exposure, information, interest rate, liquidity, market, political and valuation
risks. These risks and additional risks that the Fund may be subject to are
defined in "More About Risk." "More About Risk" also details other investment
practices the Fund may use, which, if employed, are associated with further risk
that could adversely affect the Fund's performance. Please read "More About
Risk" carefully before you invest.

-14-

<PAGE>

GLOBAL INDEPENDENCE FUND

GOAL AND STRATEGIES

The Global Independence Fund seeks total return, on a risk adjusted basis,
consistent with the preservation of capital. To achieve its investment
objective, the Fund invests in the global equity, global fixed income and
currency markets. The Fund will pursue a balanced investment approach and the
Adviser does not expect to place particular emphasis on either the equity or
fixed income portion of the portfolio at any time. The Fund seeks to enhance its
return incrementally and manage risk by using currency spot and forward
contracts, financial futures, options on futures and other derivative
instruments. The Fund will seek to provide total return on a risk adjusted basis
by applying the GDAA Strategy described under "Aggressive Equity Fund" and
investing, through the use of the instruments described below, in the global
equity, global fixed income and currency markets. The Fund's investments outside
the United States will generally be limited to developed countries.

PORTFOLIO INVESTMENTS

- - common stocks, corporate bonds, debentures and notes

- - securities convertible into common stocks, non-convertible debt instruments
and preferred stocks

- - government, bank and commercial obligations

- - rights and warrants, whose value is based on common stocks

- - depositary receipts relating to equity securities

- - currency spot and forward contracts

- - options on securities and securities indices

- - equity and interest swap contracts

- - equity index and bond futures contracts and options thereon

- - currency and interest rate futures contracts and options thereon

The Fund intends to place a substantial portion of its assets in short-term
obligations of high quality, including:

- - U.S. Government securities

- - bank obligations

- - repurchase and reverse repurchase agreements

- - commercial paper and other investment-grade debt securities

As a defensive tactic in unusual market conditions, the Fund may temporarily
invest without limit in these money market and short-term obligations. This
could potentially keep the Fund from achieving its goal.

To a lesser extent, the Fund may also purchase or sell contracts relating to the
future delivery of precious metals.

-15-

<PAGE>

RISK FACTORS

This Fund's principal risk factors are:

- - exposure risk

- - futures risk

- - leverage risk

- - risks of derivative instruments

- - foreign securities risk

- - interest rate risk

- - market risk

- - non-diversification risk

The value of your investment in the Fund will fluctuate in response to stock,
bond and currency market movements.

Because the Fund invests in foreign securities, the Fund may be affected by
additional risks such as currency, information, political and possibly, natural
event risks. To the extent that the Fund's foreign investments at any given time
are focused in one particular country or target a single region, the Fund may be
more volatile than a more geographically diversified fund.

The Fund's transactions in leveraged derivative securities, such as futures
contracts and related options, options on securities and indices and
transactions in currency contracts, carry additional risks, such as correlation,
liquidity, credit, opportunity and regulatory risks.

These risks and other risks which the Fund may be subject to are defined in
"More About Risk." "More About Risk" also details other investment practices the
Fund may use. Please read "More About Risk" carefully before you invest.

-16-

<PAGE>

COMMON INVESTMENT STRATEGIES FOR:

AGGRESSIVE EQUITY FUND

AND
GLOBAL INDEPENDENCE FUND

To realize the funds' investment objectives, the Adviser will be continuously
developing new strategies to take advantage of future market shifts or shifts in
market fundamentals, behavior or patterns. Broadly, however, the funds will
combine various approaches to modern portfolio theory and risk management with
investment themes such as relative value, market arbitrage and directional
trading. Individual position risk and return potential are estimated in a
consistent framework involving the Adviser's judgment and the use of
sophisticated quantitative tools. At the fund level, risk-return trade-offs are
carefully weighted to keep the fund's expected volatility within reasonable
ranges.

RELATIVE VALUE: Using a trading strategy, the funds will seek to exploit the
fundamental and persistent patterns of market behavior between interrelated
assets such as yield curve points, credit points, credit spreads and/or related
market spreads. As an example, a long position in a country's bond market might
be held against a short position with a similar maturity in a bond market of
another country. The related currency position could be taken to mitigate risk,
depending on market circumstances and our fundamental and quantitative analysis.
This differs from classic arbitrage positions as convergence may not be assured
or the date of the convergence may be very distant. The returns on these
transactions would be relatively independent of overall market trends.

DIRECTIONAL TRADING: The funds will take positions which will attempt to capture
gains from changes in volatility or the direction of a particular market. The
Adviser's strategies seek to exploit consistent patterns in the relationships of
fundamental economic and financial variables to the underlying bond and currency
markets. The Adviser will monitor the implicit forecasting relationships using
error-learning statistical processes. The Adviser will use these tools in making
decisions regarding the optimal level of risk to be employed on various
positions.

MODERN PORTFOLIO THEORY: The funds will employ a strategy that uses theoretical
tools in practice which consider risk, return and efficiency. With the
combination of fundamental judgment and quantitative analysis, the Adviser may
select trades not only for these reasons, but for their net return-enhancing or
risk-mitigating properties for the fund as a whole.

RISK MANAGEMENT: The risk management process emphasizes a blending of judgment
with quantitative discipline. The Adviser will monitor and control the targeted
risk-return trade-off throughout the portfolio allocation process and day-to-day
management process. As the basic measure of risk, the Adviser will focus on the
annualized standard deviation of monthly performance. The Adviser will use
daily, weekly and monthly historical data, as well as risk forecasting systems,
to provide measures of the expected standard deviation of the fund. Stress
testing for different economic environments will be performed as another measure
of risk.

The Adviser will seek to target returns for relative value and directional
trading based on the examination of long term themes, short term factors and
relative indicators. To assist in capturing and analyzing these factors, the
Adviser may use a system that has both quantitative and qualitative elements.
The system incorporates a sophisticated and dynamic process which is designed to
forecast the risk and return characteristics of all the assets in a consistent
manner.

The Adviser will also, on a regular basis, compare the correlation of individual
risk factors, projected fund returns, measures of relevant indices and
investment strategies to build a portfolio of securities that attempts to
optimize the risk-return objectives of the fund.

In addition, forecasts of targeted asset return and associated risk measures are
generated using financial and economic inputs. These forecasts are examined and
data is analyzed to promote consistency. External information, which the Adviser
deems to be outside the scope of the initial inputs, is integrated in the
forecasting

-17-

<PAGE>

process and new forecasts are generated. These forecasts and
measures of forecasting error, as well as the relationships among those errors,
are all generated in a consistent manner allowing for optimization. Optimization
of the portfolio, given the targeted risk-return trade-off, suggests potential
allocations, which are again examined for inconsistencies. These
inconsistencies, if found, tend to highlight potential errors in the information
input or assumptions about relative market movements that a non-quantitative
system would typically overlook. Inconsistencies are then dealt with at the
point of origin, and the system is once against rerun (if necessary). New
allocations are then overlaid on existing asset class positions to generate new
net exposures. Trading based on the resulting portfolio is then implemented.
Adjustments are made whenever the Adviser deems that the environment has changed
dramatically from that assumed in the current portfolio's allocations.

The entire investment process is regularly monitored, upgraded and tested to
promote consistency and integrity for the resulting portfolios and each fund's
objective.

-18-

<PAGE>

MORE ABOUT RISK

INTRODUCTION

A fund's risk profile is largely defined by the fund's investment goal and
principal strategies. You will find a summary of each fund's risk profile in
"Risk/Return Summary - Investment Goals and Principal Strategies." The fund-by-
fund discussions contain more detailed information.

In addition to the risks previously mentioned, the funds may use certain
investment practices that have high risks and opportunities associated with
them. However, each fund has limitations and policies designed to reduce these
risks. To the extent a fund utilizes these securities or practices, its overall
performance may be affected, either positively or negatively. The "Certain
Investment Practices" table in this section briefly describes these practices
and the limitations on their use, as well as the risks associated with them.

TYPES OF INVESTMENT RISK

ALL FUNDS

ACCESS RISK The risk that some countries may restrict a fund's access to
investments or offer terms that are less advantageous than those for local
investors. This could limit the attractive investment opportunities available to
a fund.

CORRELATION RISK The risk that the relationships between markets are not
contemplated in the investment decision-making process. Incomplete correlation,
or inaccurately forecasted correlation, can result in unanticipated risks.

CREDIT RISK The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.

EQUITY RISK Investments in equity securities and equity derivatives in general
are subject to market risks that may cause their prices to fluctuate over time.
The value of securities convertible into equity securities, such as warrants or
convertible debt, is also affected by prevailing interest rates, the credit
quality of the issuer and any call provision. Fluctuations in the value of
equity securities in which the funds invest will cause the net asset value of
the funds to fluctuate.

EXPOSURE RISK The risk associated with techniques that increase a fund's
exposure to a security, index or its investment portfolio. Exposure is the
fund's maximum potential gain or loss from an investment. Certain investments
(such as options and futures) and certain practices (such as short-selling) may
have the effect of magnifying declines as well as increases in a fund's net
asset value. Losses from writing options and entering into futures and short
sales can be unlimited.

LEVERAGE RISK If a fund borrows or otherwise uses leverage to invest in
securities or derivative instruments, any investment gains made on the
securities or instruments in excess of interest or other amounts paid by the
fund will cause the net asset value of the fund's shares to rise faster than
would otherwise be the case. On the other hand, if the investment performance of
the additional securities or instruments purchased fails to cover their cost
(including any interest paid on borrowed money) to the fund, the net asset value
of the fund's shares will decrease faster than would otherwise be the case. The
use of leverage can lead to substantial losses.

LIQUIDITY RISK The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity. Any of these could have a negative effect on fund management or
performance.

-19-

<PAGE>

MANAGEMENT AND OPPORTUNITY RISK The risk that a strategy used by a fund's
management may fail to produce the intended result. The risk of missing out on
an investment opportunity because the assets necessary to take advantage of it
are tied up in other investments. These risks are common to all mutual funds.

MARKET RISK The market value of a security may move up and down, sometimes
rapidly and unpredictably. Stock markets tend to move in cycles, with periods of
rising stock prices and periods of falling stock prices. These fluctuations may
cause a security to be worth less than the price originally paid for it, or less
than it was worth at an earlier time. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Market risk is common
to most investments -- including stocks and bonds, and the mutual funds that
invest in them. Bonds and other fixed-income securities may involve less market
risk than stocks, but not always. The risk of bonds can vary significantly
depending upon factors such as issuer and maturity. Bonds of some companies are
riskier than the stocks of others. The risk of bonds declining in value may be
offset in whole or in part by the income they provide.

NATURAL EVENT RISK The risk of losses attributable to natural disasters, crop
failures and similar events.

OPERATIONAL RISK The risk that some countries may have less developed securities
markets (and related transaction, registration and custody practices).

PREPAYMENT AND EXTENSION RISKS The risk that the term of a mortgage or asset-
backed pool of securities in which a fund may invest may be shortened by
unscheduled or early payments of principal on underlying mortgages or assets, or
extended under certain circumstances. Prepayments and extensions may cause the
yield on such securities to differ from the expected yield based on assumed
average life. Reinvestments of prepayments may occur at higher or lower interest
rates than the original investment and affect a fund's yield.

RISKS OF DERIVATIVE INSTRUMENTS The use of these instruments requires special
skills, knowledge and investment techniques that differ from those required for
normal portfolio management. The success of the funds in selecting these
instruments for their portfolios depends on the skill of the Adviser in
predicting the movement of interest rates, the value of particular instruments
and other economic variables. There is no assurance that the Adviser will
accurately predict these movements.

TRADING LIMIT AND TRADING HALT RISK. Exchanges on which options and futures
contracts are traded, such as the Chicago Mercantile Exchange, have established
limits on how much an option or futures contract may decline over various time
periods within a day. If an option or futures contract's price declines more
than the established limits, no trading may occur at prices outside that limit.
If a trading limit is reached before the close of a trading day, a Fund may not
be able to purchase or sell options or futures contracts at advantageous prices
or at all. In such an event, the Fund also may be required to use a "fair-
value" method to price its outstanding contracts. In addition, the Chicago
Mercantile Exchange imposes intraday 10 minute trading halts when trades occur
at specified limits within the various time periods.

VALUATION RISK The risk that a fund has valued certain of its securities at a
higher price that it can sell them for.

YEAR 2000 PROCESSING RISK. The risk that a fund is adversely affected if the
computer systems used by the Adviser or other service providers do not correctly
handle the change from "99" to "00" on January 1, 2000. CDC Investments is
working to avoid such problems and to obtain assurances from service providers
that they are taking similar steps. However, there can be no assurance that
these efforts will be entirely successful. The Year 2000 issue affects
practically all companies, organizations, governments and markets throughout the
world -- including companies or governmental entities in which the funds invest.
To the extent that the impact on a fund's holdings or on the global markets or
economies is negative, it could adversely affect a fund's returns.

-20-

<PAGE>

AGGRESSIVE EQUITY FUND AND GLOBAL INDEPENDENCE FUND ONLY

FUTURES RISK These funds will buy and sell commodity futures contracts and
options thereon up to the fullest extent permissible under applicable law.
Futures contracts and options on futures contracts provide for the future sale
by one party and purchase by another party of a specified amount of a specific
security at a specified future time and at a specified price. An option on a
futures contract gives the purchaser the right, in exchange for a premium, to
assume a position in a futures contract at a specified exercise price during the
term of the option. Index futures are futures contracts for various securities
indices that are settled in cash. Applicable law currently permits unlimited use
of futures and related options for bona fide hedging purposes; however,
aggregate initial margin and premiums required to establish non-hedging
positions may not exceed 5% of each fund's net asset value after taking into
account unrealized profits and unrealized losses on any contracts it has entered
into. Unforeseen changes in regulatory provisions relating to the use of futures
and options on futures may adversely affect a fund's management or performance.
Although these funds are limited in the amount of assets that may be invested in
futures transactions, there is no overall limit on the percentage of a fund's
assets that may be at risk with respect to futures activities.

INTEREST RATE RISK Changes in interest rates may cause a decline in an
investment's market value. With bonds and other fixed income securities, a rise
in interest rates typically causes a fall in values, while a fall in interest
rates typically causes a rise in values.

FOREIGN SECURITIES RISK

CURRENCY RISK Fluctuations in the exchange rates between the U.S. dollar
and foreign currencies may negatively affect an investment. Adverse changes
in exchange rates may erode or reverse any gains produced by foreign
currency-denominated investments and may widen any losses. If futures are
traded on non-U.S. exchanges, such exchanges may require that margin for
open positions be converted to the home currency of the contract. Whenever
margin is held in a non-U.S. currency, losses may occur if exchange rates
fluctuate. Also, direct currency positions, through currency forward
contracts, may go up or down in price.

POLITICAL RISK Government or political actions of any sort may cause losses
in a fund. These actions may range from changes in tax or trade statutes to
nationalization, expropriation, currency blockage or governmental collapse
and war, among many others.

INFORMATION RISK Key information about an issuer, security or market may be
inaccurate or unavailable.

NON-DIVERSIFICATION RISK As non-diversified portfolios, these funds are not
limited in the amount of their assets that may be invested in the securities of
a single issuer. Each fund may invest a greater proportion of its assets in the
securities of a smaller number of issuers. Because each fund is non-diversified,
there is a greater chance that the poor performance of a single position could
hurt the total value of the fund.

-21-

<PAGE>

<TABLE>
<CAPTION>
CERTAIN INVESTMENT PRACTICES
- -------------------------------------------------------------------------------------------------------------------------
Global
U.S. Core Aggressive Independence
This table shows each fund's limitations on certain investment practices. In Equity Fund Equity Fund Fund
each case the significant types of risk are listed, which are defined elsewhere
in this prospectus.
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES Interests in pools of assets such as receivables -- o o
from credit card and automobile loans. CREDIT, PREPAYMENT AND EXTENSION,
LIQUIDITY, INTEREST RATE RISKS.
- -------------------------------------------------------------------------------------------------------------------------
BELOW INVESTMENT GRADE DEBT SECURITIES Debt securities rated below BBB by -- 10% 10%
Moody's Investors Service, Inc. or Baa by Standard & Poor's Ratings Service
(or of comparable quality, if unrated) are considered junk bonds. CREDIT,
MARKET, INTEREST RATE, LIQUIDITY, VALUATION, INFORMATION RISKS.
- -------------------------------------------------------------------------------------------------------------------------
BORROWING The borrowing of money from banks for temporary or emergency
purposes to meet redemption requests and to facilitate settlement of 33 1/3% 33 1/3% 33 1/3%
transactions in portfolio securities. EXPOSURE, LEVERAGE RISKS.
- -------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES Debt securities backed by pools of mortgages, -- o o
including pass-through certificates and other senior classes of
collateralized mortgage obligations (CMOs). CREDIT, PREPAYMENT AND
EXTENSION, LIQUIDITY, INTEREST RATE RISKS.
- -------------------------------------------------------------------------------------------------------------------------
RESTRICTED AND OTHER ILLIQUID SECURITIES Securities with restrictions on 15% 15% 15%
trading or those not actively traded on the open market. LIQUIDITY,
VALUATION, MARKET RISKS.
- ------------------------------------------------------------------------------- ------------- ------------- -------------
SECURITIES LENDING. Lending portfolio securities to financial institutions; 50% - - - -
a fund receives cash, U.S. government securities or bank letters of credit as
collateral. CREDIT, LIQUIDITY, MARKET, OPERATIONAL RISKS.
- -------------------------------------------------------------------------------------------------------------------------
- - SHORT SALES AND SHORT SALES AGAINST THE BOX The selling of securities that 10% - - - -
have been borrowed on the expectation that the market price will drop.
Hedged. LEVERAGE, MARKET, CORRELATION, LIQUIDITY, OPPORTUNITY RISKS.
Speculative. LEVERAGE, MARKET, LIQUIDITY RISKS.
- -------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TRADING Selling a security shortly after purchase. A fund * o o
engaging in short-term trading will have higher turnover and transaction
expenses. Increased short-term capital gains distributions could raise
shareholders' income tax liability. MARKET RISK.
- -------------------------------------------------------------------------------------------------------------------------
TEMPORARY DEFENSIVE TACTICS Placing some or all of a fund's assets in * * *
investments such as money market obligations and investment-grade debt
securities for defensive purposes. Although intended to avoid losses in
unusual market conditions, defensive tactics might prevent a fund from
achieving its goal.
- -------------------------------------------------------------------------------------------------------------------------
WARRANTS Options issued by a company granting the holder the right to buy 10% 10% 10%
certain securities, generally common stock, at a specified price and usually
for a limited time. LIQUIDITY, MARKET, EXPOSURE RISKS.
- -------------------------------------------------------------------------------------------------------------------------
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS The purchase or sale of 20% 20% 20%
securities for delivery at a future date; market value may change before
delivery. MARKET, LIQUIDITY, EXPOSURE, OPPORTUNITY, LEVERAGE RISKS.
- -------------------------------------------------------------------------------------------------------------------------

-22-
<PAGE>

- -------------------------------------------------------------------------------------------------------------------------
ZERO COUPON BONDS Debt securities that pay no cash income to holders until 20% 20% 20%
maturity and are issued at a discount from maturity value. At maturity, the
entire return comes from the difference between purchase price and maturity
value. INTEREST RATE RISK.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

KEY TO TABLE:

* No policy limitation on usage
o Permitted, but not typically used
- - Not permitted
Numbers shown indicate percentages:
20 ITALIC TYPE represents percent of total assets
20 roman type represents percent of net assets

-23-

<PAGE>

MANAGEMENT

ABOUT THE ADVISER

The board of trustees of CDC MPT+ Funds supervises each fund's business affairs.

The board has selected CDC Investment Management Corporation, to manage the
funds. It is responsible for:

- - investing each fund's assets according to its goal and strategy

- - placing buy and sell orders

- - managing day-to-day operations and business activities

- - providing office space and equipment

CDC Investment Management Corporation was formed as a New York corporation in
1990 and is a registered investment adviser under the Investment Advisers Act of
1940, as amended. CDC Investments is an established leader in providing
alternative investment strategies for institutional clients. CDC Investments
strives to develop products and strategies which will provide its clients with
superior risk-adjusted performance that is not well correlated with traditional
stock and bond market indices. Although the Adviser has not managed U.S.
registered funds in the past, it has substantial experience managing
unregistered portfolios based in Luxembourg that are subject to restrictions
similar to those imposed on U.S. registered investment companies. As of March
31, 1999, CDC Investments has approximately $4 billion in assets under
management, providing asset management services to large European, Asian and
North American financial institutions, family offices, fund of funds, pension
funds and other investors.

CDC Investments is the wholly owned, U.S.-based, asset management subsidiary of
Caisse des Depots et Consignations ("CDC Group"), one of the world's largest
financial institutions with a "AAA" credit rating on its senior long-term debt.
Headquartered in Paris, CDC Group has nearly a 180 year record of providing
financial services. With autonomous subsidiaries in New York, Frankfurt and
Tokyo, the CDC Group specializes in investment management, capital market and
other financial activities, savings and life insurance, fiduciary services and
public finance. CDC Investments was founded as part of a strategic expansion to
provide world-class investment services in the United States and to expand its
asset management expertise and products for the European asset management
subsidiaries.

The Adviser's offices are located at:

9 West 57th Street, 35th Floor
New York, NY 10019

MANAGEMENT FEES

The U.S. Core Equity Fund pays the Adviser a basic fee of 1.00% per annum, the
Aggressive Equity Fund pays the Adviser a basic fee of 1.50% per annum and the
Global Independence Fund pays the Adviser a basic fee of 1.75% per annum, of the
respective fund's average daily net assets. This basic management fee may be
adjusted upward or downward by applying an adjustment formula (the "Performance
Adjustment"). The Performance Adjustment is calculated monthly by comparing the
Fund's investment performance to a target during the most recent twelve-month
period. The target for the U.S. Core Equity Fund and the Aggressive Equity Fund
is the investment record of the S&P 500 Index. The target for the Global
Independence Fund is the investment record of a composite benchmark, of which
50% is comprised of the World Equity Index and 50% is comprised of the Global
Bond Index.

-24-

<PAGE>

In the case of the U.S. Core Equity Fund and the Aggressive Equity Fund, the
difference between the fund's performance compared to the performance of the
relevant target is multiplied by a Performance Adjustment of 25% (as an annual
rate). The Performance Adjustment is then added to or subtracted from the basic
fee, subject to the maximum or minimum fee. The maximum annualized Performance
Adjustment is 1.00% for the U.S. Core Equity Fund and 1.50% for the Aggressive
Equity Fund.

In the case of the Global Independence Fund, the difference between the
Fund's performance compared to the performance of the relevant target is
multiplied by a Performance Adjustment of 5% as an annual rate. The
Performance Adjustment is then added to or subtracted from the basic fee,
subject to the maximum or minimum fee. The maximum Performance Adjustment is
0.25% for the Global Independence Fund.

Here are examples of how the Performance Adjustment would work (using annual
rates):

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
U.S. Core Equity Fund
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Total Fund Performance Relevant Basic Management Total Management
(before Management fee) Index Excess Performance Fee Fee Adjustment Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-10.00% -15.00% 5.00% 1.00% 1.00% 2.00%
- --------------------------------------------------------------------------------------------------------------
-5.00% 5.00% -10.00% 1.00% -1.00% 0.00%
- --------------------------------------------------------------------------------------------------------------
4.00% 5.00% -1.00% 1.00% -0.25% 0.75%
- --------------------------------------------------------------------------------------------------------------
5.00% 5.00% 0.00% 1.00% 0.00% 1.00%
- --------------------------------------------------------------------------------------------------------------
6.00% 5.00% 1.00% 1.00% 0.25% 1.25%
- --------------------------------------------------------------------------------------------------------------
10.00% 5.00% 5.00% 1.00% 1.00% 2.00%
- --------------------------------------------------------------------------------------------------------------
15.00% 5.00% 10.00% 1.00% 1.00% 2.00%
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
Aggressive Equity Fund
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Total Fund Performance Relevant Basic Management Total Management
(before Management fee) Index Excess Performance Fee Fee Adjustment Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-10.00% -15.00% 5.00% 1.50% 1.25% 2.75%
- --------------------------------------------------------------------------------------------------------------
-5.00% 5.00% -10.00% 1.50% -1.50% 0.00%
- --------------------------------------------------------------------------------------------------------------
2.00% 5.00% -3.00% 1.50% -0.75% .75%
- --------------------------------------------------------------------------------------------------------------
5.00% 5.00% 0.00% 1.50% 0.00% 1.50%
- --------------------------------------------------------------------------------------------------------------
8.00% 5.00% 3.00% 1.50% 0.75% 2.25%
- --------------------------------------------------------------------------------------------------------------
12.00% 5.00% 7.00% 1.50% 1.50% 3.00%
- --------------------------------------------------------------------------------------------------------------
15.00% 5.00% 10.00% 1.50% 1.50% 3.00%
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
Global Independence Fund
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Total Fund Performance Relevant Basic Management Total Management
(before Management fee) Index Excess Performance Fee Fee Adjustment Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-10.00% -15.00% 5.00% 1.75% 0.25% 2.00%
- --------------------------------------------------------------------------------------------------------------
4.00% 10.00% -6.00% 1.75% -0.25% 1.50%
- --------------------------------------------------------------------------------------------------------------
5.00% 10.00% -5.00% 1.75% -0.25% 1.50%
- --------------------------------------------------------------------------------------------------------------
6.00% 10.00% -4.00% 1.75% -0.20% 1.55%
- --------------------------------------------------------------------------------------------------------------
7.00% 10.00% -3.00% 1.75% -0.15% 1.60%
- --------------------------------------------------------------------------------------------------------------
12.00% 10.00% 2.00% 1.75% 0.10% 1.85%
- --------------------------------------------------------------------------------------------------------------
15.00% 10.00% 5.00% 1.75% 0.25% 2.00%
- --------------------------------------------------------------------------------------------------------------
16.00% 10.00% 6.00% 1.75% 0.25% 2.00%
- --------------------------------------------------------------------------------------------------------------
20.00% 10.00% 10.00% 1.75% 0.25% 2.00%
- --------------------------------------------------------------------------------------------------------------
</TABLE>

-25-
<PAGE>

Each fund's performance is calculated based on its net asset value per share
after expenses but before the management fee.

For purposes of calculating the Performance Adjustment, any dividends or capital
gains distributions paid by a fund are treated as if those distributions were
reinvested by shareholders in fund shares at the net asset value per share as of
the record date for payment. The performance record for the S&P 500 Index, and
the composite of the World Equity Index and the Global Bond Index (each, a
"Benchmark") is based on the change in value of the relevant Benchmark, and is
adjusted for any cash distributions from the companies whose securities comprise
the relevant Benchmark.

Because the adjustment to the basic fee is based on the comparative performance
of the fund and the record of the corresponding index, the controlling factor
(regarding the Performance Adjustment to the basic fee) is not whether the
fund's performance is up or down, but whether it is up or down more or less than
the performance record of the corresponding index. Moreover, the comparative
investment record of the fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter period.

MEET THE MANAGERS

The day-to-day portfolio management of each of the funds is managed by the
following teams of investment professionals. Each person joined CDC Investments
in 1997 and has been a co-portfolio manager of the relevant fund since its
inception. Each portfolio manager's title with CDC Investments appears next to
his name.

