SA FUNDS INVESTMENT TRUST, 497, 1999-07-22

SA FUNDS INVESTMENT TRUST
497, 1999-07-22

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<PAGE>
[LOGO]

PROSPECTUS

/ / SA FIXED INCOME FUND

/ / SA U.S. MARKET FUND

/ / SA U.S. HBtM FUND

/ / SA U.S. SMALL COMPANY FUND

/ / SA INTERNATIONAL HBtM FUND

/ / SA INTERNATIONAL SMALL COMPANY FUND

As with all mutual funds, the
Securities and Exchange Commission
has not approved or disapproved these
securities nor passed upon the
accuracy or adequacy of this
prospectus. It is a criminal offense
to state otherwise.

July 16, 1999

<PAGE>
TABLE OF CONTENTS

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

1 SA FIXED INCOME FUND

5 SA EQUITY FUNDS
5 SA U.S. Market Fund
6 SA U.S. HBtM Fund
7 SA U.S. Small Company Fund
7 SA International HBtM Fund
9 SA International Small Company Fund

13 MANAGEMENT

14 YOUR ACCOUNT

16 PRICING OF FUND SHARES

17 DISTRIBUTIONS

18 FEDERAL TAX CONSIDERATIONS

19 MORE ABOUT SA FUNDS
19 FIXED INCOME FUND
20 EQUITY FUNDS
</TABLE>

BACK COVER FOR ADDITIONAL INFORMATION

<PAGE>
RISK/RETURN SUMMARY

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

This Risk/Return Summary briefly describes the goal and principal investment
strategies of each of the SA Funds and the principal risks of investing in the
Funds. For further information on the Funds' principal investments, strategies
and risks, please read the section entitled More About SA Funds. Each Fund may
also use other investment techniques to achieve its goal. For information on
these techniques and their related risks, please read the Statement of
Additional Information.

SA FIXED INCOME FUND

GOAL

The Fund's goal is to maximize total return available from a universe of high
quality fixed income investments maturing in five years or less.

PRINCIPAL INVESTMENT STRATEGIES

The Fund intends to pursue its goal by investing at least 65% of its total
assets in high quality debt securities maturing in five years or less. These may
include:

- - obligations issued or guaranteed by the U.S. or foreign governments or their
agencies and instrumentalities;

- - corporate debt obligations;

- - bank obligations;

- - commercial paper;

- - repurchase agreements;

- - obligations of supranational organizations (such as the World Bank); and

- - Eurodollar obligations.

The Fund will attempt to maximize its total return by increasing or decreasing
its portfolio maturity length depending on prevailing interest rates. For
example, the subadvisor may sell a shorter term security and buy a longer term
security. If interest rates fall, prices for the longer term security will rise
more than the shorter term security. Thus, capital appreciation is enhanced as
well as total return. The subadviser will also allocate assets among countries
in an attempt to maximize total return.

The Fund may use foreign currency exchange contracts to hedge foreign currency
risks. The Fund may also engage in short-term trading, enter into futures and
options contracts and lend portfolio securities. These investments and
techniques are described under More About SA Funds.

PRINCIPAL RISKS

The share price of the Fund and the Fund's yield will change daily because of
changes in interest rates and other market conditions and factors. Therefore,
you may lose money if you invest in the Fund.

The principal risks that apply to the Fixed Income Fund are:

- INTEREST RATE RISK: In general, bond prices rise when interest rates fall
and fall when interest rates rise. Longer term bonds are generally more
sensitive to interest rate changes than shorter term bonds. Generally,
the longer the average maturity of the bonds held by the Fund, the more
the Fund's share price will fluctuate in response to interest rate
changes.

- CREDIT (or DEFAULT) RISK: It is possible that some of the issuers will
not make payments on debt securities held by the Fund, or there could be
defaults on repurchase agreements held by the Fund. Also, an issuer may
suffer adverse changes in financial condition that could lower the credit
quality of a security, leading to greater volatility in the price of the
security and in shares of the Fund. A change in the quality rating of a
bond can affect the bond's liquidity and make it more difficult for the
Fund to sell. If any of these events were to occur, the Fund might suffer
a loss.

- FOREIGN SECURITIES and CURRENCIES RISK: Investments by the Fund in
foreign securities involve risks in addition to those of U.S. securities.
Foreign securities are generally more

1
<PAGE>

volatile and less liquid than U.S. securities, in part because of greater
political and economic risks and because there is less public information
available about foreign companies. Issuers of foreign securities are
generally not subject to the same degree of regulation as are U.S.
issuers. The reporting, accounting and auditing standards of foreign
countries may differ, in some cases significantly, from U.S. standards. A
further risk is that a decline in the value of foreign currencies
relative to the U.S. dollar will reduce the value of securities
denominated in those currencies.

- HEDGING RISK: Forward currency exchange contracts may be used to hedge
foreign currency risk. Hedging tends to limit any potential gain that may
be realized if the value of the Fund's portfolio holdings increases
because of currency fluctuations. In addition, hedging may increase the
Fund's expenses. There is also a risk that a forward currency exchange
contract intended as a hedge may not perform as intended, in which case
the Fund may not be able to minimize the effects of foreign currency
fluctuations and may suffer a loss.

- DERIVATIVES RISK: The Fund may experience losses as a result of its use
of futures, options and forward currency exchange contracts, which are
forms of derivatives. The main risk with derivatives is that the Fund may
lose more money than its initial investment in the derivative.

- EURO RISK: The Fund may be adversely affected by the conversion of
certain European currencies into the Euro. This conversion, which is
under way, is scheduled to be completed in the year 2002. However,
problems with the conversion process and delays could increase volatility
in world capital markets and affect European capital markets in
particular.

2
<PAGE>
FEES AND EXPENSES

The table below describes the fees and expenses that you may pay if you
buy and hold shares of the Fixed Income Fund. The Fund has no sales charge
(load), redemption fees or exchange fees, although some institutions may charge
you a fee for shares you buy or sell through them.

<TABLE>
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Annual Account Maintenance Fee (for accounts under $100,000) (1)....... $ 100.00
</TABLE>

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

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

AS A % OF NET ASSETS

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

<TABLE>
<CAPTION>
CLASS S CLASS I
------------ ------------
<S> <C> <C>
Management/Advisory Fee 1.04% 1.04%
Other Expenses (2)
Shareholder Servicing Fees .25% .05%
Other Operating Expenses .82% .76%
--- ---
Total Other Operating Expenses 1.07% .81%
Total Annual Fund Operating Expenses 2.11% 1.85%
Fee Waiver and/or Expense Reimbursement (.85)% (.85)%
--- ---
Net Expenses (3) 1.26% 1.00%
</TABLE>

(1) The Fund may deduct an annual maintenance fee of $100 from accounts with a
value of less than $100,000. The account value is determined by aggregating
accounts with SA Funds. The Fund expects to value accounts on the second
Friday in November of each year. Accounts opened after September 30 will not
be subject to the fee for that year. The fee is payable to the Fund and is
designed to offset in part the relatively higher costs of servicing smaller
accounts. The Fund reserves the right to waive the fee.

(2) Other expenses are based on estimated amounts for the current fiscal year.

(3) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit the Fund's total
operating expenses to the amounts shown in the above table. This agreement
will remain in effect until July 7, 2009. The manager may elect to recapture
any amounts waived or reimbursed subject to the following conditions: (1)
the manager must request reimbursement within three years from the year in
which the waiver/reimbursement is made, (2) the Board of Trustees must
approve the reimbursement and (3) the Fund must be able to make the
reimbursement and still stay within the operating expense limitation.

EXAMPLE

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

This example is intended to help you compare the cost of investing in the
Fixed Income Fund to the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then sell all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year, that the Fund's
operating expenses remain the same as shown in the table above and that all
dividends and distributions are reinvested. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:

<TABLE>
<CAPTION>
YEAR CLASS S CLASS I
- ------------------------------------------------------- ----------- -----------
<S> <C> <C>
1 $ 129 $ 102
3 $ 401 $ 319
</TABLE>

3
<PAGE>
PERFORMANCE

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

The Fund has not commenced operations as of the date of this Prospectus and,
therefore, does not have annual returns for a full calendar year. For this
reason, a bar chart and performance table showing performance information and
information on the Fund's best and worst calendar quarters is not provided in
this prospectus.

[The remainder of this page is intentionally left blank.]

4
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SA EQUITY FUNDS

SA U.S. MARKET FUND
SA U.S. HBTM FUND
SA U.S. SMALL COMPANY FUND
SA INTERNATIONAL HBTM FUND
SA INTERNATIONAL SMALL COMPANY FUND

EQUITY INVESTMENT APPROACH

- - The sub-adviser believes that equity investing should involve a long-term
view and a focus on asset class (for example, small company stocks or large
company stocks) selection. Accordingly, the sub-adviser does not engage in
market-timing or conventional stock selection. The sub-adviser places a
premium on limiting portfolio turnover and does not take defensive positions
in anticipation of negative investment conditions.

- - The sub-adviser generally structures a Fund's portfolio by:

- Selecting a starting universe of securities (for example, all publicly
traded U.S. common stocks).

- Creating a sub-set of companies meeting the sub-adviser's investment
guidelines for each particular Fund.

- Excluding certain companies after analyzing various factors (for example,
solvency or involvement in a merger).

- Purchasing stocks so the portfolio is generally market capitalization
weighted, which means that stocks representing larger companies will
represent a proportionately larger percentage of the portfolio.

SA U.S. MARKET FUND

GOAL

The Fund's goal is to achieve long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund intends to pursue its goal by investing in common stocks of U.S.
companies within a MARKET CAPITALIZATION RANGE of deciles 1-10. Although the
market capitalization of companies within this

range will fluctuate, as of the date of this prospectus, the companies within
this range have market capitalizations of between approximately $102 million and
$334 billion.

Because it would be very expensive to buy and sell all of the stocks in the
Fund's target universe (all common stocks that are traded on the New York Stock
Exchange, the American Stock Exchange and the NASDAQ National Market System) the
sub-adviser will use a technique known as "sampling." The sub-adviser will
select stocks that will recreate in terms of market capitalization the Fund's
target universe.

The Fund will also invest up to 5% of its total assets in the U.S. 9-10 Small
Company Portfolio, an investment company that invests exclusively in stocks of
very small companies. Dimensional Fund Advisors Inc. ("DFA"), the sub-adviser of
the Fund, is the adviser of the U.S. Small Company portfolio.

The Fund may also invest a portion of its assets in fixed income securities and
may lend a portion of its portfolio securities.

ABOUT MARKET CAPITALIZATION RANGES

Market Capitalization is the total value of a company's stock in the marketplace
or on a stock exchange. For example, a company that has issued one million
shares that are selling for $30 per share would have a market capitalization of
$30,000,000.

Market capitalization ranges for the Funds are determined as follows:

1. The sub-adviser equally divides all the companies traded on the New York
Stock Exchange into 10 groups or "deciles" based on market capitalization.
Stocks in decile 1 have the biggest market capitalizations and those in
decile 10, the smallest.

2. The sub-adviser then combines two or more of these deciles into a market
capitalization segment or range.

3. The sub-adviser generally considers a stock (it may not necessarily be
traded on the New York Stock Exchange) for purchase only if its market
capitalization falls within the ranges created.

5
<PAGE>
PRINCIPAL RISKS

The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund. The
principal risks that apply to the Fund are:

- MARKET RISK: The value of the securities in which the Fund invests may go
up or down in response to the prospects of individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods.

- LARGE COMPANY RISK: Larger, more established companies are generally not
nimble and may be unable to respond quickly to competitive challenges,
such as changes in technology and consumer tastes.

- SMALLER COMPANY STOCK RISK: The stocks of small and medium-size companies
may have more risks than those of larger companies. Small and medium-size
companies often have narrower markets and more limited managerial and
financial resources than larger, more established companies. As a result,
they may be more sensitive to changing economic conditions, which could
increase the volatility of the Fund's portfolio. In addition, small
company stocks typically trade in lower volume, making them more
difficult to sell. Generally, the smaller the company size, the greater
these risks.

SA U.S. HBTM FUND

GOAL

The Fund's goal is to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund intends to pursue its goal by investing at least 80% of its total
assets in common stocks of U.S. companies that the Fund believes are value
stocks. The Fund considers value stocks to be those of companies with high book
values in relation to their market values. In measuring value, factors such as
cash flow, economic conditions and developments in the issuer's industry are
also considered.

Generally, the Fund considers a company to have a high book to market ratio if
its ratio equals or exceeds the ratios of any of the 30% of New York Stock
Exchange listed companies with the highest book to market ratios.

The Fund intends to invest in common stocks of U.S. companies within a MARKET
CAPITALIZATION RANGE of deciles 1-5. Although the market capitalization of
companies within this range will fluctuate, as of the date of this prospectus,
companies within this range have market capitalizations of at least $800
million.

The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES, when
consistent with its strategies and operational needs, to minimize adverse tax
consequences to shareholders of the Fund.

The Fund may also invest a portion of its assets in fixed income securities and
may lend a portion of its portfolio securities.

ABOUT TAX-EFFICIENT MANAGEMENT TECHNIQUES

The sub-adviser may use the following Tax-Efficient Management Techniques to
minimize taxable distributions, particularly short-term capital gains and
current income, which are taxed at a higher rate than long-term capital gains.

- - Minimizing sales of securities that result in capital gains.

- - Maximizing the extent to which any realized net capital gains are long-term
in nature (taxable at lower capital gains tax rates).

- - Minimizing dividend income.

- - Realizing losses to offset gains, when prudent to do so.

PRINCIPAL RISKS

The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.

The principal risks that apply to the Fund are:

- MARKET RISK: The value of the securities in which the Fund invests may

6
<PAGE>
go up or down in response to the prospects of individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods.

- VALUE STOCKS RISK: Value stocks may underperform when the market strongly
favors growth stocks over value stocks. In addition, a value stock may
not reach what the sub-adviser believes is its full market value or its
intrinsic value may go down.

- LARGE COMPANY STOCK RISK: Larger, more established companies are
generally not nimble and may be unable to respond quickly to competitive
challenges, such as changes in technology and consumer tastes.

- MEDIUM SIZE COMPANY STOCK RISK: The stocks of medium-size companies may
have more risks than those of larger companies. They may be more
susceptible to market downturns and their prices may be more volatile.

SA U.S. SMALL COMPANY FUND

GOAL

The Fund's goal is to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund intends to pursue its goal by investing at least 80% of its total
assets in equity securities of U.S. companies with market capitalizations within
the smaller half of companies listed on the New York Stock Exchange. Although
the market capitalization of companies within this range will fluctuate, as of
the date of this prospectus, companies within this range have market
capitalizations of less than $900 million.

The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES to minimize
adverse tax consequences to shareholders of the Fund.

The fund may also invest a portion of its assets in fixed income securities and
may lend a portion of its portfolio securities.

PRINCIPAL RISKS

The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.

The principal risks that apply to the Fund are:

- SMALL COMPANY STOCK RISK: The stocks of small companies may have more
risks than those of larger companies. Small companies often have narrower
markets and more limited managerial and financial resources than larger,
more established companies. As a result they may be more sensitive to
changing economic conditions, which could increase the volatility of the
Fund's portfolio. In addition, small company stocks typically are traded
in lower volume, making them more difficult to sell. Generally, the
smaller the company size, the greater these risks.

SA INTERNATIONAL HBTM FUND

GOAL

The Fund's goal is to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund intends to pursue its goal by investing at least 65% of its total
assets in common stocks of large non-U.S. companies that it believes are value
stocks. The Fund considers value stocks to be those of companies with high book
values in relation to their market values. In measuring value, factors such as
cash flow, economic conditions and developments in the issuer's industry are
also considered.

Generally, the Fund considers a company to have a high book to market ratio if
its ratio equals or

7
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exceeds the ratios of any of the 30% of exchange-listed companies (in the
applicable country) with the highest book to market ratios.

The Fund intends to invest in companies in countries with developed markets (for
example, Australia, Denmark or France). At least 65% of the Fund's assets will
be invested in companies in at least three non-U.S. countries.

As of the date of this prospectus, the Fund expects to invest in companies with
market capitalizations of at least $800 million.

The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES to minimize
adverse tax consequences to shareholders of the Fund.

The Fund may also invest a portion of its assets in fixed income securities and
may lend a portion of its portfolio securities.

PRINCIPAL RISKS

The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.

The principal risks that apply to the Fund are:

- FOREIGN SECURITIES AND CURRENCY RISK: Investments by the Fund in foreign
securities involve risks in addition to those of U.S. securities. Foreign
securities are generally more volatile and less liquid than U.S.
securities, in part because of greater political and economic risks and
because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting
and auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards. A further risk is that a decline in
the value of foreign currencies relative to the U.S. dollar will reduce
the value of securities denominated in those currencies.

- MEDIUM-SIZE COMPANY STOCK RISK: The stocks of medium-size companies may
have more risks than those of larger companies. They may be more
susceptible to market downturns and their prices may be more volatile.

8
<PAGE>
SA INTERNATIONAL SMALL
COMPANY FUND

GOAL

The Fund's goal is long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund is a fund of funds, which means that it invests almost all of its
assets in other mutual funds. The Fund intends to pursue its goal by investing
its assets in the following mutual funds ("Portfolios"): DFA Japanese Small
Company Portfolio, DFA United Kingdom Small Company Portfolio, DFA Continental
Small Company Portfolio, DFA Pacific Rim Small Company Portfolio and DFA
Emerging Markets Portfolio.

The Portfolios are what is known as "feeder" funds. This means that instead of
buying securities directly, each Portfolio will invest substantially all of its
assets in a "master" fund (referred to in this prospectus as an "underlying
fund") with the same investment objective, and the underlying fund will, in
turn, purchase the appropriate portfolio securities.

The Portfolios and the underlying funds are series of The DFA Investment Trust
Company, an investment company advised by DFA, the sub-adviser of the
International Small Company Fund.

Because DFA receives both an administration fee and an investment advisory fee
through its management of the Portfolios and the underlying funds, DFA will not
receive any subadvisory fee for its subadvisory services to the International
Small Company Fund. DFA has agreed to this fee arrangement in order to prevent
any duplication of fees in this multi-tier arrangement.

The Fund will invest its assets in the Portfolios within the following ranges
(expressed as a percentage of the Fund's assets):

<TABLE>
<CAPTION>
Portfolio Investment Range
- ---------------------- ----------------------

<S> <C>
Japanese Portfolio 20% - 45%
United Kingdom 5% - 40%
Portfolio
Continental Portfolio 20% - 45%
Pacific Rim Portfolio 0% - 25%
Emerging Markets 0% - 25%
Portfolio
</TABLE>

The manager will determine periodically the allocations among Portfolios.

POLICIES OF ALL UNDERLYING FUNDS DFA structures each underlying fund by
generally basing the amount of each security purchased on the issuer's market
capitalization relative to other companies located in the same country (or
region, in the case of the underlying funds of the Continental Portfolio and
Pacific Rim Portfolio).

The Fund may also invest a portion of its assets in fixed income securities and
may lend a portion of its portfolio securities.

PRINCIPAL RISKS

The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.

The principal risks that apply to the Fund are:

9
<PAGE>
there is less public information available about foreign companies.
Issuers of foreign securities are generally not subject to the same
degree of regulations as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards. A further risk is that a decline in
the value of foreign currencies relative to the U.S. dollar will reduce
the value of securities denominated in those currencies.

- EMERGING MARKETS RISK: Numerous emerging countries have recently
experienced serious, and potentially continuing, economic and political
problems. Stock markets in many emerging countries are relatively small,
expensive and risky. Foreigners are often limited in their ability to
invest in, and withdraw assets from, these markets. Additional
restrictions may be imposed under emergency conditions. Risks generally
associated with foreign securities and currencies also apply. These risks
are greater for securities of issuers in emerging market countries.

10
<PAGE>
FEES AND EXPENSES

The table below describes the fees and expenses that you may pay if you
buy and hold shares of an Equity Fund. The Funds have no sales charge (load),
redemption fees or exchange fees, although some institutions may charge you a
fee for shares you buy or sell through them.

<TABLE>
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Transaction Fees (as a % of offering price) (1)
International Small Company Fund................................. 0.675%
Annual Account Maintenance Fee (for accounts under $100,000) (2)....... $ 100.00
</TABLE>

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A % OF NET ASSETS)

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

<TABLE>
<CAPTION>
U.S. MARKET FUND U.S. HBTM U.S. SMALL
FUND COMPANY FUND
CLASS S CLASS I CLASS S CLASS I CLASS S CLASS I
---------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Management/Advisory Fee .90% .90% 1.12% 1.12% 1.23% 1.23%
Other Expenses (3)
Shareholder Servicing Fees .25% .05% .25% .05% .25% .05%
Other Operating Expenses 1.04% .98% 1.52% 1.46% 1.70% 1.64%
---------- ---------- --------- --------- --------- ---------
Total Other Operating Expenses 1.29% 1.03% 1.77% 1.51% 1.95% 1.69%
---------- ---------- --------- --------- --------- ---------
Total Annual Fund Operating Expenses 2.19% 1.93% 2.89% 2.63% 3.18% 2.92%
Fee Waiver and/or Expense Reimbursement (.85)% (.85)% (1.50)% (1.50)% (1.64)% (1.64)%
---------- ---------- --------- --------- --------- ---------
Net Expenses (4) 1.34% 1.08% 1.39% 1.13% 1.54% 1.28%
</TABLE>

<TABLE>
<CAPTION>
INTERNATIONAL HBTM INTERNATIONAL SMALL
FUND COMPANY FUND
CLASS S CLASS I CLASS S CLASS I
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Management/Advisory Fee 1.23% 1.23% .85% .85%
Other Expenses (3)
Shareholder Servicing Fees .25% .05% .25% .05%
Other Operating Expenses 1.23% 1.17% 1.31% 1.25%
---------- ---------- ---------- ----------
Total Other Operating Expenses 1.48% 1.22% 1.56% 1.30%
---------- ---------- ---------- ----------
Total Operating Expenses 2.71% 2.45% 2.41% 2.15%
Fee Waiver and/or Expense Reimbursement (.92)% (.92)% (.87)% (.87)%
---------- ---------- ---------- ----------
Net Expenses (4) 1.79% 1.53% 1.54% 1.28%
</TABLE>

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

(1) The International Small Company Fund charges a transaction fee on purchase
of, and exchanges for, shares of that Fund. The fee does not apply to
reinvested dividends or capital gain distributions. The fee is not a sales
charge. It is paid to the Fund and is used to protect existing shareholders
by offsetting the transaction costs associated with new purchases of
securities by the Fund. The transaction fee is a blended rate, which is
based on the current target investment allocations among the Portfolios.
Consequently, the transaction fee will change from time to time if the Fund
changes the target investment allocation. An investor may call the manager
at (800) 366-7266 for the transaction fee rate at the time of investment.

(2) The Funds may deduct an annual maintenance fee of $100 from accounts with a
value of less than $100,000. The account value is determined by aggregating
accounts with SA Funds. The Funds expect to

11
<PAGE>

value accounts on the second Friday in November of each year. Accounts
opened after September 30 will not be subject to the fee for that year. The
fee is payable to the Funds and is designed to offset in part the relatively
higher costs of servicing smaller accounts. The Funds reserve the right to
waive the fee.

(3) Other expenses are based on estimates for the current fiscal year.

(4) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit each Fund's total
operating expenses to the amounts shown in the above table. This agreement
will remain in effect until July 7, 2009. The manager may elect to recapture
any amounts waived or reimbursed subject to the following conditions: (1)
the manager must request reimbursement within three years from the year in
which the waiver/reimbursement is made, (2) the Board of Trustees must
approve the reimbursement and (3) the Fund must be able to make the
reimbursement and still stay within the operating expense limitation.

In addition to the expenses shown above, shareholders of the
International Small Company Fund will indirectly bear their pro rata share of
the annual fees and expenses of the Portfolios, which currently range from 0.70%
to 1.00%.

EXAMPLE

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

This example is intended to help you compare the cost of investing in an
SA Equity Fund to the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in a Fund for the time periods indicated and
then sell all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year, that the Fund's
operating expenses remain the same as shown in the table above and that all
dividends and distributions are reinvested. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------- -------------
<S> <C> <C>
U.S. MARKET FUND
CLASS S SHARES $ 137 $ 427
CLASS I SHARES $ 111 $ 345

U.S. HBTM FUND
CLASS S SHARES $ 142 $ 443
CLASS I SHARES $ 116 $ 361

U.S. SMALL COMPANY FUND
CLASS S SHARES $ 158 $ 490
CLASS I SHARES $ 131 $ 408

INTERNATIONAL HBTM FUND
CLASS S SHARES $ 183 $ 568
CLASS I SHARES $ 157 $ 487

INTERNATIONAL SMALL COMPANY FUND
CLASS S SHARES $ 158 $ 490
CLASS I SHARES $ 131 $ 408
</TABLE>

PERFORMANCE

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

The Funds have not commenced operations as of the date of this Prospectus
and, therefore, do not have annual returns for a full calendar year. For this
reason, a bar chart and performance table showing performance information and
information on each Fund's best and worst calendar quarters is not provided in
this prospectus.

12
<PAGE>
MANAGEMENT

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

RWB Advisory Services Inc., 1190 Saratoga Avenue, San Jose, California 95129, is
the Funds' investment manager. Founded in 1975, the manager provides investment
advisory services to individuals, pension and profit sharing plans, trusts,
estates, charitable organizations and other business entities. Today the firm
has approximately $1.4 billion in assets under management.

The manager, in its capacity as investment adviser, handles the business affairs
of the Funds and has general responsibility for the management of the Funds'
investments. In its capacity as administrator, the manager provides
administrative services to the Funds. The manager has no prior experience as
manager of a mutual fund.

The manager has engaged Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401, as investment sub-adviser to the Funds.
Since its organization in May 1981, the sub-adviser has provided investment
management services to institutional investors and to other mutual funds. The
sub-adviser presently serves as the investment adviser to four other investment
companies-The DFA Investment Trust Company, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Value
Fund Inc. Currently, the sub-adviser manages over $31 billion in assets,
including over $14 billion in mutual fund assets.

The sub-adviser, subject to the supervision of the manager, is responsible for
managing the assets of the Funds. The sub-adviser's investment committee makes
investment decisions for the Funds.

The following chart shows the aggregate annual investment management fees that
each Fund will pay to the manager and the sub-adviser. Fees are stated before
any waiver. Please refer to the Fees and Expenses Table in the Risk/Return
Summary section of this prospectus for more information about fee waivers.

<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT FEE
(EXPRESSED AS PERCENTAGE OF AVERAGE DAILY NET
ASSETS)
<S> <C>
Fixed Income Fund 1.04%
U.S. Market Fund .90%
U.S. HBtM Fund 1.12%
U.S. Small Company Fund 1.23%
International HBtM Fund 1.23%
International Small Company Fund .85%
</TABLE>

YEAR 2000

Like other mutual funds, financial institutions, business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by the manager and the Funds' other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. The manager is taking steps that it believes are
reasonably designed to address year 2000 computer-related problems with respect
to the computer systems that it uses and to obtain assurances that comparable
steps are being taken by the Funds' other, major service providers. Although
there can be no assurances, the manager believes that these steps will be
sufficient to avoid any adverse impact on any of the Funds. Similarly, there can
be no assurances that year 2000 issues will not affect the companies and other
issuers in which the Funds invest or affect worldwide markets and economies.

13
<PAGE>
YOUR ACCOUNT

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

This section describes how to do business with SA Funds and the services that
are available to shareholders.

HOW TO REACH SA FUNDS

By telephone: (800) 366-7266
Call for account information 8:00 a.m. to 5:00 p.m. Pacific time
Monday through Friday

By mail: 1190 Saratoga Avenue
Suite 200
San Jose, California 95125

SHARE CLASSES

Each Fund offers two classes of shares: Class S and Class I. Both of the classes
are offered without a sales charge (load). Different shareholder servicing fees,
which are payable to the manager as the Funds' shareholder servicing agent, and
different operating expenses are payable by each class. Shareholder servicing
fees will be paid at an annual rate of up to 0.25% and 0.05% of the daily net
assets of the Class S and Class I shares, respectively. Other operating expenses
paid by Class S shares will exceed those paid by Class I shares by 0.06% of
their respective daily net assets.

SA Funds bases your eligibility to purchase shares of a class on the type of
investor you are. Investors who maintain aggregate accounts of at least
$5,000,000 (or less at the discretion of SA Funds) may purchase Class I shares.
All other investors must purchase Class S shares.

PURCHASING SHARES

Only clients of investment advisers are eligible to purchase shares of the
Funds.

If you are making an initial investment, you must complete and submit an account
application.

You or your financial representative should notify the manager of any proposed
investment.

If you purchase shares through an omnibus account maintained by a securities
firm, the firm may charge you a fee.

MINIMUM INVESTMENTS

The minimum initial investment is $100,000, unless waived by SA Funds.

There is no minimum for additional investments.

TIMING OF REQUESTS

All requests received by SA Funds' transfer agent, or other authorized
intermediary, before 4:00 p.m. Eastern time will be executed the same day, at
that day's net asset value per share ("NAV"). Orders received after 4:00 p.m.
Eastern time will be executed the following day, at that day's NAV. Authorized
intermediaries acting on a purchaser's behalf are responsible for transmitting
orders by the deadline.

SELLING SHARES

You or your financial representative may sell shares at any time by furnishing a
redemption request to the manager in the form required by the manager.

INCOMPLETE SELL REQUESTS

SA Funds will attempt to notify you or your financial representative promptly if
any information necessary to process your request is missing.

TIMING OF REQUESTS

All requests received (in the form required by the manager) by SA Funds, or
authorized intermediary, before 4:00 p.m. Eastern time will be executed the same
day, at that day's NAV. Requests received after 4:00 p.m. Eastern time will be
executed the following day, at that day's NAV.

WIRE TRANSACTIONS

A fee of $10 will be deducted from all proceeds sent by wire, and your bank may
charge an additional fee to receive wired funds.

SELLING SHARES RECENTLY PURCHASED

If you sell shares before the check or electronic funds transfer (ACH) for those
shares has been collected, you will not receive the proceeds until your initial
payment has cleared. This may take up

14
<PAGE>
to 15 days after your purchase was recorded (in rare cases, longer). If you open
an account with shares purchased by wire, you cannot sell those shares until
your application has been processed.

ACCOUNTS WITH LOW BALANCES

If the value of your total account with SA Funds falls below $10,000 as a result
of selling or exchanging shares, SA Funds may send you a notice asking you to
bring the account back up to $10,000 or to close it out. If you do not take
action within 60 days, SA Funds may sell your shares and mail the proceeds to
you at the address of record.

EXCHANGES

There is no fee to exchange shares among SA Funds. The exchange privilege is not
intended as a way to speculate on short-term movements in the markets.

You may acquire shares of the Funds by exchanging shares of the SSgA Money
Market Fund and may exchange your shares of the Funds for shares of the SSgA
Money Market Fund, if such shares are offered in your state of residence. The
SSgA Money Market Fund is a portfolio of the SSgA Funds. The SSgA Funds is an
open-end management investment company with multiple portfolios advised by State
Street Bank and Trust Company, 225 Franklin Street, Boston MA 02110, and is not
affiliated with SA Funds or SA Funds' distributor. Prior to making such an
exchange, you should carefully read the prospectus for the SSgA Money Market
Fund. You can obtain a copy of the prospectus through your financial
representative or by calling the manager at (800) 366-7266. The exchange
privilege is not an offering or recommendation on the part of the SA Funds or
the distributor of an investment in the SSgA Money Market Fund.

The SSgA Money Market Fund's fundamental investment objective is to maximize
current income, to the extent consistent with the preservation of capital and
liquidity and the maintenance of a stable $1.00 per share net asset value, by
investing in dollar denominated securities with remaining maturities of one year
or less.

An investment in the SsgA Money Market Fund is neither insured nor guaranteed by
the U.S. Government or by State Street Bank and Trust Company. There is no
assurance that the SSgA Money Market Fund will maintain a stable net asset value
of $1.00 per share.

ADDITIONAL POLICIES FOR PURCHASES, SALES AND EXCHANGES

- SA Funds reserves the right to reject any purchase order.

- At any time, SA Funds may change any of its purchase, redemption or
exchange procedures, and may suspend sale of its shares.

- SA Funds may delay sending your redemption proceeds for up to seven days,
or longer if permitted by the Securities and Exchange Commission.

- In the interest of economy, SA Funds does not issue share certificates.

- If accepted by SA Funds, you may purchase shares of the Funds (except for
the International Small Company Fund) with securities you own.

- SA Funds reserves the right to make payment for redeemed shares wholly or
in part by giving the redeeming shareholder portfolio securities. The
shareholder will pay transaction costs to dispose of these securities.