-26-

<PAGE>

- --------------------------------------------------------------------------------
U.S. CORE EQUITY FUND BLUFORD H. PUTNAM, PH.D., President and
Chief Investment Officer
Managing Director and Chief Investment
Officer for Equities and Asset Allocation
with the Global Investment Management
Department of Bankers Trust Company (NY)
from 1994 to 1997
President of Putnam & Associates, Inc. from
1991 to 1994
Director and Chief Economist at Kleinwort
Benson Ltd. (London) from 1989 to 1991
Visiting Professor at St. Mary's College,
1988 to 1989
Principal and Head of the international
fixed income strategy team at Morgan
Stanley & Co. from 1984 to 1988
Partner with Stern Stewart & Co. from 1982
to 1984
Economist with Chase Manhattan Bank from
1978 to 1982
Economist with the Federal Reserve Bank of
New York from 1976 to 1978

JOSE QUINTANA, PH.D., Managing Director
Vice President and Head of Quantitative
Research for the Strategic Asset Allocation
team in the Global Investment Management
Group of Bankers Trust Company from 1994 to
1997
Vice President in the Global Risk
Management Sector of Chase Manhattan
Bank from 1992 to 1994
Vice President at Chase Investors
Management Corporation from 1988 to 1992
Staff Supervisor for AT&T's Market Analysis
and Forecasting Directorate from 1987 to
1988

JASON WOLIN, Vice President and Portfolio
Manager
Portfolio Manager at Bankers Trust Company
from 1994 to 1997
Project Manager (Financial Systems Group)
at J.P. Morgan & Co. from 1992 to 1994

FRANK HANLEY, Vice President
Worked as a proprietary trader with Spear,
Leeds & Kellog from 1995 to 1997
Worked as a head trader for Gabelli & Co.
Inc./GAMCO Investors from 1984 to 1995
- --------------------------------------------------------------------------------

-27-

<PAGE>

- --------------------------------------------------------------------------------
AGGRESSIVE EQUITY FUND BLUFORD H. PUTNAM, PH.D., President
AND GLOBAL INDEPENDENCE See above
FUND
JOSE QUINTANA, PH.D., Managing Director
See above

D. SYKES WILFORD, PH.D., Managing Director
Chief Investment Officer of Bankers Trust
Private Bank and Managing Director of
Bankers Trust Global Investment Management
from 1994 to 1997
Managing Director of Chase Investment Bank,
Ltd., London from 1992 to 1994
Managing Director of Chase Manhattan Bank,
responsible for Risk Management
product development and marketing from
1988 to 1992
Chief International Fixed Income Strategist
for Drexel Burnham Lambert (London)
from 1987 to 1988
Managing Director of Chase Manhattan Bank
from 1977 to 1987
Economist with the Federal Reserve Bank of
New York from 1976 to 1977

ANDREW DALTON, Director
Vice President at Bankers Trust Company
from 1995 to 1997
Worked on the development and
implementation of global asset
allocation models for Chase Manhattan
Bank 1992 to 1995
- --------------------------------------------------------------------------------

PRIOR PERFORMANCE OF SIMILAR PORTFOLIOS MANAGED BY THE ADVISER

The statistics below show the performance of three unregistered investment
portfolios managed by CDC Investments. In managing the Funds, CDC Investments
will employ substantially the same investment objectives, policies and
strategies that it employs in managing the corresponding portfolios described
below. However, in managing the Funds, CDC Investments will be subject to
certain rules imposed on registered investment companies (E.G., limits on the
percentage of assets invested in securities of issuers in a single industry,
limits on futures trading and requirements on distributing income to
shareholders) that do not apply to the unregistered portfolios. In addition, the
continuous offering of a Fund's shares and a Fund's obligation to redeem its
shares will likely cause the Fund to experience cash flows different from those
of the corresponding portfolio. Moreover, the way of calculating the performance
of the portfolios, which value their assets at the end of each month, differs
from the method employed by mutual funds, which among other things value their
assets on a daily basis. If the unregistered investment portfolios had been
subject to the same investment restrictions as the Funds, their investment
returns may have been lower.

The performance returns shown below are for the period from the commencement of
the relative portfolio's operations through December 31, 1998, and, in the case
of the Global Independence Portfolio described below, for the full year ended
December 31, 1998.

Fees and expenses incurred in the operation of the portfolios differ from and
are lower than the fees and expenses expected to be incurred by the
corresponding Funds. Accordingly, the performance results for each portfolio
have been adjusted to reflect the overall expense ratio expected to be borne by
the corresponding Fund in its first fiscal year and the management fee and
applicable Performance Adjustment that would have been charged given the actual
performance of the relevant index over the period shown.

THE PERFORMANCE DATA REPRESENTS THE PRIOR PERFORMANCE OF THE PORTFOLIOS, NOT THE
PRIOR PERFORMANCE OF THE FUNDS, AND SHOULD NOT BE CONSIDERED AN INDICATION OF OR
A SUBSTITUTE FOR FUTURE PERFORMANCE OF ANY OF THE FUNDS. THE TIME PERIODS
REFERENCED BELOW ARE RELATIVELY SHORT AND MAY NOT BE REPRESENTATIVE OF THE

-28-

<PAGE>

PERFORMANCE OF THESE PORTFOLIOS OVER THE LONG TERM. THE PERFORMANCE FIGURES FOR
THE GLOBAL INDEPENDENCE PORTFOLIO ARE PRESENTED IN ACCORDANCE WITH THE STANDARDS
PROMULGATED BY THE ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH ("AIMR").
THE FIGURES FOR THE YEAR ENDED DECEMBER 31, 1997 (INCLUDED IN THE RETURN SINCE
INCEPTION) HAVE BEEN EXAMINED BY AN INDEPENDENT ACCOUNTING FIRM. THE U.S. EQUITY
PORTFOLIO AND THE AGGRESSIVE EQUITY PORTFOLIO HAVE ENGAGED AN INDEPENDENT
ACCOUNTING FIRM TO PERFORM AN EXAMINATION OF THE PERFORMANCE FIGURES FOR THE
PERIOD ENDED DECEMBER 31, 1998 FOR PRESENTATION IN ACCORDANCE WITH THE STANDARDS
PROMULGATED BY AIMR.

Set forth below is the performance of an unregistered, privately-offered
investment portfolio (the "U.S. Equity Portfolio"), which commenced operations
on January 5, 1998 and employs substantially the same investment objectives,
policies and strategies as the U.S. Core Equity Fund. Returns of the U.S. Equity
Portfolio are compared to the S&P 500 Index. Unlike the U.S. Equity Portfolio's
net returns, those of the S&P 500 Index, an unmanaged index, do not reflect fees
and expenses. Both the returns of the U.S. Equity Portfolio and the S&P 500
Index reflect the reinvestment of dividends and distributions.

<TABLE>
<CAPTION>
Mgmt. Fee Plus
Other Adjusted Performance Net
Gross Return Expenses Return Adjustment Return
------------ -------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
U.S. Equity 29.53% .35% 29.18% 1.30% 27.88%
Portfolio
S&P 500 Index 27.97% n/a n/a n/a n/a
</TABLE>

Set forth below is the performance of a separately managed private account (the
"Aggressive Equity Portfolio"), which commenced operations on July 1, 1998 and
employs substantially the same investment objectives, policies and strategies as
the Aggressive Equity Fund. Returns of the Aggressive Equity Portfolio are
compared to the S&P 500 Index. Unlike the Aggressive Equity Portfolio's net
returns, those of the S&P 500 Index do not reflect fees and expenses. Both the
returns of the Aggressive Equity Portfolio and the S&P 500 Index reflect the
reinvestment of dividends and distributions.

<TABLE>
<CAPTION>
Mgmt. Fee Plus
Other Adjusted Performance Net
Gross Return Expenses Return Adjustment Return
------------ -------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Aggressive Equity Portfolio 10.52% .35% 10.17% 1.74% 8.43%
S &P 500 Index 9.23% n/a n/a n/a n/a
</TABLE>

Set forth below is the performance of an unregistered, privately-offered
investment portfolio registered under the laws of Luxembourg (the "Global
Independence Portfolio"), which commenced operations on October 1, 1997 and
employs substantially the same investment objectives, policies and strategies as
the Global Independence Fund. Returns of the Global Independence Portfolio are
compared to a composite index, comprised of 50% of the World Equity Index and
50% of the Global Bond Index (the "Composite Index."). Unlike the Global
Independence Portfolio's net returns, those of the Composite Index do not
reflect fees and expenses. Both the returns of the Global Independence Portfolio
and the Composite Index reflect the reinvestment of dividends and distributions,
if any.

-29-

<PAGE>

<TABLE>
<CAPTION>
SINCE INCEPTION Mgmt. Fee Plus
Other Adjusted Performance Net
Gross Return Expenses Return Adjustment Return
------------ -------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Global Independence Portfolio 22.18% .35% 21.83% 3.00% 18.83%
Composite Index 14.08% n/a n/a n/a n/a
</TABLE>

<TABLE>
<CAPTION>
Mgmt. Fee Plus
YEAR-ENDED Other Adjusted Performance Net
DECEMBER 31, 1998 Gross Return Expenses Return Adjustment Return
------------ -------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Global Independence Portfolio 17.51% .35% 17.16% 3.00% 14.16%
Composite Index 12.40% n/a n/a n/a n/a

</TABLE>

ACCOUNT POLICIES

PRICING OF SHARES

You pay no sales charges to invest in the funds. When you invest in a fund, you
pay the net asset value (NAV) per Institutional share or Investor share, as
appropriate. Your purchase or redemption order will be priced at the next NAV
calculated after your order is received by the Fund.

The NAV is determined at the close of regular trading on the New York Stock
Exchange (typically 4 p.m. Eastern time) each day the Exchange is open for
business. It is calculated by dividing total assets of the fund's relevant class
of shares, less all liabilities, by the number of the relevant class of shares
outstanding.

Each fund's assets are valued primarily on the basis of market quotations.
Short-term securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued on the basis of amortized cost.
This method minimizes the effect of changes in a security's market value.
Foreign securities are valued on the basis of quotations from the primary market
in which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates. Options are generally valued at the last
sale price or, in the absence of a last sale price, the last bid price. The
value of a futures contract equals the unrealized gain or loss on the contract
that is determined by marking it to the current settlement price for a like
contract acquired on the day on which the futures contract is being valued. A
settlement price may not be used if the market makes a limit move with respect
to a particular commodity. In addition, if quotations are not readily available,
or if the values have been materially affected by events occurring after the
closing of a foreign market, assets may be valued by another method that the
Board of Trustees believes accurately reflects fair value.

BUYING AND SELLING SHARES

Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Fund shares will not be priced on major
national holidays recognized in New York and other days when the Exchange is
closed for trading.

-30-

<PAGE>

If we receive your purchase or redemption request in correct form by 4 p.m. ET,
your transaction will be priced at that day's NAV. If we receive it after 4
p.m., it will be priced at the next business day's NAV.

You can also purchase fund shares through financial services firms such as
banks, brokers and investment advisers. Where authorized, your order will be
priced at the NAV next computed after your financial services firm has accepted
it.

All investments must be in U.S. dollars. Third-party checks
cannot be accepted. You may be charged a fee for any check that
does not clear.

When selling shares, your order will be processed promptly and you will
generally receive the proceeds within a week.

Some circumstances require written sell orders, along with signature guarantees.
These include:

- - amounts of $100,000 or more

- - amounts of $1,000 or more on accounts whose address has been changed within
the last 30 days

- - requests to send the proceeds to a different payee or address

A signature guarantee helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. Please call us to
ensure that your signature guarantee will be processed correctly.

MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS:

INVESTOR SHARES: $2,500

INSTITUTIONAL SHARES: $1,000,000

In its discretion, subject to review by the board of trustees, the Adviser may
waive these minimum investment requirements. Without limiting this discretion,
the Adviser intends to waive the minimum on investments in Institutional shares
for employees of the Adviser and its affiliates, and for the spouse, parents,
children, siblings, grandparents or grandchildren of these employees.

ACCOUNT STATEMENTS

In general, you will receive account statements as follows:

- - after every transaction that affects your account balance (except for
distribution reinvestments and automatic purchases)

- - after any changes of name or address of the registered owner(s)

- - otherwise, every month

You will receive annual and semiannual financial reports. Every year you also
should receive, if applicable, a Form 1099 tax information statement mailed by
January 31.

-31-

<PAGE>

SHAREHOLDER SERVICES

AUTOMATIC SERVICES

Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application or by
calling 1-800-774- 9838.

FOR BUYING SHARES:

AUTOMATIC INVESTMENT PLAN For making automatic investments from a
designated bank account.

PAYROLL DEDUCTION PLAN For making automatic
investments through a payroll
deduction.

GOVERNMENT DIRECT DEPOSIT For making automatic
PRIVILEGE investments from your federal
employment, Social Security or
other regular federal
government check.

FOR BUYING AND FOR SELLING SHARES:

AUTO-EXCHANGE PRIVILEGE For making regular exchanges from one fund
into another.

FOR SELLING SHARES:

AUTOMATIC WITHDRAWAL PLAN For making regular withdrawals from the funds.

EXCHANGE PRIVILEGE

You can exchange $2,500 or more of the Investor shares and $1,000,000 or more of
the Institutional shares from one fund into the same class of shares of another
fund (no minimum for retirement accounts). You can request your exchange in
writing or by phone. Be sure to read the fund description in the current
prospectus for any fund into which you are exchanging. Any new account
established through an exchange will have the same privileges as your original
account (as long as they are available). No fee is currently charged on
exchanges.

TELEPHONE PRIVILEGE

To move money between your bank account and your fund account with a phone call,
use the telephone privilege. You can set up this privilege on your account by
providing bank account information and following the instructions on your
application.

Unless you decline telephone privileges on your application, you may be
responsible for any fraudulent telephone order as long as the fund takes
reasonable measures to verify the order.

GENERAL POLICIES

If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 45 days, the fund may close your account and
send you the proceeds.

-32-

<PAGE>

Each fund reserves the right to:

- - refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group who,
in the fund's view, is likely to engage in excessive trading (usually
defined as more than four exchanges out of the fund within a calendar year)

- - refuse any purchase or exchange request in excess of 1% of the fund's total
assets

- - change or discontinue its exchange privilege, or temporarily suspend this
privilege during unusual market conditions

- - change its minimum investment amounts

- - delay sending out redemption proceeds for up to seven days if doing so
sooner would adversely affect the fund (generally applies only in cases of
very large redemptions, excessive trading or during unusual market
conditions)

- - make a "redemption in kind" -- payment in portfolio securities rather than
cash -- if the amount you are redeeming is large enough to affect fund
operations

INVESTMENT THROUGH INTERMEDIARIES

If you invest through a third party (rather than directly through the funds'
distributor), the policies and fees may be different than those described here.
Banks, brokers, 401(k) plans, financial advisers and financial supermarkets may
charge transaction fees and may set different minimum investments or limitations
on buying or selling shares. Consult a representative of your plan or financial
institution if in doubt.

Financial services firms selling significant amounts of fund shares may receive
extra compensation. This compensation, which the Adviser will pay out of its own
resources, may include non-cash promotional incentives as well as reimbursement
for marketing costs. From time to time, we may provide opportunities for you or
your financial representative to attend business meetings, conferences, training
programs or other events. Travel, meals and lodging may be included. To find out
more about promotional events in your area, please contact your financial
representative.

DISTRIBUTION POLICIES AND TAXES

DISTRIBUTIONS

As a fund investor, you are entitled to your share of the fund's net income and
gains on its investments. The fund passes these earnings along to its
shareholders as distributions.

Each fund earns dividends from stocks and interest from bond, money market and
other investments. These are passed along as dividend distributions. A fund
realizes capital gains whenever it sells securities for a higher price than it
paid for them. These are passed along as capital gain distributions, a portion
of which may be taxable to you as ordinary income.

Each fund distributes its net income at least annually. All of the funds
distribute capital gains annually, usually in November or December.

-33-

<PAGE>

DISTRIBUTION OPTIONS

When you open an account, specify on your application how you want to receive
your distributions. Each fund offers the following options:

- - REINVESTMENT OPTION Your dividend and capital gain distributions will be
automatically reinvested in additional shares of the fund. You will be
assigned this option unless you indicate a different choice.

- - INCOME-EARNED OPTION Your capital gain distributions will be automatically
reinvested, but you will receive dividend distributions by check or
electronic transfer.

- - CAPITAL GAINS OPTION Your dividend distributions will be automatically
reinvested, but you will receive capital gain distributions by check or
electronic transfer.

- - CASH OPTION You will receive your dividend and capital gain distributions
by check or electronic transfer.

For retirement accounts, all distributions are automatically reinvested. When
you are over 59 1/2 years old, you can receive distributions in cash.

TAXES

As with any investment, you should consider how your investment in a fund will
be taxed. Unless your account is an IRA or other tax-advantaged account, you
should be aware of the potential tax implications. Please consult your tax
professional concerning your own tax situation.

TAXES ON DISTRIBUTIONS

As long as a fund continues to meet the requirements for being a tax-qualified
regulated investment company, it pays no federal income tax on the earnings it
distributes to shareholders.

Consequently, distributions you receive from a fund, whether reinvested or taken
in cash, are generally considered taxable. Distributions from a fund's long-term
capital gains are taxed as capital gains; distributions from other sources are
generally taxed as ordinary income.

If you buy shares shortly before or on the "record date" -- the date that
establishes you as the person to receive the upcoming distribution -- you will
receive a portion of the money you just invested in the form of a taxable
distribution. Some dividends paid in January may be taxable as if they had been
paid the previous December.

If you fail to provide your correct taxpayer identification number on your
application, or you have been notified by the IRS that you are subject to backup
withholding, the funds may withhold 31% of all distributions to you for federal
taxes. In the case of an individual, your taxpayer identification number is your
social security number.

The form 1099 that is mailed to you every January details your distributions and
their federal tax category.

TAXES ON TRANSACTIONS

Any time you sell or exchange shares, it is considered a taxable event for you.
Depending on the purchase price and the sale price of the shares you sell or
exchange, you may have a gain or loss on the transaction. You are responsible
for any tax liabilities generated by your transactions.

-34-

<PAGE>

FUND DETAILS

MULTI-CLASS STRUCTURE

Each fund offers two no-load classes of shares, called Institutional and
Investor.

Institutional shares are sold directly by the funds' distributor. They may be
purchased by endowments, foundations and plan sponsors of 401(a), 401(k), 457
and 403(b) plans and by individuals.

Investor shares may be purchased by intermediary financial institutions
(including broker-dealers, investment advisers, financial planners, banks and
insurance companies), and certain individual retirement accounts and
individuals. Investment professionals may purchase Investor shares for
discretionary or non-discretionary accounts maintained by individuals.

Shares of each class represent equal pro rata interests in the funds. Each class
accrues dividends and calculates its net asset value and performance the same
way. But because of their higher fees, Investor shares will generally have a
lower total return than Institutional shares.

SHAREHOLDER SERVICING AND DISTRIBUTION

As part of its business strategy, each fund has adopted a Rule 12b-1 shareholder
servicing and distribution plan with respect to Investor shares for the payment
of certain distribution-related services. Under the plan, the distributor
receives fees at an annual rate of 0.25% of the average daily net assets of the
fund's Investor shares, which the distributor may use to pay third-party
broker-dealers who sell shares of the fund or other distribution-related
services.

Rule 12b-1 is the federal securities regulation authorizing fees of this type.
Because the fees are paid out of a fund's assets on an ongoing basis, over time
they will increase the cost of an investment in Investor shares and may cost you
more than paying other types of sales charges.

No compensation is paid by the funds for distribution services with respect to
sales of Institutional shares. Shareholder and distribution services to these
shareholders will be provided at no charge to fund shareholders.

-35-

<PAGE>

ADDITIONAL INFORMATION

Additional documents are available that offer further information about the
funds:

ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS

Includes financial statements, portfolio investments, detailed performance
information, a statement from portfolio management and the independent
accountants' report.

The annual report also provides a discussion of the market conditions and
investment strategies that significantly affected fund performance during the
last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

Provides more details about the funds and their investments. A current SAI has
been filed with the Securities and Exchange Commission and is incorporated by
reference. You may visit the Commission's Internet Website (www.sec.gov) to view
the SAI, other material incorporated by reference, and other information. You
can also get copies of this information by writing to the Commission and paying
a duplicating fee. Write to:

Securities and Exchange Commission
Public Reference Section
Washington, D.C. 20540-6009.

You may review and copy information about the funds, including the SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
To find out more about the public reference room, call the Commission at
1-800-SEC-0330.

Please contact CDC MPT+ Funds to obtain more information about the funds,
inquire about your account or request a free copy of the current
annual/semi-annual report or SAI:

By mail:

CDC MPT+ Funds
P.O. Box 8122
Boston, MA 02266-8122

By overnight or courier service:

Boston Financial
Attn: CDC MPT+ Funds
2 Heritage Drive
North Quincy, MA 02171

By telephone: 800-774-9838

SEC File No. 811-09083

-36-
<PAGE>

Subject to Completion, dated May 6, 1999

STATEMENT OF ADDITIONAL INFORMATION

June __, 1999

CDC MPT+ FUNDS

U.S. CORE EQUITY FUND
AGGRESSIVE EQUITY FUND
GLOBAL INDEPENDENCE FUND

This Statement of Additional Information is meant to be read in
conjunction with the Prospectus for the Institutional shares and the Investor
shares of CDC MPT+ Funds (the "Trust"), dated June __, 1999 as amended or
supplemented from time to time (the "Prospectus"), and is incorporated by
reference in its entirety into the Prospectus. The Trust currently offers three
separately managed portfolios: U.S. Core Equity Fund, Aggressive Equity Fund and
Global Independence Fund (together the "Funds" and each a "Fund"). Because this
Statement of Additional Information is not itself a prospectus, no investment in
shares of a Fund should be made solely upon the information contained herein.
Copies of the Funds' Prospectus and information regarding the Funds' current
performance and the status of shareholder accounts may be obtained by calling
the Funds at (800) 774-9838 or by writing to the Funds at P.O. Box 8122,
Boston, Massachusetts, 02266-8122.

The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any State where the offer
or sale is not permitted.
<PAGE>

TABLE OF CONTENTS

Page
----

Organization of the Funds. . . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . 1
Options, Futures, Currency Exchange Transactions and Swaps . . . 1
Securities Options. . . . . . . . . . . . . . . . . . . . . 2
Securities Index Options. . . . . . . . . . . . . . . . . . 5
OTC Options . . . . . . . . . . . . . . . . . . . . . . . . 5
Futures Activities. . . . . . . . . . . . . . . . . . . . . 6
Futures Contracts. . . . . . . . . . . . . . . . . . . 6
Options on Futures Contracts . . . . . . . . . . . . . 7
Currency Exchange Transactions. . . . . . . . . . . . . . . 8
Forward Currency Contracts . . . . . . . . . . . . . . 8
Currency Options . . . . . . . . . . . . . . . . . . . 9
Hedging. . . . . . . . . . . . . . . . . . . . . . . . 9
Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Asset Coverage for Forward Contracts, Options,
Futures and Options on Futures and Swaps . . . . . . . . . 11
U.S. Government Securities . . . . . . . . . . . . . . . . . . . 12
Money Market Obligations . . . . . . . . . . . . . . . . . . . . 12
Bank Obligations. . . . . . . . . . . . . . . . . . . . . . 13
Commercial Paper. . . . . . . . . . . . . . . . . . . . . . 13
Other Short-Term Corporate Obligations. . . . . . . . . . . 13
Foreign Investments. . . . . . . . . . . . . . . . . . . . . . . 14
Foreign Currency Exchange . . . . . . . . . . . . . . . . . 14
Information . . . . . . . . . . . . . . . . . . . . . . . . 14
Foreign Markets . . . . . . . . . . . . . . . . . . . . . . 15
Political Instability . . . . . . . . . . . . . . . . . . . 15
Increased Expenses. . . . . . . . . . . . . . . . . . . . . 15
Foreign Debt Securities . . . . . . . . . . . . . . . . . . 15
Emerging Markets. . . . . . . . . . . . . . . . . . . . . . 16
Depositary Receipts . . . . . . . . . . . . . . . . . . . . 16
Euro Conversion . . . . . . . . . . . . . . . . . . . . . . 16
Fixed Income Securities. . . . . . . . . . . . . . . . . . . . . 17
Securities of Other Investment Companies . . . . . . . . . . . . 17
Standard & Poor's Depositary Receipts ("SPDRS"). . . . . . . . . 17
When-Issued Securities, Delayed-Delivery Transactions
and Forward Commitments. . . . . . . . . . . . . . . . . . . . 18
Repurchase Agreements. . . . . . . . . . . . . . . . . . . . . . 18
Reverse Repurchase Agreements and Dollar Rolls . . . . . . . . . 19
Loan Participations and Assignments. . . . . . . . . . . . . . . 20
Zero Coupon Securities . . . . . . . . . . . . . . . . . . . . . 20
Convertible Securities . . . . . . . . . . . . . . . . . . . . . 20
Mortgage-Backed Securities. . . . . . . . . . . . . . . . . 22
Asset-Backed Securities . . . . . . . . . . . . . . . . . . 23

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<PAGE>

Structured Notes. . . . . . . . . . . . . . . . . . . . . . 23
Non-Publicly Traded and Illiquid Securities . . . . . . . . 24
Rule 144A Securities . . . . . . . . . . . . . . . . . 24
Rights Offerings and Purchase Warrants. . . . . . . . . . . 25
Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 26
U.S. Core Equity Fund Only . . . . . . . . . . . . . . . . . . . 26
Short Selling . . . . . . . . . . . . . . . . . . . . . . . 26
Short Sales "Against the Box".. . . . . . . . . . . . . . . 27
Lending of Portfolio Securities . . . . . . . . . . . . . . 27
Aggressive Equity Fund and Global Independence Fund Only . . . . 28
Non-Diversified Status. . . . . . . . . . . . . . . . . . . 28
Below Investment Grade Securities . . . . . . . . . . . . . 28
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Portfolio Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Management of the Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 36
Officers and Trustees. . . . . . . . . . . . . . . . . . . . . . 36
Control Persons and Principal Stockholders . . . . . . . . . . . 38
Investment Adviser and Administrator . . . . . . . . . . . . . . 38
Management Fees. . . . . . . . . . . . . . . . . . . . . . . . . 39
Choice of Performance Benchmark . . . . . . . . . . . . . . 39
Distribution and Shareholder Servicing . . . . . . . . . . . . . 42
Investor Shares . . . . . . . . . . . . . . . . . . . . . . 42
Institutional Shares. . . . . . . . . . . . . . . . . . . . 43
General . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Custodian and Transfer Agent . . . . . . . . . . . . . . . . . . 43
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 43
Additional Purchase and Redemption Information . . . . . . . . . . . . . . 44
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Additional Information Concerning Taxes. . . . . . . . . . . . . . . . . . 46
The Funds and Their Investments. . . . . . . . . . . . . . . . . 46
Taxation of United States Shareholders . . . . . . . . . . . . . 49
Other Taxation . . . . . . . . . . . . . . . . . . . . . . . . . 51
Determination of Performance . . . . . . . . . . . . . . . . . . . . . . . 51
Independent Auditors and Counsel . . . . . . . . . . . . . . . . . . . . . 52
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Appendix -- Description of Ratings . . . . . . . . . . . . . . . . . . . . A-1

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<PAGE>

ORGANIZATION OF THE FUNDS

The Trust is an open-end management investment company that was
organized on October 13, 1998 under the laws of the State of Delaware and is a
business entity commonly known as "Delaware business trust." The Trust
currently offers three separately managed series each comprised of both Investor
and Institutional shares: U.S. Core Equity Fund, Aggressive Equity Fund and
Global Independence Fund. Unless otherwise indicated, references to a "Fund"
apply to all classes of shares of that Fund as a group.

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of each Fund's
investment objectives and policies in the Prospectus. There are no assurances
that a Fund will achieve its investment objectives.

The U.S. Core Equity Fund is a diversified portfolio that seeks total
return greater than that of the S&P 500 Index by investing primarily in equity
securities of U.S. companies.

The Aggressive Equity Fund is a non-diversified portfolio that seeks
total return greater than that of the S&P 500 Index by investing primarily in
equity and equity related securities and certain derivative instruments.

The Global Independence Fund is a non-diversified portfolio that seeks
total return, on a risk adjusted basis, consistent with the preservation of
capital by investing primarily in the global equity, global fixed income and
currency markets.

CDC Investment Management Corporation ("CDC Investments" or the
"Adviser") serves as the investment adviser to each Fund. Both the Aggressive
Equity Fund and the Global Independence Fund apply CDC Investments' Global
Dynamic Asset Allocation Strategy ("GDAA Strategy"), which focuses on building a
risk-return balanced portfolio which seeks to control the effect of shifts in
market volatility through the use of certain investment strategies. The GDAA
Strategy seeks to exploit patterns in the relationships of fundamental economic
and financial variables to the underlying equity, bond and currency markets and
uses a mix of fundamental judgment and sophisticated quantitative tools to
achieve that objective.