- SA Funds may authorize certain financial intermediaries to accept
purchase, redemption and exchange orders from their customers on behalf
of the SA Funds. Other intermediaries may also be designated to accept
such orders, if approved by SA Funds. Authorized intermediaries are
responsible for transmitting orders on a timely basis. A Fund will be
deemed to have received an order when the order is accepted in proper
form by the authorized intermediary, and the order will be priced at the
Fund's NAV next determined.

15
<PAGE>
PRICING OF FUND SHARES

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

Each Fund's NAV is calculated on each day the New York Stock Exchange is open.
NAV is the value of a single share of a Fund. NAV is calculated by (1) taking
the current value of a Fund's total assets, (2) subtracting the liabilities and
(3) dividing that amount by the total number of shares owned by shareholders.
NAV includes interest on fixed income securities which is accrued daily.

The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange closes
early, the Funds accelerate calculation of NAV transaction deadlines to that
time.

Market or fair values of the Funds' portfolio securities are determined as
follows:

- Equity securities listed on an exchange for which market quotations are
readily available: according to the last quoted sale price of the day (on
the exchange where the security is primarily traded).

- In the absence of recorded sales for listed equity securities: according
to the mean between the most recent quoted bid and asked prices.

- Unlisted equity securities for which market quotations are readily
available: mean between the most recent quoted bid and asked prices.

- Bond and other fixed income securities: based on prices provided by an
independent pricing service.

- Shares of an investment company: at the investment company's net asset
value.

- All other securities: at fair value as determined in good faith by the
Board of Trustees of SA Funds.

Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Funds value foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing of
the New York Stock Exchange. Foreign securities quoted in foreign currencies are
translated into U.S. dollars at current rates. Occasionally, events that affect
these values and exchange rates may occur between the times at which they are
determined and the closing of the New York Stock Exchange. If such events
materially affect the value of portfolio securities, these securities may be
valued at their fair value as determined in good faith by the Board of Trustees.

Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the portfolio
of a Fund holding foreign securities may change on days when shareholders will
not be able to buy or sell their shares.

16
<PAGE>
DISTRIBUTIONS

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

As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. Each Fund passes substantially all of its earnings
along to its shareholders as distributions. When a Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a DIVIDEND DISTRIBUTION. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these gains
are distributed to shareholders, it is called a CAPITAL GAIN DISTRIBUTION.
Dividend distributions may be made several times a year, while capital gain
distributions are generally made on an annual basis.

The Fixed Income Fund pays dividends, if any, quarterly.

The U.S. Market Fund, U.S. HBtM Fund, U.S. Small Company Fund, International
HBtM Fund and International Small Company Fund pay dividends, if any, annually.

Each Fund pays capital gain distributions, if any, at least annually.

You will receive distributions from a Fund in additional shares of that Fund
unless you elect to receive your distributions in cash. If you wish to receive
distributions in cash, you may either indicate your request on your account
application or you or your financial representative may notify the manager by
calling (800) 366-7266.

17
<PAGE>
FEDERAL TAX CONSIDERATIONS

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

Your investment in a Fund will have tax consequences that you should consider.
Some of the more common federal tax consequences are described here, but your
should consult your tax adviser about your own particular situation.

TAXES ON DISTRIBUTIONS

You will generally have to pay federal income tax on all Fund distributions.
Your distributions will be taxed in the same manner whether you receive the
distributions in cash or in additional shares of the Fund. Distributions that
are derived from net long-term capital gains generally will be taxed as long-
term capital gains. Dividend distributions and short-term capital gains
generally will be taxed as ordinary income. The tax you pay on a given capital
gain distribution generally depends on how long the Fund held the portfolio
securities it sold. It does not depend on how long you held your Fund shares.

The Fixed Income Fund expects that its distributions will consist primarily of
ordinary income. The Equity Funds expect that their distributions will consist
primarily of capital gains.

You generally are required to report all Fund distributions on your federal
income tax return. Each year SA Funds will send you information detailing the
amount of ordinary income and capital gains paid to you for the previous year.

TAXES ON SALES OR EXCHANGES

If you sell your shares of a Fund or exchange them for shares of another Fund,
you generally will be subject to tax on any taxable gain. Your taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep your account statements so that you or your tax preparer
will be able to determine whether a sale or exchange will result in a taxable
gain.

OTHER CONSIDERATIONS

If you buy shares in a Fund just before the Fund makes any distribution, you
will receive some of the purchase price back in the form of a taxable
distribution.

By law, SA Funds must withhold a portion of your proceeds to pay federal income
taxes if you have not provided complete, correct taxpayer information.

18
<PAGE>
MORE ABOUT SA FUNDS

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

FIXED INCOME FUND

The Fund's principal strategies and risks are summarized above in the section
entitled SA Fixed Income Fund. Below is further information about the Fund's
principal investments and strategies and their associated risks. The Fund may
also use strategies and invest in securities described in the Statement of
Additional Information. The Fund's objective may be changed without shareholder
approval.

SHORT-TERM TRADING. The Fund may engage in short-term trading, which could
produce higher trading costs and taxable distributions. Frequent trading also
increases transaction costs, which could detract from the Fund's performance.

SECURITIES LENDING. The Fund may seek additional income by lending
portfolio securities to qualified institutions. By reinvesting any cash
collateral it receives in these transactions, the Fund could realize additional
income gains or losses. If the borrower fails to return the securities or the
invested collateral has declined in value, the Fund could lose money.

MATURITY RISK PREMIUMS. The sub-adviser will manage the fund with a view
toward capturing maturity risk premiums. The term "maturity risk premium" means
the anticipated incremental return on investment for holding securities with
maturities of longer than one month compared to securities with a maturity of
one month. This means that although the Fund will primarily invest in foreign
obligations, the Fund will invest in U.S. obligations when the sub-adviser
believes that foreign securities do not offer maturity risk premiums that
compare favorably with those offered by U.S. securities.

DERIVATIVES. The Fund may use futures, options and forward currency
exchange contracts, which are forms of derivatives. Derivatives are financial
contracts whose value is based on a security, a currency exchange rate or a
market index. Derivatives can be used for hedging (attempting to reduce risk by
offsetting one investment position with another) or speculation (taking a
position in the hope of increasing return). The Fund will not use derivatives
for speculative purposes. The main risk with derivatives is that some types can
amplify a gain or loss, potentially earning or losing substantially more money
than the actual cost of the derivative. With some derivatives, there is also the
risk that the counterparty may fail to honor its contract terms, causing a loss
for the Fund.

The Fund may, but is not required to, use forward currency exchange contracts to
hedge foreign currency risks. A forward currency exchange contract is an
obligation to exchange one currency for another on a future date at a specified
exchange rate. These contracts are privately negotiated transactions and can
have substantial price volatility. When used for hedging purposes, they tend to
limit any potential gain that may be realized if the value of the Fund's foreign
holdings increases because of currency fluctuations.

The Fund may, but is not required to, use futures contracts and options on
futures contracts, but only for the purpose of remaining fully invested and to
maintain liquidity to pay redemptions. A futures contract obligates the holder
to buy or sell an asset in the future at an agreed upon price. When the Fund
purchases an option on a futures contract, it has the right to assume a position
as a purchaser or seller of a futures contract at a specified price during the
option period. When the Fund sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised.
Futures contracts and options present the following risks: imperfect correlation
between the change in market value of the Fund's portfolio securities and the
price of futures contracts and options; the possible inability to close a
futures contract when desired; losses due to unanticipated market movements,
which are potentially unlimited; and the possible inability of the investment
management team to correctly predict the direction of securities prices,
interest rates, currency exchange rates and other economic factors.

DEFENSIVE INVESTING. The Fund does not take temporary defensive positions
in anticipation of negative investment conditions.

DESCRIPTION OF INVESTMENTS

- - U.S. GOVERNMENT OBLIGATIONS--Debt securities issued by the U.S. Treasury
which are

19
<PAGE>
direct obligations of the U.S. Government, including bills, notes and bonds.

- - U.S. GOVERNMENT AGENCY OBLIGATIONS--Issued or guaranteed by U.S.
Government-sponsored instrumentalities and federal agencies, including the
Federal National Mortgage Association, Federal Home Loan Bank and the Federal
Housing Administration.

- - CORPORATE DEBT OBLIGATIONS-- Nonconvertible corporate debt securities (e.g.,
bonds and debentures) which are issued by companies whose commercial paper is
rated Prime 1 by Moody's Investors Service, Inc. ("Moody's") or A1 by
Standard & Poor's Rating Services ("S&P") and dollar-denominated obligations
of foreign issuers issued in the U.S. If the issuer's commercial paper is
unrated, then the debt security would have to be rated at least AA by S&P or
Aa2 by Moody's. If there is neither a commercial paper rating nor a rating of
the debt security, then the sub-advisor must determine that the debt security
is of comparable quality to equivalent issues of the same issuer rated at
least AA or Aa2.

- - BANK OBLIGATIONS--Obligations of U.S. banks and savings and loan associations
and dollar-denominated obligations of U.S. subsidaries and branches of
foreign banks, such as certificates of deposit (including marketable variable
rate certificates of deposit) and bankers' acceptances. Bank certificates of
deposit will only be acquired from banks having assets in excess of
$1,000,000,000.

- - COMMERCIAL PAPER--Rated, at the time of purchase, A1 or better by S&P or
Prime 1 by Moody's, or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated AAA by Moody's or AAA by S&P, and
having a maximum maturity of nine months.

- - REPURCHASE AGREEMENTS-- Instruments through which the Fund purchases
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase
the security at an agreed price, plus interest at a specified rate. The
underlying securities will be limited to U.S. Government and agency
obligations described above. The Funds will not enter into a repurchase
agreement with a duration of more than seven days if, as a result, more than
15% of the value of the Fund total assets would be so invested. The Funds
will also only invest in repurchase agreements with a bank if the bank has at
least $1,000,000,000 in assets.

- - FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS--Bills, notes, bonds and other debt
securities issued or guaranteed by foreign governments, or their agencies and
instrumentalities.

- - SUPRANATIONAL ORGANIZATION OBLIGATIONS--Debt securities of supranational
organizations such as the World Bank, which are chartered to promote economic
development.

- - FOREIGN ISSUER OBLIGATIONS--Debt securities of non-U.S. issuers rated AA or
better by S&P or Aa2 or better by Moody's.

- - EURODOLLAR OBLIGATIONS--Debt securities of domestic or foreign issuers
denominated in U.S. dollars but not trading in the United States.

The Fund's investments may include both fixed and floating rate securities.
Floating rate securities bear interest at rates that vary with prevailing market
rates. Interest rate adjustments are made periodically (e.g., every six months),
usually based on a money market index such as the London Interbank Offered Rate
(LIBOR) or the Treasury bill rate.

EQUITY FUNDS

The Funds' principal strategies and risks are summarized above in the section
entitled SA Equity Funds. Below is further information about each Fund's
principal investments and strategies and their associated risks. The Funds may
also use strategies and invest in securities described in the Statement of
Additional Information. Each Fund's objective may be changed without shareholder
approval.

20
<PAGE>
PORTFOLIO CONSTRUCTION

U.S. MARKET FUND. The U.S. Market Fund is approximately market capitalization
weighted. A company's stock may not be purchased if (i) in the sub-adviser's
judgment, the issuer is in extreme financial difficulty, (ii) the issuer is
involved in a merger or consolidation or is the subject of an acquisition or
(iii) a significant portion of the issuer's securities are closely held.
Further, securities of real estate investment trusts will not be acquired
(except as part of a merger, consolidation or acquisition of assets.)

U.S. HBtM FUND. The U.S. HBtM Fund is approximately market capitalization
weighted. On not less that a semi-annual basis, the sub-adviser will calculate
the book to market ratio necessary to determine those companies whose stock may
be eligible for investment by the Fund.

INTERNATIONAL HBtM FUND. As of the date of this prospectus, the International
HBtM Fund intends to invest in companies having at least $800 million of market
capitalization, and the Fund will be approximately market capitalization
weighted. The sub-adviser may reset such floor from time to time to reflect
changing market conditions. In determining market capitalization weights, the
sub-adviser, using its best judgment, will seek to eliminate the effect of cross
holdings on the individual country weights. As a result, the weighting of
certain countries in the Fund may vary from their weighting in international
indices such as those published by The Financial Times, Morgan Stanley Capital
International or Salomon/Russell. The sub-adviser, however, will not attempt to
account for cross holding within the same country.

It is management's belief that the value stocks of large companies offer, over a
long term, a prudent opportunity for capital appreciation, but, at the same
time, selecting a limited number of such issues for inclusion in the Fund
involves greater risk than including a large number of them.

U.S. SMALL COMPANY FUND AND INTERNATIONAL SMALL COMPANY FUND. The U.S. Small
Company Fund and each underlying fund of the International Small Company Fund
(except the Emerging Markets Series) (collectively the "Small Company Funds")
are approximately market capitalization weighted.

The decision to include or exclude the shares of an issuer will be made on the
basis of such issuer's relative market capitalization determined by reference to
other companies located in the same country, except that with respect to the
underlying funds of the Continental and Pacific Rim Portfolio, such
determination shall be made by reference to other companies located in all
countries in which those underlying funds invest. Company size is measured in
terms of local currencies in order to eliminate the effect of variations in
currency exchange rates, except that the underlying funds of the Continental and
Pacific Rim Portfolio each will measure company size in terms of a common
currency. Even though a company's stock may meet the applicable market
capitalization criterion of a particular Small Company Fund, it may not be
purchased if (i) in the sub-adviser's judgment, the issuer is in extreme
financial difficulty, (ii) the issuer is involved in a merger or consolidation
or is the subject of an acquisition or (iii) a significant portion of the
issuer's securities are closely held or (iv) in the sub-adviser's judgment the
issuer may be a "passive foreign investment company" (as defined in the Internal
Revenue Code). Further, none of the Small Company Funds will acquire (except as
part of a merger, consolidation or acquisition of assets) the securities of real
estate investment trusts.

If any Small Company Fund must sell securities in order to obtain funds to make
redemption payments, the Small Company Fund may repurchase such securities as
additional cash becomes available. In most instances, however, the sub-adviser
would anticipate selling securities which had appreciated sufficiently to be
eligible for sale and, therefore, would not need to repurchase such securities.

It is the Small Company Funds' belief that the stocks of small companies offer,
over a long term, a prudent opportunity for capital appreciation, but, at the
same time, selecting a limited number of such issues for investment involves
greater risk than investing in a large number of them.

On a periodic basis, the sub-adviser will review the holdings of each Small
Company Fund and determine which, at the time of such review, are no longer
considered small U.S., Japanese, United Kingdom, European or Pacific Rim
companies. The present policy of the sub-adviser (except with

21
<PAGE>
respect to the U.S. Small Company Fund) is to consider portfolio securities for
sale when they have appreciated sufficiently to rank, on a market capitalization
basis, more than one full decile higher than the company with the largest market
capitalization that is eligible for purchase by the particular Small Company
Fund as determined periodically by the sub-adviser. The sub-adviser may, from
time to time, revise that policy if, in the opinion of the sub-adviser, such
revision is necessary to maintain appropriate market capitalization weighting.

The policy followed by the underlying fund of the Emerging Markets Portfolio of
seeking broad market diversification means that the sub-adviser will not utilize
"fundamental" securities research techniques in identifying securities
selections. The decision to include or exclude the shares of an issuer will be
made primarily on the basis of such issuer's relative market capitalization
determined by reference to other companies located in the same country. Company
size is measured in terms of reference to other companies located in the same
country and in terms of local currencies in order to eliminate the effect of
variations in currency exchange rates. The sub-adviser will also exercise
discretion in determining the allocation of investments as among approved
markets.

PORTFOLIO TRANSACTIONS. Portfolio investments of the U.S. Market Fund, U.S.
HBtM Fund, U.S. Small Company Fund, International HBtM Fund and the underlying
funds of the International Small Company Fund, will generally be made in
eligible securities on a market capitalization weighted basis. Securities in
each Fund's portfolio will not be purchased or sold based on the prospects for
the economy, the securities markets or the individual issuers whose shares are
eligible for purchase. Securities in each Fund's portfolio which have
depreciated in value since their acquisition will not be sold solely because
prospects for the issuer are not considered attractive or due to an expected or
realized decline in securities prices in general. Securities in each Fund's
portfolio will not be sold to realize short-term profits, but when circumstances
warrant, they may be sold without regard to the length of time held. Securities
in each Fund's portfolio, including those eligible for purchase, may be disposed
of, however, at any time when, in the sub-adviser's judgment, circumstances,
including but not limited to tender offers, mergers and similar transactions, or
bids made for block purchases at opportune prices, warrant their sale.
Generally, securities in each Fund's portfolio will be purchased with the
expectation that they will be held for longer than one year and will be held
until such time as they are no longer considered an appropriate holding in light
of the investment policy of the relevant Fund.

The U.S. HBtM Fund will make investments in most eligible securities on a market
capitalization weighted basis. This Fund may sell portfolio securities when the
issuer's market capitalization falls substantially below that of the issuer with
the minimum market capitalization which is then eligible for purchase by the
Fund. In addition, this Fund may sell portfolio securities when their book to
market ratio falls substantially below that of the security with the lowest such
ratio that is then eligible for purchase by the Fund.

DEVIATION FROM MARKET CAPITALIZATION WEIGHTING. The portfolio structures of
the U.S. Market Fund, U.S. HBtM Fund, U.S. Small Company Fund, International
HBtM Fund and the underlying funds of the International Small Company Fund
involve market capitalization weighting. That is, their investment portfolios
are market capitalization weighted. Deviation from strict market capitalization
weighting may occur for several reasons. First, the sub-adviser may exclude the
stock of a company that meets each Fund's applicable market capitalization
criterion if the sub-adviser determines in its best judgment that the purchase
of such stock is inappropriate given other conditions. Deviation also will occur
because the sub-adviser intends to purchase in round lots only. Furthermore, the
sub-adviser may reduce the relative amount of any security held from the level
of strict adherence to market capitalization weighting, in order to retain
sufficient portfolio liquidity. A portion, but generally not in excess of 20% of
each Fund's assets, may be invested in interest bearing obligations, such as
money market instruments, thereby causing further deviation from strict market
capitalization weighting. A further deviation may occur due to investments by
each Fund in privately placed convertible debentures. Finally, the tax
management strategies undertaken by the U.S. HBtM, U.S. Small Company and
International HBtM Funds may cause deviation from market capitalization
weighting.

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<PAGE>

Block purchases of eligible securities may be made at opportune prices even
though such purchases exceed the number of shares which, at the time of
purchase, strict adherence to the policy of market capitalization weighting
would otherwise required. In addition, securities eligible for purchase by each
Fund or otherwise represented in the portfolio of each Fund may be acquired in
exchange for the issuance of shares. While such transactions might cause a
temporary deviation from market capitalization weighting, they would ordinarily
be made in anticipation of further growth of assets.

Changes in the composition and relative ranking (in terms of market
capitalization) of the stocks which are eligible for purchase by each Fund take
place with every trade when the securities markets are open for trading due,
primarily, to price fluctuations of such securities. On at least a semi-annual
basis, the sub-adviser will determine those companies eligible for investment by
a Fund (other than the U.S. Market Fund). Additional investments generally will
not be made in securities which have changed in value sufficiently to be
excluded from the sub-adviser's then current market capitalization requirement
for eligible portfolio securities, but not by a sufficient amount to warrant
their sale.

SECURITIES LENDING. Each Fund may seek additional income by lending
portfolio securities to qualified institutions. By reinvesting any cash
collateral it receives in these transactions, the Fund could realize additional
gains or losses. If the borrower fails to return the securities or the invested
collateral has declined in value, the Fund could lose money.

FIXED INCOME SECURITIES. Each Fund may invest in fixed income securities.
Risks of these securities are:

- Interest rate risk: Increases in prevailing interest rates will cause
fixed income securities held by a Fund to decline in value. The magnitude
of the decline will be greater for longer-term fixed income securities
than for shorter-term fixed income securities.

- Credit (default) risk: It is possible that some of the issuers will not
make payments on debt securities held by a Fund, or there could be
defaults on repurchase agreements held by a Fund. Or, an issuer may
suffer adverse changes in financial condition that could lower the credit
quality of a security, leading to greater volatility in the price of the
security and in shares of a Fund. A change in the quality rating of a
bond can affect the bond's liquidity and make it more difficult for the
Fund to sell. If any of these events were to occur, the Fund might suffer
a loss.

CASH MANAGEMENT. Each Fund may invest up to 20% of its assets in
short-term, high quality, highly-liquid, fixed income obligations such as money
market instruments and short-term repurchase agreements pending investment or
for liquidity purposes.

MASTER/FEEDER STRUCTURE. Each Fund reserves the right to convert to a
"master/feeder" structure at a future date. Under such a structure, one or more
feeder funds invest all of their assets in a master fund, which, in turn,
invests directly in a portfolio of securities. If required by applicable law, a
Fund will seek shareholder approval before converting to a master/feeder
structure. If the requisite regulatory authorities determine that such approval
is not required, shareholders will be deemed, by purchasing shares, to have
consented to such conversion and no further shareholder approval will be sought.

INTERNATIONAL SMALL COMPANY FUND

UNDERLYING FUND SPECIFIC POLICIES. The following are the investment
policies of each underlying fund.

JAPANESE PORTFOLIO

The underlying fund of the Japanese Portfolio invests in a broad and diverse
group of readily marketable stocks of Japanese small companies which are traded
in the Japanese securities markets. A Japanese small company generally means a
company located in Japan whose market capitalization is not larger than the
largest of those in the smaller one-half of companies whose securities are
listed on the First Section of the Tokyo Stock Exchange. The underlying fund
will invest primarily in securities traded on the Tokyo Stock Exchange or in
other Japanese securities markets. The underlying fund intends to purchase a

23
<PAGE>

portion of the stock of each eligible company on a market capitalization
weighted basis. The underlying fund invests at least 80% of its total assets in
equity securities of Japanese small companies.

UNITED KINGDOM PORTFOLIO

The underlying fund of the United Kingdom Portfolio invests in a broad and
diverse group of readily marketable stocks of United Kingdom small companies
which are traded principally on the International Stock Exchange of the United
Kingdom and the Republic of Ireland ("ISE"). A United Kingdom small company
typically means a company organized in the United Kingdom, with shares listed on
the ISE whose market capitalization is not larger than the largest of those in
the smaller one-half of companies included in the Financial Times-Actuaries All
Share Index ("FTA"). Generally, the underlying fund of the United Kingdom
Portfolio will not purchase shares of any company whose market capitalization is
less than $5,000,000. The underlying fund intends to purchase a portion of the
stock of each eligible company on a market capitalization weighted basis. The
underlying Fund invests at least 80% of its total assets in equity securities of
United Kingdom small companies.

CONTINENTAL PORTFOLIO

The underlying fund of the Continental Portfolio invests in a broad and diverse
group of readily marketable stocks of small companies organized in certain
European countries whose shares are traded principally in securities markets
located in those countries. As of the date of this prospectus, the underlying
fund of the Continental Portfolio is authorized to invest in Austria, Belgium,
Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain,
Sweden and Switzerland. DFA typically determines company size by comparing the
market capitalizations of companies in all countries in which the underlying
fund invests. Small companies are those whose market capitalizations are not
greater than the largest of those in the smallest 20% of companies listed in the
FTA. The underlying fund will not purchase shares of any company whose market
capitalization is less than $5,000,000. The underlying fund intends to purchase
a portion of the stock of each eligible company on a market capitalization
weighted basis. The underlying fund invests at least 80% of its total assets in
equity securities of European small companies.

PACIFIC RIM PORTFOLIO

The underlying fund of the Pacific Rim Portfolio invests in a broad and diverse
group of readily marketable stocks of small companies located in Australia, New
Zealand and Asian countries whose shares are traded principally in securities
markets located in those countries. Small companies are those whose market
capitalizations are not greater than the largest of those in the smallest 30% of
companies listed in the FTA as combined for the countries in which the
underlying fund of the Pacific Rim Portfolio invests. The underlying fund
typically will not purchase shares of any company whose market capitalization is
less than $5,000,000. The underlying fund intends to purchase a portion of the
stock of each eligible company on a market capitalization weighted basis. The
underlying fund invests at least 80% of its total assets in equity securities of
small companies located in countries in the Pacific Rim.

EMERGING MARKETS PORTFOLIO

The underlying fund of the Emerging Markets Portfolio invests in companies
located in emerging markets. An emerging market is any country that the
International Finance Corporation (a member of the World Bank Group) considers
an emerging market. In determining what countries have emerging markets with
respect to the underlying fund of the Emerging Markets Portfolio, the data,
analysis and classification of countries published or disseminated by the
International Bank for Reconstruction and Development (a member of the World
Bank Group) and the International Finance Corporation, among other things, will
be considered. Approved emerging markets may not include all such emerging
markets. In determining whether to approve markets for investment, the
sub-adviser will take into account, among other things, market liquidity,
relative availability of investor information, government regulation, including
fiscal and foreign exchange repatriation rules and the availability of other
access to these markets for the underlying fund. The underlying fund invests
only in emerging markets approved by DFA.

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<PAGE>

The underlying fund of the Emerging Markets Portfolio invests primarily in
equity securities listed on securities exchanges or actively traded on OTC
markets. The underlying fund invests in companies whose aggregate overall share
of the emerging market's total public market capitalization is at least in the
upper 40% of such capitalization. The underlying fund may also invest in shares
of other mutual funds that invest in the approved emerging markets where access
to those markets is otherwise significantly limited.

As of the date of this prospectus, the underlying fund of the Emerging Markets
Portfolio is authorized to invest in the following emerging market countries:
Argentina, Brazil, Chile, Greece, Hungary, Indonesia, Israel, Korea, Malaysia,
Mexico, Philippines, Portugal, Thailand, Turkey and Poland.

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<PAGE>
FOR MORE INFORMATION

More information on SA Funds is available free upon request, including the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

Provides more details about the funds and their policies. A current SAI is on
file with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).

TO OBTAIN INFORMATION:

BY TELEPHONE

Call 1-800-366-7266

BY MAIL Write to:
SA Funds
1190 Saratoga Avenue
Suite 200
San Jose, California 95129

ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from:

SEC
http://www.sec.gov

You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC 2054-6009.
SA FUNDS-INVESTMENT TRUST
SEC FILE NUMBER: 811-09195
<PAGE>
SA FUNDS
SA Fixed Income Fund
SA U.S. Market Fund
SA U.S. HBtM Fund
SA U.S. Small Company Fund
SA International HBtM Fund
SA International Small Company Fund

STATEMENT OF ADDITIONAL INFORMATION

July 16, 1999

This Statement of Additional Information ("SAI") provides supplementary
information pertaining to all shares representing interests in each of the
no-load mutual funds listed above (the "Funds"). SA Funds Investment Trust (the
"Trust") currently offers a selection of six Funds, each of which is described
in this SAI. This SAI is not a prospectus, and should be read only in
conjunction with the Trust's Prospectus dated July 16, 1999. A copy of the
Prospectus may be obtained by calling (800) 366-7266.

<PAGE>

TABLE OF CONTENTS
PAGE
----
<S> <C>
1. History and General Information..................................................................3
2. Description of the Funds and Their Investments and Risks.........................................3
Investments, Strategies and Risks.............................................................3
Tax Management Strategies of the U.S. HBtM Fund, U.S. Small Company Fund
and the International HBtM Fund.............................................................12
Fund Policies................................................................................13
3. Management of the Trust.........................................................................14
Trustees and Officers........................................................................14
Compensation Table...........................................................................16
4. Control Persons and Principal Holders of Securities.............................................16
5. Investment Advisory and Other Services..........................................................17
Investment Manager and Sub-Adviser...........................................................17
Distributor..................................................................................18
Shareholder Servicing Arrangements...........................................................18
Administration...............................................................................18
Custodian....................................................................................19
Transfer Agent and Dividend Disbursing Agent.................................................19
Counsel......................................................................................19
Independent Auditors.........................................................................19
6. Brokerage Allocations and Other Practices.......................................................19
7. Information Concerning Shares...................................................................20
8. Purchase, Redemption and Pricing of Shares......................................................21
Purchase and Redemption Information..........................................................21
9. Taxes...........................................................................................22
Tax Status of the Funds......................................................................22
Taxation of Fund Distributions...............................................................22
Disposition of Shares........................................................................23
Information Relating to Foreign Investments..................................................23
Information Relating to Fund Investments.....................................................24
Backup Withholding...........................................................................26
Other Taxation...............................................................................26
10. Performance Information..........................................................................26
11. Financial Statements.............................................................................28
</TABLE>

No person has been authorized to give any information or to make any
representations not contained in this SAI or in the Prospectus in connection
with the offering made by the Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Funds. The Prospectus does not constitute an offering by the Funds in any
jurisdiction in which such offering may not lawfully be made.

2
<PAGE>

HISTORY AND GENERAL INFORMATION

The Trust was organized as a Delaware business trust on June 16, 1998 under
the name RWB Funds Investment Trust which was changed on June 7, 1999 to SA
Funds-Investment Trust.

The Trust is an open-end, management investment company. The Declaration of
Trust permits the Trust to offer separate portfolios ("Funds") of shares of
beneficial interest and different classes of shares of each Fund. The Trust
currently offers six Funds, each of which is a diversified mutual fund.

The following Funds are described in this SAI:

SA Fixed Income Fund
SA U.S. Market Fund
SA U.S. HBtM Fund
SA U.S. Small Company Fund
SA International HBtM Fund
SA International Small Company Fund

The investment manager of each Fund is RWB Advisory Services Inc. ("RWBAS"
or the "Manager"). Dimensional Fund Advisors Inc. ("Dimensional" or the
"Sub-Adviser") serves as sub-adviser for each of the Funds.

RWB Securities, Inc. is the distributor of shares of the Funds.

DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS

INVESTMENTS, STRATEGIES AND RISKS

The following supplements the information contained in the Prospectus
concerning the investments and investment techniques of the Funds. Each Fund's
investment objective is a non-fundamental policy and may be changed without the
approval of the Fund's shareholders. There can be no assurance that a Fund will
achieve its objective. A description of applicable credit ratings is set forth
in Appendix A to this SAI.

BORROWING. The Funds are authorized to borrow money in amounts up to 5% of
the value of their total assets at the time of such borrowings for temporary
purposes, and are authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act").
This borrowing may be unsecured. The 1940 Act requires the Funds to maintain
continuous asset coverage of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or other reasons, the
Funds may be required to sell some of their portfolio holdings within three days
to reduce the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that time.
Borrowed funds are subject to interest costs that may or may not be offset by
amounts earned on the borrowed funds. A Fund may also be required to maintain
minimum average balances in connection with such borrowing or to pay a
commitment or other fees to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
Each Fund may, in connection with permissible borrowings, transfer as collateral
securities owned by the Funds.

CONVERTIBLE DEBENTURES. The International HBtM Fund and each investment
company in which the International Small Company Fund invests ("underlying
fund") may invest up to 5% of their assets in convertible debentures issued by
non-U.S. companies. Convertible debentures include corporate bonds and notes
that may be converted into or exchanged for common stock. These securities are
generally convertible either at a stated price or a stated rate (that is, for a
specific number of shares of common stock or other security). As with other
fixed income securities, the price of a convertible debenture to some extent
varies inversely with interest rates. While providing a fixed income stream
(generally higher in yield than the income derived from a common stock but lower
than that afforded by a nonconvertible debenture), a convertible debenture also
affords the investor an opportunity, through its conversion feature, to
participate in the capital appreciation of the common stock into which it is
convertible. As

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<PAGE>

the market price of the underlying common stock declines, convertible debentures
tend to trade increasingly on a yield basis and so may not experience market
value declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the price of a
convertible debenture tends to rise as a reflection of the value of the
underlying common stock. To obtain such a higher yield, a Fund may be required
to pay for a convertible debenture an amount in excess of the value of the
underlying common stock. Common stock acquired by a Fund upon conversion of a
convertible debenture will generally be held for so long as the Sub-Adviser
anticipates such stock will provide the Fund with opportunities which are
consistent with the Fund's investment objective and policies.

FOREIGN CURRENCY TRANSACTIONS. A forward foreign currency exchange 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 agreed upon
by the parties, at a price set at the time of the contract. These contracts are
principally traded in the interbank market conducted directly between currency
traders (usually large, commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades.

A Fund may enter into forward contracts in connection with the management
of the foreign currency exposure of its portfolio. When the Fund enters into a
contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale, for a fixed amount of
dollars of the amount of foreign currency involved in the underlying security
transactions, the Fund will be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
the subject foreign currency during the period between the date the security is
purchased or sold and the date on which payment is made or received.