OPTIONS, FUTURES, CURRENCY EXCHANGE TRANSACTIONS AND SWAPS

At the discretion of CDC Investments, each Fund may engage in a number
of strategies involving options, futures, forward currency contracts and swaps.
These instruments, commonly referred to as "derivatives," may be used (i) for
the purpose of hedging against a decline in value of a Fund's current or
anticipated portfolio holdings, (ii) as a substitute for purchasing or selling
portfolio securities or (iii) in an attempt to generate income to offset
expenses or increase return. Transactions that are not considered hedging
should be considered speculative and may serve to increase a Fund's investment
risk. Transaction costs and any premiums associated with these strategies, and
any losses incurred,
<PAGE>

will affect a Fund's net asset value and performance. Therefore, an investment
in a Fund may involve a greater risk than an investment in other mutual funds
that do not use these strategies. The Funds' use of these strategies may be
limited by position and exercise limits established by securities and
commodities exchanges and other applicable regulatory authorities.

To the extent a Fund engages in the strategies described below, a Fund
may experience losses greater than if these strategies had not been utilized.
In addition to the risks described below, these instruments may be illiquid
and/or subject to trading limits, and a Fund may be unable to close out
positions without incurring substantial losses, if at all. A Fund is also
subject to the risk of a default by a counterparty to an off-exchange
transaction.

SECURITIES OPTIONS. Each Fund may write covered call options on stock
and debt securities and may purchase U.S. and foreign exchange-traded and
over-the-counter ("OTC") put and call options.

A Fund realizes fees (referred to as "premiums") for granting the
rights evidenced by the options it has written. A put option embodies the right
of its purchaser to compel the writer of the option to purchase from the option
holder an underlying security at a specified price for a specified time period
or at a specified time. In contrast, a call option embodies the right of its
purchaser to compel the writer of the option to sell to the option holder an
underlying security at a specified price for a specified time period or at a
specified time.

The principal reason for writing covered options on a security is to
attempt to realize, through the receipt of premiums, a greater return than would
be realized on the securities alone. In return for a premium, a Fund that
writes a covered call option forfeits the right to any appreciation in the value
of the underlying security above the strike price for the life of the option (or
until a closing purchase transaction can be effected). A Fund that writes a
call option retains the risk of an increase in the price of the underlying
security. The size of the premiums that a Fund may receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option-writing activities.

If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that the
writer will also profit, because it should be able to close out the option at a
lower price. If security prices decline, the put writer would expect to suffer
a loss. This loss may be less than the loss from purchasing the underlying
instrument directly to the extent that the premium received offsets the effects
of the decline.

In the case of options written by a Fund that are deemed covered by
virtue of a Fund holding convertible or exchangeable preferred stock or debt
securities, the time required to convert or exchange and obtain physical
delivery of the underlying common stock with respect to which a Fund has written
options may exceed the time within which a Fund must make delivery in accordance
with an exercise notice. In these instances, a Fund may purchase or temporarily
borrow the underlying securities for purposes of physical delivery. By so
doing, a Fund will not bear any market risk, since a Fund will have the absolute
right to

2
<PAGE>

receive from the issuer of the underlying security an equal number of shares to
replace the borrowed securities, but a Fund may incur additional transaction
costs or interest expenses in connection with any such purchase or borrowing.

The potential loss associated with purchasing an option is limited to
the premium paid, and the premium would partially offset any gains achieved by
its use. However, for an option writer the exposure to adverse price movements
in the underlying security or index is potentially unlimited during the exercise
period. Writing securities options may result in substantial losses to a Fund,
force the sale of portfolio securities at inopportune times or at less
advantageous prices, limit the amount of appreciation a Fund could realize on
its investments or require a Fund to hold securities it would otherwise sell.

Additional risks exist with respect to certain securities for which a
Fund may write covered call options. For example, if a Fund writes covered call
options on mortgage-backed securities, the mortgage-backed securities that it
holds as cover may, because of scheduled amortization or unscheduled
prepayments, cease to be sufficient cover. If this occurs, a Fund will
compensate for the decline in the value of the cover by purchasing an
appropriate additional amount of mortgage-backed securities.

Options written by a Fund will normally have expiration dates between
one and nine months from the date written. The exercise price of the options
may be below, equal to or above the market values of the underlying securities
at the times the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively. Each Fund may write (i) in-the-money call
options when CDC Investments expects that the price of the underlying security
will remain flat or decline moderately during the option period,
(ii) at-the-money call options when CDC Investments expects that the price of
the underlying security will remain flat or advance moderately during the option
period and (iii) out-of-the-money call options when CDC Investments expects that
the premiums received from writing the call option plus the appreciation in
market price of the underlying security up to the exercise price will be greater
than the appreciation in the price of the underlying security alone. In any of
the preceding situations, if the market price of the underlying security
declines and the security is sold at this lower price, the amount of any
realized loss will be offset wholly or in part by the premium received. To
secure its obligation to deliver the underlying security when it writes a call
option, each Fund will be required to deposit in escrow the underlying security
or other assets in accordance with the rules of the Options Clearing Corporation
(the "Clearing Corporation") and of the securities exchange on which the option
is written.

Prior to their expirations, put and call options may be sold in
closing sale or purchase transactions (sales or purchases by a Fund prior to the
exercise of options that it has purchased or written, respectively, of options
of the same series) in which a Fund may realize a profit or loss from the sale.
An option position may be closed out only where there exists a secondary market
for an option of the same series on a recognized securities exchange or in the
OTC market. When a Fund has purchased an option and engages in a closing sale
transaction, whether a Fund realizes a profit or loss will depend upon whether
the amount received in the

3
<PAGE>

closing sale transaction is more or less than the premium a Fund initially paid
for the original option plus the related transaction costs. Similarly, in cases
where a Fund has written an option, it will realize a profit if the cost of the
closing purchase transaction is less than the premium received upon writing the
original option and will incur a loss if the cost of the closing purchase
transaction exceeds the premium received upon writing the original option. Each
Fund may engage in a closing purchase transaction to realize a profit, to
prevent an underlying security with respect to which it has written an option
from being called or put or, in the case of a call option, to unfreeze an
underlying security (thereby permitting its sale or the writing of a new option
on the security prior to the outstanding option's expiration). The obligation
of a Fund under an option it has written would be terminated by a closing
purchase transaction, but a Fund would not be deemed to own an option as a
result of the transaction. So long as the obligation of a Fund as the writer of
an option continues, a Fund may be assigned an exercise notice by the
broker-dealer through which the option was sold, requiring a Fund to deliver the
underlying security against payment of the exercise price. This obligation
terminates when the option expires or a Fund effects a closing purchase
transactin. A Fund cannot effect a closing purchase transaction with respect to
an option once it has been assigned an exercise notice.

There is no assurance that sufficient trading interest will exist to
create a liquid secondary market on a securities exchange for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market for an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow or other unforeseen events have at times rendered certain
of the facilities of the Clearing Corporation and various securities exchanges
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts or
suspensions in one or more options. There can be no assurance that similar
events, or events that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it might not be possible to
effect closing transactions in particular options. Moreover, each Fund's
ability to terminate options positions established in the OTC market may be more
limited than for exchange-traded options and may also involve the risk that
securities dealers participating in OTC transactions would fail to meet their
obligations to a Fund. Each Fund, however, intends to purchase OTC options only
from dealers whose debt securities, as determined by CDC Investments, are
considered to be investment grade. If, as a covered call option writer, a Fund
is unable to effect a closing purchase transaction in a secondary market, it
will not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise. In either case, a Fund would
continue to have market risk on the security and could face higher transaction
costs, including brokerage commissions.

Securities exchanges generally have established limitations governing
the maximum number of calls and puts for each class which may be held or
written, or exercised within certain time periods by an investor or group of
investors acting in concert (regardless of whether the options are written on
the same or different securities exchanges or are held, written or exercised in
one or more accounts or through one or more brokers). It is possible that each
Fund and other clients of CDC Investments and certain of its affiliates may be

4
<PAGE>

considered to be such a group. A securities exchange may order the liquidation
of positions found to be in violation of these limits and it may impose certain
other sanctions. These limits may restrict the number of options a Fund will be
able to purchase on a particular security.

SECURITIES INDEX OPTIONS. Each Fund may purchase and write
exchange-listed and OTC put and call options on securities indexes. A
securities index measures the movement of a certain group of securities by
assigning relative values to the securities included in the index, fluctuating
with changes in the market values of the securities included in the index. Some
securities index options are based on a broad market index, such as the NYSE
Composite Index, or a narrower market index such as the Standard & Poor's 100
Index. Indexes may also be based on a particular industry or market segment.

Options on securities indexes are similar to options on stock, except
that (i) the expiration cycles of securities index options are monthly, while
those of stock options are currently quarterly, and (ii) the delivery
requirements are different. Instead of giving the right to take or make
delivery of stock at a specified price, an option on a securities index gives
the holder the right to receive a cash "exercise settlement amount" equal to (a)
the amount, if any, by which the fixed exercise price of the option exceeds (in
the case of a put) or is less than (in the case of a call) the closing value of
the underlying index on the date of exercise, multiplied by (b) a fixed "index
multiplier." Receipt of this cash amount will depend upon the closing level of
the securities index upon which the option is based being greater than, in the
case of a call, or less than, in the case of a put, the exercise price of the
index and the exercise price of the option times a specified multiple. The
writer of the option is obligated, in return for the premium received, to make
delivery of this amount. Securities index options may be offset by entering
into closing transactions as described above for stock options.

OTC OPTIONS. Each Fund may purchase OTC or dealer options or sell
covered OTC options. Unlike exchange-listed options where an intermediary or
clearing corporation, such as the Clearing Corporation, assures that all
transactions in such options are properly executed, the responsibility for
performing all transactions with respect to OTC options rests solely with the
writer and the holder of those options. A listed call option writer, for
example, is obligated to deliver the underlying stock to the clearing
organization if the option is exercised, and the clearing organization is then
obligated to pay the writer the exercise price of the option. If a Fund were to
purchase a dealer option, however, it would rely on the dealer from whom it
purchased the option to perform if the option were exercised. If the dealer
fails to honor the exercise of the option by a Fund, a Fund would lose the
premium it paid for the option and the expected benefit of the transaction.

Exchange-traded options generally have a continuous liquid market
while OTC or dealer options do not. Consequently, a Fund will generally be able
to realize the value of a dealer option it has purchased only by exercising it
or reselling it to the dealer who issued it. Similarly, when a Fund writes a
dealer option, it generally will be able to close out the option prior to its
expiration only by entering into a closing purchase transaction with the dealer
to which a Fund originally wrote the option. Although each Fund will seek to
enter into dealer options only with dealers who will agree to and that are
expected to be capable of entering into

5
<PAGE>

closing transactions with a Fund, there can be no assurance that a Fund will be
able to liquidate a dealer option at a favorable price at any time prior to
expiration. The inability to enter into a closing transaction may result in a
material loss to the Fund. Until a Fund, as a covered OTC call option writer,
is able to effect a closing purchase transaction, it will not be able to
liquidate securities (or other assets) used to cover the written option until
the option expires or is exercised. This requirement may impair a Fund's
ability to sell portfolio securities or, with respect to currency options,
currencies at a time when such sale might be advantageous

FUTURES ACTIVITIES. Each Fund may enter into foreign currency,
interest rate and stock index futures contracts and purchase and write (sell)
related options traded on exchanges designated by the Commodity Futures Trading
Commission (the "CFTC") or consistent with CFTC regulations on foreign
exchanges. The Aggressive Equity and Global Independence Funds may also enter
into futures contracts on precious metals and purchase and sell related options
on precious metals. These futures contracts are standardized contracts for the
future delivery of a foreign currency, precious metal, an interest rate
sensitive security or, in the case of index futures contracts or certain other
futures contracts, are settled in cash with reference to a specified multiplier
times the change in the specified index. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract. These transactions may be entered into for "bona fide
hedging" purposes as defined in CFTC regulations and other permissible purposes
including (i) for the purpose of hedging against a decline in value of a Fund's
current or anticipated portfolio holdings, (ii) as a substitute for purchasing
or selling portfolio securities or (iii) in an attempt to generate income to
offset expenses or increase return. Aggregate initial margin and premiums
(discussed below) required to establish positions other than those considered to
be "bona fide hedging" by the CFTC will not exceed 5% of the Fund's net asset
value after taking into account unrealized profits and unrealized losses on any
such contracts it has entered into. The Funds reserve the right to engage in
transactions involving futures contracts and options on futures contracts to the
extent allowed by CFTC regulations in effect from time to time and in accordance
with a Fund's policies. There is no overall limit on the percentage of Fund
assets that may be at risk with respect to futures activities.

FUTURES CONTRACTS. A foreign currency futures contract provides for
the future sale by one party and the purchase by the other party of a certain
amount of a specified non-U.S. currency at a specified price, date, time and
place. A precious metals futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a precious
metal at a specified price, date, time and place. An interest rate futures
contract provides for the future sale by one party and the purchase by the other
party of a certain amount of a specific interest rate sensitive financial
instrument (debt security) at a specified price, date, time and place.
Securities indexes are capitalization weighted indexes which reflect the market
value of the securities represented in the indexes. A securities index futures
contract is an agreement to be settled by delivery of an amount of cash equal to
a specified multiplier times the difference between the value of the index at
the close of the last trading day on the contract and the price at which the
contract is made.

6
<PAGE>

No consideration is paid or received by a Fund upon entering into a
futures contract. Instead, a Fund is required to segregate with its custodian
an amount of cash or securities acceptable to the broker, equal to approximately
1% to 10% of the contract amount (this amount is subject to change by the
exchange on which the contract is traded, and brokers may charge a higher
amount). This amount is known as "initial margin" and is in the nature of a
performance bond or good faith deposit on the contract which is returned to a
Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. The broker will have access to amounts in the
margin account if a Fund fails to meet its contractual obligations. Subsequent
payments, known as "variation margin," to and from the broker, will be made
daily as the currency, precious metal, financial instrument or stock index
underlying the futures contract fluctuates, making the long and short positions
in the futures contract more or less valuable, a process known as
"marking-to-market." A Fund will also incur brokerage costs in connection with
entering into futures transactions.

At any time prior to the expiration of a futures contract, a Fund may
elect to close the position by taking an opposite position, which will operate
to terminate a Fund's existing position in the contract. Positions in futures
contracts and options on futures contracts (described below) may be closed out
only on the exchange on which they were entered into (or through a linked
exchange). No secondary market for such contracts exists. Although each Fund
intends to enter into futures contracts only if there is an active market for
such contracts, there is no assurance that an active market will exist at any
particular time. Most futures exchanges limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be made
that day at a price beyond that limit or trading may be suspended for specified
periods during the day. It is possible that futures contract prices could move
to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions at an
advantageous price and subjecting a Fund to substantial losses. In such event,
and in the event of adverse price movements, a Fund would be required to make
daily cash payments of variation margin. In such situations, if a Fund had
insufficient cash, it might have to sell securities to meet daily variation
margin requirements at a time when it would be disadvantageous to do so. In
addition, if the transaction is entered into for hedging purposes, in such
circumstances a Fund may realize a loss on a futures contract or option that is
not offset by an increase in the value of the hedged position. Losses incurred
in futures transactions and the costs of these transactions will affect a Fund's
performance.

OPTIONS ON FUTURES CONTRACTS. Each Fund may purchase and write put
and call options on foreign currency, interest rate and stock index futures
contracts and may enter into closing transactions with respect to such options
to terminate existing positions. The Aggressive Equity Fund and the Global
Independence Fund may also purchase and write put and call options on precious
metals futures contracts and may enter into closing transactions with respect to
such options to terminate existing positions. There is no guarantee that such
closing transactions can be effected; the ability to establish and close out
positions on such options will be subject to the existence of a liquid market.

7
<PAGE>

An option on a currency, precious metal, interest rate or stock index
futures contract, as contrasted with the direct investment in such a contract,
gives the purchaser the right, in return for the premium paid, to assume a
position in a futures contract at a specified exercise price at any time prior
to the expiration date of the option. The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if the
option is a call and a long position if the option is a put). Upon exercise of
an option, the delivery of the futures position by the writer of the option to
the holder of the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin account, which represents the amount by
which the market price of the futures contract exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on the
futures contract. The potential loss related to the purchase of an option on
futures contracts is limited to the premium paid for the option (plus
transaction costs). Because the value of the option is fixed at the point of
sale, there are no daily cash payments by the purchaser to reflect changes in
the value of the underlying contract; however, the value of the option does
change daily and that change would be reflected in the net asset value of each
Fund. The CFTC has recently adopted rules that will permit exchanges to use
futures-style margining with respect to options on futures upon approval by the
CFTC.

CURRENCY EXCHANGE TRANSACTIONS. The value in U.S. dollars of the
assets of a Fund that are invested in foreign securities may be affected
favorably or unfavorably by a variety of factors not applicable to investment in
U.S. securities, and a Fund may incur costs in connection with conversion
between various currencies. Currency exchange transactions may be from any
non-U.S. currency into U.S. dollars or into other appropriate currencies. Each
Fund will conduct its currency exchange transactions (i) on a spot (I.E., cash)
basis at the rate prevailing in the currency exchange market, (ii) through
entering into futures contracts or options on such contracts (as described
above), (iii) through entering into forward contracts to purchase or sell
currency, (iv) by purchasing exchange-traded currency options or (v) by engaging
in currency swaps. Risk associated with currency forward contracts and
purchasing currency options are similar to those described herein for futures
contracts and securities and stock index options. In addition, the use of
currency transactions could result in losses from the imposition of foreign
exchange controls, suspension of settlement or other governmental actions or
unexpected events.

FORWARD CURRENCY CONTRACTS. A forward currency contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract as agreed upon by the
parties, at a price set at the time of the contract. These contracts are
entered into in the interbank market conducted directly between currency traders
(usually large commercial banks and brokers) and their customers. Forward
currency contracts are similar to currency futures contracts, except that
futures contracts are traded on commodities exchanges and are standardized as to
contract size and delivery date.

At or before the maturity of a forward contract, a Fund may either
sell a portfolio security and make delivery of the currency, or retain the
security and fully or partially offset its contractual obligation to deliver the
currency by negotiating with its trading

8
<PAGE>

partner to enter into an offsetting transaction. If a Fund retains the
portfolio security and engages in an offsetting transaction, a Fund, at the time
of execution of the offsetting transaction, will incur a gain or a loss to the
extent that movement has occurred in forward contract prices.

The OTC market in forward foreign currency exchange contracts offers
less protection against defaults by the other party to such instruments than is
available for currency instruments traded on an exchange. Such contracts are
subject to the risk that the counterparty to the contract will default on its
obligations. Since these contracts are not guaranteed by an exchange or
clearinghouse, a default on the contract would deprive a Fund of unrealized
profits, transaction costs or the benefits of a currency hedge or force a Fund
to cover its purchase or sale commitments, if any, at the current market price.
Currency exchange rates may fluctuate significantly over short periods of time.
They generally are determined by the forces of supply and demand in the foreign
exchange markets and the relative merits of investments in different countries,
actual or perceived changes in interest rates and other complex factors as seen
from an international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central banks,
or the failure to intervene, or by currency controls or political developments
in the U.S. or abroad.

CURRENCY OPTIONS. Each Fund may purchase exchange-traded put and call
options on foreign currencies. Put options convey the right to sell the
underlying currency at a price which is anticipated to be higher than the spot
price of the currency at the time the option is exercised. Call options convey
the right to buy the underlying currency at a price which is expected to be
lower than the spot price of the currency at the time the option is exercised.

HEDGING. In addition to entering into options, futures and currency
exchange transactions for other purposes, including generating current income to
offset expenses or increase return, each Fund may enter into these transactions
as hedges to reduce investment risk, generally by making an investment expected
to move in the opposite direction of a portfolio position. A hedge is designed
to offset a loss in a portfolio position with a gain in the hedged position or
to mitigate against non-diversification risks; at the same time, however, a
properly correlated hedge will result in a gain in the portfolio position being
offset by a loss in the hedged position. As a result, the use of options,
futures, contracts and currency exchange transactions for hedging purposes could
limit any potential gain from an increase in the value of the position hedged.
In addition, the movement in the portfolio position hedged may not be of the
same magnitude as movement in the hedge. With respect to futures contracts,
since the value of portfolio securities will far exceed the value of short
futures contracts entered into by a Fund, an increase in the value of the
futures contracts could only mitigate, but not totally offset, the decline in
the value of a Fund's assets.

In hedging transactions based on an index, whether a Fund will realize
a gain or loss from the purchase or writing of options on an index depends upon
movements in the level of stock prices in the stock market generally or, in the
case of certain indexes, in an industry or market segment, rather than movements
in the price of a particular stock. The risk of

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<PAGE>

imperfect correlation increases as the composition of a Fund's portfolio varies
from the composition of the index. In an effort to compensate for imperfect
correlation of relative movements in the hedged position and the hedge, a Fund's
hedge positions may be in a greater or lesser dollar amount than the dollar
amount of the hedged position. Such "over hedging" or "under hedging" may
adversely affect a Fund's net investment results if market movements are not as
anticipated when the hedge is established. Stock index futures transactions may
be subject to additional correlation risks. First, all participants in the
futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which would distort the normal
relationship between the stock index and futures markets. Second, from the
point of view of speculators, the deposit requirements in the futures market are
less onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market also may cause
temporary price distortions. Because of the possibility of price distortions in
the futures market and the imperfect correlation between movements in the stock
index and movements in the price of stock index futures, a correct forecast of
general market trends by CDC Investments still may not result in a successful
hedging transaction.

A Fund will engage in hedging transactions only when deemed advisable
by CDC Investments, and successful use by a Fund of hedging transactions will be
subject to CDC Investments' ability to predict trends in currency, interest rate
or securities markets, as the case may be, and to correctly predict movements in
the directions of the hedge and the hedged position and the correlation between
them, which predictions could prove to be inaccurate. This requires different
skills and techniques than predicting changes in the price of individual
securities, and there can be no assurance that the use of these strategies will
be successful. Even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or trends. Losses incurred in hedging
transactions and the costs of these transactions will affect a Fund's
performance.

To the extent that a Fund engages in the strategies described above,
the Fund may experience losses greater than if these strategies had not been
utilized. In addition to the risks described above, these instruments may be
illiquid and/or subject to trading limits, and the Fund may be unable to close
out a position without incurring substantial losses, if at all. The Fund is
also subject to the risk of a default by a counterparty to an off-exchange
transaction.

SWAPS. Each Fund may enter into swaps relating to indexes, currencies
and equity interests of issuers without limit. A swap transaction is an
agreement between a Fund and a counterparty to act in accordance with the terms
of the swap contract. Index swaps involve the exchange by a Fund with another
party of the respective amounts payable with respect to a notional principal
amount related to one or more indexes. Currency swaps involve the exchange of
cash flows on a notional amount of two or more currencies based on their
relative future values. An equity swap is an agreement to exchange streams of
payments computed by reference to a notional amount based on the performance of
a basket of stocks or a single stock. Each Fund may enter into these
transactions to preserve a return or spread on a

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<PAGE>

particular investment or portion of its assets, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities a Fund anticipates purchasing at a later
date. Each Fund may also use these transactions for speculative purposes, such
as to obtain the price performance of a security without actually purchasing the
security in circumstances, for example, the subject security is illiquid, is
unavailable for direct investment or available only on less attractive terms.
Swaps have risks associated with them including possible default by the
counterparty to the transaction, illiquidity and, where swaps are used as
hedges, the risk that the use of a swap could result in losses greater than if
the swap had not been employed. The Funds may only enter into swaps with
counterparties that are "eligible swap participants" as defined in CFTC
Regulation Section 35.1 (b)(2).

Each Fund will usually enter into swaps on a net basis (I.E., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the agreement, with a Fund receiving or paying, as the case may be,
only the net amount of the two payments). Swaps do not involve the delivery of
securities, other underlying assets or principal. Accordingly, the risk of loss
with respect to swaps is limited to the net amount of payments that a Fund is
contractually obligated to make. If the counterparty to a swap defaults, a
Fund's risk of loss consists of the net amount of payments that a Fund is
contractually entitled to receive. Where swaps are entered into for good faith
hedging purposes, CDC Investments believes such obligations do not constitute
senior securities under the Investment Company Act of 1940, as amended (the
"1940 Act") and, accordingly, will not treat them as being subject to a Fund's
borrowing restrictions. Where swaps are entered into for other than hedging
purposes, a Fund will segregate an amount of cash or liquid securities having a
value equal to the accrued excess of its obligations over entitlements with
respect to each swap on a daily basis.

ASSET COVERAGE FOR FORWARD CONTRACTS, OPTIONS, FUTURES AND OPTIONS ON
FUTURES AND SWAPS. The Funds will comply with guidelines established by the
U.S. Securities and Exchange Commission (the "SEC") and other applicable
regulatory bodies with respect to coverage of forward currency contracts;
options written by the Funds on currencies, securities and securities indexes
and swaps; and currency, interest rate and index futures contracts and options
on these futures contracts. These guidelines may, in certain instances, require
segregation by a Fund of cash or liquid securities with its custodian or
designated sub-custodian to the extent the Fund's obligations with respect to
these strategies are not otherwise "covered" through ownership of the underlying
security, financial instrument or currency or by other portfolio positions or by
other means consistent with applicable regulatory policies. Segregated assets
cannot be sold or transferred unless equivalent assets are substituted in their
place or it is no longer necessary to separate them. As a result, there is a
possibility that segregation of a large percentage of a Fund's assets could
impede portfolio management or a Fund's ability to meet redemption requests or
other current obligations.

For example, a call option written by a Fund on securities may require
a Fund to hold the securities subject to the call (or securities convertible
into the securities without additional consideration) or to segregate assets (as
described above) sufficient to purchase and

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<PAGE>

deliver the securities if the call is exercised. A call option written by a
Fund on an index may require a Fund to own portfolio securities that correlate
with the index or to segregate assets (as described above) equal to the excess
of the index value over the exercise price on a current basis. A Fund could
purchase a put option if the strike price of that option is the same or higher
than the strike price of a put option sold by a Fund. If a Fund holds a futures
or forward contract, a Fund could purchase a put option on the same futures or
forward contract with a strike price as high or higher than the price of the
contract held. A Fund may enter into fully or partially offsetting transactions
so that its net position, coupled with any segregated assets (equal to any
remaining obligation), equals its net obligation. Asset coverage may be
achieved by other means when consistent with applicable regulatory policies.

U.S. GOVERNMENT SECURITIES.

Each Fund may invest in debt obligations of varying maturities issued
or guaranteed by the U.S. government, its agencies or instrumentalities ("U.S.
Government Securities"). Direct obligations of the U.S. Treasury include a
variety of securities that differ in their interest rates, maturities and dates
of issuance. U.S. Government Securities also include securities issued or
guaranteed by the Federal Housing Administration, Farmers Home Loan
Administration, Export-Import Bank of the U.S., Small Business Administration,
Government National Mortgage Association ("GNMA"), General Services
Administration, Central Bank for Cooperatives, Federal Farm Credit Banks,
Federal Home Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"),
Federal Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association ("FNMA"), Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board and Student Loan Marketing Association. The
Funds may also invest in instruments that are supported by the right of the
issuer to borrow from the U.S. Treasury and instruments that are supported by
the credit of the instrumentality. Because the U.S. government is not obligated
by law to provide support to an instrumentality it sponsors, a Fund will invest
in obligations issued by such an instrumentality only if CDC Investments
determines that the credit risk with respect to the instrumentality does not
make its securities unsuitable for investment by a Fund.

MONEY MARKET OBLIGATIONS.

Each Fund is authorized to invest in short-term money market
obligations having remaining maturities of less than one year at the time of
purchase. These short-term instruments consist of U.S. Government Securities;
bank obligations (including certificates of deposit, time deposits and bankers'
acceptances of domestic or foreign banks, domestic savings and loans and similar
institutions) that are high quality investments or, if unrated, deemed by CDC
Investments to be high quality investments; commercial paper rated no lower than
A-2 by S&P or Prime-2 by Moody's or the equivalent from another major rating
service or, if unrated, of an issuer having an outstanding, unsecured debt issue
then rated within the three highest rating categories; and repurchase agreements
with respect to portfolio securities.

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<PAGE>

BANK OBLIGATIONS. The Funds may purchase certificates of deposit,
time deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Funds may be subject to
additional investment risks, including future and political and economic
developments, the possible imposition of withholding taxes on interest income,
possible establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect the payment of principal
and interest on such obligations.

Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.

Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven days)
at a stated interest rate.

Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.

COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by each Fund will consist only of direct obligations which, at
the time of their purchase, are (a) rated not lower than Prime-1 by Moody's or
A-1 by S&P, (b) issued by companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, or (c) if unrated,
determined by CDC Investments to be of comparable quality to those rated
obligations which may be purchased by the Fund.

OTHER SHORT-TERM CORPORATE OBLIGATIONS. These instruments include
variable amount master demand notes, which are obligations that permit a Fund to
invest fluctuating amounts at varying rates of interest pursuant to direct
arrangements between a Fund, as lender, and the borrower. These notes permit
daily changes in the amounts borrowed. Because these obligations are direct
lending arrangements between the lender and borrower, it is not contemplated
that such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are redeemable
at face value, plus accrued interest, at any time. Accordingly, where these
obligations are not secured by letters of credit or other credit support
arrangements, a Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Such obligations frequently
are not rated by credit rating agencies, and a Fund may invest in them only if
at the time of an investment CDC Investments determines that such investment is
of comparable quality to those rated obligations which may be purchased by each
Fund.

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<PAGE>

If CDC Investments determines that market conditions temporarily
warrant a defensive investment policy, each Fund may invest up to 100% of its
assets in money market instruments. The yield on such securities may be lower
than the yield on lower-rated, fixed-income securities.

FOREIGN INVESTMENTS. Investors should recognize that investing in
foreign companies involves certain risks, including those discussed below, which
are not typically associated with investing in U.S. issuers. Individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments positions. A
Fund may invest in securities of foreign governments (or agencies or
instrumentalities thereof), and many, if not all, of the foregoing
considerations apply to such investments as well.

FOREIGN CURRENCY EXCHANGE. Since the Funds may invest in securities
denominated in currencies other than the U.S. dollar, and since the Funds may
temporarily hold funds in bank deposits or other money market investments
denominated in foreign currencies, the Funds may be affected favorably or
unfavorably by exchange control regulations or changes in the exchange rate
between such currencies and the dollar. A change in the value of a foreign
currency relative to the U.S. dollar will result in a corresponding change in
the dollar value of Fund assets denominated in that foreign currency. Changes
in foreign currency exchange rates may also affect the value of dividends and
interest earned, gains and losses realized on the sale of securities and net
investment income and gains, if any, to be distributed to shareholders by the
Funds. The rate of exchange between the U.S. dollar and other currencies is
determined by the forces of supply and demand in the foreign exchange markets.
Changes in the exchange rate may result over time from the interaction of many
factors directly or indirectly affecting economic and political conditions in
the U.S. and a particular foreign country, including economic and political
developments in other countries. Governmental intervention may also play a
significant role. National governments rarely voluntarily allow their
currencies to float freely in response to economic forces. Sovereign
governments use a variety of techniques, such as intervention by a country's
central bank or imposition of regulatory controls or taxes, to affect the
exchange rates of their currencies. The Funds may, but are not required to, use
hedging techniques with the objective of protecting against loss through the
fluctuation of the value of foreign currencies against the U.S. dollar,
particularly the forward market in foreign exchange, currency options and
currency futures.

INFORMATION. Many of the foreign securities held by the Funds will
not be registered with, nor the issuers thereof be subject to reporting
requirements of, the SEC. Accordingly, there may be less publicly available
information about the securities and about the foreign company or government
issuing them than is available about a domestic company or government entity.
Foreign companies are generally subject to financial reporting standards,
practices and requirements that are either not uniform or less rigorous than
those applicable to U.S. companies.

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<PAGE>

FOREIGN MARKETS. Securities of some foreign companies are less liquid
and their prices are more volatile than securities of comparable U.S. companies.
Certain foreign countries are known to experience long delays between the trade
and settlement dates of securities purchased or sold, which may result in
increased exposure to market and foreign exchange fluctuations and increased
liquidity.

POLITICAL INSTABILITY. With respect to some foreign countries, there
is the possibility of expropriation, nationalization, or confiscatory taxation
and limitations on the use or removal of funds or other assets of a Fund,
including the withholding of dividends. Political or social instability, or
domestic developments could affect U.S. investments in those and neighboring
countries.

INCREASED EXPENSES. The operating expenses of a Fund, to the extent
it invests in foreign securities, may be higher than that of an investment
company investing exclusively in U.S. securities, since the expenses of the
Fund, such as the cost of converting foreign currency into U.S. dollars, the
payment of fixed brokerage commissions on foreign exchanges, custodial costs,
valuation costs and communication costs, may be higher than those costs incurred
by investment companies not investing in foreign securities. In addition,
foreign securities may be subject to foreign government taxes that would reduce
the net yield in such securities.

FOREIGN DEBT SECURITIES. Each of the Funds may invest in debt
securities (other than money market obligations) and preferred stocks that are
not convertible into common stock for the purpose of seeking capital
appreciation. Each Fund's holdings of debt securities will be considered
investment grade at the time of purchase, except that the Aggressive Equity Fund
and the Global Independence Fund may purchase a certain amount of below
investment grade securities (see "Below Investment Grade Securities"). A
security will be deemed to be investment grade if it is rated within the four
highest grades by Moody's Investors Service, Inc. ("Moody's") or Standard &
Poor's Ratings Service ("S&P") or, if unrated, is determined to be of comparable
quality by CDC Investments. The returns on foreign debt securities reflect
interest rates and other market conditions prevailing in those countries and the
effect of gains and losses in the denominated currencies against the U.S.
dollar, which have had a substantial impact on investment in foreign
fixed-income securities. The relative performance of various countries'
fixed-income markets historically has reflected wide variations relating to the
unique characteristics of each country's economy. Year-to-year fluctuations in
certain markets have been significant, and negative returns have been
experienced in various markets from time to time.

The foreign government securities in which the Funds may invest
generally consist of obligations issued or backed by national, state or
provincial governments or similar political subdivisions or central banks in
foreign countries. Foreign government securities also include debt obligations
of supranational entities, which include international organizations designated
or backed by governmental entities to promote economic reconstruction or
development, international banking institutions and related government agencies.
Examples include the International Bank for Reconstruction and Development (the
"World Bank"), the

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European Coal and Steel Community, the Asian Development Bank and the
InterAmerican Development Bank.

Foreign government securities also include debt securities of
quasi-governmental agencies and debt securities denominated in multinational
currency units of an issuer (including supranational issuers). Debt securities
of quasi-governmental agencies are issued by entities owned by either a
national, state or equivalent government or are obligations of a political unit
that is not backed by the national government's full faith and credit and
general taxing powers. An example of a multinational currency unit is the
European Currency Unit ("ECU"). An ECU represents specified amounts of the
currencies of certain member states of the European Economic Community. The
specific amounts of currencies comprising the ECU may be adjusted by the Council
of Ministers of the European Union to reflect changes in relative values of the
underlying currencies.

EMERGING MARKETS. Investing in securities of issuers located in
"emerging markets" (less developed countries located outside of the U.S.)
involves not only the risks described above with respect to investing in foreign
securities, but also other risks, including exposure to economic structures that
are generally less diverse and mature than, and to political systems that can be
expected to have less stability than, those of developed countries. For
example, many investments in emerging markets have recently experienced
significant declines in value due to political and currency volatility in
emerging markets countries. Other characteristics of emerging markets that may
affect investment include certain national policies that may restrict investment
by foreigners in issuers or industries deemed sensitive to relevant national
interests and the absence of developed structures governing private and foreign
investments and private property. The typically small size of the markets for
securities of issuers located in emerging markets and the possibility of a low
or nonexistent volume of trading in those securities may also result in a lack
of liquidity and in price volatility of those securities.

DEPOSITARY RECEIPTS. The assets of each Fund may be invested in the
securities of foreign issuers in the form of American Depositary Receipts
("ADRs") and European Depositary Receipts ("EDRs") and certain of the above
risks of investing in foreign securities may be involved in investing in such
securities. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a U.S. bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are receipts
issued in Europe typically by non-U.S. banks and trust companies that evidence
ownership of either foreign or domestic securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets and EDRs and
CDRs in bearer form are designed for use in European securities markets.

EURO CONVERSION. The introduction of a single European currency, the
euro, on January 1, 1999 for participating European nations in the Economic and
Monetary Union presents unique risks and uncertainties for investors in those
countries, including (i) the functioning of the payment and operational systems
of banks and other financial institutions;

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(ii) the creation of suitable clearing and settlement payment schemes for the
euro; (iii) the fluctuation of the euro relative to non-euro currencies during
the transition period from January 1, 1999 to December 31, 2000 and beyond; and
(iv) whether the interest rate, tax and labor regimes of the European countries
participating in the euro will converge over time. Further, the conversion of
the currencies of other Economic Monetary Union countries, such as the United
Kingdom, and the admission of other countries to the Economic and Monetary Union
could adversely affect the euro. These or other factors may cause market
disruptions and could adversely affect the value of foreign securities and
currencies held by the Funds.

FIXED INCOME SECURITIES. The value of the securities held by a Fund,
and thus the net asset value of the shares of a Fund, generally will vary
inversely in relation to changes in prevailing interest rates. Thus, if
interest rates have increased from the time a debt or other fixed income
security was purchased, such security, if sold, might be sold at a price less
than its cost. Conversely, if interest rates have declined from the time such a
security was purchased, such security, if sold, might be sold at a price greater
than its cost. Also, the value of such securities may be affected by changes in
real or perceived creditworthiness of the issuers. Thus, if creditworthiness is
enhanced, the price may rise. Conversely, if creditworthiness declines, the
price may decline. A Fund is not restricted to any maximum or minimum time to
maturity in purchasing portfolio securities, and the average maturity of a
Fund's assets will vary based on CDC Investments' assessment of economic and
market conditions.

SECURITIES OF OTHER INVESTMENT COMPANIES. Each Fund may invest in
securities of other investment companies to the extent permitted under the 1940
Act. Presently, under the 1940 Act, each Fund may hold securities of another
investment company in amounts which (i) do not exceed 3% of the total
outstanding voting stock of such company, (ii) do not exceed 5% of the value of
each Fund's total assets and (iii) when added to all other investment company
securities held by each Fund, do not exceed 10% of the value of each Fund's
total assets.

STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRS"). Each Fund may
purchase interests in a unit investment trust holding a portfolio of securities
linked to the S&P 500 Index. SPDRs closely track the underlying portfolio of
securities, trade like a share of common stock and pay periodic dividends
proportionate to those paid by the portfolio of stocks that comprise the S&P 500
Index. SPDRs trade on the American Stock Exchange like shares of common stock.
As a holder of interests in a unit investment trust, a Fund would indirectly
bear its ratable share of that unit investment trust's expenses. At the same
time, a Fund would continue to pay its own management and advisory fees and
other expenses, as a result of which a Fund and its shareholders in effect will
be absorbing duplicate levels of fees with respect to investments in such unit
investment trusts. The liquidity of small holdings of SPDRs will depend upon
the existence and liquidity of a secondary market. The price of SPDRs is
derived from and based upon the securities held by the unit investment trust.
Accordingly, the level of risk involved in the purchase or sale of a SPDR is
similar to the risk involved in the purchase or sale of traditional common
stock, with the exception that the pricing mechanism for SPDRs

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is based on a basket of stock. Disruptions in the markets for the securities
underlying SPDRs purchased or sold by a Fund could result in losses on SPDRs.

WHEN-ISSUED SECURITIES, DELAYED-DELIVERY TRANSACTIONS AND FORWARD
COMMITMENTS. Each Fund may purchase securities on a "when-issued" basis, for
delayed delivery (I.E., payment or delivery occur beyond the normal settlement
date at a stated price and yield) or on a forward commitment basis in an amount
up to 20% of its total assets. Each Fund does not intend to engage in these
transactions for speculative purposes, but only in furtherance of its investment
objectives. These transactions occur when securities are purchased or sold by a
Fund with payment and delivery taking place in the future to secure what is
considered an advantageous yield and price to a Fund at the time of entering
into the transaction. The payment obligation and the interest rate that will be
received on when-issued securities are fixed at the time the buyer enters into
the commitment. Due to fluctuations in the value of securities purchased or
sold on a when-issued, delayed-delivery basis or forward commitment basis, the
prices obtained on such securities may be higher or lower than the prices
available in the market on the dates when the investments are actually delivered
to the buyers. When-issued securities may include securities purchased on a
"when, as and if issued" basis under which the issuance of the security depends
on the occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring.

When a Fund agrees to purchase when-issued, delayed-delivery
securities or securities on a forward commitment basis, its custodian will set
aside cash or liquid securities equal to the amount of the commitment in a
segregated account. Normally, the custodian will set aside portfolio securities
to satisfy a purchase commitment, and in such a case a Fund may be required
subsequently to place additional assets in the segregated account in order to
ensure that the value of the account remains equal to the amount of a Fund's
commitment. The assets contained in the segregated account will be
marked-to-market daily. It may be expected that a Fund's net assets will
fluctuate to a greater degree when it sets aside portfolio securities to cover
such purchase commitments than when it sets aside cash. When a Fund engages in
when-issued, delayed-delivery or forward commitment transactions, it relies on
the other party to consummate the trade. Failure of the seller to do so may
result in a Fund's incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.

REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities
from a bank or recognized securities dealer and simultaneously commit to resell
the securities to the bank or dealer at an agreed-upon date and price reflecting
a market rate of interest unrelated to the coupon rate or maturity of the
purchased securities ("repurchase agreements"). Such Fund would maintain
custody of the underlying securities prior to their repurchase; thus, the
obligation of the bank or dealer to pay the repurchase price on the date agreed
to would be, in effect, secured by such securities. If the value of such
securities were less than the repurchase price, plus interest, the other party
to the agreement would be required to provide additional collateral so that at
all times the collateral is at least 102% of the repurchase price plus accrued
interest. Default by or bankruptcy of a seller would expose a Fund to possible
loss because of adverse market action, expenses and/or delays in connection with
the disposition of the underlying obligations. The financial institutions with
which a Fund may enter into repurchase

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<PAGE>

agreements will be banks and non-bank dealers of U.S. Government securities that
are listed on the Federal Reserve Bank of New York's list of reporting dealers,
if such banks and non-bank dealers are deemed creditworthy by CDC Investments.
CDC Investments will continue to monitor creditworthiness of the seller under a
repurchase agreement, and will require the seller to maintain during the term of
the agreement the value of the securities subject to the agreement to equal at
least 102% of the repurchase price (including accrued interest). In addition,
CDC Investments will require that the value of this collateral, after
transaction costs (including loss of interest) reasonably expected to be
incurred on a default, be equal to 102% or greater than the repurchase price
(including accrued premium) provided in the repurchase agreement or the daily
amortization of the difference between the purchase price and the repurchase
price specified in the repurchase agreement. CDC Investments will
mark-to-market daily the value of the securities. There are no percentage
limits on a Fund's ability to enter into repurchase agreements. Repurchase
agreements are considered to be loans by the Fund under the 1940 Act.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. Each Fund may enter
into reverse repurchase agreements with the same parties with whom it may enter
into repurchase agreements. Reverse repurchase agreements involve the sale of
securities held by a Fund pursuant to its agreement to repurchase them at a
mutually agreed upon date, price and rate of interest. At the time a Fund
enters into a reverse repurchase agreement, it will establish and maintain a
segregated account with an approved custodian containing cash or liquid
securities having a value not less than the repurchase price (including accrued
interest). The assets contained in the segregated account will be
marked-to-market daily and additional assets will be placed in such account on
any day in which the assets fall below the repurchase price (plus accrued
interest). A Fund's liquidity and ability to manage its assets might be
affected when it sets aside cash or portfolio securities to cover such
commitments. Reverse repurchase agreements involve the risk that the market
value of the securities retained in lieu of sale may decline below the price of
the securities a Fund has sold but is obligated to repurchase. In the event the
buyer of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce a Fund's obligation to
repurchase the securities, and a Fund's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.

Each Fund also may enter into "dollar rolls," in which a Fund sells
fixed-income securities for delivery in the current month and simultaneously
contracts to repurchase similar but not identical (same type, coupon and
maturity) securities on a specified future date. During the roll period, a Fund
would forego principal and interest paid on such securities. A Fund would be
compensated by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale. At the time a Fund enters into a dollar roll
transaction, it will segregate with an approved custodian, cash or liquid
securities having a value not less than the repurchase price (including accrued
interest) and will subsequently monitor the segregated assets to ensure that
their value is maintained. Reverse repurchase agreements and dollar rolls that
are accounted for as financings are considered to be borrowings under the 1940
Act.

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<PAGE>

LOAN PARTICIPATIONS AND ASSIGNMENTS. Each Fund may invest in fixed
and floating rate loans ("Loans") arranged through private negotiations between
a foreign government and one or more financial institutions ("Lenders"). The
majority of the Funds' investments in Loans are expected to be in the form of
participations in Loans ("Participations") and assignments of portions of Loans
from third parties ("Assignments"). Participations typically will result in a
Fund having a contractual relationship only with the Lender, not with the
borrower. A participating Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, a Fund
generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the Loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and a Fund may not directly benefit from
any collateral supporting the Loan in which it has purchased the Participation.
As a result, participating Funds will assume the credit risk of both the
borrower and the Lender that is selling the Participation. In the event of the
insolvency of the Lender selling a Participation, a Fund may be treated as a
general creditor of the Lender and may not benefit from any set-off between the
Lender and the borrower. The Funds will acquire Participations only if the
Lender interpositioned between the Funds and the borrower is determined by CDC
Investments to be creditworthy.

ZERO COUPON SECURITIES. Each Fund may invest up to 20% of its total
assets in "zero coupon" U.S. Treasury, foreign government and U.S. and foreign
corporate debt securities, which are bills, notes and bonds that have been
stripped of their unmatured interest coupons and custodial receipts or
certificates of participation representing interests in such stripped debt
obligations and coupons. A zero coupon security pays no interest to its holder
prior to maturity. Accordingly, such securities usually trade at a deep
discount from their face or par value and will be subject to greater
fluctuations of market value in response to changing interest rates than debt
obligations of comparable maturities that make current distributions of interest
and may be more, speculative than such other securities. Accordingly, the
values of these securities may be highly volatile as interest rates rise or
fail. Redemption of shares of a Fund that require it to sell zero coupon
securities prior to maturity may result in capital gains or losses that are
substantial. Each Fund anticipates that it will not normally hold zero coupon
securities to maturity. Federal tax law requires that a holder of a zero coupon
security accrue a portion of the discount at which the security was purchased as
income each year, even though the holder receives no interest payment on the
security during the year. Such accrued discount will be included in determining
the amount of dividends a Fund must pay each year and, in order to generate cash
necessary to pay such dividends, a Fund may liquidate portfolio securities at a
time when it would not otherwise have done so.

CONVERTIBLE SECURITIES. A convertible security is a bond, debenture,
note, preferred stock or other security that may be converted into or exchanged
for a prescribed amount of common stock of the same or a different issuer within
a particular period of time at a specified price or formula. A convertible
security entitles the holder to receive interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged. Before conversion, convertible securities

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<PAGE>

have characteristics similar to nonconvertible debt securities in that they
ordinarily provide a stable stream of income with generally higher yields than
those of common stocks of the same or similar issuers. Convertible securities
rank senior to common stock in a corporation's capital structure but are usually
subordinated to comparable nonconvertible securities. While no securities
investment is completely without risk, investments in convertible securities
generally entail less risk than the corporation's common stock, although the
extent to which such risk is reduced depends in large measure upon the degree to
which the convertible security sells above its value as a fixed-income security.
Convertible securities have unique investment characteristics in that they
generally (1) have higher yields than common stocks, but lower yields than
comparable non-convertible securities, (2) are less subject to fluctuation in
value than the underlying stock since they have fixed-income characteristics and
(3) provide the potential for capital appreciation if the market price of the
underlying common stock increases. Most convertible securities currently are
issued by U.S. companies, although a substantial Eurodollar convertible
securities market has developed, and the markets for convertible securities
denominated in local currencies are increasing. Subsequent to purchase by a
Fund, convertible securities may cease to be rated or a rating may be reduced
below the minimum required for purchase by a Fund. Neither event will require
sale of such securities, although CDC Investments will consider such event in
its determination of whether a Fund should continue to hold the securities.

The value of a convertible security is a function of its "investment
value" (determined by its yield in comparison with the yields of other
securities of comparable maturity and quality that do not have a conversion
privilege) and its "conversion value" (the security's worth, at market value, if
converted into the underlying common stock). The investment value of a
convertible security is influenced by changes in interest rates, with investment
value declining as interest rates increase and increasing as interest rates
decline. The credit standing of the issuer and other factors also may have an
effect on the convertible security's investment value. The conversion value of
a convertible security is determined by the market price of the underlying
common stock. If the conversion value is low relative to the investment value,
the price of the convertible security is governed principally by its investment
value. Generally the conversion value decreases as the convertible security
approaches maturity. To the extent the market price of the underlying common
stock approaches or exceeds the conversion price, the price of the convertible
security will be increasingly influenced by its conversion value. A convertible
security generally will sell at a premium over its conversion value by the
extent to which investors place value on the right to acquire the underlying
common stock while holding a fixed-income security.

A convertible security might be subject to redemption at the option of
the issuer at a price established in the convertible security's governing
instrument. If a convertible security held by a Fund is called for redemption,
the Fund will be required to permit the issuer to redeem the security, convert
it into the underlying common stock or sell it to a third party. The Funds will
invest in convertible securities without regard to their credit rating.

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<PAGE>

MORTGAGE-BACKED SECURITIES. Each Fund may invest in mortgage-backed
securities issued by U.S. government entities, such as GNMA, FNMA or FHLMC. In
addition, a Fund may invest in mortgage-backed securities sponsored by U.S.
issuers as well as non-governmental issuers. The Aggressive Equity Fund and the
Global Independence Fund may also invest in mortgage-backed securities of
foreign issuers. Non-government issued mortgage-backed securities may offer
higher yields than those issued by government entities, but may be subject to
greater price fluctuations. Mortgage-backed securities represent direct or
indirect participations in, or are secured by and payable from, mortgage loans
secured by real property. The mortgages backing these securities include, among
other mortgage instruments, conventional 30-year fixed-rate mortgages, 15-year
fixed-rate mortgages, graduated payment mortgages and adjustable rate mortgages.
Although there may be government or private guarantees on the payment of
interest and principal of these securities, the guarantees do not extend to the
securities' yield or value, which are likely to vary inversely with fluctuations
in interest rates, nor do the guarantees extend to the yield or value of a
Fund's shares. These securities generally are "pass-through" instruments,
through which the holders receive a share of all interest and principal payments
from the mortgages underlying the securities, net of certain fees. Some
mortgage-backed securities, such as collateralized mortgage obligations
("CMOs"), make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate and
repay principal at maturity (like a typical bond).

Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption. The average life of pass-through pools
varies with the maturities of the underlying mortgage loans. A pool's term may
be shortened by unscheduled or early payments of principal on the underlying
mortgages. The occurrence of mortgage prepayments is affected by various
factors, including the level of interest rates, general economic conditions, the
location, scheduled maturity and age of the mortgage and other social and
demographic conditions. Because prepayment rates of individual pools vary
widely, it is not possible to predict accurately the average life of a
particular pool. At present, pools, particularly those with loans with other
maturities or different characteristics, are priced on an assumption of average
life determined for each pool. In periods of falling interest rates, the rate
of prepayment tends to increase, thereby shortening the actual average life of a
pool of mortgage-backed securities. Conversely, in periods of rising rates the
rate of prepayment tends to decrease, thereby lengthening the actual average
life of the pool. However, these effects may not be present, or may differ in
degree, if the mortgage loans in the pools have adjustable interest rates or
other special payment terms, such as a prepayment charge. Actual prepayment
experience may cause the yield of mortgage-backed securities to differ from the
assumed average life yield. Reinvestment of prepayments may occur at higher or
lower interest rates than the original investment, thus affecting a Fund's
yield.

The rate of interest on mortgage-backed securities is lower than the
interest rates paid on the mortgages included in the underlying pool due to the
annual fees paid to the servicer of the mortgage pool for passing through
monthly payments to certificate holders and to any guarantor, such as GNMA, and
due to any yield retained by the issuer. Actual yield to

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<PAGE>

the holder may vary from the coupon rate, even if adjustable, if the
mortgage-backed securities are purchased or traded in the secondary market at a
premium or discount. In addition, there is normally some delay between the time
the issuer receives mortgage payments from the servicer and the time the issuer
makes the payments on the mortgage-backed securities, and this delay reduces the
effective yield to the holder of such securities.

ASSET-BACKED SECURITIES. Each Fund may also invest in asset-backed
securities, which represent participations in, or are secured by and payable
from, pools of consumer loans on assets such as motor vehicle installment sales,
installment loan contracts, leases of various types of real and personal
property and receivables from revolving credit (credit card) agreements. Such
assets are securitized through the use of trusts and special purpose
corporations. Payments or distributions of principal and interest ultimately
depend on payments in respect of the underlying loans by individuals and may be
guaranteed up to certain amounts and for a certain time period by a letter of
credit or a pool insurance policy issued by a financial institution unaffiliated
with the trust or corporation.

Asset-backed securities present certain risks that are not presented
by other securities in which a Fund may invest. Automobile receivables
generally are secured by automobiles. Most issuers of automobile receivables
permit the loan servicers to retain possession of the underlying obligations.
If the servicer were to sell these obligations to another party, there is a risk
that the purchaser would acquire an interest superior to that of the holders of
the asset-backed securities. In addition, because of the large number of
vehicles involved in a typical issuance and technical requirements under state
laws, the trustee for the holders of the automobile receivables may not have a
proper security interest in the underlying automobiles. Therefore, there is the
possibility that recoveries on repossessed collateral may not, in some cases, be
available to support payments on these securities. Credit card receivables are
generally unsecured, and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on the credit cards, thereby reducing the
balance due. In addition, there is no assurance that the security interest in
the collateral can be realized. The remaining maturity of any asset-backed
security a Fund invests in will be 397 days or less. A Fund may purchase
asset-backed securities that are unrated.

STRUCTURED NOTES. The Funds may invest in structured notes. The
distinguishing feature of a structured note is that the amount of interest
and/or principal payable on the notes is based on the performance of a benchmark
asset or market other than fixed-income securities or interest rates. Examples
of a benchmark include stock prices, currency exchange rates and physical
commodity prices. Investing in a structured note allows a Fund to gain exposure
to the benchmark asset or market, such as investments in certain emerging
markets that restrict investment by foreigners. The structured note fixes the
maximum loss that a Fund may experience in the event that the market does not
perform as expected. The performance tie can be a straight relationship or
leveraged, although CDC Investments generally will not use leverage in its
structured note strategies. Depending on the terms of the note, a Fund may
forego all or part of the interest and principal that would be payable on a
comparable conventional note; a Fund's loss cannot exceed this foregone interest

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<PAGE>

and/or principal. An investment in a structured note involves risks similar to
those associated with a direct investment in the benchmark asset. Structured
notes will be treated as illiquid securities for investment limitation purposes.

NON-PUBLICLY TRADED AND ILLIQUID SECURITIES. Each Fund may not invest
more than 15% of its net assets in non-publicly traded and illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market, repurchase agreements which have a maturity of longer than
seven days, certain Rule 144A Securities (as described below) and time deposits
maturing in more than seven days. Securities that have legal or contractual
restrictions on resale but have a readily available market are not considered
illiquid for purposes of this limitation. Repurchase agreements subject to
demand are deemed to have a maturity equal to the notice period.

Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Companies whose securities are
not publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded. Limitations on resale may have an adverse effect on the marketability
of portfolio securities and a mutual fund might be unable to dispose of
restricted or other illiquid securities promptly or at reasonable prices and
might thereby experience difficulty satisfying redemptions within seven days
without borrowing. A mutual fund might also have to register such restricted
securities in order to dispose of them resulting in additional expense and
delay. Adverse market conditions could impede such a public offering of
securities.

In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act
including repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.