When the Sub-Adviser believes that one currency may experience a
substantial movement against another currency, including the U.S. dollar, or it
wishes to alter the Fund's exposure to the currencies of the countries in its
investment universe, it may enter into a forward contract to sell or buy foreign
currency in exchange for the U.S. dollar or another foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. Under normal circumstances,
consideration of the prospect for currency parities will be incorporated into
the longer term investment decisions made with regard to overall diversification
strategies. However, the Sub-Adviser believes that it is important to have the
flexibility to enter into such forward contracts when it determines that the
best interests of a Fund will be served.

Each Fund may enter into forward contacts for any other purpose consistent
with the Fund's investment objective and program. The Fund will not enter into a
forward contract, or maintain exposure to any such contract(s), if the amount of
foreign currency required to be delivered thereunder would exceed the Fund's
holdings of liquid securities and currency available for cover of the forward
contract(s). In determining the amount to be delivered under a contract, the
Fund may net offsetting positions.

At the maturity of a forward contract, the Fund may sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and either extend the maturity of the forward contract (by "rolling"
that contract forward) or may initiate a new forward contract.

If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of

4
<PAGE>

the currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent of the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.

A Fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. However, each Fund
reserves the right to enter into forward foreign currency contracts for
different purposes and under different circumstances. Of course, the Fund is not
required to enter into forward contracts with regard to its foreign currency
denominated securities and will not do so unless deemed appropriate by the
Sub-Adviser. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of the hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.

Although each Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. It will do so from time to time, and investors should be aware
of the costs of currency conversion. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the difference
(the "spread") between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer.

Federal tax treatment of forward foreign exchange contracts is discussed in
the section entitled "Futures and Options on Futures -- Federal Tax Treatment of
Futures Contracts, Options and Forward Foreign Exchange Contracts."

FOREIGN SECURITIES. As stated in the Prospectus, certain Funds may invest
in foreign securities. Investors should consider carefully the substantial risks
involved in securities of companies and governments of foreign nations, which
are in addition to the usual risks inherent in domestic investments.

There may be less publicly available information about foreign companies
comparable to the reports and ratings published about companies in the United
States. Foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to U.S. companies.
Foreign markets have substantially less volume than U.S. markets and securities
of some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. In many foreign countries, there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States. Such concerns are particularly heightened for
emerging markets and Eastern European countries.

Investments in companies domiciled in developing countries may be subject
to potentially higher risks than investments in developed countries. These risks
include: (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict a
Fund's investment opportunities, including restrictions on investment in issuers
or industries deemed sensitive to national interest; (iv) foreign taxation; (v)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain Eastern European countries, of a capital
market structure or market-oriented economy; and (vii) the possibility that
recent favorable economic developments in Eastern Europe may be slowed or
reversed by unanticipated political or social events in such countries.

Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, a Fund could lose a substantial
portion of any investments it has made in the affected countries. Further, no
accounting standards exist in Eastern European countries. Finally, even though
certain Eastern European currencies may be convertible into

5
<PAGE>

United States dollars, the conversion rates may be artificial to the actual
market values and may be adverse to a Fund.

The Sub-Adviser endeavors to buy and sell foreign currencies on as
favorable a basis as practicable. Some price spread on currency exchange (to
cover service charges) may be incurred, particularly when the Fund changes
investments from one country to another or when proceeds of the sale of Fund
shares in U.S. dollars are used for the purchase of securities in foreign
countries. Also, some countries may adopt policies which would prevent the Fund
from transferring cash out of the country or withhold portions of interest and
dividends at the source. There is the possibility of expropriation,
nationalization or confiscatory taxation, withholding and other foreign taxes on
income or other amounts, foreign exchange controls (which may include suspension
of the ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments that could affect investments in securities of issuers in foreign
nations.

Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.

A Fund may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within a Fund from the perspective of U.S. investors, and 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 a Fund. 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. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. The Sub-Adviser will attempt to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places a Fund's investments.

The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may enter
into futures contracts and options on futures contracts only for the purpose of
remaining fully invested and to maintain liquidity to pay redemptions. Futures
contracts provide for the future sale by one party and purchase by another party
of a specified amount of defined securities at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges. A
Fund will be required to make a margin deposit in cash or government securities
with a broker or custodian to initiate and maintain positions in futures
contracts. Minimal initial margin requirements are established by the futures
exchange and brokers may establish margin requirements which are higher than the
exchange requirements. After a futures contract position is opened, the value of
the contract is marked to market daily. If the futures contract price changes,
to the extent that the margin on deposit does not satisfy margin requirements,
payment of additional "variation" margin will be required. Conversely, reduction
in the contract value may reduce the required margin resulting in a repayment of
excess margin to a Fund. Variation margin payments are made to and from the
futures broker for as long as the contract remains open. The Funds expect to
earn income on their margin deposits. To the extent that a Fund invests in
futures contracts and options thereon for other than bona fide hedging purposes,
no Fund will enter into such transactions if, immediately thereafter, the sum of
the amount of initial margin deposits and premiums paid for open futures options
would exceed 5% of the Fund's net assets, after taking into account

<PAGE>

unrealized profits and unrealized losses on such contracts it has entered into;
provided, however, that, in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the 5%.
Pursuant to published positions of the Securities and Exchange Commission, the
Funds may be required to identify liquid assets, such as cash or liquid
securities (or, as permitted under applicable regulation, enter into offsetting
positions) in an account maintained with the Fund's custodian in connection with
their futures contract transactions in order to cover their obligations with
respect to such contracts.

Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract an any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, a Fund would continue to be required to
make variation margin deposits. In such circumstances, if a Fund has
insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.

A Fund may purchase and sell options on the same types of futures in which
it may invest.

Options on futures are similar to options on underlying instruments except
that options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract (a long position if the option
is a call and a short position if the option is a put), rather than to purchase
or sell the futures contract, at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by the 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, at exercise, 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.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.

As an alternative to writing or purchasing call and put options on stock
index futures, a Fund may write or purchase call and put options on stock
indices. Such options would be used in a manner similar to the use of options on
futures contracts.

SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON FUTURES CONTRACTS. The risks
described above for futures contracts are substantially the same as the risks of
using options on futures. In addition, where a Fund seeks to close out an option
position by writing or buying an offsetting option covering the same underlying
instrument, index or contract and having the same exercise price and expiration
date, its ability to establish and close out positions on such options will be
subject to the maintenance of a liquid secondary market. Reasons for the absence
of a liquid secondary market on an exchange include the following: (i) there may
be insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options, or underlying instruments;
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or a clearing corporation may not at
all times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that exchange (or in
the class or series of options) would cease to exist, although outstanding
options on the exchange that had been issued by a clearing corporation as a
result of trades on that exchange would continue to be exercisable in accordance
with their terms. There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render certain of the
facilities of any of the clearing corporations inadequate, and thereby result in
the institution by an exchange of special procedures which may interfere with
the timely execution of customers' orders.

ADDITIONAL FUTURES AND OPTIONS CONTRACTS. Although the Funds have no
current intention of engaging in futures or options transactions other than
those described above, they reserve the right to do so. Such futures and options
trading might involve risks which differ from those involved in the futures and
options described above.

7
<PAGE>

FEDERAL TAX TREATMENT OF FUTURES CONTRACTS, OPTIONS AND FORWARD FOREIGN
EXCHANGE CONTRACTS. Certain option, futures, and forward foreign exchange
contracts, including options and futures on currencies, which are Section 1256
contracts, may result in a Fund entering into straddles.

Open Section 1256 contracts at fiscal year end will be considered to have
been closed at the end of the Fund's fiscal year and any gains or losses will be
recognized for tax purposes at that time. Such gains or losses from the normal
closing or settlement of such transactions will be characterized as 60%
long-term capital gain or loss and 40% short-term capital gain or loss
regardless of the holding period of the instrument. The Fund will be required to
distribute net gains on such transactions to shareholders even though it may not
have closed the transaction and received cash to pay such distributions.

Options, futures and forward foreign exchange contracts, including options
and futures on currencies, which offset a security or currency position may be
considered straddles for tax purposes, in which case a loss on any position in a
straddle will be subject to deferral to the extent of unrealized gain in an
offsetting position. The holding period of the securities or currencies
comprising the straddle may be deemed not to begin until the straddle is
terminated. The holding period of the security offsetting an "in-the-money
qualified covered call" option will not include the period of time the option is
outstanding.

Losses on written covered calls and purchased puts on securities, excluding
certain "qualified covered call" options, may be long-term capital loss, if the
security covering the option was held for more than twelve months prior to the
writing of the option.

ILLIQUID SECURITIES. Each Fund may invest up to 15% of the value of its net
assets (determined at time of acquisition) in securities that are illiquid.
Illiquid securities would generally include securities for which there is a
limited trading market, repurchase agreements and time deposits with
notice/termination dates in excess of seven days, and certain securities that
are subject to trading restrictions because they are not registered under the
Securities Act of 1933, as amended (the "Act"). If, after the time of
acquisition, events cause this limit to be exceeded, the Fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the Securities and Exchange
Commission.

A Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). A Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to other qualified institutional buyers. If a particular
investment in Section 4(2) paper or Rule 144A securities is not determined to be
liquid, that investment will be included within the Fund's limitation on
investment in illiquid securities. The Sub-Adviser will determine the liquidity
of such investments pursuant to guidelines established by the Board of Trustees.
It is possible that unregistered securities purchased by a Fund in reliance upon
Rule 144A could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
period, uninterested in purchasing these securities.

INVESTMENT COMPANY SECURITIES. Each Fund may invest in securities issued by
other investment companies. As a shareholder of another investment company, a
Fund would bear its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses
each Fund bears directly in connection with its own operations. Each Fund (other
than the International Small Company Fund) currently intends to limit its
investments in securities issued by other investment companies so that, as
determined immediately after a purchase of such securities is made: (i) not more
than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more

8
<PAGE>

than 3% of the outstanding voting stock of any one investment company will be
owned by the Fund. The International Small Company Fund intends to rely on an
exemption under Section 12(d)(1)(F) of the 1940 Act that permits the Fund to
invest without limit in the securities of other investment companies provided
that not more than 3% of the outstanding voting stock of any one investment
company may be owned by the Fund. Such 3% ownership limitation may restrict the
Fund's ability to pursue its strategy.

LENDING OF PORTFOLIO SECURITIES. To enhance the return on its portfolio,
each of the Funds may lend securities in its portfolio (subject to a limit of
33 1/3% of the total assets) to securities firms and financial institutions,
provided that each loan is secured continuously by collateral adjusted daily to
have a market value at least equal to the current market value of the securities
loaned. These loans are terminable at any time, and the Funds will receive any
interest or dividends paid on the loaned securities. In addition, it is
anticipated that a Fund may share with the borrower some of the income received
on the collateral for the loan or the Fund will be paid a premium for the loan.
The risk in lending portfolio securities, as with other extensions of credit,
consists of possible delay in recovery of the securities or possible loss of
rights in the collateral or loss on sale of the collateral should the borrower
fail financially. In determining whether the Funds will lend securities, the
Sub-Adviser will consider all relevant facts and circumstances. The Funds will
only enter into loan arrangements with broker-dealers, banks or other
institutions which the Manager has determined are creditworthy under guidelines
established by the Board of Trustees.

MONEY MARKET INSTRUMENTS. Each Fund may invest from time to time in "money
market instruments," a term that includes, among other instruments, bank
obligations, commercial paper, variable amount master demand notes and corporate
bonds with remaining maturities of 397 days or less.

Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Sub-Adviser deems the
instrument to present minimal credit risks, such investments may nevertheless
entail risks that are different from those of investments in domestic
obligations of U.S. banks due to differences in political, regulatory and
economic systems and conditions. All investments in bank obligations are limited
to the obligations of financial institutions having more than $1 billion in
total assets at the time of purchase.

The Funds may also purchase variable amount master demand notes which are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master notes only when the Sub-Adviser deems the investment to
involve minimal credit risk.

NON-DOMESTIC BANK OBLIGATIONS. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits ("ETDs"), which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule Bs
which are obligations issued by Canadian branches of foreign or domestic banks;
Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated
certificates of deposit issued by a U.S. branch of a foreign bank and held in
the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are
U.S. dollar denominated bankers' acceptances issued by a U.S. branch of a
foreign bank and held in the United States.

REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System or any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an

9
<PAGE>

agreed-upon time and price ("repurchase agreements"). The Sub-Adviser will
review and continuously monitor the creditworthiness of the seller under a
repurchase agreement, and will require the seller to maintain liquid assets
segregated on the books of the Fund or the Fund's custodian in an amount that is
greater than the repurchase price. Default by, or bankruptcy of, the seller
would, however, expose a Fund to possible loss because of adverse market action
or delays in connection with the disposition of underlying obligations except
with respect to repurchase agreements secured by U.S. Government securities.

The repurchase price under repurchase agreements generally equals the price
paid by a Fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement).

Securities subject to repurchase agreements will be held, as applicable, by
the Fund's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depositary. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act.

REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow funds for temporary or
emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
Fund may decline below the repurchase price. A Fund will pay interest on amounts
obtained pursuant to a reverse repurchase agreement. While reverse repurchase
agreements are outstanding, a Fund will maintain cash, U.S. Government
securities or other liquid high-grade securities earmarked on the books of the
Fund or the Fund's custodian in an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.

SUPRANATIONAL BANK OBLIGATIONS. The Fixed Income Fund may invest in the
obligations of supranational banks. Supranational banks are international
banking institutions designed or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., The World
Bank). Obligations of supranational banks may be supported by appropriated but
unpaid commitments of their member countries and there is no assurance these
commitments will be undertaken or met in the future.

U.S. GOVERNMENT OBLIGATIONS. Each Fund may purchase obligations issued or
guaranteed by the U.S. Government and U.S. Government agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the GNMA, are supported by the full faith and
credit of the U.S. Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to borrow from the
U.S. Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury Bills,
Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, FNMA, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, FHLMC, Federal Intermediate Credit
Banks and Maritime Administration.

VARIABLE AND FLOATING RATE INSTRUMENTS. The Fixed Income Fund may invest in
variable and floating rate instruments. Debt instruments may also be structured
to have variable or floating interest rates. Variable and floating rate
obligations purchased by the Fund may have stated maturities in excess of the
Fund's maturity limitation if the Fund can demand payment of the principal of
the instrument at least once during such period on not more than thirty days'
notice (this demand feature is not required if the instrument is guaranteed by
the U.S. Government or an agency thereof). These instruments may include
variable amount master demand notes that permit the indebtedness to vary in
addition to providing for periodic adjustments in the interest rates. The
Sub-Adviser will consider the earning power, cash flows and other liquidity
ratios of the issuers and guarantors of such instruments and, if the instrument
is subject to a demand feature, will continuously monitor their financial
ability to

10
<PAGE>

meet payment on demand. Where necessary to ensure that a variable or floating
rate instrument is equivalent to the quality standards applicable to the Fund,
the issuer's obligation to pay the principal of the instrument will be backed by
an unconditional bank letter or line of credit, guarantee or commitment to lend.

The absence of an active secondary market for certain variable and floating
rate notes could make it difficult to dispose of the instruments, and the Fund
could suffer a loss if the issuer defaulted or during periods that the Fund is
not entitled to exercise its demand rights.

Variable and floating rate instruments held by the Fund will be subject to
the Fund's limitation on illiquid investments when the Fund may not demand
payment of the principal amount within seven days absent a reliable trading
market.

WARRANTS. Warrants are privileges issued by corporations enabling the
owners to subscribe to and purchase a specified number of shares of the
corporation at a specified price during a specified period of time. The purchase
of warrants involves the risk that a Fund could lose the purchase value of a
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed the value of the subscribed security's market price
such as when there is no movement in the level of the underlying security.

WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (DELAYED-DELIVERY
TRANSACTIONS). Each Fund may purchase securities on a when-issued or delayed
delivery basis. When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by a Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.

When a Fund agrees to purchase securities on a when-issued or forward
commitment basis, the Fund will earmark cash or liquid portfolio securities
equal to the amount of the commitment. Normally, the Fund will earmark portfolio
securities to satisfy a purchase commitment, and in such a case the Fund may be
required subsequently to earmark additional assets in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it earmarks portfolio securities to cover such purchase
commitments than when it earmarks cash.

A Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, a Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a taxable capital gain or loss.

When a Fund engages in when-issued and forward commitment transactions, it
relies on the other party to consummate the trade. Failure of such party to do
so may result in the Fund's incurring a loss or missing an opportunity to obtain
a price considered to be advantageous.

The market value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Fund starting on the day the Fund agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until they
are paid for and delivered on the settlement date.

YIELDS AND RATINGS. The yields on certain obligations, including the money
market instruments in which the Funds may invest (such as commercial paper and
bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally

11
<PAGE>

recognized statistical rating organizations ("NRSROs") represent their
respective opinions as to the quality of the obligations they undertake to rate.
Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices.