RULE 144A SECURITIES. Each Fund may purchase securities that are not
registered under the Securities Act, but that can be sold to "qualified
institutional buyers" in accordance with Rule 144A under the Securities Act
adopted by the SEC. Rule 144A allows for a broader institutional trading market
for securities otherwise subject to restriction on resale to the general public.
Rule 144A establishes a "safe harbor" from the registration requirements of the
Securities Act for resales of certain securities to qualified institutional
buyers. CDC Investments anticipates that the market for certain restricted
securities such as institutional

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<PAGE>

commercial paper will expand further as a result of this regulation and use of
automated systems for the trading, clearance and settlement of unregistered
securities of domestic and foreign issuers, such as the PORTAL System sponsored
by the National Association of Securities Dealers, Inc.

An investment in Rule 144A Securities will be considered illiquid and
therefore subject to each Fund's limit on the purchase of illiquid securities
unless the Trustees or their delegates determines that the Rule 144A Securities
are liquid. In reaching liquidity decisions, the Trustees and its delegates may
consider, INTER ALIA, the following factors: (i) the unregistered nature of the
security; (ii) the frequency of trades and quotes for the security; (iii) the
number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (iv) dealer undertakings to make a market in the
security and (v) the nature of the security and the nature of the marketplace
trades (E.G., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer). This investment practice
could have the effect of increasing the level of illiquidity in the Funds to the
extent that qualified institutional buyers become uninterested for a time in
purchasing Rule 144A Securities. The Trustees of each Fund will carefully
monitor any investments by a Fund in Rule 144A Securities. The Trustees may
adopt guidelines and delegate to CDC Investments the daily function of
determining and monitoring the liquidity of Rule 144A Securities, although the
Trustees will retain ultimate responsibility for any determination regarding
liquidity.

Rule 144A Securities may involve a high degree of business and
financial risk and may result in substantial losses. These securities may be
less liquid than publicly traded securities, and a Fund may take longer to
liquidate these positions than would be the case for publicly traded securities.
Although these securities may be resold in privately negotiated transactions,
the prices realized on such sales could be less than those originally paid by a
Fund. Further, companies whose securities are not publicly traded may not be
subject to the disclosure and other investor protection requirements applicable
to companies whose securities are publicly traded. A Fund's investment in
illiquid securities is subject to the risk that should a Fund desire to sell any
of these securities when a ready buyer is not available at a price that is
deemed to be representative of their value, the value of a Fund's net assets
could be adversely affected.

RIGHTS OFFERINGS AND PURCHASE WARRANTS. Each Fund may invest up to
10% of its net assets in rights and warrants to purchase newly created equity
securities consisting of common and preferred stock. The equity security
underlying a right or warrant is authorized at the time the right or warrant is
issued or is issued together with the right or warrant.

Investing in rights and warrants can provide a greater potential for
profit or loss than an equivalent investment in the underlying security, and,
thus, can be a speculative investment. At the time of issue, the cost of a
warrant is substantially less than the cost of the underlying security itself,
and price movements on the underlying security are generally magnified in the
price movements of the warrant. The value of a right or warrant may decline
because of a decline in the value of the underlying security, the passage of
time, changes in

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<PAGE>

interest rates or in the dividend or other policies of the company whose equity
underlies the warrant or a change in the perception as to the future price of
the underlying security, or any combination thereof. An investor's risk
increases in the event of a decline in the value of the underlying security and
can result in a complete loss of the amount invested in a warrant. In addition,
the price of a warrant tends to be more volatile than, and may not correlate
exactly to, the price of the underlying security. If the market price of the
underlying security is below the exercise price of the warrant on its expiration
date, the warrant with generally expire without value. Rights and warrants
generally pay no dividends and confer no voting or other rights other than to
purchase the underlying security.

BORROWING. Each Fund may borrow up to 33 1/3% of its total assets
(including the amount borrowed) for temporary or emergency purposes, including
to meet portfolio redemption requests so as to permit the orderly disposition of
portfolio securities or to facilitate settlement transactions on portfolio
securities. Investments (including roll-overs) will not be made when borrowings
exceed 5% of a Fund's total assets. Although the principal of such borrowings
will be fixed, a Fund's assets may change in value during the time the borrowing
is outstanding. The Funds expect that some of their borrowings may be made on a
secured basis. In such situations, either the custodian will segregate the
pledged assets for the benefit of the lender or arrangements will be made with a
suitable subcustodian, which may include the lender.

U.S. CORE EQUITY FUND ONLY

SHORT SELLING. The Fund may from time to time sell securities short.
A short sale is a transaction in which the Fund sells borrowed securities it
does not own in anticipation of a decline in the market price of the securities.
The current market value of the securities sold short (excluding short sales
"against the box") will not exceed 10% of the Fund's total assets.

To deliver the securities to the buyer, the Fund must arrange through
a broker to borrow the securities and, in so doing, the Fund becomes obligated
to replace the securities borrowed at their market price at the time of
replacement, whatever that price may be. The Fund will make a profit or incur a
loss as a result of a short sale depending on whether the price of the
securities decreases or increases between the date of the short sale and the
date on which the Fund purchases the security to replace the borrowed securities
that have been sold. The amount of any loss would be increased (and any gain
decreased) by any premium or interest the Fund is required to pay in connection
with a short sale. The Fund may have to pay a premium to borrow the securities
and must pay any dividends or interest payable on the securities until they are
replaced.

The Fund's obligation to replace the securities borrowed in connection
with a short sale will be secured by cash or liquid securities deposited as
collateral with the broker. In addition, the Fund will segregate with its
custodian or a qualified subcustodian an amount of cash or liquid securities
equal to the difference, if any, between (i) the market value of the securities
sold at the time they were sold short and (ii) any cash or liquid securities
deposited

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<PAGE>

as collateral with the broker in connection with the short sale (not including
the proceeds of the short sale). Until it replaces the borrowed securities, the
Fund will maintain the segregated account daily at a level so that (a) the
amount deposited in the account plus the amount deposited with the broker (not
including the proceeds form the short sale) will equal the current market value
of the securities sold short and (b) the amount deposited in the account plus
the amount deposited with the broker (not including the proceeds from the short
sale) will not be less than the market value of the securities at the time they
were sold short.

SHORT SALES "AGAINST THE BOX". The Fund may enter into a short sale
of securities such that when the short position is open a fund owns an equal
amount of the securities sold short or owns preferred stocks or debt securities,
convertible or exchangeable without payment of further consideration, into an
equal number of securities sold short. This kind of short sale, which is
referred to as one "against the box," may be entered into by the Fund to, for
example, lock in a sale price for the security a Fund does not wish to sell
immediately. The Fund will segregate with its custodian or a qualified
subcustodian, the securities sold short or convertible or exchangeable preferred
stocks or debt securities in connection with short sales against the box.

The Fund may make a short sale as a hedge, when it believes that the
price of a security may decline in the value of a security owned by the Fund (or
a security convertible or exchangeable for such security). In such case, any
future losses in the Fund's long position should be offset by a gain in the
short position and, conversely, any gain in the short position. The extent to
which such gains or losses are reduced will depend upon the amount of the
security sold relative to the amount the Fund owns. There will be certain
additional transaction costs associated with short sales against the box, but
the Fund will endeavor to offset these costs with the income from the investment
of the cash proceeds of short sales.

If the Fund effects a short sale of securities at a time when it has
an unrealized gain in the securities, it may be required to recognize that gain
as if it had actually sold the securities (as a "constructive sale") on the date
it effects the short sale. However, such constructive sale treatment may not
apply if the Fund closes out the short sale with securities other than
appreciated securities held at the time of the short sale and if certain other
conditions are satisfied. Uncertainty regarding the tax consequences of
effecting short sales may limit the extent to which the Fund may effect short
sales.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio
securities to brokers, dealers and other financial organizations that meet
capital and other credit requirements or other criteria established by the
Fund's Trustees. These loans, if and when made, may not exceed 50% of the
Fund's total assets (including the loan collateral) taken at value. The Fund
will not lend portfolio securities to affiliates of CDC Investments unless it
has applied for and received specific authority to do so from the SEC. Loans of
portfolio securities will be collateralized by cash or liquid securities, which
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. Any gain or loss in the market price of
the securities loaned that might occur during the term of the loan would be for
the account of the Fund. From time to time, the Fund may return a part of

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<PAGE>

the interest earned from the investment of collateral received for securities
loaned to the borrower and/or a third party that is unaffiliated with the Fund
and that is acting as a "finder."

By lending its securities, the Fund can increase its income by
continuing to receive interest and any dividends on the loaned securities as
well as by either investing the collateral received for securities loaned in
short-term instruments or obtaining yield in the form of interest paid by the
borrower when U.S. Government Securities are used as collateral. The Fund will
adhere to the following conditions whenever its portfolio securities are loaned:
(i) the Fund must receive at least 100% cash collateral or equivalent securities
of the type discussed in the preceding paragraph from the borrower; (ii) the
borrower must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (iii) the Fund must be able
to terminate the loan at any time; (iv) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other distributions
on the loaned securities and any increase in market value; (v) the Fund may pay
only reasonable custodian fees in connection with the loan; and (vi) voting
rights on the loaned securities may pass to the borrower, provided, however,
that if a material event adversely affecting the investment occurs, the Trustees
must terminate the loan and regain the right to vote the securities. Loan
agreements involve certain risks in the event of default or insolvency of the
other party including possible delays or restrictions upon the Fund's ability to
recover the loaned securities or dispose of the collateral for the loan.

AGGRESSIVE EQUITY FUND AND GLOBAL INDEPENDENCE FUND ONLY

NON-DIVERSIFIED STATUS. The Aggressive Equity and Global Independence
Funds are classified as non-diversified investment companies under the 1940 Act,
which means that a Fund is not limited by the 1940 Act in the proportion of its
assets that it may invest in the obligations of a single issuer. Each Fund
will, however, comply with diversification requirements imposed by the Internal
Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated
investment company. As a non-diversified investment company, a Fund may invest
a greater proportion of its assets in the obligations of a small number of
issuers and, as a result, may be subject to greater risk with respect to
portfolio securities. To the extent that a Fund assumes large positions in the
securities of a small number of issuers, its return may fluctuate to a greater
extent than that of a diversified company as a result of changes in the
financial condition or in the market's assessment of the issuers.

BELOW INVESTMENT GRADE SECURITIES. Each of these Funds may invest its
assets in non-investment grade securities (securities that are rated below the
fourth highest grade at the time of purchase by Moody's or S&P, or, if unrated,
deemed by CDC Investments to be of comparable quality). Subsequent to its
purchase by a Fund, an issue of securities may cease to be rated or its rating
may be reduced. Neither event will require a sale of such securities by a Fund,
although CDC Investments will consider such event in its determination of
whether a Fund should continue to hold the securities. The widespread expansion
of government, consumer and corporate debt within the economy has made the
corporate sector, especially cyclically sensitive industries, more vulnerable to
economic downturns or increased interest rates. Because lower-rated securities
involve issuers with weaker credit fundamentals (such as

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<PAGE>

debt-to-equity ratios, interest charge coverage, earnings history and the like),
an economic downturn, or increases in interest rates, could severely disrupt the
market for lower-rated securities and adversely affect the value of outstanding
securities and the ability of issuers to repay principal and interest.

The market values of below investment grade securities and unrated
securities of comparable quality tend to react less to fluctuations in interest
rate levels than do those of investment grade securities and the market values
of certain of these securities also tend to be more sensitive to individual
corporate developments and changes in economic conditions than higher-quality
securities. In addition, these securities generally present a higher degree of
credit risk. Issuers of these securities are often highly leveraged and may not
have more traditional methods of financing available to them so that their
ability to service their obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. The risk of loss
due to default by such issuers is significantly greater because below investment
grade securities generally are unsecured and frequently are subordinated to
prior payment of senior indebtedness. If the issuer of a security owned by a
Fund defaulted, a Fund could incur additional expenses in seeking recovery with
no guarantee of recovery. Also, a recession could disrupt severely the market
for such securities and may adversely affect the value of such securities and
the ability of the issuers of such securities to repay principal and pay
interest thereon. Lower-rated securities also present risks based on payment
expectations. For example, lower-rated securities may contain redemption or
call provisions. If an issuer exercises these provisions in a declining
interest rate market, a Fund would have to replace the security with a lower
yielding security, resulting in a decreased return for investors.

An economic recession could disrupt severely the market for such
securities and may adversely affect the value of such securities to repay
principal and pay interest thereon. The Funds may have difficulty disposing of
certain of these securities because there may be a thin trading market. Because
there is no established retail secondary market for many of these securities,
the Funds anticipate that these securities could be sold only to a limited
number of dealers or institutional investors. To the extent a secondary trading
market for these securities does exist, it generally is not as liquid as the
secondary market for investment grade securities. The lack of a liquid
secondary market, as well as adverse publicity and investor perception with
respect to these securities, may have an adverse impact on market price and a
Fund's ability to dispose of particular issues when necessary to meet liquidity
needs or in response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Funds to obtain
accurate market quotations for purposes of valuing the Funds and calculating net
asset value.

The market value of securities rated below investment grade is more
volatile than that of investment grade securities. Factors adversely impacting
the market value of these securities will adversely impact a Fund's net asset
value. The Funds will rely on the judgment, analysis and experience of CDC
Investments in evaluating the creditworthiness of an issuer. In this
evaluation, CDC Investments will consider, among other things, the issuer's

29
<PAGE>

financial resources, its sensitivity to economic conditions and trends, its
operating history, the quality of the issuer's management and regulatory
matters. Normally, below investment grade securities and comparable unrated
securities are not intended for short-term investment. A Fund may incur
additional expenses to the extent it is required to seek recovery upon a default
in the payment of principal or interest on its portfolio holdings of such
securities.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 8 may not be changed
without the affirmative vote of the holders of a majority of each Fund's
outstanding shares. Such majority is defined as the lesser of (i) 67% or more
of the shares present at the meeting, if the holders of more than 50% of the
outstanding shares of a Fund are present or represented by proxy, or (ii) more
than 50% of the outstanding shares. Investment limitations 9 through 14 may be
changed by a vote of the Trustees at any time.

Each Fund may not:

1. Borrow money except that a Fund may (a) borrow from banks for
temporary or emergency purposes and (b) enter into reverse repurchase
agreements; provided that reverse repurchase agreements, dollar roll
transactions that are accounted for as financings and any other transactions
constituting borrowing by a Fund may not exceed 33-1/3% of the value of a Fund's
total assets (including the amount borrowed) at the time of such borrowing. For
purposes of this restriction, short sales and the entry into currency
transactions, options, futures contracts, options on futures contracts, forward
commitment transactions and dollar roll transactions that are not accounted for
as financings (and the segregation of assets in connection with any of the
foregoing) shall not constitute borrowing.

2. Purchase any securities which would cause 25% or more of a value
of the Fund's total assets at the time of purchase to be invested in the
securities of issuers conducting their principal business activities in the same
industry; provided that to the extent the Fund's benchmark is concentrated in a
particular industry, the Fund will be concentrated in that industry. This
limitation does not apply to the purchase of U.S. Government Securities.

3. With respect to the U.S. Core Equity Fund only, purchase the
securities of any issuer if as a result more than 5% of the value of a Fund's
total assets would be invested in the securities of such issuer, except that
this 5% limitation does not apply to U.S. Government Securities and except that
up to 25% of the value of a Fund's total assets may be invested without regard
to this 5% limitation.

4. Make loans, except that a Fund may purchase or hold fixed-income
securities, including structured securities, and enter into repurchase
agreements. The U.S. Core Equity Fund may also lend its portfolio securities in
an amount not to exceed 50% of its total assets.

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<PAGE>

5. Underwrite any securities issued by others except to the extent
that the investment in restricted securities and the sale of securities in
accordance with a Fund's investment objective, policies and limitations may be
deemed to be underwriting.

6. Purchase or sell real estate or invest in oil, gas or mineral
exploration or development programs, except that a Fund may invest in (a)
securities secured by real estate, mortgages or interests therein and (b)
securities of companies that invest in or sponsor oil, gas or mineral
exploration or development programs.

7. Invest in commodities, except that the Funds may purchase and
sell futures contracts, including those relating to securities, currencies and
indices, and options on futures contracts, securities, currencies or indices,
and purchase and sell currencies on a forward commitment or delayed-delivery
basis and enter into stand-by commitments, and, in the case of the Aggressive
Equity and Global Independence Funds, purchase or sell contracts relating to the
future delivery of precious metals.

8. Issue any senior security except as permitted in a Fund's
investment limitations.

9. Purchase securities on margin, except that a Fund may obtain any
short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of initial
or variation margin in connection with transactions in currencies, options,
futures contracts or related options will not be deemed to be a purchase of
securities on margin.

10. Purchase securities of other investment companies except in
connection with a merger, consolidation, acquisition, reorganization or offer of
exchange, or as otherwise permitted under the 1940 Act.

11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow and in connection with the writing of covered put
and call options and purchase of securities on a forward commitment or
delayed-delivery basis and collateral and initial or variation margin
arrangements with respect to currency transactions, options, futures contracts,
and options on futures contracts.

12. Invest more than 15% of a Fund's net assets in securities which
may be illiquid because of legal or contractual restrictions on resale or
securities for which there are no readily available market quotations. For
purposes of this limitation, repurchase agreements with maturities greater than
seven days shall be considered illiquid securities.

13. Invest in rights or warrants (other than rights or warrants
acquired by a Fund as part of a unit or attached to securities at the time of
purchase) if, as a result, the investments (valued at the lower of cost or
market) would exceed 10% of the value of a Fund's net assets.

31
<PAGE>

14. Make additional investments (including roll-overs) if a Fund's
borrowings exceed 5% of its net assets.

If a percentage restriction (other than the percentage limitation set
forth in No. 1 and No. 12) is adhered to at the time of an investment, a later
increase or decrease in the percentage of assets resulting from a change in the
values of portfolio securities or in the amount of a Fund's assets will not
constitute a violation of such restriction.

PORTFOLIO VALUATION

The Prospectus discusses the time at which the net asset value of each
Fund is determined for purposes of sales and redemptions. The following is a
description of the procedures used by each Fund in valuing its assets.

Securities listed on a U.S. securities exchange (including securities
traded through the NASDAQ National Market System) or foreign securities exchange
or traded in an over-the-counter market will be valued at the most recent sale
as of the time the valuation is made or, in the absence of sales, at the mean
between the bid and asked quotations. If there are no such quotations, the
value of the securities will be taken to be the highest bid quotation on the
exchange or market. Options are generally valued at the last sale price or, in
the absence of a last sale price, the last bid price. The value of a futures
contract equals the unrealized gain or loss on the contract that is determined
by marking it to the current settlement price for a like contract acquired on
the day on which the futures contract is being valued. A settlement price may
not be used if the market makes a limit move with respect to a particular
commodity. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. Short-Term obligations with maturities of 60 days or less are
valued at amortized cost, which constitutes fair value as determined by the
Trustees. Amortized cost involves valuing a portfolio instrument at its initial
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. The amortized cost method of valuation may also be
used with respect to other debt obligations with 60 days or less remaining to
maturity. Notwithstanding the foregoing, in determining the market value of
portfolio investments, a Fund may employ outside organizations (a "Price
Service") which may use a matrix, formula or other objective method that takes
into consideration market indexes, matrices, yield curves and other specific
adjustments. The procedures of Pricing Services are reviewed periodically by
the officers of each Fund under the general supervision and responsibility of
the Trustees, which may replace a Pricing Service at any time. Securities,
options and futures contracts for which market quotations are not available and
certain other assets of a Fund will be valued at their fair value as determined
in good faith pursuant to consistently applied procedures established by the
Trustees. In addition, the Trustees or their delegates may value a security at
fair value if they determine that such security's value determined by the
methodology set forth above does not reflect its fair value.

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<PAGE>

Trading in securities in certain foreign countries is completed at
various times prior to the close of business on each business day in New York
(I.E., a day on which the New York Stock Exchange (the "NYSE") is open for
trading). In addition, securities trading in a particular country or countries
may not take place on all business days in New York. Furthermore, trading takes
place in various foreign markets on days which are not business days in New
York and days on which a Fund's net asset value is not calculated. As a result,
calculation of a Fund's net asset value may not take place contemporaneously
with the determination of the prices of certain foreign portfolio securities
used in such calculation. Events affecting the values of portfolio securities
that occur between the time their prices are determined and the close of regular
trading on the NYSE will not be reflected in a Fund's calculation of net asset
value unless the Trustees or their delegates deem that the particular event
would materially affect net asset value, in which case an adjustment may be
made. All assets and liabilities initially expressed in foreign currency values
will be converted into U.S. dollar values at the prevailing rate as quoted by a
Pricing Service. If such quotations are not available, the rate of exchange
will be determined in good faith pursuant to consistently applied procedures
established by the Trustees.

PORTFOLIO TRANSACTIONS

CDC Investments is responsible for establishing, reviewing and, where
necessary, modifying each Fund's investment program to achieve its investment
objective. Purchases and sales of newly issued portfolio securities are usually
principal transactions without brokerage commissions effected directly with the
issuer or with an underwriter acting as principal. Other purchases and sales
may be effected on a securities exchange or over-the-counter, depending on where
it appears that the best price or execution will be obtained. The purchase
price paid by a Fund to underwriters of newly issued securities usually includes
a concession paid by the issuer to the underwriter, and purchases of securities
from dealers, acting as either principals or agents in the after market, are
normally executed at a price between the bid and asked price, which includes a
dealer's mark-up or mark-down. Transactions on U.S. stock exchanges and some
foreign stock exchanges involve the payment of negotiated brokerage commissions.
On exchanges on which commissions are negotiated, the cost of transactions may
vary among different brokers. On most foreign exchanges, commissions are
generally fixed. There is generally no stated commission in the case of
securities traded in domestic or foreign over-the-counter markets, but the price
of securities traded in over-the-counter markets includes an undisclosed
commission or mark-up. U.S. Government Securities are generally purchased from
underwriters or dealers, although certain newly issued U.S. Government
Securities may be purchased directly from the U.S. Treasury or from the issuing
agency or instrumentality.

CDC Investments will select specific portfolio investments and effect
transactions for each Fund and in doing so seeks to obtain the overall best
execution of portfolio transactions. In evaluating prices and executions, CDC
Investments will consider the factors it deems relevant, which may include the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of a broker or dealer and the reasonableness
of the commission, if any, for the specific transaction and on a continuing

33
<PAGE>

basis. CDC Investments may, in its discretion, effect transactions in portfolio
securities with dealers who provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934) to
each Fund and/or other accounts over which CDC Investments exercises investment
discretion. CDC Investments may place portfolio transactions with a broker or
dealer with whom it has negotiated a commission that is in excess of the
commission another broker or dealer would have charged for effecting the
transaction if CDC Investments determines in good faith that such amount of
commission was reasonable in relation to the value of such brokerage and
research services provided by such broker or dealer viewed in terms of either
that particular transaction or of the overall responsibilities of CDC
Investments. Research and other services received may be useful to CDC
Investments in serving both a Fund and its other clients and, conversely,
research or other services obtained by the placement of business of other
clients may be useful to CDC Investments in carrying out its obligations to each
Fund. Research may include furnishing advice, either directly or through
publications or writings, as to the value of securities, the advisability of
purchasing or selling specific securities and the availability of securities or
purchasers or sellers of securities; furnishing seminars, information, analyses
and reports concerning issuers, industries, securities, tading markets and
methods, legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research analysts,
corporate management personnel, industry experts, economists and government
officials; comparative performance evaluation and technical measurement services
and quotation services; and products and other services (such as third party
publications, reports and analyses, and computer and electronic access,
equipment, software, information and accessories that deliver, process or
otherwise utilize information, including the research described above) that
assist CDC Investments in carrying out its responsibilities. Research received
from brokers or dealers is supplemental to CDC Investments' own research
program. The fees to CDC Investments under its advisory agreement with each
Fund are not reduced by reason of its receiving any brokerage and research
services.

Investment decisions for each Fund concerning specific portfolio
securities are made independently from those for other clients advised by CDC
Investments. Such other investment clients may invest in the same securities as
the Funds. When purchases or sales of the same security are made at
substantially the same time on behalf of such other clients, transactions are
averaged as to price and available investments allocated as to amount, in a
manner which CDC Investments believes to be equitable to each client, including
the Funds. In some instances, this investment procedure may adversely affect
the price paid or received by a Fund or the size of the position obtained or
sold for the Funds. To the extent permitted by law, CDC Investments may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for such other investment clients in order to obtain best
execution.

In no instance will portfolio securities be purchased from or sold to
CDC Investments or its affiliates. In addition, a Fund will not give preference
to any institutions with whom it enters into distribution or shareholder
servicing agreements concerning the provision of distribution services or
support services.

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<PAGE>

Transactions for a Fund may be effected on foreign securities
exchanges. In transactions for securities not actively traded on a foreign
securities exchange, a Fund will deal directly with the dealers who make a
market in the securities involved, except in those circumstances where better
prices and execution are available elsewhere. Such dealers usually are acting
as principal for their own account. On occasion, securities may be purchased
directly from the issuer. Such portfolio securities are generally traded on a
net basis and do not normally involve brokerage commissions. Securities firms
may receive brokerage commissions on certain portfolio transactions, including
options, futures and options on futures transactions and the purchase and sale
of underlying securities upon exercise of options.

Each Fund may participate, if and when practicable, in bidding for the
purchase of securities for its portfolio directly from an issuer in order to
take advantage of the lower purchase price available to members of such a group.
A Fund will engage in this practice, however, only when CDC Investments, in its
sole discretion, believes such practice to be otherwise in a Fund's interest.

PORTFOLIO TURNOVER

Each Fund does not intend to seek profits through short-term trading,
but the rate of turnover will not be a limiting factor when a Fund deems it
desirable to sell or purchase securities. Each Fund's portfolio turnover rate
is calculated by the value of the securities purchased or sold, excluding all
securities whose maturities at the time of acquisition were one year or less,
divided by the average monthly value of such securities owned during the year.
Based on this calculation, instruments, including options and futures contracts,
with remaining maturities of less than one year are excluded from the portfolio
turnover rate.

Certain practices that may be employed by each Fund could result in
high portfolio turnover. For example, options on securities may be sold in
anticipation of a decline in the price of the underlying security (market
decline) or purchased in anticipation of a rise in the price of the underlying
security (market rise) and later sold. To the extent that its portfolio is
traded for the short-term, a Fund will be engaged essentially in trading
activities based on short-term considerations affecting the value of an issuer's
stock instead of long-term investments based on fundamental valuation of
securities. Because of this policy, portfolio securities may be sold without
regard to length of time for which they have been held. Consequently, the
annual portfolio turnover rate of a Fund may be higher than mutual funds having
a similar objective that do not use these strategies.

While it is not possible to predict the Funds' portfolio turnover
rates, the U.S. Core Equity Fund expects its turnover rate for its first year of
operation to total approximately 120% and each of the Aggressive Equity Fund and
the Global Independence Fund expects its first year turnover rate to total
approximately 100%. High portfolio turnover rates (100% or more) may result in
dealer markups or underwriting commissions as well as other transaction costs,
including correspondingly higher brokerage commissions. In addition, short-term
gains realized from portfolio turnover may be taxable to shareholders as
ordinary income.

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<PAGE>

MANAGEMENT OF THE FUNDS

OFFICERS AND TRUSTEES

Each Fund's business and affairs is managed by its Trustees in
accordance with the law of the State of Delaware. The Trustees elect officers
who are responsible for the day-to-day operations of each Fund and who execute
policies formulated by the Trustees.

The names (and ages) of the Trustees and officers of the Trust, their
addresses, present positions and principal occupations during the past five
years and other affiliations are set forth below. Unless otherwise indicated,
the address of each officer is 9 West 57th Street, New York, New York 10019.

Bluford H. Putnam, Ph.D.* (48) PRESIDENT, CHIEF INVESTMENT OFFICER AND
TRUSTEE.
President of CDC Investments since 1997;
Managing Director and Chief Investment
Officer for Equities and Asset
Allocation with the Global Investment
Management Department of Bankers Trust
Company in New York from 1994 to 1997;
President of Putnam & Associates, Inc.
from 1991 to 1994.

Mike West (42) TRUSTEE.
Institute of Statistics and The Arts and Sciences Professor of
Decision Statistics and Decision Sciences and
Sciences Duke University Director of the Institute of Statistics
Durham, NC 27708-0251 and Decision Sciences, Duke University.

Arnold Zellner (72) TRUSTEE.
The University of Chicago H.G.B. Alexander Distinguished Service
Graduate School of Business Professor Emeritus of Economics and
1101 East 58th Street Statistics - Graduate School of
Chicago, IL 60637 Business, University of Chicago; From
1984 to 1996, H.G.B. Alexander
Distinguished Service Professor -
Graduate School of Business, University
of Chicago.

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<PAGE>

D. Sykes Wilford, Ph.D (49) VICE PRESIDENT AND INVESTMENT OFFICER.
Managing Director of CDC Investments;
Chief Investment Officer of Bankers
Trust Private Bank and Managing Director
of Bankers Trust Global Investment
Management from 1994 to 1997; Managing
Director of Chase Investment Bank, Ltd.,
London from 1992 to 1994; Managing
Director of Chase Manhattan Bank from
1988 to 1992.

Jose Quintana (48) VICE PRESIDENT AND INVESTMENT OFFICER.
Managing Director of CDC Investments;
Vice President and Head of Quantitative
Research for the Strategic Asset
Allocation team in the Global Investment
Management Group of Bankers Trust
Company from 1994 to 1997; Vice
President in the Global Risk Management
Sector of Chase Manhattan Bank from 1992
to 1994. Vice President at Chase
Investors Management Corporation from
1988 to 1992; Staff Supervisor for
AT&T's Market Analysis and Forecasting
Directorate from 1987 to 1988.

C. Peter Paterno (36) TREASURER.
Vice President of CDC Investments;
Financial Consultant from 1995 to 1997;
Managing Director and Head of Trading,
Putnam & Associates from 1993 to 1994;
Director, Panther Capital Advisers, Ltd.
in 1992; Vice President, Proprietary
Fixed Income Trading, Merrill Lynch
International Ltd. from 1991 to 1992;
Manager, International Arbitrage,
Kleinwort Benson Ltd. from 1989 to 1991;
Research Analyst in the International
Fixed Income Strategy and Economics
Group at Morgan Stanley & Co.,
Incorporated from 1986 to 1989.

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<PAGE>

Rachel D. Manney (31) SECRETARY.
Vice President of CDC Investments; Vice
President, BEA Associates from 1992 to
1997; Senior Associate, Coopers &
Lybrand, LLP from 1989 to 1992.

The Trust pays Trustees who are not "affiliated persons" (as defined in the 1940
Act) of CDC Investments, its administrator or distributor an annual fee of
$10,000 and $3,000 for each meeting attended by the Trustee for services as
Trustee, and each such Trustee is reimbursed for expenses incurred with the
Trustee's attendance at meetings.

TRUSTEES' TOTAL COMPENSATION:

Name of Trustee From the Trust+
- --------------- ---------------
<S> <C>
Bluford H. Putnam* None

Mike West $22,000

Arnold Zellner $22,000
</TABLE>

- ---------

+ Amounts shown are estimates of payments to be made for the Trust's first
full fiscal year ending October 31, 1999 pursuant to existing arrangements.

* Mr. Putnam receives compensation as an affiliate of CDC Investments and,
accordingly, receive no compensation from the Trust.

CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS.

CDC Investments will hold all of the shares of each Fund on the date
the Trust's Registration Statement becomes effective. The shares were issued to
CDC Investments for providing the initial seed capital to the Trust. It is
anticipated that shortly after the Trust's Registration Statement becomes
effective, CIMCO Holdings LLC ("CIMCO"), a Delaware limited liability company,
will invest approximately $25 million in each Fund. Master Holdings, a Cayman
Islands corporation, is the majority shareholder of CIMCO and CDC Investments is
a minority shareholder of CIMCO. CDC Group, Paris is the majority shareholder
of Master Holdings. CDC Investments is a wholly-owned subsidiary of CDC Group,
Paris. So long as CDC Investments or CIMCO owns more than 25% of the
outstanding voting securities of a Fund, it may be deemed to control the Fund.

INVESTMENT ADVISER AND ADMINISTRATOR

CDC Investments, located at 9 West 57th Street, 35th Floor, New York,
New York 10019, serves as investment adviser to each Fund pursuant to separate
written

38
<PAGE>

agreements (the "Advisory Agreements"). The Adviser is doing business in New
York under the name "CDC Investments".

MANAGEMENT FEES

As described in the Prospectus, the U.S. Core Equity Fund pays the
Adviser a basic fee of 1.00%, the Aggressive Equity Fund pays the Adviser a
basic fee of 1.50% and the Global Independence Fund pays the Adviser a basic fee
of 1.75%, of the respective Fund's average daily net assets. This basic
management fee may be adjusted upward or downward by applying an adjustment
formula (the "Performance Adjustment"). The Performance Adjustment is
calculated monthly by comparing the Fund's investment performance to a target
during the most recent twelve-month period. The target for the U.S. Core Equity
Fund and the Aggressive Equity Fund is the investment record of the S&P 500
Index. The target for the Global Independence Fund is the investment record of
a composite benchmark, 50% of which is comprised of the Morgan Stanley Capital
International World Index (the "World Equity Index") and 50% of which is
comprised of the J.P. Morgan Global Bond Index (the "Global Bond Index").

In the case of the U.S. Core Equity Fund and the Aggressive Equity
Fund, the difference between the Fund's performance compared to the performance
of the relevant target is multiplied by a Performance Adjustment of 25% (as an
annual rate). The Performance Adjustment is then added or subtracted from the
basic fee, subject to the maximum or minimum fee. The maximum annualized
Performance Adjustment is 1.00% for the U.S. Core Equity Fund and 1.50% for the
Aggressive Equity Fund.

In the case of the Global Independence Fund, the difference between
the Fund's performance compared to the performance of the relevant target is
multiplied by a Performance Adjustment of 5% (as an annual rate). The
Performance Adjustment is then added to or subtracted from the basic fee,
subject to the maximum or minimum fee. The maximum Performance Adjustment is
0.25% for the Global Independence Fund.

CHOICE OF PERFORMANCE BENCHMARK

In the case of most equity strategies, the performance benchmark may
contain much of the risk to the investor, depending on how tightly or loosely
the adviser attempts to either track the benchmark or provide excess returns
above the return provided by the benchmark. The risks taken in a given
portfolio strategy will need to be measured in terms of the total risk of the
whole fund, as well as the risks taken in the attempt to earn excess returns
above the benchmark. In this latter case, one is conceptually separating the
fund into two portfolios, in which one matches the benchmark and the other
provides the excess return above the benchmark (noting that the excess return
can be negative if the strategy does not work as planned). The adviser will
need to measure and understand how the expected returns and risks in the
strategy designed to produce excess returns are correlated, if at all, to the
expected returns and risks inherent in the performance benchmark. All of these
concerns will have a bearing on the total risk being accepted by the investor in
a fund, and they are driven in part

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<PAGE>

by the choice of the benchmark and in part by the choice of strategies to
out-perform the benchmark.

In the case of mutual funds using "fulcrum" fee formulas to raise or
lower the base management fee depending on fund performance, such as the Funds,
the choice of benchmark is a critical factor to be considered by the investor.
With incentive fees using the fulcrum fee approach, the total management fee
paid to the adviser will depend on a base fee as a percentage of assets under
management as well as a performance adjustment that will add to or subtract from
the base management fee depending explicitly on the magnitude of positive excess
returns above the benchmark or the magnitude of negative excess returns below
the benchmark. The design of the "fulcrum" around which the incentive fees
either add to or subtract from the base management fees hinges on the choice of
the benchmark. The investor, by buying shares of a fund utilizing fulcrum fees,
is providing incentives to the adviser to strive for higher excess returns and
to take additional risks. The adviser, when taking additional risks in order to
attempt to gain excess returns above the benchmark, knows that the total
management fees can rise or fall depending on performance. To a limited extent,
then, the adviser will benefit when the investor benefits, and the adviser will
suffer a detriment when the investor suffers a below-benchmark performance.

The formula used in the Funds for calculating the fulcrum fees is
discussed in more detail, with examples, in the Prospectus. Basically, the
total management fee can range from 0.00% (zero) to 2.00% of assets under
management in the case of the U.S. Core Equity Fund, from 0.00% to 3.00% in
the case of the Aggressive Equity Fund, and from 1.50% to 2.00% in the case
of the Global Independence Fund. In the case of the U.S. Core Equity Fund,
if the Fund underperforms its benchmark by four percentage points, over a
12-month period, the minimum management fee of 0.00% (zero) will apply.
Correspondingly, if the Fund overperforms its benchmark by four percentage
points, the maximum total management fee of 2.00% will apply. In the case of
the Aggressive Equity Fund, if the Fund underperforms its benchmark by six
percentage points, over a 12-month period, the minimum management fee of
0.00% (zero) will apply. Correspondingly, if the Fund overperforms its
benchmark by six percentage points, the maximum total management fee of 3.00%
will apply. In the case of the Global Independence Fund, if the Fund
underperforms its benchmark by 5 percentage points or more, over a 12-month
period, the minimum management fee of 1.50% will apply. Correspondingly, if
the Fund overperforms its benchmark by 5 percentage points or more, the
maximum total management fee of 2.00% will apply.

Therefore, investors in the Funds should pay special attention to the
choice of benchmark since it plays a critical role in determining the total risk
of the Fund as well as the management fees charged by the Fund. The choice of
the benchmark for each Fund depends on a number of factors, including the
objectives of the Fund, the universe of securities and other investments which
the Adviser plans to utilize, the level of risks expected to be taken, and the
ability of the portfolio to develop strategies that attempt to out-perform the
benchmark.

In the case of the U.S. Core Equity Fund and the Aggressive Equity
Fund, the performance benchmark is the S&P 500 Index. Both of these Funds are
designed to give the investor a basic exposure to the U.S. equity market. The
S&P 500 Index is one of several established indexes that provide a good measure
of the core U.S. equity market. Other indexes cover the stocks of more
companies, but these additional company stocks are often very small and trade in
a relatively less liquid manner. In most market conditions, the S&P 500 Index
has a capitalization that includes 70% or more of other broad-based U.S. equity

40
<PAGE>

indexes. In addition, the S&P 500 Index has a deep and liquid futures market
associated with it, giving the Adviser an effective tool for hedging the risks
of cash inflows and outflows in the funds, as well as managing other portfolio
risks or designing efficient strategies to enhance returns.

In the case of the Global Independence Fund, the performance
benchmark is a composite of the World Equity Index and the Global Bond Index
as described above. The Fund will invest in the global equity, global fixed
income and currency markets through the use of a variety of equity and fixed
income instruments. The Fund will pursue a balanced investment approach and
does not expect to place particular emphasis on either the equity or fixed
income portion of the Fund's portfolio at any given time. The Adviser
believes that the overall risk profile of the composite benchmark will be
comparable to the targeted risk level of the Fund. From a risk and return
perspective, the total expected risk associated with the composite benchmark,
as measured in a value-at-risk framework using annualized standard
deviations, will be approximately 15% for the equity component and 5% for the
bond component. When combined in the 50/50 composite benchmark under normal
market conditions this will provide a total expected risk of approximately
10% (annualized standard deviation), or less given the moderate correlation
between equities and bonds. The value-at-risk framework provides a statistical
estimate of the volatility of a given portfolio on average and over time. The
Adviser hopes to earn returns in relation to risks being taken, such that
long run average return to risk ratio of the Fund will equal or exceed the
long run average return to risk ratio of the composite benchmark.

Under the Advisory Agreements, CDC Investments will not be liable for
any error of judgment or mistake of law or for any loss suffered by a Fund in
connection with the matters to which the Advisory Agreements relate. The
Advisory Agreements for the U.S. Core Equity and Aggressive Equity Funds were
approved on January 7, 1999, and the Advisory Agreement for the Global
Independence Fund was approved on June 3, 1999, each by a vote of the Trustees,
including a majority of those Trustees who are not parties to the Advisory
Agreements or interested persons (as defined in the 1940 Act) of such parties.
The Advisory Agreements were also approved by each Fund's initial shareholder.
The Advisory Agreements are terminable by vote of the Trustees or by the holders
of a majority of the outstanding voting securities of the relevant Fund, and at
any time without penalty, on 60 days' written notice to CDC Investments. The
Advisory Agreements may also be terminated by CDC Investments on 90 days'
written notice to a Fund. The Advisory Agreements terminate automatically in
the event of an assignment.

State Street Bank and Trust Company located at 222 Franklin Street,
Boston, Massachusetts 02110, serves as administrator (the "Administrator") to
each Fund pursuant to separate written agreements. The Administrator provides
shareholder liaison services to each Fund, including responding to shareholder
inquiries and providing information on shareholder investments. The
Administrator also performs a variety of other services, including furnishing
certain executive and administrative services, acting as liaison between the
Funds and their various service providers, furnishing certain corporate
secretarial services, which include preparing materials for meetings of the
Trustees, assisting with proxy statements and annual and semiannual reports,
assisting in the preparation of tax returns and monitoring and developing
certain compliance procedures for the Funds. The Administrator also calculates
each Fund's net asset value, provides all accounting services for each Fund and
assists in related aspects of each Fund's operations. As compensation, each
Fund will pay the Administrator a fee calculated at an annual rate of 0.05% of
its average daily net assets,

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subject to a minimum annual fee of $75,000 per Fund and an additional annual fee
of $3,500 per Class if more than one Class of shares is operational in a Fund.

Each class of shares of a Fund bears its proportionate share of fees
payable to CDC Investments and the Administrator in the proportion that its
assets bear to the aggregate assets of a Fund at the time of calculation. These
fees are calculated at an annual rate based on a percentage of a Fund's average
daily net assets. CDC Investments or the Administrator may voluntarily waive a
portion of their fees from time to time and temporarily limit the expenses to be
borne by a Fund.

DISTRIBUTION AND SHAREHOLDER SERVICING

Funds Distributor, Inc., located at 60 State Street, Suite 1300,
Boston, Massachusetts 02109 (the "Distributor") serves as the distributor of the
shares of each Fund under a Distribution Agreement. Pursuant to the
Distribution Agreement, the Distributor receives no compensation for services as
the distributor.

INVESTOR SHARES. Each Fund has entered into a Shareholder Servicing
and Distribution Plan (the "12b-1 Plan") pursuant to Rule 12b-1 under the 1940
Act, under which each Fund will pay the Distributor, in consideration for
Services (as defined below), a fee calculated at an annual rate of 0.25% of the
average daily net assets of each Fund's Investor shares for certain Services (as
defined below) that pertain only to Investor shares. Services include: (i) the
sale of the Investor shares, as set forth in the 12b-1 Plan ("Selling
Services"), (ii) ongoing servicing and/or maintenance of the accounts of the
Investor shares, as set forth in the 12b-1 Plan ("Shareholder Services"), and
(iii) sub-transfer agency services, subaccounting services or administrative
services related to the sale of the Investor shares, as set forth in the 12b-1
Plan ("Administrative Services" and collectively with Selling Services and
Administrative Services, "Services") including, without limitation, (a) payments
reflecting an allocation of overhead and other office expenses of the
Distributor related to providing Services; (b) payments made to, and
reimbursement of expenses of, persons who provide support services in connection
with the distribution of the Investor shares including, but not limited to,
office space and equipment, telephone facilities, answering routine inquiries
regarding a Fund, and providing any other Shareholder Services; (c) payments
made to compensate selected dealers or other authorized persons for providing
any Services; (d) costs relating to the formulation and implementation of
marketing and promotional activities for the Investor shares, including, but not
limited to, direct mail promotions and television, radio, newspaper, magazine
and other mass media advertising, and related travel and entertainment expenses;
(e) costs of printing and distributing prospectuses, statements of additional
information and reports of the Funds to prospective shareholders of the Funds;
and (f) costs involved in obtaining whatever information, analyses and reports
with respect to marketing and promotional activities that the Funds may, from
time to time, deem advisable.

Pursuant to the 12b-1 Plan, the Distributor will provide each Fund's
Trustees with periodic reports of amounts expended under the 12b-1 Plan and the
purpose for which the expenditures were made.

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INSTITUTIONAL SHARES. A 12b-1 Plan has not been adopted with respect
to the Institutional shares of each Fund. Accordingly, the Institutional shares
will not pay any 12b-1 fees to the Distributor.

GENERAL. The 12b-1 Plan will continue in effect for so long as its
continuance is specifically approved at least annually by the Trustees,
including a majority of the Trustees who are not interested persons of each Fund
and who have no direct or indirect financial interest in the operation of the
Distribution Plan ("Independent Trustees"). Any material amendment of the
Distribution Plan would require the approval of the Trustees in the manner
described above. The Distribution Plan may not be amended to increase
materially the amount to be spent under it without shareholder approval of the
Investor shares. The Distribution 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 the Investor shares of each
Fund.

CUSTODIAN AND TRANSFER AGENT

State Street Bank and Trust Company (the "Custodian") acts as
custodian for each Fund and also acts as the custodian for each Fund's foreign
securities pursuant to written Custodian Agreements (the "Custodian Agreement").
The Custodian will (i) maintain a separate account or accounts in the name of
each Fund, (ii) hold and transfer portfolio securities on account of each Fund,
(iii) accept receipts and disbursements of money on behalf of each Fund, (iv)
collect and receive all income and other payments and distributions for the
account of each Fund's portfolio securities and (v) make periodic reports to the
Trustees concerning each Fund's custodial arrangements. The Custodian is
authorized to select one or more foreign banking institutions and foreign
securities depositories to serve as sub-custodian on behalf of the Funds,
provided that the Custodian remains responsible for the performance of all its
duties under the Custodian Agreement and holds the Funds harmless from the
negligent acts and omissions of any sub-custodian. For its services to the
Funds under the Custodian Agreement, the Custodian receives a fee which is
calculated based upon each Fund's average daily gross assets, exclusive of
transaction charges and out-of-pocket expenses, which are also charged to the
Funds.

State Street Bank and Trust Company (the "Transfer Agent") also serves
as each Fund's shareholder servicing, transfer and dividend disbursing agent
pursuant to written Transfer Agency and Service Agreements, under which the
Transfer Agent (i) issues and redeems shares of the Funds, (ii) addresses and
mails all communications by the Funds to record owners of each Fund's shares,
including reports to shareholders, dividend and distribution notices and proxy
material for meetings of shareholders, (iii) maintains shareholder accounts and,
if requested, sub-accounts and (iv) makes periodic reports to the Trustees
concerning the Transfer Agent's operations with respect to the Funds.

CAPITAL STOCK

The Trust Instrument authorizes the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest of which an
unlimited number are designated

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Investor shares and an unlimited number are designated Institutional shares.
The Trust Instrument currently has three separate series: U.S. Core Equity
Fund, Aggressive Equity Fund, and Global Independence Fund. Each Fund will be
comprised of both Institutional shares and Investor shares. Institutional
shares are sold directly by the Funds' distributor and may be purchased by
endowments, foundations and plan sponsors of 401(a), 401(k), 457 and 403(b)
plans and by individuals. Investor shares may be purchased by intermediary
financial institutions (including broker-dealers, investment advisers, financial
planners, banks and insurance companies), and certain individual retirement
accounts and individuals. Investment professionals may purchase Investor shares
for discretionary or non-discretionary accounts maintained by individuals.

Under the Trust Instrument, the Trustees have the power (without
shareholder approval) to classify or reclassify any unissued shares of the Trust
into one or more additional classes by setting or changing in any one or more
respects their relative rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption. The Trustees
may similarly classify or reclassify any class of the Trust's shares into one or
more series and, without shareholder approval, may increase the number of
authorized shares of the Trust.

All shareholders of a Fund in each class, upon liquidation, will
participate ratably in the Fund's net assets. Shares do not have cumulative
voting rights, which means that holders of more than 50% of the shares voting
for the election of Trustees can elect all Trustees. Shares are transferable
but have no preemptive, conversion or subscription rights.

Investors in each Fund are entitled to one vote for each full share
held and fractional votes for fractional shares held. Shareholders of each Fund
will vote in the aggregate except where otherwise required by law and except
that the Investor Class will vote separately on certain matters pertaining to
its distribution and shareholder servicing arrangements. There will normally be
no meetings of investors for the purpose of electing Trustees unless and until
such time as less than a majority of the Trustees holding office have been
elected by investors. Investors of record of no less than two-thirds of the
outstanding shares of the Trust may remove a Trustee through a declaration in
writing or by vote cast in person or by proxy at a meeting called for the
purpose. A meeting will be called for the purpose of voting on the removal of a
Trustee at the written request of holders of 10% of the outstanding shares.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The offering price of each Fund's shares is equal to the per share net
asset value of the relevant class of shares of each Fund.

Under the 1940 Act, each Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
NYSE is closed, other than customary weekend and holiday closings, or during
which trading on the NYSE is restricted, or during which (as determined by the
SEC) an emergency exists as a result of which disposal or fair valuation of
portfolio securities is not reasonably practicable,

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or for such other periods as the SEC may permit. (Each Fund may also suspend or
postpone the recordation of an exchange of its shares upon the occurrence of any
of the foregoing conditions.)

If a shareholder's account falls below $500, a Fund may ask the
shareholder to increase its balance. If the balance remains below $500 after 45
days, a Fund may close a shareholder's account and redeem the proceeds to the
shareholder.

If the Trustees determines that conditions exist which make payment of
redemption proceeds wholly in cash unwise or undesirable, a Fund may make
payment wholly or partly in securities or other investment instruments which may
not constitute securities as such term is defined in the applicable securities
laws. If a redemption is paid wholly or partly in securities or other property,
a shareholder would incur transaction costs in disposing of the redemption
proceeds. Each Fund intends to comply with Rule 18f-1 promulgated under the
1940 Act with respect to redemptions in kind.

AUTOMATIC CASH WITHDRAWAL PLAN. An automatic cash withdrawal plan
(the "Plan") is available to shareholders who wish to receive specific amounts
of cash periodically. Withdrawals may be made under the Plan by redeeming as
many shares of each Fund as may be necessary to cover the stipulated withdrawal
payment. To the extent that withdrawals exceed dividends, distributions and
appreciation of a shareholder's investment in a Fund, there will be a reduction
in the value of the shareholder's investment and continued withdrawal payments
may reduce the shareholder's investment and ultimately exhaust it. Withdrawal
payments should not be considered as income from investment in a Fund. All
dividends and distributions on shares in the Plan are automatically reinvested
at net asset value in additional shares of a Fund.

EXCHANGE PRIVILEGE

An exchange privilege among the Funds is available to investors.
Investors can exchange their Investor and Institutional shares for Investor and
Institutional shares of other funds advised by CDC Investments.

This exchange privilege enables shareholders to acquire shares in a
fund with a different investment objective when they believe that a shift
between funds is an appropriate investment decision. This privilege is
available to shareholders residing in any state in which the Investor shares or
Institutional shares being acquired, as relevant, may legally be sold.
Shareholders may exchange $1,000,000 or more of the Institutional shares and
$2,500 or more of the Investor shares from one fund into the same class of
shares of another fund. There is no minimum for retirement accounts. Prior to
any exchange, shareholders should obtain and review a copy of the current
prospectus of the relevant class of each fund into which an exchange is being
considered.

Upon receipt of proper instructions and all necessary supporting
documents, shares submitted for exchange are redeemed at the then-current net
asset value of the relevant class and the proceeds are invested on the same day,
at a price as described above, in shares of

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the relevant class of the fund being acquired. Each Fund may refuse any
purchase or exchange request that could adversely affect a Fund or its
operations, including those from any individual or group who, in a Fund's view,
is likely to engage in excessive trading (usually defined as more than four
exchange out of a Fund within a calendar year), and any purchase or exchange
request in excess of 1% of a Fund's total assets. Each Fund may also (i) change
or discontinue its exchange privilege or temporarily suspend this privilege
during unusual market conditions; (ii) change its minimum investment amounts;
(iii) delay sending out redemption proceeds for up to seven days if doing so
sooner would adversely affect a Fund (this generally applies only in cases of
very large redemptions, excessive trading or during unusual market conditions);
and (iv) make a "redemption in kind" -- payment in portfolio securities rather
than cash -- if the amount an investor is redeeming is large enough to affect a
Fund's operations. The exchange privilege may be modified or terminated at any
time upon 60 days' notice to shareholders.

ADDITIONAL INFORMATION CONCERNING TAXES

The following is a summary of the material U.S. federal income tax
considerations regarding the purchase, ownership and disposition of shares in
each Fund. Each prospective shareholder is urged to consult his own tax adviser
with respect to the specific federal, state, local and foreign tax consequences
of investing in a Fund. The summary is based on the laws in effect on the date
of this Statement of Additional Information, which are subject to change.

THE FUNDS AND THEIR INVESTMENTS

Each Fund intends to qualify to be treated as a regulated investment
company each taxable year under the Code. To so qualify, a Fund must, among
other things: (a) derive at least 90% of its gross income in each taxable year
from dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or other income (including, but not limited to, gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies; and (b) diversify its holdings so that, at the
end of each quarter of a Fund's taxable year, (i) at least 50% of the market
value of a Fund's assets is represented by cash, securities of other regulated
investment companies, U.S. government securities and other securities, with such
other securities limited, in respect of any one issuer, to an amount not greater
than 5% of a Fund's assets and not greater than 10% of the outstanding voting
securities of such issuer and (ii) not more than 25% of the value of its assets
is invested in the securities (other than U.S. government securities or
securities of other regulated investment companies) of any one issuer or any two
or more issuers that a Fund controls and are determined to be engaged in the
same or similar trades or businesses or related trades or businesses.

As a regulated investment company, each Fund will not be subject to
U.S. federal income tax on its net investment income (I.E., income other than
its net realized long- and short-term capital gains) and its net realized long-
and short-term capital gains, if any, that

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it distributes to its shareholders, provided that an amount equal to at least
90% of the sum of its investment company taxable income (I.E., 90% of its
taxable income minus the excess, if any, of its net realized long-term capital
gains over its net realized short-term capital losses (including any capital
loss carryovers), plus or minus certain other adjustments as specified in the
Code) and its net tax-exempt income for the taxable year is distributed, but
will be subject to tax at regular corporate rates on any taxable income or gains
that it does not distribute. No more than 10% of each Fund's gross income may
be from nonqualifying sources, including income from investments in physical
commodities and related options in the case of the Aggressive Equity and Global
Independence Funds. A Fund may therefore need to limit the extent to which it
makes such investments in order to qualify as a regulated investment company.
Furthermore, each Fund will be subject to a U.S. corporate income tax with
respect to such distributed amounts in any year that it fails to qualify as a
regulated investment company or fails to meet this distribution requirement.

The Code imposes a 4% nondeductible excise tax on each Fund to the
extent a Fund does not distribute by the end of any calendar year at least 98%
of its net investment income for that year and 98% of the net amount of its
capital gains (both long-and short-term) for the one-year period ending, as a
general rule, on October 31 of that year. For this purpose, however, any income
or gain retained by a Fund that is subject to corporate income tax will be
considered to have been distributed by year-end. In addition, the minimum
amounts that must be distributed in any year to avoid the excise tax will be
increased or decreased to reflect any underdistribution or overdistribution, as
the case may be, from the previous year. Each Fund anticipates that it will pay
such dividends and will make such distributions as are necessary in order to
avoid the application of this tax.

With regard to a Fund's investments in foreign securities, exchange
control regulations may restrict repatriations of investment income and capital
or the proceeds of securities sales by foreign investors such as a Fund and may
limit a Fund's ability to pay sufficient dividends and to make sufficient
distributions to satisfy the 90% and excise tax distribution requirements.

If, in any taxable year, a Fund fails to qualify as a regulated
investment company under the Code, it would be taxed in the same manner as an
ordinary corporation and distributions to its shareholders would not be
deductible by a Fund in computing its taxable income. In addition, in the event
of a failure to qualify, a Fund's distributions, to the extent derived from a
Fund's current or accumulated earnings and profits, would constitute dividends
(eligible for the corporate dividends-received deduction) which are taxable to
shareholders as ordinary income, even though those distributions might otherwise
(at least in part) have been treated in the shareholders' hands as long-term
capital gains. If a Fund fails to qualify as a regulated investment company in
any year, it must pay out its earnings and profits accumulated in that year in
order to qualify again as a regulated investment company. In addition, if a
Fund failed to qualify as a regulated investment company for a period greater
than one taxable year, a Fund may be required to recognize any net built-in
gains (the excess of the aggregate gains, including items of income, over
aggregate losses that would have been realized if it had been liquidated) in
order to qualify as a regulated investment company in a subsequent year.