OTHER. Subsequent to its purchase by a Fund, a rated security may cease to
be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Trustees or the Sub-Adviser, pursuant to
guidelines established by the Board, will consider such an event in determining
whether the Fund should continue to hold the security in accordance with the
interests of the Fund and applicable regulations of the Securities and Exchange
Commission.

Because the structure of the Equity Funds is based on the relative market
capitalizations of eligible holdings, it is possible that the Funds might hold
at least 5% of the outstanding voting securities of one or more issuers. In such
circumstances, the Trust and the issuer would be deemed "affiliated persons"
under the 1940 Act and certain requirements of the 1940 Act regulating dealings
between affiliates might become applicable. However, based on the present
capitalizations of the groups of companies eligible for purchase by the Funds
and the anticipated amount of a Fund's assets intended to be invested in such
securities, management does not anticipate that a Fund will hold as much as 5%
of the voting securities of any issuer.

TAX MANAGEMENT STRATEGIES OF THE U.S. HBTM FUND, U.S. SMALL FUND AND THE
INTERNATIONAL HBTM FUND

These Funds may try to minimize the impact of federal taxes on returns by
managing their portfolios in a manner that will defer the realization of net
capital gains where possible and may minimize ordinary income.

When selling securities, each Fund typically will select the highest cost
shares of the specific security in order to minimize the realization of capital
gains. In certain cases, the highest cost shares may produce a short-term
capital gain. Since short-term capital gains are taxed at higher tax rates than
long-term capital gains, the highest cost shares with a long-term holding period
may be disposed of instead. Each Fund also will seek, when possible, not to
dispose of a security until the long-term holding period for capital gains for
tax purposes has been satisfied. Additionally, each Fund may, when consistent
with all other tax management policies, sell securities in order to realize
capital losses. Realized capital losses can be used to offset realized capital
gains, thus reducing capital gains distributions. However, realization of
capital gains is not entirely within the Sub-Adviser's control. Capital gains
distributions may vary considerably from year to year; there will be no capital
gains distributions in years when a Fund realizes net capital losses.

The timing of purchases and sales of securities may be managed to minimize
dividends to the extent possible. With respect to dividends that are received,
the Funds may not be eligible to flow through the dividends received deduction
to corporate shareholders, if because of timing activities, the requisite
holding period is not met. Except for the U.S. HBtM Fund, portfolio holdings may
be managed to minimize high dividend-yielding securities and to emphasize low
dividend-yielding securities.

The Funds are expected to deviate from their market capitalization
weightings to a greater extent than the other Funds. For example, the
Sub-Adviser may exclude the stock a company that meets applicable market
capitalization criterion in order to avoid dividend income, and the Sub-Adviser
may sell the stock of a company that meets applicable market capitalization
criterion in order to realize a capital loss. Additionally, while the Funds are
managed so that securities will generally be held for longer than one year, the
Funds may dispose of any securities whenever the Sub-Adviser determines that
such disposition would be consistent with the tax management strategies of the
Funds.

Although the Sub-Adviser may manage each Fund to minimize the realization
of capital gains and taxable dividend distributions during a particular year,
the Funds may nonetheless distribute taxable gains and taxable income to
shareholders from time to time. Furthermore, shareholders may be required to pay
taxes on capital gains realized, if any, upon redemption of shares of a Fund, if
the amount realized on redemption is greater than the amount the shareholder
paid for the shares.

12
<PAGE>

FUND POLICIES

FUNDAMENTAL POLICIES. Each Fund is subject to the investment limitations
enumerated in this section which may be changed with respect to a particular
Fund only by a vote of the holders of a majority of such Fund's outstanding
shares. As used in this SAI and in the Prospectus, a "majority of the
outstanding shares" of a Fund means the lesser of (a) 67% of the shares of the
particular Fund represented at a meeting at which the holders of more than 50%
of the outstanding shares of such Fund are present in person or by proxy, or (b)
more than 50% of the outstanding shares of such Fund.

1. No Fund may invest more than 25% of its total assets in any one
industry (securities issued or guaranteed by the United States
Government, its agencies or instrumentalities are not considered to
represent industries).

2. No Fund may with respect to 75% of the Fund's assets, invest more than
5% of the Fund's assets (taken at a market value at the time of
purchase) in the outstanding securities of any single issuer or own
more than 10% of the outstanding voting securities of any one issuer,
in each case other than securities issued or guaranteed by the United
States Government, its agencies or instrumentalities.

3. No Fund may borrow money or issue senior securities (as defined in the
1940 Act) except that the Funds may borrow amounts not exceeding 33
1/3% of its total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) valued at the time the borrowing is made and additionally
for temporary or emergency purposes in amounts not exceeding 5% of its
total assets.

4. No Fund may pledge, mortgage or hypothecate its assets other than to
secure borrowings permitted by investment limitation 3 above
(collateral arrangements with respect to margin requirements for
options and futures transactions are not deemed to be pledges or
hypothecations for this purpose).

5. No Fund may make loans of securities to other persons in excess of 33
1/3% of a Fund's total assets; provided the Funds may invest without
limitation in short-term debt obligations (including repurchase
agreements) and publicly distributed debt obligations.

6. No Fund may underwrite securities of other issuers, except insofar as
a Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, in selling portfolio securities.

7. No Fund may purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships, except
securities issued by companies (including real estate investment
trusts) that invest in real estate or interests therein.

8. No Fund may purchase securities on margin, except for the use of
short-term credit necessary for the clearance of purchases and sales
of portfolio securities, but the Funds may make margin deposits in
connection with transactions in options, futures and options on
futures.

9. No Fund may invest in commodities or commodity futures contracts,
provided that this limitation shall not prohibit the purchase or sale
by the Fund of forward foreign currency exchange contracts, financial
futures contracts and options on financial futures contracts, foreign
currency futures contracts, and options on securities, foreign
currencies and securities indices, as permitted by the Fund's
prospectus.

NON-FUNDAMENTAL POLICIES. Additional investment restrictions adopted by
each Fund, which may be changed by the Board of Trustees, provide that a Fund
may not:

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<PAGE>

1. Invest more than 15% of its net assets (taken at market value at the
time of purchase) in securities which cannot be readily sold or
disposed of within the ordinary course of business within seven days
at approximately the value at which the Fund has valued the
investment;

2. Purchase or sell interests in oil, gas or other mineral exploration or
development plans or leases;

3. Make investments for the purpose of exercising control or management;
or

4. Invest in other investment companies except as permitted under the
1940 Act.

If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the 1940 Act (currently three days). Otherwise, a Fund may continue to hold a
security even though it causes the Fund to exceed a percentage limitation
because of fluctuation in the value of the Fund's assets.

MANAGEMENT OF THE TRUST

The management of the Trust is supervised by the Board of Trustees under
the laws of the State of Delaware. Subject to the provisions of the Declaration
of Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility.

TRUSTEES AND OFFICERS

The Trustees and executive officers of the Trust and their principal
occupations during the past five years are as set forth below. An asterisk
indicates a Trustee who may be deemed to be an "interested person" (as defined
by the 1940 Act) of the Trust.

NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------------------------- -------------------------- ---------------------------------------------------
<S> <C> <C>

Bryan W. Brown Trustee Self Employed Management Consultant (since 1992)
950 Hayman Place
Los Altos, CA 94024
DOB: 02/09/45

David G. Booth* Trustee President and Chairman-Chief Executive Officer of
1299 Ocean Avenue the following companies: Dimensional Fund Advisors
Santa Monica, CA 90401 Inc., DFA Securities Inc., DFA Australia Limited,
DOB: 12/02/46 DFA Investment Dimensions Group Inc., Dimensional
Investment Group Inc. and Dimensional Emerging
Markets Value Fund Inc.; Trustee, President and
Chairman-Chief Executive Officer of the DFA
Investment Trust Company (registered investment
company); Chairman and Director, Dimensional Fund
Advisors Ltd.

John J. Bowen, Jr.* Trustee, President Chief Executive Officer and
</TABLE>

14
<PAGE>

<TABLE>
<S> <C> <C>
1190 Saratoga Avenue, Suite 200 and Chief Executive Officer President, Assante Capital Management Inc. (holding
San Jose, CA 95120 company) (since July 1998); Chief Executive Officer,
DOB: 10/01/55 Registered Principal and President, RWB Securities
Inc. (since July 1998); Chief Executive Officer and
President, RWB Advisory Services Inc. (since July
1998); Chief Executive Officer, Registered Principal
and President, Reinhardt Werba Bowen Securities,
Inc. (December 1993 to October 1998); Chief
Executive Officer, Director and President,
Reinhardt, Werba, Bowen, Inc. (investment adviser)
(July 1980 to October 1998).

Patrick Keating* Trustee Director, Assante Corporation (financial services
Commodity Exchange Tower company) (since September 1998); President and Chief
1500-360 Main Street Ward") Executive Officer, Loring Ward (since
Winnipeg, Manitoba, Canada, R3C3Z3 Investment Counsel Ltd. ("Loring September 1998);
DOB: 12/21/54 Executive Vice President, Loring Ward (January 1996
to September 1998); Manager, Client Services, Loring
Ward (May 1995 to December 1995); General Manager,
Advance Electronics Ltd. (retail organization)
(until May 1995).

Charles M. Roame Trustee Managing Principal, The Tiburon Group (management
The Tiburon Group consulting to financial institutions) (since April
1735 Tiburon Blvd. 1998); Vice President, Charles Schwab & Co.
Tiburon, CA 94920 (discount brokerage and mutual funds) (July 1995 to
DOB: 09/17/65 April 1998); Senior Engagement Manager, McKinsey &
Co. (management consulting to financial
institutions) (February 1994 to July 1995).

Harold M. Shefrin Trustee Professor of Finance, Santa Clara University.
Leavey School of Business
Santa Clara University
Santa Clara, CA 95053
DOB: 07/27/48

Alexander B. Potts Vice President and Secretary Vice President of Advisor Services and Investment
1190 Saratoga Avenue, Suite 200 Operations, RWB Advisory Services Inc. (since
San Jose, CA 95120 October 1998); Vice President of Advisor Services
DOB: 06/14/67 and Investment Operations, Reinhardt, Werba, Bowen
Inc. (April 1990 - October 1998).

Michael R. Clinton Treasurer and Chief Financial and Treasurer and Chief Financial Officer, RWB Advisory
1190 Saratoga Avenue, Suite 200 Accounting Officer Services Inc. (since October 1998); Treasurer and
San Jose, CA 95120 Chief Financial Officer, Reinhardt, Werba, Bowen
DOB: 10/06/66 Inc. (June 1995 to October 1998); CPA, Crawford,
Pimentel & Co., Inc.
</TABLE>

15
<PAGE>

<TABLE>
<S> <C> <C>
(accounting firm) (September 1989 to June 1995).

Ronald G. Reynolds Assistant Secretary and Assistant Chief Operating Officer, RWB Advisory Services Inc.
1190 Saratoga Avenue, Suite 200 Treasurer (since July 1998); Chief Operating Officer,
San Jose, CA 95120 Reinhardt, Werba, 1998); Bowen, Inc. (January 1997
DOB: 6/20/41 to October Consultant (February 1995 to January
1997); Vice President Operations/Corporate
Secretary, Coastcom (telecommunications) (August
1994 to February 1995); Vice President Operations,
Litton Corporation (February 1967 to August 1994).

</TABLE>

COMPENSATION TABLE

For their services as trustees, the trustees who are not "interested
persons" (as defined in the 1940 Act) receive a $5,000 annual retainer fee and
$1,000 per meeting attended, as well as reimbursement for expenses incurred in
connection with attendance at such meetings. The interested trustees receive no
compensation for their services as trustees. The following table summarizes the
estimated compensation to be paid by the Trust to its trustees during the
current fiscal year. The aggregate compensation is provided for the Trust, which
is comprised of six Funds.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION FROM THE PENSION OR RETIREMENT
NAME OF TRUSTEE TRUST BENEFITS
- ------------------------------------------------------------------------------
<S> <C> <C>
Bryan W. Brown $9,000 None
David G. Booth None None
John J. Bowen, Jr. None None
Patrick Keating None None
Charles M. Roame $9,000 None
Harold M. Shefrin $9,000 None
</TABLE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of the date of this SAI, RWBAS may be deemed to control the Funds
because it is the record and beneficial owner of 100% of each class of each
Fund. As a result, RWBAS will be able to affect the outcome of matters presented
for a vote of each Fund's shareholders.

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT MANAGER AND SUB-ADVISER

The Trust, on behalf of each Fund, has entered into an Investment Advisory
and Administrative Services Agreement (the "Agreement") with the Manager, an
indirect, wholly-owned subsidiary of Assante Corporation, which is a privately
held financial services company located in Winnipeg, Canada.

The Agreement will continue in effect for a period of two years from its
effective date. If not sooner terminated, the Agreement will continue in effect
for successive one year periods thereafter, provided that its continuance is
specifically approved annually by (a) the vote of a majority of the Board of
Trustees who are not

16
<PAGE>

parties to the Agreement or interested persons (as defined in the 1940 Act),
cast in person at a meeting called for the purpose of voting on approval, and
(b) either (i) the vote of a majority of the outstanding voting securities of
the affected Fund, or (ii) the vote of a majority of the Board of Trustees. The
Agreement is terminable with respect to a Fund by vote of the Board of Trustees,
or by the holders of a majority of the outstanding voting securities of the
Fund, at any time without penalty, on 60 days' written notice to the Manager.
The Manager may also terminate its advisory relationship with respect to a Fund
without penalty on 90 days' written notice to the Trust, as applicable. The
Advisory Agreement terminates automatically in the event of its assignment (as
defined in the 1940 Act).

For the advisory services provided pursuant to the Agreement, the Manager
is entitled to a fee from each Fund computed daily and payable monthly at the
rate of .85% of the average daily net assets of each Fund.

For the administrative services provided, the Manager is entitled to a fee
from each Fund computed daily and payable monthly at the rate of .10% of the
average daily net assets of each Fund.

Dimensional is the Sub-Adviser to each Fund. Dimensional is a Delaware
corporation and is registered with the Securities and Exchange Commission as an
investment adviser. David G. Booth and Rex A. Sinquefield, directors and
officers of Dimensional and shareholders of approximately 51% of Dimensional's
outstanding stock, may be considered controlling persons of the Sub-Adviser.

The Trust has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with Dimensional. Under the terms of the Sub-Advisory Agreement,
Dimensional provides sub-advisory services to the Funds. Subject to supervision
of the Manager, Dimensional is responsible for the management of each the Fund's
portfolio, including decisions regarding purchases and sales of portfolio
securities by the Funds. Dimensional is also responsible for arranging the
execution of portfolio management decisions, including the selection of brokers
to execute trades and the negotiation of brokerage commissions in connection
therewith.

The Sub-Advisory Agreement will continue in effect with respect to a Fund
for a period of two years from its effective date. If not sooner terminated, the
Sub-Advisory Agreement will continue in effect for successive one year periods
thereafter, provided that each continuance is specifically approved annually by
(a) the vote of a majority of the Board of Trustees who are not parties to the
Sub-Advisory Agreement or interested persons (as defined in the 1940 Act), cast
in person at a meeting called for the purpose of voting on approval, and (b) the
vote of a majority of the Board of Trustees. The Sub-Advisory Agreement is
terminable by vote of the Board of Trustees, or, with respect to a Fund, by the
holders of a majority of the outstanding voting securities of that Fund, at any
time without penalty, on 60 days' written notice to Dimensional. Once the
Sub-Advisory Agreement has been in effect for a period of not less than four
years, it may be terminated by the Manager or Dimensional as to all the Funds by
giving not less than twelve month's written notice. The Sub-Advisory Agreement
terminates automatically in the event of its assignment (as defined in the 1940
Act).

For the sub-advisory services provided, Dimensional is entitled to a fee
from each Fund (except the International Small Company Fund) computed daily and
payable monthly at an annual rate based on each Fund's average daily net assets
as set forth below. Because Dimensional receives administrative fees from the
feeder funds in which the International Small Company Fund invests and
investment advisory fees from their related master funds, Dinmensional has
agreed that it will not receive a sub-advisory fee for its services to the Fund

FUND FEE
- ---- ---
<S> <C>
Fixed Income Fund .19%
U.S. Market Fund .05%
U.S. HBtM Fund .27%
U.S. Small Company Fund .38%
International HBtM Fund .38%
International Small Company Fund .00%
</TABLE>

The following individuals are affiliated persons of the Trust and of the
Manager: John J. Bowen, Jr.; Patrick Keating; Alexander B. Potts; Michael R.
Clinton and Ronald G. Reynolds. David G. Booth is an affiliated

17
<PAGE>

person of the Trust and of the Sub-Adviser. The capacities in which each such
individual is affiliated with the Trust and the Manager or Sub-Adviser is set
forth above under "Trustees and Officers."

DISTRIBUTOR

RWB Securities, Inc. (the "Distributor") and the Trust have entered into a
distribution agreement, under which the Distributor, as agent, sells shares of
each Fund on a continuous basis. The Distributor's principal offices are located
at 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129. The Distributor is an
indirect, wholly-owned subsidiary of Assante Capital Management, Inc. and is an
affiliate of RWBAS. The Distributor receives no compensation for distribution of
the Funds shares.

John J. Bowen, Jr. is an affiliated person of the Trust and of the
Distributor.

SHAREHOLDER SERVICING ARRANGEMENTS

Under a Shareholder Servicing Agreement with the Trust, the Manager
performs various services for the Funds, including establishing a toll-free
telephone number for shareholders of each Fund to use to obtain up-to-date
account information; providing to shareholders quarterly and other reports with
respect to the performance of each Fund; and providing shareholders with such
information regarding the operations and affairs of each Fund, and their
investment in its shares, as the shareholders or the Board of Trustees may
reasonably request. The Manager is paid an annual service fee at the rate of up
to 0.25% of the value of average daily net assets of the Class S shares, and an
annual service fee at the rate of up to 0.05% of the value of average daily net
assets of the Class I shares of each Fund.

ADMINISTRATION

State Street Bank and Trust Company ("State Street"), whose principal
business address is 225 Franklin Street, Boston, Massachusetts, 02110, serves as
sub-administrator for the Trust, pursuant to a sub-administration agreement (the
"Sub-Administration Agreement") with the manager and the Trust.

Under the Sub-Administration Agreement, State Street has agreed to oversee
the computation of each Fund's net asset value, net income and realized capital
gains, if any; furnish statistical and research data, clerical services, and
stationery and office supplies; prepare and file various reports with the
appropriate regulatory agencies; and prepare various materials required by the
Securities and Exchange Commission. For providing these services, State Street
receives a fee which is calculated daily and paid monthly at an annual rate
based on the average daily net assets of each Fund as follows: 0.06% on the
first $750 million of net assets, plus 0.04% for net assets between $750 million
and $1.5 billion, plus 0.02% on net assets over $1.5 billion. There is a minimum
charge of $85,000 per fund.

CUSTODIAN

State Street is the custodian of each Fund's assets pursuant to a custodian
agreement (the "Custody Contract") with the Trust. State Street is also the
custodian with respect to the custody of foreign securities held by the Funds.
Under the Custody Contract, State Street (i) holds and transfers portfolio
securities on account of each Fund, (ii) accepts receipts and makes
disbursements of money on behalf of each Fund, (iii) collects and receives all
income and other payments and distributions on account of each Fund's securities
and (iv) makes periodic reports to the Board of Trustees concerning the Funds'
operations.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

State Street serves as the transfer agent and dividend disbursing agent for
the Funds.

18
<PAGE>

COUNSEL

The law firm of Paul, Hastings, Janofsky & Walker LLP, 345 California
Street, San Francisco, California 94104, has passed upon certain legal matters
in connection with the shares offered by the Funds and serves as counsel to the
Trust.

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLC, 555 California Street, San Francisco,
California 94101, serves as the independent auditors for the Trust, providing
audit and accounting services including: examination of each Fund's annual
financial statements, assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission; and
preparation of income tax returns.

BROKERAGE ALLOCATIONS AND OTHER PRACTICES

Subject to the general supervision of the Trustees, the Sub-Adviser makes
decisions with respect to and places orders for all purchases and sales of
portfolio securities for the Funds.

Transactions on U.S. 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.

Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, the Sub-Adviser
will normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from and sold to dealers include a dealer's mark-up or mark-down.

The Sub-Adviser will place portfolio transaction with a view to receiving
the best price and execution.

Transactions may be placed with brokers who provide the Sub-Adviser with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. The
Sub-Advisory Agreement permits the Sub-Adviser to cause the Funds to pay a
broker or dealer which furnishes brokerage and research services a higher
commission than that which might be charged by another broker or dealer for
effecting the same transaction, provided that the Sub-Adviser determines in good
faith that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either the particular transaction or the overall responsibilities of
the Sub-Adviser to the Funds.

Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by the Sub-Adviser and does not
reduce the advisory fees payable to the Sub-Adviser. It is possible that certain
of the supplementary research or other services received will primarily benefit
one or more other investment companies or other accounts for which investment
discretion is exercised. Conversely, a Fund may be the primary beneficiary of
the research or services received as a result of portfolio transactions effected
for such other account or investment company.

Investment decisions for each Fund and for other investment accounts
managed by the Sub-Adviser are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as to
amount in a manner deemed equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as a Fund is concerned, in other cases it is believed to be
beneficial to a Fund. To the extent permitted by law, the Sub-Adviser may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.

19
<PAGE>

Portfolio securities will not be purchased from or sold to the Manager,
Sub-Adviser, Distributor or any affiliated person (as defined in the 1940 Act)
of the foregoing entities except to the extent permitted by Securities and
Exchange Commission exemptive order or by applicable law. A Fund will not
purchase securities during the existence of any underwriting or selling group
relating to such securities of which the Manager, Sub-Adviser or any affiliated
person (as defined in the 1940 Act) thereof is a member except pursuant to
procedures adopted by the Trust's Board of Trustees in accordance with Rule
10f-3 under the 1940 Act.

INFORMATION CONCERNING SHARES

The Trust is a Delaware business trust. Under the Declaration of Trust, the
beneficial interest in the Trust may be divided into an unlimited number of full
and fractional transferable shares. The Declaration of Trust authorizes the
Board of Trustees to classify or reclassify any unissued shares of the Trust
into one or more classes by setting or changing, in any one or more respects,
their respective designations, preferences, conversion or other rights, voting
powers, restrictions, limitations, qualifications and terms and conditions of
redemption. Currently, the Trust's Board of Trustees has authorized the issuance
of an unlimited number of shares of beneficial interest in the Trust,
representing interests in six separate series, each of which is a Fund. Each
Fund currently offers two classes of shares.

In the event of a liquidation or dissolution of the Trust, shareholders of
a particular Fund would be entitled to receive the assets available for
distribution belonging to such Fund, and a proportionate distribution, based
upon the relative net asset values of the Funds, of any general assets not
belonging to any particular Fund which are available for distribution.
Shareholders of a Fund are entitled to participate in the net distributable
assets of the particular Fund involved on liquidation, based on the number of
shares of the Fund that are held by each shareholder.

Shares of the Trust have noncumulative voting rights and, accordingly, the
holders of more than 50% of the Trusts outstanding shares (irrespective of
class) may elect all of the trustees. Shares have no preemptive rights and only
such conversion and exchange rights as the Board may grant in its discretion.
When issued for payment as described in the applicable Prospectus, shares will
be fully paid and non-assessable by the Trust.

Shareholder meetings to elect trustees will not be held unless and until
such time as required by law. At that time, the trustees then in office will
call a shareholders' meeting to elect trustees. Except as set forth above, the
trustees will continue to hold office and may appoint successor trustees.
Meetings of the shareholders, shall be called by the trustees upon the written
request of shareholders owning at least 10% of the outstanding shares entitled
to vote.

PURCHASE, REDEMPTION AND PRICING OF SHARES

PURCHASE AND REDEMPTION INFORMATION

Purchases and redemptions are discussed in the Funds' Prospectus and such
information is incorporated herein by reference.

RETIREMENT PLANS. Shares of any of the Funds may be purchased in connection
with various types of tax deferred retirement plans, including individual
retirement accounts ("IRAs"), 401(k) plans, deferred compensation for public
schools and charitable organizations (403(b) plans) and simplified employee
pension IRAs (SEP-IRAs). An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.

20
<PAGE>

IN-KIND PURCHASES. Payment for shares may, in the discretion of the
Sub-Adviser, be made in the form of securities that are permissible investments
for the Funds as described in the Prospectuses. For further information about
this form of payment please contact the Manager. In connection with an in-kind
securities payment, a Fund will require, among other things, that the securities
(a) meet the investment objectives and policies of the Funds; (b) are acquired
for investment and not for resale; (c) are liquid securities that are not
restricted as to transfer either by law or liquidity of markets; (d) have a
value that is readily ascertainable by a listing on a nationally recognized
securities exchange; and (e) are valued on the day of purchase in accordance
with the pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.

REDEMPTION IN-KIND. Redemption proceeds are normally paid in cash; however,
each Fund reserves the right to pay the redemption price in whole or part by a
distribution in kind of securities from the portfolio of the particular Fund, in
lieu of cash. Redemption in-kind will be made in conformity with applicable
rules of the Securities and Exchange Commission taking such securities at the
same value employed in determining net asset value and selecting the securities
in a manner the Board of Trustees determines to be fair and equitable. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act under which the Fund
is obligated to redeem shares for any one shareholder in cash only up to the
lesser of $250,000 or 1% of the class' net asset value during any 90-day period.
If shares are redeemed in kind, the redeeming shareholder might incur
transaction costs in converting the assets into cash.

OTHER REDEMPTION INFORMATION. The Funds reserve the right to suspend or
postpone redemptions during any period when: (i) trading on the New York Stock
Exchange (the "NYSE") is restricted by applicable rules and regulations of the
Securities and Exchange Commission; (ii) the NYSE is closed for other than
customary weekend and holiday closings; (iii) the Securities and Exchange
Commission has by order permitted such suspension or postponement for the
protection of the shareholders; or (iv) an emergency, as determined by the
Securities and Exchange Commission, exists, making disposal of portfolio
securities or valuation of net assets of a Fund not reasonably practicable.

The Funds may involuntarily redeem an investor's shares if the net asset
value of such shares is less than $10,000; provided that involuntary redemptions
will not result from fluctuations in the value of an investor's shares. A notice
of redemption, sent by first-class mail to the investor's address of record,
will fix a date not less than 60 days after the mailing date, and shares will be
redeemed at the net asset value at the close of business on that date unless
sufficient additional shares are purchased to bring the aggregate account value
up to $10,000 or more. A check for the redemption proceeds payable to the
investor will be mailed to the investor at the address of record.

TAXES

The following summarizes certain additional federal and state income tax
considerations generally affecting the Funds and their shareholders that are not
described in the Funds' Prospectuses. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. This discussion is based upon present provisions of the
Code, the regulations promulgated thereunder, and judicial and administrative
ruling authorities, all of which are subject to change, which change may be
retroactive. Prospective investors should consult their own tax advisors with
regard to the federal tax consequences of the purchase, ownership and
disposition of Fund shares, as well as the tax consequences arising under the
laws of any state, foreign country, or other taxing jurisdiction.

TAX STATUS OF THE FUNDS

Each Fund intends to elect and qualify to be taxed separately as a
regulated investment company under the Code. As a regulated investment company,
each Fund generally is exempt from federal income tax on its net investment
income and realized capital gains which it distributes to shareholders, provided
that it distributes an amount equal to the sum of (a) at least 90% of its
investment company taxable income (net investment income and

21
<PAGE>

the excess of net short-term capital gain over net long-term capital loss), if
any, for the year and (b) at least 90% of its net tax-exempt interest income, if
any, for the year (the "Distribution Requirement") and satisfies certain other
requirements of the Code that are described below. Distributions of investment
company taxable income and net tax-exempt interest income made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year will satisfy the Distribution Requirement.

In addition to satisfaction of the Distribution Requirement, each Fund must
derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement").

In addition to the foregoing requirements, at the close of each quarter of
its taxable year, at least 50% of the value of each Fund's assets must consist
of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.

If for any taxable year any Fund does not qualify as a regulated investment
company, all of its taxable income will be subject to tax at regular corporate
rates without any deduction for distributions to shareholders. In such event,
all distributions (whether or not derived from exempt-interest income) would be
taxable as ordinary income and would be eligible for the dividends received
deduction in the case of corporate shareholders to the extent of such Fund's
current and accumulated earnings and profits.

Although a Fund expects to qualify as a "regulated investment company" and
to be relieved of all or substantially all Federal income taxes, depending upon
the extent of its activities in states and localities in which its offices are
maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, a Fund may be subject to
the tax laws of such states or localities.

TAXATION OF FUND DISTRIBUTIONS

Distributions of net investment income received by a Fund from investments
in debt securities and any net realized short-term capital gains distributed by
a Fund will be taxable to shareholders as ordinary income and will not be
eligible for the dividends received deduction for corporations.

Each Fund intends to distribute to shareholders any excess of net long-term
capital gain over net short-term capital loss ("net capital gain") for each
taxable year. Such gain is distributed as a capital gain dividend and is taxable
to shareholders as gain from the sale or exchange of a capital asset held for
more than one year, regardless of the length of time a shareholder has held his
or her Fund shares and regardless of whether the distribution is paid in cash or
reinvested in shares. The Funds expect that capital gain dividends will be
taxable to shareholders as long-term gain. Capital gain dividends are not
eligible for the dividends received deduction.

In the case of corporate shareholders, distributions of a Fund for any
taxable year generally qualify for the dividends received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and if certain holding period requirements are met. Generally, a
dividend will be treated as a "qualifying dividend" if it has been received from
a domestic corporation.

Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, a Fund must distribute during each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year, (2) at least 98% of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses, as prescribed by the Code) for the
one-year period ending on October 31 of the

22
<PAGE>

calendar year, and (3) any ordinary income and capital gains for previous years
that was not distributed during those years. A distribution will be treated as
paid on December 31 of the current calendar year if it is declared by a Fund in
October, November or December with a record date in such a month and paid by a
Fund during January of the following calendar year. Such distributions will be
taxable to shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are received.
To prevent application of the excise tax, a Fund intends to make its
distributions in accordance with the calendar year distribution requirement.

Shareholders will be advised annually as to the federal income tax
consequences of distributions made by the Funds each year.

DISPOSITION OF SHARES

Upon a redemption, sale or exchange of his or her shares, a shareholder
will realize a taxable gain or loss depending upon his or her basis in the
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 or
short-term, generally, depending upon the shareholder's holding period for the
shares. Any loss realized on a redemption, sale or exchange will be disallowed
to the extent the shares disposed of are replaced (including through
reinvestment of dividends) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of Fund shares held by the shareholder for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gains received or treated as having been
received by the shareholder with respect to such shares and treated as long-term
capital gains. Furthermore, a loss realized by a shareholder on the redemption,
sale or exchange of shares of a Fund with respect to which exempt-interest
dividends have been paid will, to the extent of such exempt-interest dividends,
be disallowed if such shares have been held by the shareholder for six months or
less.

INFORMATION RELATING TO FOREIGN INVESTMENTS

Income received by a Fund from sources within foreign countries may be
subject to withholding and other foreign taxes. The payment of such taxes will
reduce the amount of dividends and distributions paid to the Funds'
shareholders. So long as a Fund qualifies as a regulated investment company,
certain distribution requirements are satisfied, and more than 50% of the value
of the Fund's assets at the close of the taxable year consists of securities of
foreign issuers, the Fund may elect, subject to limitation, to pass through its
foreign tax credits to its shareholders. The Fund may qualify for and make this
election in some, but not necessarily all, of its taxable years. If a Fund were
to make an election, an amount equal to the foreign income taxes paid by the
Fund would be included in the income of its shareholders and the shareholders
would be entitled to credit their portions of this amount against their U.S. tax
due, if any, or to deduct such portions from their U.S. taxable income, if any.
Shortly after any year for which it makes such an election, a Fund will report
to its shareholders, in writing, the amount per share of such foreign tax that
must be included in each shareholder's gross income and the amount which will be
available for deduction or credit. No deduction for foreign taxes may be claimed
by a shareholder who does not itemize deductions. Certain limitations are
imposed on the extent to which the credit (but not the deduction) for foreign
taxes may be claimed.

Shareholders who choose to utilize a credit (rather than a deduction) for
foreign taxes will be subject to limitations, including the restriction that the
credit may not exceed the shareholder's United States tax (determined without
regard to the availability of the credit) attributable to his or her total
foreign source taxable income. For this purpose, the portion of dividends and
distributions paid by the Fund from its foreign source income will be treated as
foreign source income. The Fund's gains and losses from the sale of securities
will generally be treated as derived from United States sources and certain
foreign currency gains and losses likewise will be treated as derived from
United States sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from the Fund which qualifies as foreign source income. In addition,
only a portion of the foreign tax credit will be allowed to offset any
alternative minimum tax imposed on

23
<PAGE>

corporations and individuals. Because of these limitations, shareholders may be
unable to claim a credit for the full amount of their proportionate shares of
the foreign income taxes paid by the Fund.