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Each Fund's short sales against the box, if any, and transactions in
foreign currencies, forward contracts, options and futures contracts (including
options and futures contracts on foreign currencies) will be subject to special
provisions of the Code that, among other things, may affect the character of
gains and losses realized by a Fund (I.E., may affect whether gains or losses
are ordinary or capital), accelerate recognition of income to a Fund and defer
Fund losses. These rules could therefore affect the character, amount and
timing of distributions to shareholders. These provisions also (a) will require
a Fund to mark-to-market certain types of the positions in its portfolio (I.E.,
treat them as if they were closed out) and (b) may cause a Fund to recognize
income without receiving cash with which to pay dividends or make distributions
in amounts necessary to satisfy the distribution requirements for avoiding
income and excise taxes. Each Fund will monitor its transactions, will make the
appropriate tax elections and will make the appropriate entries in its books and
records when it engages in a short sale against the box or acquires any foreign
currency, forward contract, option, futures contract or hedged investment in
order to mitigate the effect of these rules and prevent disqualification of a
Fund as a regulated investment company.

Each Fund's investments in zero coupon securities, if any, may create
special tax consequences. Zero coupon securities do not make interest payments,
although a portion of the difference between a zero coupon security's face value
and its purchase price is imputed as income to a Fund each year even though a
Fund receives no cash distribution until maturity. Under the U.S. federal tax
laws, a Fund will not be subject to tax on this income if it pays dividends to
its shareholders substantially equal to all the income received from, or imputed
with respect to, its investments during the year, including its zero coupon
securities. These dividends ordinarily will constitute taxable income to the
shareholders of each Fund.

PASSIVE FOREIGN INVESTMENT COMPANIES. If a Fund purchases shares in
certain foreign investment entities, called "passive foreign investment
companies" (a "PFIC"), it may be subject to U.S. federal income tax on a portion
of any "excess distribution" or gain from the disposition of such shares even if
such income is distributed as a taxable dividend by a Fund to its shareholders.
Additional charges in the nature of interest may be imposed on a Fund in respect
of deferred taxes arising from such distributions or gains. If a Fund were to
invest in a PFIC and elected to treat the PFIC as a "qualified electing fund"
under the Code, in lieu of the foregoing requirements, a Fund might be required
to include in income each year a portion of the ordinary earnings and net
capital gains of the qualified electing fund, even if not distributed to a Fund,
and such amounts would be subject to the 90% and excise tax distribution
requirements described above. In order to make this election, a Fund would be
required to obtain certain annual information from the passive foreign
investment companies in which it invests, which may be difficult or not possible
to obtain.

Recently, legislation was enacted that provides a mark-to-market
election for regulated investment companies effective for taxable years
beginning after December 31, 1997. This election would result in a Fund being
treated as if it had sold and repurchased all of the PFIC stock at the end of
each year. In this case, a Fund would report gains as ordinary income and would
deduct losses as ordinary losses to the extent of previously recognized gains.
The election, once made, would be effective for all subsequent taxable years of
a Fund,

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unless revoked with the consent of the Internal Revenue Service (the "IRS"). By
making the election, a Fund could potentially ameliorate the adverse tax
consequences with respect to its ownership of shares in a PFIC, but in any
particular year may be required to recognize income in excess of the
distributions it receives from PFICs and its proceeds from dispositions of PFIC
company stock. A Fund may have to distribute this "phantom" income and gain to
satisfy its distribution requirement and to avoid imposition of the 4% excise
tax. Each Fund will make the appropriate tax elections, if possible, and take
any additional steps that are necessary to mitigate the effect of these rules.

TAXATION OF UNITED STATES SHAREHOLDERS

DIVIDENDS AND DISTRIBUTIONS. Each Fund intends to distribute annually to
its shareholders substantially all of its investment company taxable income, and
any net realized long-term capital gains in excess of net realized short-term
capital losses (including any capital loss carryovers). Each Fund currently
expects to distribute any excess annually to its shareholders. However, if a
Fund retains for investment an amount equal to all or a portion of its net
long-term capital gains in excess of its net short-term capital losses and
capital loss carryovers, it will be subject to a corporate tax (currently at a
rate of 35%) on the amount retained. In that event, a Fund intends to designate
such retained amounts as undistributed capital gains in a notice to its
shareholders who (a) will be required to include in income for United States
federal income tax purposes, as long-term capital gains, their proportionate
shares of the undistributed amount, (b) will be entitled to credit their
proportionate shares of the 35% tax paid by the Fund on the undistributed amount
against their United States federal income tax liabilities, if any, and to claim
refunds to the extent their credits exceed their liabilities, if any, and (c)
will be entitled to increase their tax basis, for United States federal income
tax purposes, in their shares by an amount equal to 65% of the amount of
undistributed capital gains included in the shareholder's income. Organizations
or persons not subject to federal income tax on such capital gains will be
entitled to a refund of their pro rata share of such taxes paid by a Fund upon
filing appropriate returns or claims for refund with the IRS. Any dividend
declared by a Fund in October, November or December of any calendar year and
payable to shareholders of record on a specified date in such a month shall be
deemed to have been received by each shareholder on December 31 of such calendar
year and to have been paid by a Fund not later than such December 31, provided
that such dividend is actually paid by a Fund during January of the following
calendar year.

Dividends of net investment income and distributions of net realized
short-term capital gains are taxable to a U.S. shareholder as ordinary income,
whether paid in cash or in shares. Distributions of net-long-term capital
gains, if any, that a Fund designates as capital gains dividends are taxable as
long-term capital gains, whether paid in cash or in shares and regardless of how
long a shareholder has held shares of a Fund. Dividends and distributions paid
by a Fund (except for the portion thereof, if any, attributable to dividends on
stock of U.S. corporations received by a Fund) will not qualify for the
deduction for dividends received by corporations. Distributions in excess of a
Fund's current and accumulated earnings and profits will, as to each
shareholder, be treated as a tax-free return of capital, to the extent of a

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shareholder's basis in his shares of a Fund, and as a capital gain thereafter
(if the shareholder holds his shares of a Fund as capital assets).

Shareholders receiving dividends or distributions in the form of
additional shares should be treated for U.S. federal income tax purposes as
receiving a distribution in the amount equal to the amount of money that the
shareholders receiving cash dividends or distributions will receive, and should
have a cost basis in the shares received equal to such amount.

Investors considering buying shares just prior to a dividend or
capital gain distribution should be aware that, although the price of shares
just purchased at that time may reflect the amount of the forthcoming
distribution, such dividend or distribution may nevertheless be taxable to them.

If a Fund is the holder of record of any stock on the record date for
any dividends payable with respect to such stock, such dividends are included in
a Fund's gross income not as of the date received but as of the later of (a) the
date such stock became ex-dividend with respect to such dividends (I.E., the
date on which a buyer of the stock would not be entitled to receive the
declared, but unpaid, dividends) or (b) the date a Fund acquired such stock.
Accordingly, in order to satisfy its income distribution requirements, a Fund
may be required to pay dividends based on anticipated earnings, and shareholders
may receive dividends in an earlier year than would otherwise be the case.

SALES OF SHARES. Upon the sale or exchange of his shares, a
shareholder will realize a taxable gain or loss equal to the difference between
the amount realized and his basis in his shares. Such gain or loss will be
treated as capital gain or loss, if the shares are capital assets in the
shareholder's hands, and will be long-term capital gain or loss if the shares
are held for more than one year and short-term capital gain or loss if the
shares are held for one year or less. Any loss realized on a sale or exchange
will be disallowed to the extent the shares disposed of are replaced, including
replacement through the reinvesting of dividends and capital gains distributions
in a Fund, within a 61-day period beginning 30 days before and ending 30 days
after the disposition of the shares. In such a case, the basis of the shares
acquired will be increased to reflect the disallowed loss. Any loss realized by
a shareholder on the sale of a Fund share held by the shareholder for six months
or less will be treated for U.S. federal income tax purposes as a long-term
capital loss to the extent of any distributions or deemed distributions of
long-term capital gains received by the shareholder with respect to such share.

BACKUP WITHHOLDING. Each Fund may be required to withhold, for U.S.
federal income tax purposes, 31% of the dividends, distributions and redemption
proceeds payable to shareholders who fail to provide a Fund with their correct
taxpayer identification number or to make required certifications, or who have
been notified by the IRS that they are subject to backup withholding. Certain
shareholders are exempt from backup withholding. Backup withholding is not an
additional tax and any amount withheld may be credited against a shareholder's
U.S. federal income tax liabilities.

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NOTICES. Shareholders will be notified annually by each Fund as to
the U.S. federal income tax status of the dividends, distributions and deemed
distributions attributable to undistributed capital gains (discussed above in
"The Funds and Their Investments") made by a Fund to its shareholders.
Furthermore, shareholders will also receive, if appropriate, various written
notices after the close of a Fund's taxable year regarding the U.S. federal
income tax status of certain dividends, distributions and deemed distributions
that were paid (or that are treated as having been paid) by a Fund to its
shareholders during the preceding taxable year.

OTHER TAXATION

Distributions also may be subject to additional state, local and
foreign taxes depending on each shareholder's particular situation.

THE FOREGOING IS ONLY A SUMMARY OF CERTAIN MATERIAL TAX CONSEQUENCES AFFECTING
THE FUND AND ITS SHAREHOLDERS. SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISERS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF AN
INVESTMENT IN THE FUNDS.

DETERMINATION OF PERFORMANCE

From time to time, a Fund may quote the total return of its
Investor shares and/or Institutional shares in advertisements or in reports
and other communications to shareholders. These total return figures show
the average percentage change in value of an investment in the Investor
and/or Institutional shares from the beginning of the measuring period to the
end of the measuring period. The figures reflect changes in the price of the
Investor and/or Institutional shares assuming that any income dividends
and/or capital gain distributions made by a Fund during the period were
reinvested in Investor and/or Institutional shares of a Fund. Total return
will be shown for recent one-, five- and ten-year periods, and may be shown
for other periods as well (such as from commencement of a Fund's operations
or on a year-by-year, quarterly or current year-to-date basis). These
figures are calculated by finding the average annual compounded rates of
return for the one-, five- and ten- (or such shorter period as the relevant
class of shares has been offered) year periods that would equate the initial
amount invested to the ending redeemable value according to the following
formula: P (1 + T)TO THE POWER OF n = ERV. For purposes of this formula,
"P" is a hypothetical investment of $1,000; "T" is average annual total
return; "n" is number of years; and "ERV" is the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the one-, five- or
ten-year periods (or fractional portion thereof). Total return or "T" is
computed by finding the average annual change in the value of an initial
$1,000 investment over the period and assumes that all dividends and
distributions are reinvested during the period.

When considering average total return figures for periods longer than
one year, it is important to note that the annual total return for one year in
the period might have been greater or less than the average for the entire
period. When considering total return figures for periods shorter than one
year, investors should bear in mind that each Fund seeks long-term appreciation
and that such return may not be representative of any Fund's return over a
longer market cycle. Each Fund may also advertise aggregate total return
figures of its Investor and/or Institutional shares for various periods,
representing the cumulative change in value of

51
<PAGE>

an investment in the Investor and/or Institutional shares for the specific
period (again reflecting changes in share prices and assuming reinvestment of
dividends and distributions). Aggregate and average total returns may be shown
by means of schedules, charts or graphs and may indicate various components of
total return (I.E., change in value of initial investment, income dividends and
capital gain distributions). Investors should note that total return figures
are based on historical earnings and are not intended to indicate future
performance.

Each Fund may advertise, from time to time, comparisons of the
performance and the expense ratio of its Investor shares and/or Institutional
shares with that of one or more other mutual funds with similar investment
objectives. Each Fund may advertise average annual calendar year-to-date and
calendar quarter returns, which are calculated according to the formula set
forth in the preceding paragraph, except that the relevant measuring period
would be the number of months that have elapsed in the current calendar year or
most recent three months, as the case may be. Investors should note that this
performance may not be representative of a Fund's total return in longer market
cycles.

The performance of a class of Fund shares will vary from time to time
depending upon market conditions, the composition of a Fund's portfolio and
operating expenses allocable to it. As described above, total return is based
on historical earnings and is not intended to indicate future performance.
Consequently, any given performance quotation should not be considered as
representative of performance for any specified period in the future.
Performance information may be useful as a basis for comparison with other
investment alternatives. However, a Fund's performance will fluctuate, unlike
certain bank deposits or other investments which pay a fixed yield for a stated
period of time. Any fees charged by institutions or other institutional
investors directly to their customers in connection with investments in Fund
shares are not reflected in a Fund's total return, and such fees, if charged,
will reduce the actual return received by customers on their investments.

In its reports, investor communications or advertisements, each Fund
may include: (i) its total return performance; (ii) its performance compared
with various indexes or other mutual funds; (iii) published evaluations by
nationally recognized ranking services and financial publications; (iv) updates
concerning its strategies and portfolio investments; (v) its goals, risk factors
and expenses compared with other mutual funds; (vi) analysis of its investments
by industry, country, credit quality and other characteristics; (vii) a
discussion of the risk/return continuum relating to different investments;
(viii) the potential impact of adding foreign stocks to a domestic portfolio;
(ix) the general biography or work experience of the portfolio managers of the
Funds; (x) portfolio manager commentary or market updates; (xi) discussion of
macroeconomic factors affecting the Fund and its investments; and (xii) other
information of interest to investors.

INDEPENDENT AUDITORS AND COUNSEL

Deloitte & Touche LLP, with principal offices at Two World Financial
Center, New York, New York 10281-1414, serves as the independent auditors for
the Trust. The statements of assets and liabilities of each Fund, as of April
27, 1999, that appear in this

52
<PAGE>

Statement of Additional Information have been audited by Deloitte & Touche LLP,
whose report thereon appears elsewhere herein and has been included herein in
reliance upon the report of such firm of independent auditors given upon their
authority as experts in accounting and auditing.

Willkie Farr & Gallagher serves as counsel for the Trust, as well as
counsel to CDC Investments.

FINANCIAL STATEMENTS

Each Fund's financial statement follows the Independent Auditors'
Report.

53
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Trustees and Shareholders,
CDC MPT+ Funds:

We have audited the accompanying statements of assets and liabilities of CDC
MPT+ Funds (comprising, respectively, the Aggressive Equity Fund, Global
Independence Fund and US Core Equity Fund) as of April 27, 1999. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such statements of assets and liabilities presents fairly, in
all material respects, the financial positions of each of the respective funds
constituting CDC MPT+ Funds as of April 27, 1999 in conformity with generally
accepted accounting principles.

/s/ Deloitte & Touche LLP

New York, NY
April 28, 1999

54
<PAGE>

CDC MPT+ Funds

Statements of Assets and Liabilities

April 27, 1999

Aggressive Global U.S. Core
Equity Independence Equity
Fund Fund Fund
<S> <C> <C> <C>
ASSETS
CASH $ 33,333 $ 33,333 $ 33,334
TOTAL ASSETS 33,333 33,333 33,334

LIABILITIES
Total Liabilities 0 0 0

NET ASSETS $ 33,333 $ 33,333 $ 33,334

Shares of beneficial interest outstanding, no par
value 3,333.300 3,333.300 3,333.400

Net asset value, offering price and redemption price
per share $ 10.00 $ 10.00 $ 10.00
</TABLE>

See accompanying notes.

55
<PAGE>

CDC MPT+ Funds

Notes to Statements of Assets and Liabilities

April 27, 1999

1. ORGANIZATION

CDC MPT+ Funds (the "Trust"), is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Trust consists of three funds, each having distinct investment objectives
and policies: Aggressive Equity Fund (non-diversified portfolio), Global
Independence Fund (non-diversified portfolio) and U.S. Core Equity Fund
(diversified portfolio) (individually, the "Fund", and collectively, the
"Funds"). The Trust currently offers Institutional shares of each Fund and
may offer Investor shares.

The Trust was organized as a Delaware business trust on October 13, 1998.
Prior to April 20, 1999, the Trust had no operations other than its
organization. On April 20, 1999, the Aggressive Equity Fund and Global
Independence Fund issued 3,333 Institutional shares and the U.S. Core
Equity Fund issued 3,334 Institutional shares at net asset value (the
"Initial Shares") to CDC Investment Management Corporation.

2. USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements. Actual results could differ from
those estimates.

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES

The Trust has an Investment Management Agreement with CDC Investment
Management Corporation (the "Adviser"), under which the Adviser manages the
investments of each Fund. Aggressive Equity Fund pays the Adviser a basic
fee of 1.50% per annum, Global Independence Fund pays the Adviser a basic
fee of 1.75% per annum and U.S. Core Equity Fund pays the Adviser a basic
fee of 1.00% per annum, of the respective Fund's average daily net assets.
This basic management fee may be adjusted upward or downward by applying an
adjustment formula (the "Performance Adjustment"). The Performance
Adjustment is calculated monthly by comparing the Aggressive Equity and
U.S. Core Equity Funds' investment performance to the S&P 500 Index and the
Global Independence Fund's investment performance to a blend of 50% MSCI
World Index/50% JP Morgan Global Bond Index, during the most recent
twelve-month period. The difference between the Fund's performance
compared to the

56
<PAGE>

performance of the S&P 500 Index for the Aggressive Equity and U.S. Core
Equity Funds is multiplied by a performance adjustment of 25% (as an annual
rate). The maximum annualized Performance Adjustment is 1.50% for
Aggressive Equity Fund and 1.00% for the U.S. Core Equity Fund. In the
case of the Global Independence Fund, the difference between the Fund's
performance compared to the performance of the relevant target is
multiplied by a Performance Adjustment of 5% (as an annual rate). The
Performance Adjustment is then added to or subtracted from the basic
fee, subject to the maximum or minimum fee. The maximum Performance
Adjustment is 0.25% for the Global Independence Fund. Each Fund's
performance is calculated based on its net asset value per share after
expenses but before the management fee.

4. ORGANIZATION EXPENSES

The Adviser has borne all costs associated with the organization of the
Trust.

57
<PAGE>

APPENDIX

DESCRIPTION OF RATINGS

COMMERCIAL PAPER RATINGS

Commercial paper rated A-1 by Standard and Poor's Ratings Services
("S&P") indicates that the degree of safety regarding timely payment is strong.
Those issues determined to possess extremely strong safety characteristics are
denoted with a plus sign designation. Capacity for timely payment on commercial
paper rated A-2 is satisfactory, but the relative degree of safety is not as
high as for issues designated A-1.

The rating Prime-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Issuers rated Prime-1 (or related
supporting institutions) are considered to have a superior capacity for
repayment of short-term promissory obligations. Issuers rated Prime-2 (or
related supporting institutions) are considered to have a strong capacity for
repayment of short-term promissory obligations. This will normally be evidenced
by many of the characteristics of issuers rated Prime-1 but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternative liquidity is maintained.

CORPORATE BOND RATINGS

The following summarizes the ratings used by S&P for corporate bonds:

AAA - This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay interest and repay principal.

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

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

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

BB, B and CCC - Debt rated BB and B are regarded, on balance, as
predominately speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB represents a lower
degree of speculation than B, and CCC the highest degree of speculation. While
such bonds will likely have some quality
<PAGE>

and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions, which could
lead to inadequate capacity to meet timely interest and principal payments. The
BB rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB rating.

B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.

CCC - Debt rated CCC has a currently identifiable vulnerability to
default and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The CCC rating
category is also used for debt subordinated to senior debt that is assigned an
actual or implied B or B- rating.

CC - This rating is typically applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.

C - This rating is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.

Additionally, the rating CI is reserved for income bonds on which no
interest is being paid. Such debt is rated between debt rated C and debt rated
D.

To provide more detailed indications of credit quality, the ratings
may be modified by the addition of a plus or minus sign to show relative
standing within this major rating category.

D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

The following summarizes the ratings used by Moody's for corporate
bonds:

Aaa - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest

A-2
<PAGE>

payments are protected by a large or exceptionally stable margin and principal
is secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.

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

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

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

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

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

Moody's applies numerical modifiers (1, 2 and 3) with respect to the
bonds rated "Aa" through "B." The modifier 1 indicates that the bond being
rated ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the bond ranks
in the lower end of its generic rating category.

Caa - Bonds that are rated Caa are of poor standing. These issues may
be in default or present elements of danger may exist with respect to principal
or interest.

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

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

A-3
<PAGE>

<TABLE>
<CAPTION>
PART C
<S> <C>
OTHER INFORMATION
Item 23. EXHIBITS

Exhibit No. Description of Exhibit
- ----------- ----------------------
(a)(1) Certificate of Trust.*

(2) Trust Instrument.*

(b) By-Laws.*

(d)(1) Investment Advisory Agreement for the U.S. Core Equity
Fund.

(d)(2) Investment Advisory Agreement for the Aggressive Equity
Fund.

(d)(3) Investment Advisory Agreement for the Global Independence
Fund.

(e) Form of Distribution Agreement with Funds
Distributor, Inc.**

(f) Not applicable.

(g) Form of Custodian Agreement with State Street Bank and
Trust Company.**

(h)(1) Form of Transfer Agency and Service Agreement with State
Street Bank and Trust Company.**

(2) Form of Administration Agreement with State Street Bank
and Trust Company.**

(i)(1) Opinion and Consent of Willkie Farr & Gallagher,
counsel to Registrant.

(2) Opinion and Consent of Richards, Layton & Finger,
Delaware counsel to Registrant.

(j) Consent of Deloitte & Touche LLP, Independent Auditors.

(k) Not applicable.

(l) Purchase Agreement.

(m)(1) Shareholder Servicing and Distribution Plan.**

* Incorporated by reference to Registrant's Registration Statement on
Form N-1A filed on October 28, 1998.

** Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
its Registration Statement on Form N-1A filed on March 22, 1999.

C-1
<PAGE>

(2) Shareholder Servicing and Distribution Agreement.**

(n) Not applicable.

(o) 18f-3 Plan.**
</TABLE>

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

All of the outstanding shares of beneficial interest of
Registrant on the date Registrant's Registration Statement becomes effective
will be owned by CDC Investment Management Corporation, which will have
contributed Registrant's initial seed capital.

It is anticipated that shortly after the Trust's Registration
Statement becomes effective, CIMCO Holdings LLC, ("CIMCO"), a Delaware limited
liability company, will invest approximately $25 million in each of the U.S.
Core Equity Fund, the Aggressive Equity Fund and the Global Independence Fund
(each a "Fund" and collectively the "Funds"). Master Holdings, a Cayman Islands
corporation, is the majority shareholder of CIMCO and CDC Investments is a
minority shareholder of CIMCO. CDC Group, Paris is the majority shareholder of
Master Holdings. CDC Investments is a wholly-owned subsidiary of CDC Group,
Paris.

Item 25. INDEMNIFICATION

Under Article X of the Trust Instrument (the "Instrument"), the
Trustees and officers of Registrant shall not have any liability to Registrant
or its stockholders for money damages, to the fullest extent permitted by
Delaware law. This limitation on liability applies to events occurring at the
time a person serves as a Trustee or officer of Registrant whether or not such
person is a Trustee or officer at the time of any proceeding in which liability
is asserted. No provision of Article X shall protect or purport to protect any
Trustee or officer of Registrant against any liability to Registrant or its
stockholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. Registrant shall indemnify and advance
expenses to its currently acting and its former Trustee to the fullest extent
that indemnification of Trustees and advancement of expenses to Directors is
permitted by Delaware law.

Registrant shall indemnify and advance expenses to its officers to the
same extent as its Trustees and to such further extent as is consistent with
such law.

Article X of the Instrument and Article VIII of the Bylaws authorize
Registrant to obtain insurance on behalf of its Trustees, officers and
employees, including any such person who

C-2
<PAGE>

was serving at the request of the Registrant as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against and claimed by such person
in such capacity, whether or not Registrant would have the power to indemnify
such person against such liability. Registrant may not, however, obtain
insurance that protects or purports to protect any Trustee, officer or
employee against any liability to Registrant or its Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of
his office.

Additionally, with respect to indemnification against liability
incurred by Registrant's distributor, reference is made to the form of
Distribution Agreement filed herewith. With respect to indemnification against
liability incurred by Registrant's investment manager, reference is made to the
form of Investment Advisory Agreement filed herewith.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Registrant is managed by CDC Investment Management Corporation ("CDC
Investments"). CDC Investments is an established leader in providing alternative
investment strategies for institutional clients. CDC Investments currently has
approximately $4 billion in assets under management and provides asset
management services to large European, Asian and North American financial
institutions, family offices, fund of funds, pension funds and other investors.
The list required by this Item 26 of officers and directors of CDC Investments
together with information as to their other businesses, professions, vocations
or employment of a substantial nature during the past two years is incorporated
by reference to Schedules A and D of Form ADV filed by CDC Investments (SEC File
No. 801-42137) pursuant to the Advisers Act.

Item 27. PRINCIPAL UNDERWRITER

(a) Funds Distributor, Inc. serves as distributor for Registrant, as
well as for: American Century California Tax-Free and Municipal Funds, American
Century Capital Portfolios, Inc., American Century Government Income Trust,
American Century International Bond Funds, American Century Investment Trust,
American Century Municipal Trust, American Century Mutual Funds, Inc., American
Century Premium Reserves, Inc., American Century Quantitative Equity Funds,
American Century Strategic Asset Allocations, Inc., American Century Target
Maturities Trust, American Century Variable Portfolios, Inc., American Century
World Mutual Funds, Inc., The Brinson Funds, Dresdner RCM Capital Funds, Inc.,
Dresdner RCM Equity Funds, Inc., Harris Insight Funds Trust, HT Insight Funds,
Inc. d/b/a Harris Insight Funds, J.P. Morgan Institutional Funds, J.P. Morgan
Funds, JPM Series Trust, JPM Series Trust II, LaSalle Partners Funds, Inc.,
Kobrick Investment Trust, Merrimac Series, Monetta Fund, Inc., Monetta

C-3
<PAGE>

Trust, The Montgomery Funds I, The Montgomery Funds II, The Munder
Framlington Funds Trust, The Munder Funds Trust, The Munder Funds, Inc.,
National Investors Cash Management Fund, Inc., Orbitex Group of Funds, SG
Cowen Funds, Inc., SG Cowen Income + Growth Fund, Inc., SG Cowen Standby
Reserve Fund, Inc., SG Cowen Standby Tax-Exempt Reserve Fund, Inc., SG Cowen
Series Funds, Inc., St. Clair Funds, Inc., The Skyline Funds, Waterhouse
Investors Family of Funds, Inc. and WEBS Index Fund, Inc.

(b) The information required by this Item 27 relating to each
director, officer or partner of Funds Distributor, Inc. is incorporated by
reference to Schedule A of Form BD filed by Funds Distributor, Inc. (SEC File
No. 8-20518) pursuant to the Securities Exchange Act of 1934.

Item 28. LOCATION OF ACCOUNTS AND RECORDS

(1) CDC Investment Management Corporation
9 West 57th Street, 35th Floor
New York, New York 10019
(records relating to its functions as investment
adviser; Registrant's Certificate of Trust,
Trust Instrument, By-laws and minute books)

(2) State Street Bank and Trust Company
222 Franklin Street
Boston, Massachusetts 02110
(records relating to its functions as
administrator and fund accounting
agent)

(3) Funds Distributor, Inc.
60 State Street, Suite 1300
Boston, Massachusetts 02109
(records relating to its functions as distributor)

(4) State Street Bank and Trust Company
222 Franklin Street
Boston, Massachusetts 02110
(records relating to its functions as custodian)

(5) Boston Financial Data Services, Inc.
2 Heritage Drive
North Quincy, Massachusetts 02171
(records relating to its functions as transfer agent)

Item 29. MANAGEMENT SERVICES

Not applicable.

Item 30. UNDERTAKINGS.

C-4
<PAGE>

Not applicable.

C-5
<PAGE>

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, thereunto duly authorized, in the City of New York and the State of
New York, on this 3rd day of May, 1999.

CDC MPT+ FUNDS

By: /s/ Bluford H. Putnam
--------------------------------------
Bluford H. Putnam
President and Chief Investment Officer

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

Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Bluford H. Putnam Trustee, President and Chief May 3, 1999
- ------------------------------ Investment Officer
Bluford H. Putnam

Trustee May 3, 1999
- ------------------------------
Mike West*

Trustee May 3, 1999
- -------------------------------
Arnold Zellner*

/s/ C. Peter Paterno Treasurer May 3, 1999
- -------------------------------
C. Peter Paterno

/s/ Rachel D. Manney Secretary May 3, 1999
- -------------------------------
Rachel D. Manney

By: /s/ Rachel D. Manney
- -------------------------------
Rachel D. Manney as attorney-
in fact

*Rachel D. Manney signs this document pursuant to the power of attorney
contained in Pre-Effective Amendment No. 1 to the Registration Statement,
filed March 22, 1999.
</TABLE>

<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description of Exhibit
- ----------- ----------------------

(d)(1) Investment Advisory Agreement for the U.S. Core Equity Fund.

(d)(2) Investment Advisory Agreement for the Aggressive Equity Fund.

(d)(3) Investment Advisory Agreement for the Global
Independence Fund.

(i)(1) Opinion and Consent of Willkie Farr & Gallagher,
counsel to Registrant.

(2) Opinion and Consent of Richards, Layton & Finger,
Delaware counsel to Registrant.

(j) Consent of Deloitte & Touche LLP, Independent Auditors.

(l) Purchase Agreement.

<PAGE>

INVESTMENT ADVISORY AGREEMENT

______________ ___, 1999

CDC Investment Management Corporation
9 West 57th Street, 35th Floor
New York, New York 10019

Dear Sirs:

CDC MPT+ Funds (the "Trust"), a business trust organized and existing
under the laws of the State of Delaware, is an open-end, management investment
company that currently offers three portfolios, one of which is the U.S. Core
Equity Fund (the "Fund"). The Trust on behalf of the Fund herewith confirms its
agreement with CDC Investment Management Corporation (the "Adviser") as follows:

1. INVESTMENT DESCRIPTION; APPOINTMENT

The Trust desires to employ the capital of the Fund by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Trust Instrument, as may be amended from time to time, and in
its Prospectus and Statement of Additional Information relating to the Fund as
from time to time in effect (the "Prospectus" and "SAI," respectively), and in
such manner and to such extent as may from time to time be approved by the Board
of Trustees of the Trust. Copies of the Trust's Prospectus and SAI have been or
will be submitted to the Adviser. The Trust desires to employ and hereby
appoints the Adviser to act as investment adviser to the Fund. The Adviser
accepts the appointment and agrees to furnish the services for the compensation
set forth below.

2. SERVICES AS INVESTMENT ADVISER

Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser will (a) act in strict conformity with the Trust
Instrument, the Investment Company Act of 1940 (the "1940 Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended,
(b) manage the Fund in accordance with the Fund's investment objective and
policies as stated in the Trust's Prospectus and SAI relating to the Fund, (c)
make investment decisions for the Fund, (d) place purchase and sale orders for
securities on behalf of the Fund, (e) exercise voting rights in respect of Fund
securities and other investments for the Fund, (f) pledge or assign assets of
the Fund and aggregate orders on behalf of the Fund with orders entered by the
Adviser on behalf of other clients of the Adviser to the extent consistent with
applicable law and (g) monitor and evaluate the services provided by the Fund's
investment sub-adviser(s), if any, under the terms of the applicable investment
sub-advisory agreement(s). In providing those services, the Adviser will
provide investment research and supervision of the

<PAGE>

Fund's investments and conduct a continual program of investment, evaluation
and, if appropriate, sale and reinvestment of the Fund's assets. In addition,
the Adviser will furnish the Trust with whatever statistical information the
Trust may reasonably request with respect to the securities that the Fund may
hold or contemplate purchasing.

Subject to the approval of the Board of Trustees of the Trust and
where required, the Trust's shareholders, the Adviser may engage an investment
sub-adviser or sub-advisers to provide advisory services in respect of the Fund
and may delegate to such investment sub-adviser(s) the responsibilities
described in subparagraphs (b) through (f) above. In the event that an
investment sub-adviser's engagement has been terminated, the Adviser shall be
responsible for furnishing the Fund with the services required to be performed
by such investment sub-adviser(s) under the applicable investment sub-advisory
agreements or arranging for a successor investment sub-adviser(s) to provide
such services on terms and conditions acceptable to the Trust and the Trust's
Board of Trustees and subject to the requirements of the 1940 Act.

3. BROKERAGE

In executing transactions for the Fund, selecting brokers or dealers
and negotiating any brokerage commission rates, the Adviser will use its best
efforts to seek the best overall terms available. In assessing the best overall
terms available for any portfolio transaction, the Adviser will consider all
factors it deems relevant including, but not limited to, breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, the Adviser may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as the same may from time to time be amended) provided to the Fund and/or other
accounts over which the Adviser or an affiliate exercises investment discretion.

4. INFORMATION PROVIDED TO THE TRUST

The Adviser will keep the Trust informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Trust from time
to time with whatever information the Adviser believes is appropriate for this
purpose.

5. STANDARD OF CARE; INDEMNIFICATION

The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above.

-2-
<PAGE>

The Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to protect or
purport to protect the Adviser against any liability to the Trust or the Fund or
to shareholders of the Trust or the Fund to which the Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement ("disabling
conduct"). The Fund will indemnify the Adviser against, and hold it harmless
from, any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) not resulting from disabling conduct by
the Adviser. Indemnification shall be made only following: (i) a final
decision on the merits by a court or other body before whom the proceeding was
brought that the Adviser was not liable by reason of disabling conduct or (ii)
in the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the Adviser was not liable by reason of disabling
conduct by (a) the vote of a majority of a quorum of Trustees of the Fund who
are neither "interested persons" of the Fund nor parties to the proceeding
("disinterested non-party Trustees") or (b) an independent legal counsel in a
written opinion. The Adviser shall be entitled to advances from the Fund for
payment of the reasonable expenses incurred by it in connection with the matter
as to which it is seeking indemnification in the manner and to the fullest
extent permissible under Delaware Law. The Adviser shall provide to the Fund a
written affirmation of its good faith belief that the standard of conduct
necessary for indemnification by the Fund has been met and a written undertaking
to repay any such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the
following additional conditions shall be met: (a) the Adviser shall provide
security in form and amount acceptable to the Fund for its undertaking; (b) the
Fund is insured against losses arising by reason of the advance; or (c) a
majority of a quorum of disinterested non-party Trustees, or independent legal
counsel, in a written opinion, shall have determined, based on a review of facts
readily available to the Fund at the time the advance is proposed to be made,
that there is reason to believe that the Adviser will ultimately be found to be
entitled to indemnification.

6. LIMITATION OF LIABILITY

The Trust and the Adviser agree that the obligations of the Trust
under this Agreement will not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and property of the
Fund, as provided in the Trust Instrument. The execution and delivery of this
Agreement have been authorized by the Trustees of the Trust, and signed by an
authorized officer of the

-3-
<PAGE>

Trust, acting as such, and neither the authorization by the Trustees nor the
execution and delivery by the officer will be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but will
bind only the trust property of the Trust as provided in the Trust Instrument.
No series of the Trust, including the Fund, will be liable for any claims
against any other series.

7. COMPENSATION

(a) The Fund shall pay to the Adviser and the Adviser agrees to
accept, as full compensation for all investment advisory services furnished or
provided to the Fund pursuant to this Agreement, an investment advisory fee at
the annual rate set forth in the Description of Fees attached hereto as APPENDIX
A.

(b) The investment advisory fee shall be accrued daily by the Fund
and paid to the Adviser on the fifth business day of the succeeding month.

(c) The initial fee under this Agreement shall be payable on the
fifth business day of the first month following the effective date of this
Agreement and shall be prorated as set forth below. If this Agreement is
terminated before the end of any month, the fee to the Adviser shall be prorated
for the portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within ten (10) days after the
date of termination.

8. EXPENSES

The Adviser will bear all expenses in connection with the performance
of its services under this Agreement, including the fees payable to any
investment sub-adviser engaged pursuant to paragraph 2 of this Agreement. The
Fund will bear its proportionate share of certain other expenses to be incurred
in its operation, including: investment advisory and administration fees;
taxes, interest, brokerage fees and commissions, if any; fees of Trustees of the
Trust who are not officers, trustees, or employees of the Adviser or any of its
affiliates; fees of any pricing service employed to value shares of the Fund;
Securities and Exchange Commission fees and state blue sky qualification fees;
charges of custodians and transfer and dividend disbursing agents; the Fund's
proportionate share of insurance premiums; outside auditing and legal expenses;
costs of maintenance of the Fund's existence; costs attributable to investor
services, including, without limitation, telephone and personnel expenses; costs
of preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the shareholders of the Fund and of the

-4-
<PAGE>

officers or Board of Trustees of the Trust; and any extraordinary expenses.

The Fund will be responsible for nonrecurring expenses which may
arise, including costs of litigation to which the Fund is a party and of
indemnifying officers and Trustees of the Trust with respect to such litigation
and other expenses as determined by the Trustees.

9. SERVICES TO OTHER COMPANIES OR ACCOUNTS

The Trust understands that the Adviser now acts, will continue to act
and may act in the future as investment adviser to fiduciary and other managed
accounts and to one or more other investment companies or series of investment
companies, and the Trust has no objection to the Adviser so acting, provided
that whenever the Fund and one or more other accounts or investment companies or
portfolios advised by the Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in accordance
with a formula believed to be equitable to each entity. The Trust recognizes
that in some cases this procedure may adversely affect the size of the position
obtainable for the Fund. In addition, the Trust understands that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of the Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature, provided that doing
so does not adversely affect the ability of the adviser to perform its services
under this Agreement.

10. TERM OF AGREEMENT

This Agreement shall continue until December 31, 2000 and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (a) the Board of
Trustees of the Trust or (b) a vote of a "majority" (as defined in the 1940 Act)
of the Trust's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Trustees who are not
"interested persons" (as defined in said Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, without penalty, on 60 days' written
notice, by the Board of Trustees of the Trust or by vote of holders of a
majority of the Fund's outstanding voting securities, or upon 90 days' written
notice, by the Adviser. This Agreement will also terminate automatically in the
event of its assignment (as defined in said Act).

-5-
<PAGE>

11. REPRESENTATION BY THE TRUST

The Trust represents that a copy of its Certificate of Trust and Trust
Instrument, each dated October 8, 1998, together with all amendments thereto,
are on file in the State of Delaware.

Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.

12. POWER OF ATTORNEY

The Trust hereby grants to the Adviser or any authorized person of the
Adviser (an "Authorized Person") the authority to act as its attorney-in-fact
under power of attorney for purposes of accomplishing on its behalf and on
behalf of the Fund any matters which are properly the subject of this Agreement,
including (i) to negotiate, execute, enter into and deliver, on behalf of the
Fund any and all agreements, consents, authorizations, assignments, revocations,
instructions or other instruments which such Authorized Person may think useful
for the sale, transfer, withdrawal or pledge of securities, the making of any
loans or borrowings of securities, the management of the Fund's assets or
generally the accomplishment of any of the purposes enumerated herein or in the
Trust's Prospectus and Statement of Additional Information relating to the Fund;
(ii) to sign or give any order or directions in writing to the Fund's
Administrator or any other service provider at any time for the purchase,
whether from or through the Fund's custodian or otherwise, of any securities or
other assets which may be held by the custodian at any time for or on behalf of
the Fund, whether in safekeeping, as security or otherwise, and for the
collection, deposit, withdrawal, investment or other disposition of all or any
of the proceeds thereof and/or of any dividends, interest or other amounts which
may be declared and/or paid relative thereto; and (iii) in general, to sign any
agreements, make any representations, give any directions or perform any other
acts (which the Fund may do through an attorney-in-fact), incidental to or
deemed by the Adviser to be necessary or proper in exercising any powers hereby
conferred. The Trust intends for this general power of attorney to be construed
in the broadest possible manner and for third parties to accept and rely upon
this power of attorney granted to the Adviser duly without further written
assurances from the Trust.

13. MISCELLANEOUS

The Trust recognizes that directors, officers and employees of the
Adviser may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"CDC" as

-6-
<PAGE>

part of their names, and that the Adviser or its affiliates may enter into
advisory or other agreements with such other corporations and trusts. If the
Adviser ceases to act as the investment adviser of the Fund's shares, the Trust
agrees that, at the Adviser's request, the Trust's license to use the words
"CDC" will terminate and that the Trust will take all necessary action to change
the name of the Trust and the Fund to names not including the words "CDC."

Very truly yours,

CDC MPT+ FUNDS

By: _______________________

Name: ________________

Title: _______________

Accepted:

CDC INVESTMENT MANAGEMENT CORPORATION

By: _______________________

Name: ________________

Title: _______________

-7-
<PAGE>

APPENDIX A to
Investment Advisory Agreement

DESCRIPTION OF FEES

In consideration of the services rendered pursuant to this Agreement,
the U.S. Core Equity Fund will pay the Adviser a basic annual fee (the "Basic
Fee") calculated at an annual rate of 1.00% of the Fund's average daily net
assets. This Basic Fee shall be adjusted upward or downward by applying an
adjustment formula (the "Performance Adjustment"). The Performance Adjustment
is calculated monthly by comparing the Fund's investment performance to the
investment record of the S&P 500 Index (the "Index") during the most recent
twelve-month period. The difference between the Fund's performance compared to
the performance of the Index is multiplied by a Performance Adjustment of 25%
(as an annual rate). The Performance Adjustment shall then be added to or
subtracted from the Basic Fee. The maximum annualized Performance Adjustment is
1.00% for the Fund.

The Fund's performance is calculated based on its net asset value per
share after expenses but before the advisory fee. For purposes of calculating
the Performance Adjustment, any dividends or capital gains distributions paid by
the Fund are treated as if those distributions were reinvested by shareholders
in Fund shares at the net asset value per share as of the record date for
payment. The performance record for the Index is based on the change in value
of the Index, and is adjusted for any cash distributions from the companies
whose securities comprise the Index.

The performance period initially used for calculating any Performance
Adjustment to the Basic Fee will begin when the Fund's operations commence and
will increase by each succeeding month until a total of twelve months has been
reached. For example, the first performance period will be one month, the
second performance period will be two months, the third performance period will
be three months, etc. The Performance Adjustment is calculated once per month
(but is accrued daily on an estimated basis using the prior adjustment).

-8-

<PAGE>

INVESTMENT ADVISORY AGREEMENT

______________ ___, 1999

CDC Investment Management Corporation
9 West 57th Street, 35th Floor
New York, New York 10019

Dear Sirs:

CDC MPT+ Funds (the "Trust"), a business trust organized and existing
under the laws of the State of Delaware, is an open-end, management investment
company that currently offers three portfolios, one of which is the Aggressive
Equity Fund (the "Fund"). The Trust on behalf of the Fund herewith confirms its
agreement with CDC Investment Management Corporation (the "Adviser") as follows:

1. INVESTMENT DESCRIPTION; APPOINTMENT

2. SERVICES AS INVESTMENT ADVISER

<PAGE>

3. BROKERAGE

4. INFORMATION PROVIDED TO THE TRUST

5. STANDARD OF CARE; INDEMNIFICATION

The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above.

-2-
<PAGE>

6. LIMITATION OF LIABILITY

-3-
<PAGE>

7. COMPENSATION

(b) The investment advisory fee shall be accrued daily by the Fund
and paid to the Adviser on the fifth business day of the succeeding month.

8. EXPENSES

-4-
<PAGE>

officers or Board of Trustees of the Trust; and any extraordinary expenses.

9. SERVICES TO OTHER COMPANIES OR ACCOUNTS

10. TERM OF AGREEMENT

-5-
<PAGE>

11. REPRESENTATION BY THE TRUST

The Trust represents that a copy of its Certificate of Trust and Trust
Instrument, each dated October 8, 1998, together with all amendments thereto,
are on file in the State of Delaware.

Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.

12. POWER OF ATTORNEY

13. MISCELLANEOUS

-6-
<PAGE>

Very truly yours,

CDC MPT+ FUNDS

By: _______________________

Name: ________________

Title: _______________

Accepted:

CDC INVESTMENT MANAGEMENT CORPORATION

By: _______________________

Name: ________________

Title: _______________

-7-
<PAGE>

APPENDIX A to
Investment Advisory Agreement

DESCRIPTION OF FEES

In consideration of the services rendered pursuant to this Agreement,
the Aggressive Equity Fund will pay the Adviser a basic annual fee (the "Basic
Fee") calculated at an annual rate of 1.50% of the Fund's average daily net
assets. This Basic Fee shall be adjusted upward or downward by applying an
adjustment formula (the "Performance Adjustment"). The Performance Adjustment
is calculated monthly by comparing the Fund's investment performance to the
investment record of the S&P 500 Index (the "Index") during the most recent
twelve-month period. The difference between the Fund's performance compared to
the performance of the Index is multiplied by a Performance Adjustment of 25%
(as an annual rate). The Performance Adjustment shall then be added to or
subtracted from the Basic Fee. The maximum annualized Performance Adjustment is
1.50% for the Fund.

-8-

<PAGE>

INVESTMENT ADVISORY AGREEMENT

______________ ___, 1999

CDC Investment Management Corporation
9 West 57th Street, 35th Floor
New York, New York 10019

Dear Sirs:

CDC MPT+ Funds (the "Trust"), a business trust organized and existing
under the laws of the State of Delaware, is an open-end, management investment
company that currently offers three portfolios, one of which is the Global
Independence Fund (the "Fund"). The Trust on behalf of the Fund herewith
confirms its agreement with CDC Investment Management Corporation (the
"Adviser") as follows:

1. INVESTMENT DESCRIPTION; APPOINTMENT

2. SERVICES AS INVESTMENT ADVISER

<PAGE>

3. BROKERAGE

4. INFORMATION PROVIDED TO THE TRUST

5. STANDARD OF CARE; INDEMNIFICATION

The Adviser shall exercise its best judgment in rendering the services
listed in paragraphs 2, 3 and 4 above.

-2-

<PAGE>

6. LIMITATION OF LIABILITY

-3-
<PAGE>

7. COMPENSATION

(b) The investment advisory fee shall be accrued daily by the Fund
and paid to the Adviser on the fifth business day of the succeeding month.

8. EXPENSES

-4-
<PAGE>

officers or Board of Trustees of the Trust; and any extraordinary expenses.

9. SERVICES TO OTHER COMPANIES OR ACCOUNTS

10. TERM OF AGREEMENT

-5-
<PAGE>

11. REPRESENTATION BY THE TRUST

The Trust represents that a copy of its Certificate of Trust and Trust
Instrument, each dated October 8, 1998, together with all amendments thereto,
are on file in the State of Delaware.

Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.

12. POWER OF ATTORNEY

13. MISCELLANEOUS

-6-
<PAGE>

Very truly yours,

CDC MPT+ FUNDS

By: _______________________

Name: ________________

Title: _______________

Accepted:

CDC INVESTMENT MANAGEMENT CORPORATION

By: _______________________

Name: ________________

Title: _______________

-7-
<PAGE>

APPENDIX A to
Investment Advisory Agreement

DESCRIPTION OF FEES

In consideration of the services rendered pursuant to this Agreement,
the Global Independence Fund will pay the Adviser a basic annual fee (the "Basic
Fee") calculated at an annual rate of 1.75% of the Fund's average daily net
assets. This Basic Fee shall be adjusted upward or downward by applying an
adjustment formula (the "Performance Adjustment"). The Performance
Adjustment is calculated monthly by comparing the Fund's investment
performance to a composite index, 50% of which will be comprised of the
Morgan Stanley International World Index and 50% of which will be comprised
of the J.P. Morgan Global Bond Index (the "Composite Index") during the most
recent twelve-month period. The difference between the Fund's performance
compared to the performance of the Composite Index is multiplied by a
Performance Adjustment of 5% (as an annual rate). The Performance Adjustment
is then added or subtracted from the basic fee, subject to the maximum or
minimum fee. The maximum Performance Adjustment is 0.25% for the Fund. In no
event will the management fee charged to the Fund exceed the maximum fee rate
of 2.00%, or be lower than the minimum fee rate of 1.50% of the Fund's
average daily net assets.

The Fund's performance is calculated based on its net asset value
per share after expenses but before the advisory fee. For purposes of
calculating the Fund's performance record, any dividends or capital gains
distributions paid by the Fund are treated as if those distributions were
reinvested by shareholders in Fund shares at the net asset value per share as
of the record date for payment. The performance record for the Composite
Index is based on the change in value of the Composite Index, and is adjusted
for any cash distributions from the companies whose securities comprise the
Composite Index.

-8-

<PAGE>

May 5, 1999

CDC MPT+ Funds
9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

We have acted as counsel to CDC MPT+ Funds (the "Trust"), a business trust
organized under the laws of the State of Delaware, in connection with the
preparation of a registration statement on Form N-1A covering the offer and sale
of an indefinite number of shares of beneficial interest of the Trust of which
an unlimited number are designated Investor Shares and an unlimited number are
designated Institutional Shares (the "Shares"). The Trust has established three
series: U.S. Core Equity Fund, Aggressive Equity Fund and Global Independence
Fund.

We have examined copies of the Trust Instrument, Certificate of Trust and
By-Laws of the Trust, the Trust's Prospectus and Statement of Additional
Information included in Pre-Effective Amendment No. 1 to its Registration
Statement on Form N-1A, Securities Act File No. 333-66279 and Investment Company
Act File No. 811-09083 (the "Registration Statement"), all resolutions adopted
by the Trust's Board of Trustees (the "Board") at its organizational meeting
held on January 7, 1999 and telephonic meeting held on March 23, 1999, consents
of the Board and other records, documents and papers that we have deemed
necessary for the purpose of this opinion. We have also examined such other
statutes and authorities as we have deemed necessary to form a basis for the
opinion hereinafter expressed.

In our examination of the above material, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies submitted to
us. As to various questions of fact material to our opinion, we have relied upon
statements and certificates of officers and representatives of the Trust and
others.

<PAGE>

CDC MPT+ Funds
May 5, 1999
Page 2

Based upon the foregoing, we are of the opinion that:

1. The Trust is duly organized and validly existing as a business
trust in good standing under the laws of the State of
Delaware.

2. The 10,000 presently issued and outstanding Shares
representing 3,334 Shares of the U.S. Core Equity Fund, 3,333
Shares of the Aggressive Equity Fund and 3,333 Shares of the
Global Independence Fund have been validly and legally issued
and are fully paid and nonassessable.

3. The Shares of the Trust to be offered for sale pursuant to the
Registration Statement are duly authorized and, when sold,
issued and paid for as contemplated by the Registration
Statement, will have been validly and legally issued and will
be fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the reference to us in the Statement of Additional
Information and to the filing of this opinion as an exhibit to any application
made by or on behalf of the Trust or any distributor or dealer in connection
with the registration or qualification of the Trust or the Shares under the
securities laws of any state or other jurisdiction.

We are members of the Bar of the State of New York only and do not opine as to
the laws of any jurisdiction other than the laws of the State of New York and
the laws of the United States, and the opinions set forth above are,
accordingly, limited to the laws of those jurisdictions. As to matters involving
the application of the laws of the State of Delaware, we have relied on the
opinion of Richards, Layton & Finger, a copy of which is attached hereto.

Very truly yours,

/s/ Willkie Farr & Gallagher

<PAGE>

May 5, 1999

CDC MPT+ Funds
9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

We have acted as special Delaware counsel to CDC MPT+ Funds (the
"Trust"), a business trust organized under the laws of the State of Delaware, in
connection with formation of the Trust and the offering, pursuant to a
registration statement on Form N-1A, of an indefinite number of shares of
beneficial interest of the Trust of which an unlimited number are designated
Investor Shares and an unlimited number are designated Institutional Shares (the
"Shares"). The Trust has established three series: U.S. Core Equity Fund,
Aggressive Equity Fund and Global Independence Fund.

For the purposes of rendering our opinions as stated herein, we have
been furnished and have reviewed the following documents:

(a) the Trust Instrument dated October 8, 1998 made by Rachel D.
Manney, as sole trustee;

(b) the Certificate of Trust of the Trust dated October 8, 1998 as
filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State");

(d) the Trust's Prospectus and Statement of Additional Information
included in Pre-Effective Amendment No. 1 to its Registration
Statement on Form N-1A, Securities Act File No. 333-66279 and
Investment Company Act File No. 811-09083 (the "Registration
Statement");

(e) Resolutions duly adopted by the Trustees of the Trust on January
7, 1999,

<PAGE>

CDC MPT+ Funds
May 5, 1999
Page 2

and March 23, 1999;

(f) a Certificate of the Secretary of the Trust dated May __, 1999 as
to the Trust Instrument, the By-laws, the Resolutions of the
Trustees and certain other matters; and

(g) a Certificate of Good Standing with respect to the Trust dated
May 5, 1999, issued by the Secretary of State.

With respect to the foregoing documents, we have assumed: (i) the
authenticity of all documents submitted to us as originals, the conformity to
the originals of all documents submitted to us as copies or forms, the
genuineness of all signatures and the legal capacity of natural persons; and
(ii) that the foregoing documents, in the forms submitted to us for our review
have not altered or amended in any respect material to our opinions as stated
herein. Except as stated above, we have not reviewed any other document of the
Trust or by which it or its properties are bound, and we assume that there
exists no provisions of any such other document which bears upon or is
inconsistent with our opinions as stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely upon
the foregoing documents and the statements and information set forth therein
which we assume to be true, complete and accurate in all material respects.

Based upon and subject to the foregoing and subject to the limitations
stated hereinbelow, it is our opinion that:

1. The Trust is duly organized and validly existing as a business
trust in good standing under the laws of the State of Delaware.

2. The 10,000 presently issued and outstanding Shares representing
3,334 Shares of the U.S. Core Equity Fund, 3,333 Shares of the Aggressive Equity
Fund and 3,333 Shares of the Global Independence Fund have been validly and
legally issued and are fully paid and nonassessable.

3. The Shares of the Trust to be offered for sale pursuant to the
Registration Statement are duly authorized and, when sold, issued and paid for
as contemplated by the Registration Statement, will have been validly and
legally issued and will be fully paid and nonassessable.

This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.

<PAGE>

CDC MPT+ Funds
May 5, 1999
Page 3

We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. We understand that Messrs. Willkie Farr & Gallagher wish
to rely on our opinions as set forth herein in rendering certain opinions in
connection with the matters addressed herein, and we hereby consent to such
reliance. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.

Very truly yours,

/S/ Richards, Layton & Finger
WF:sem

<PAGE>

INDEPENDENT AUDITORS' CONSENT

CDC MPT+ Funds:

We consent to the use in this Pre-Effective Amendment No. 2 to Registration
Statement No. 333-66279 of our report dated April 28, 1999 and to the
references to us under the caption "Independent Auditors and Counsel"
appearing in the Statement of Additional Information, which is a part of such
Registration Statement.

/s/ Deloitte & Touche LLP

New York, NY
April 28, 1999

<PAGE>

PURCHASE AGREEMENT

CDC MPT+ Funds (the "Trust"), a business trust organized under the laws of
the State of Delaware, and CDC Investment Management Corporation ("CDC
Investments") hereby agree as follows:

1. The Trust offers CDC Investments and CDC Investments hereby purchases
10,000 shares of beneficial interest of the Trust, (the "Shares"), consisting of
(a) 3,334 shares in the Trust's U.S. Core Equity Fund; (b) 3,333 shares in the
Trust's Aggressive Equity Fund; and (c) 3,333 shares in the Trust's Global
Independence Fund, at a price of $10.00 per Share (the "Initial Shares"). Each
of the U.S. Core Equity Fund, the Aggressive Equity Fund and the Global
Independence Fund is referred to herein as a "Fund". CDC Investments hereby
acknowledges receipt of certificates representing the Initial Shares and the
Trust hereby acknowledges receipt from CDC Investments of $100,000.00 in full
payment for the Initial Shares.

2. CDC Investments represents and warrants to the Trust that the Initial
Shares are being acquired for investment purposes and not for the purpose of
distributing them.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 20th day of April, 1999.

CDC MPT+ FUNDS

By:_______________________________________
Name:
Title:
ATTEST:

__________________________

CDC INVESTMENT MANAGEMENT CORPORATION

By:________________________________________
Name:
Title:
ATTEST:

__________________________