Certain Funds may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute passive assets, or 75% or more of its gross passive
income. If a Fund receives a so-called "excess distribution" with respect to
PFIC stock, the Fund itself may be subject to a tax on a portion of the excess
distribution, whether or not the corresponding income is distributed by the Fund
to shareholders. In general, under the PFIC rules, an excess distribution is
treated as having been realized ratably over the period during which the Fund
held the PFIC shares. Each Fund will itself be subject to tax on the portion, if
any, of an excess distribution that is so allocated to prior Fund taxable years
and an interest factor will be added to the tax, as if the tax had been payable
in such prior taxable years. Certain distributions from a PFIC as well as gain
from the sale of PFIC shares are treated as excess distributions. Excess
distributions are characterized as ordinary income even though, absent
application of the PFIC rules, certain excess distributions might have been
classified as capital gain.

The Funds may be eligible to elect alternative tax treatment with respect
to PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions were received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election would involve
marking to market the Fund's PFIC shares at the end of each taxable year, with
the result that unrealized gains would be treated as though they were realized
and reported as ordinary income. Any mark-to market losses and any loss from an
actual disposition of Fund shares would be deductible as ordinary losses to the
extent of any net mark-to-market gains included in income in prior years.

Income received by a Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries.

INFORMATION RELATING TO FUND INVESTMENTS

TAXATION OF CERTAIN FINANCIAL INSTRUMENTS. Special rules govern the Federal
income tax treatment of financial instruments that may be held by some of the
Funds. These rules may have a particular impact on the amount of income or gain
that the Funds must distribute to their respective shareholders to comply with
the Distribution Requirement and on the income or gain qualifying under the
Income Requirement.

ORIGINAL ISSUE DISCOUNT. The Funds may purchase debt securities with
original issue discount. Original issue discount represents the difference
between the original issue price of the debt instrument and the stated
redemption price at maturity. Original issue discount is required to be accreted
on a daily basis and is considered interest income for federal income tax
purposes and, therefore, such income would be subject to the distribution
requirements applicable to regulated investment companies.

MARKET DISCOUNT. The Funds may purchase debt securities at a discount in
excess of the original issue discount, or at a discount to the stated redemption
price at maturity (for debt securities without original issue discount). This
discount is called "market discount". Market discount is permitted to be
recorded daily or at time of disposition of the debt security. If market
discount is to be recognized at time of disposition of the debt security,
accrued market discount is recognized to the extent of gain on the disposition
of the debt security.

HEDGING TRANSACTIONS. The taxation of equity options and over-the-counter
options on debt securities is governed by Code section 1234. Pursuant to Code
section 1234, the premium received by a Fund for selling a put or call option is
not included in income at the time of receipt. If the option expires, the
premium is short-term capital gain to the Fund. If the Fund enters into a
closing transaction, the difference between the amount paid to close out its
position and the premium received is short-term capital gain or loss. If a call
option written by a Fund is exercised, thereby requiring the Fund to sell the
underlying security, the premium will increase the amount realized upon the sale
of such security and any resulting gain or loss will be a capital gain or loss,
and will be long-

24
<PAGE>

term or short-term depending upon the holding period of the security. With
respect to a put or call option that is purchased by a Fund, if the option is
sold, any resulting gain or loss will be a capital gain or loss, and will be
long-term or short-term, depending upon the holding period of the option. If the
option expires, the resulting loss is a capital loss and is long-term or
short-term, depending upon the holding period of the option. If the option is
exercised, the cost of the option, in the case of a call option, is added to the
basis of the purchased security and, in the case of a put option, reduces the
amount realized on the underlying security in determining gain or loss.

Any regulated futures and foreign currency contracts and certain options
(namely, nonequity options and dealer equity options) in which a Fund may invest
may be "section 1256 contracts." Gains or losses on section 1256 contracts are
generally considered 60% long-term and 40% short-term capital gains or losses;
however, foreign currency gains or losses arising from certain section 1256
contracts may be treated as ordinary income or loss. Also, section, 1256
contracts held by a Fund at the end of each taxable year (and generally for
purposes of the 4% excise tax, on October 31 of each year) are
"marked-to-market" with the result that unrealized gains or losses are treated
as though they were realized.

Generally, hedging transactions, if any, undertaken by a Fund may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by the Funds. In addition, losses
realized by a Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which such losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences of hedging transactions to the Funds are not
entirely clear. The hedging transactions may increase the amount of short-term
capital gain realized by the Funds which is taxed as ordinary income when
distributed to shareholders.

The Funds may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.

Because application of the straddle rules may affect the character of gains
or losses, defer losses and/or accelerate the recognition of gains or losses
from the affected straddle positions, the amount which must be distributed to
shareholders, and which will be taxed to shareholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a fund that did not engage in such hedging transactions.

The diversification requirements applicable to the Funds' assets may limit
the extent to which the Funds will be able to engage in transactions in options,
futures or forward contracts.

CONSTRUCTIVE SALES. Recently enacted rules may affect the timing and
character of gain if a Fund engages in transactions that reduce or eliminate its
risk of loss with respect to appreciated financial positions. If the Fund enters
into certain transactions in property while holding substantially identical
property, the Fund would be treated as if it had sold and immediately
repurchased the property and would be taxed on any gain (but not loss) from the
constructive sale. The character of gain from a constructive sale would depend
upon the Fund's holding period in the property. Loss from a constructive sale
would be recognized when the property was subsequently disposed of, and its
character would depend on the Fund's holding period and the application of
various loss deferral provisions of the Code.

CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time a Fund accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities generally are treated as ordinary income and loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain futures, forward contracts and options, gains or
losses attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security or contract and the date of disposition
also may be treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988"

25
<PAGE>

gains or losses, may increase or decrease the amount of a Fund's investment
company taxable income to be distributed to its shareholders as ordinary income.

BACKUP WITHHOLDING

The Trust will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable distributions, including gross proceeds
realized upon sale or other dispositions paid to any shareholder (i) who has
provided an incorrect tax identification number or no number at all, (ii) who is
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of taxable interest or dividend income properly, or (iii) who
has failed to certify that he is not subject to backup withholding or that he is
an "exempt recipient."

OTHER TAXATION

The foregoing discussion relates only to U.S. federal income tax law and
certain state taxes as applicable to U.S. persons (i.e., U.S. citizens and
residents and domestic corporations, partnerships, trusts and estates).
Distributions by the Funds, and dispositions of Fund shares also may be subject
to other state and local taxes, and their treatment under state and local income
tax laws may differ from the U.S. federal income tax treatment. Shareholders
should consult their tax advisers with respect to particular questions of U.S.
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisers regarding U.S. and foreign tax consequences of
ownership of shares of the Fund, including the likelihood that distributions to
them would be subject to withholding of U.S. federal income tax at a rate of 30%
(or at a lower rate under a tax treaty). Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.

PERFORMANCE INFORMATION

The 30-day (or one month) standard yield is calculated for the Fixed Income
Fund in accordance with the method prescribed by the SEC for mutual funds:

6
YIELD = 2 [( a-b + 1) - 1]
---
cd

Where:
a=dividends and interest earned by the Fund during the period;
b=expenses accrued for the period (net of reimbursements and waivers);
c=average daily number of shares outstanding during the period entitled
to receive dividends;
d=maximum offering price per share on the last day of the period.

For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by the Fund, dividend
income is recognized by accruing 1/360 of the stated dividend rate of the
security for each day that the security is held by the Fund.

Interest earned on tax-exempt obligations that are issued without original
issue discount and have a current market discount is calculated by using the
coupon rate of interest instead of the yield to maturity. In the case of
tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt

26
<PAGE>

obligations that are issued with original issue discount but which have the
discounts based on current market value that are less than the then-remaining
portion of the original issue discount (market premium), the yield to maturity
is based on the market value.

With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula).

TOTAL RETURN

Each Fund that advertises its "average annual total return" computes such
return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:

n
P (1 + T) = ERV

Where:
T = average annual total return

ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year (or other) periods at the end of
the applicable period (or a fractional portion thereof)

P = hypothetical initial payment of $1,000

n = period covered by the computation, expressed in years.

Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment.

The calculations are made assuming that (1) all dividends and capital gain
distributions are reinvested on the reinvestment dates at the price per share
existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value is determined by assuming
complete redemption of the hypothetical investment after deduction of all
non-recurring charges at the end of the measuring period.

The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.

From time to time, the performance of a Fund may be compared in
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of a Fund may also be
compared in publications to averages, performance rankings, or other information
prepared by recognized mutual fund statistical services.

FINANCIAL STATEMENTS

The Financial Statements for the Trust at July 7, 1999 including the notes
thereto and the report of PricewaterhouseCoopers LLP thereon are contained in
this SAI on the following pages.

27
<PAGE>
SA Funds - Investment Trust

Statements of Assets and Liabilities

July 7, 1999

SA SA SA SA SA SA
Fixed U.S. U.S. U.S. Inter- Inter-
Income Market HBtM Small national national
Fund Fund Fund Company HBtM Small
------- ------- ------- Fund Fund Company
------- ------- Fund
--------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash $50,000 $10,000 $10,000 $10,000 $10,000 $10,000
Reimbursement due from Manager 18,276 18,276 18,276 18,275 18,275 18,275
------- ------- ------ ------- ------- -------
Total Assets 68,276 28,276 28,276 28,275 28,275 28,275
------- ------- ------ ------- ------- -------

LIABILITIES
Payable to Manager for
organizational expenses 18,276 18,276 18,276 18,275 18,275 18,275

Total Liabilities 18,276 18,276 18,276 18,275 18,275 18,275
------- ------- ------ ------- ------- -------
TOTAL NET ASSETS $50,000 $10,000 $10,000 $10,000 $10,000 $10,000
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

NET ASSETS CONSIST OF:
Paid in capital $50,000 $10,000 $10,000 $10,000 $10,000 $10,000
TOTAL NET ASSETS $50,000 $10,000 $10,000 $10,000 $10,000 $10,000
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

CLASS I:

Net Assets $25,000 $5,000 $5,000 $5,000 $5,000 $5,000
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

Shares of beneficial interest
outstanding, with a par value of $.01 2,500 500 500 500 500 500
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

Net asset value per share $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

CLASS S:
Net Assets $25,000 $5,000 $5,000 $5,000 $5,000 $5,000
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

Shares of beneficial interest
outstanding, with a par value of $.01 2,500 500 500 500 500 500
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------

Net asset value per share $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
------- ------- ------ ------- ------- -------
------- ------- ------ ------- ------- -------
</TABLE>

See accompanying notes.

<PAGE>

SA Funds - Investment Trust

Statements of Operations

July 7, 1999

INVESTMENT INCOME $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
------- ------- ------ ------- ------- -------

EXPENSES
Organizational expenses 18,276 18,276 18,276 18,275 18,275 18,275
------- ------- ------ ------- ------- -------

Total Expenses before
Reimbursement 18,276 18,276 18,276 18,275 18,275 18,275
------- ------- ------ ------- ------- -------

Reimbursement from Manager (18,276) (18,276) (18,276) (18,275) (18,275) (18,275)
------- ------- ------ ------- ------- -------
NET EXPENSES 0 0 0 0 0 0
------- ------- ------ ------- ------- -------
NET INVESTMENT INCOME $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
------- ------- ------ ------- ------- -------

</TABLE>

See accompanying notes.

<PAGE>

SA Funds - Investment Trust

Notes to Statements of Assets and Liabilities and Statements of Operations

July 7, 1999

1. ORGANIZATION

SA Funds - Investment Trust (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust consists of six series of shares, each
having distinct investment objectives and policies: SA Fixed Income Fund,
SA U.S. Market Fund, SA U.S. HBtM Fund, SA U.S. Small Company Fund, SA
International HBtM Fund and SA International Small Company Fund, each of
which is a diversified fund (individually, a "Fund", collectively, the
"Funds"). The Trust currently offers two classes of shares - Class I and
Class S. Each class has its own expense structure, including different
shareholder servicing fees and operating expenses. Both classes are
offered without a sales charge.

The Trust was organized as a Delaware business trust on June 16, 1998,
under the name RWB Funds - Investment Trust, which was changed on June 7,
1999 to SA Funds - Investment Trust. Prior to July 7, 1999, the Trust had
no operations other than its organization. On July 7, 1999, the SA Fixed
Income Fund issued 2,500 Class I shares and 2,500 Class S shares, and each
of the SA U. S. Market Fund, the SA U.S HBtM Fund, the SA U.S. Small
Company Fund, the SA International HBtM Fund and the SA International Small
Company Fund issued 500 Class I shares and 500 Class S shares at net asset
value (the "Initial Shares") to RWB Advisory Services Inc.

2. SIGNIFICANT ACCOUNTING POLICY

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.

FEDERAL INCOME TAX -
The Fund's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute all of its taxable income to its stockholders. Therefore, no
Federal income tax provision is required.

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES

The Trust has an Investment Advisory and Administrative Service Agreement
with RWB Advisory Services Inc. (the "Manager"), an indirect, wholly-owned
subsidiary of Assante Corporation which is a privately held financial
service company located in Winnipeg, Canada, under which the Manager
manages the investments of and provides administrative services to each
Fund. For the advisory services provided, the Manager is entitled to a fee
from each Fund computed daily and payable monthly at the rate of 0.85% of
the average daily net assets of each Fund. For the administrative services
provided, the Manager is entitled to a fee from each Fund

<PAGE>

computed daily and payable monthly at the rate of 0.10% of the average
daily net assets of each Fund.

SA Funds - Investment Trust

Notes to Statements of Assets and Liabilities and Statements of Operations

July 7, 1999

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES (CONTINUED)

The Trust has a Shareholder Servicing Agreement with the Manager. For the
shareholder services provided, the Manager is paid an annual service fee at
the rate of up to 0.25% of the value of average daily net assets of the
Class S shares, and an annual service fee at the rate of up to 0.05% of the
value of average daily net assets of Class I shares of each Fund.

The Manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit each Fund's total
operating expenses to the amounts shown in the table below. This agreement
will remain in effect until July 7, 2009.

FUND CLASS I CLASS S
---- ------- -------
<S> <C> <C>
Fixed Income Fund 1.00% 1.26%
U.S. Market Fund 1.08% 1.34%
U.S. HBtM Fund 1.13% 1.39%
U.S. Small Company Fund 1.28% 1.54%
International HBtM Fund 1.53% 1.79%
International Small Company Fund 1.28% 1.54%
</TABLE>

The manager may elect to recapture any amounts waived or reimbursed subject
to the following conditions: (1) the manager must request reimbursement
within three years from the year in which the waiver/reimbursement is made,
(2) the Board of Trustees must approve the reimbursement and (3) the Fund
must be able to make the reimbursement and still stay within the operating
expense limitations. As of July 7, 1999, the following amounts are subject
to this recapture through July 7, 2002.

FUND
----
<S> <C>
Fixed Income Fund $18,276
U.S. Market Fund $18,276
U.S. HBtM Fund $18,276
U.S. Small Company Fund $18,275
International HBtM Fund $18,275
International Small Company Fund $18,275
</TABLE>

The Trust has entered into Sub-Advisory Agreement with Dimensional Fund
Advisors Inc. ("Dimensional"). For the sub-advisory services provided,
Dimensional is entitled to a fee from each Fund (other than the
International Small Company Fund) computed daily and payable monthly at an
annual rate based on each Fund's average daily net assets as set forth
below. The International Small Company Fund will not pay a fee to
Dimensional for its sub-advisory services. Dimensional, however, receives
administration fees from the feeder funds in which the International Small
Company Fund invests and also receives advisory fees for providing advisory
services to the corresponding master funds.

<PAGE>

SA Funds - Investment Trust

Notes to Statements of Assets and Liabilities and Statements of Operations

July 7, 1999

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES (CONTINUED)

FUND SUB-ADVISORY FEE
---- ----------------
<S> <C>
Fixed Income Fund .19%
U.S. Market Fund .05%
U.S. HBtM Fund .27%
U.S. Small Company Fund .38%
International HBtM Fund .38%
</TABLE>

4. ORGANIZATION EXPENSES

Costs and expenses of the Trust paid by the Manager in connection with the
organization of the Trust and the initial public offering of its shares
were immediately expensed by each Fund.