TRUST FOR INVESTMENT MANAGERS, 497, 2000-06-01

TRUST FOR INVESTMENT MANAGERS
497, 2000-06-01

Previous: TRUEVISION INTERNATIONAL INC, 8-A12B/A, 2000-06-01

Next: LUNA MEDICAL TECHNOLOGIES INC, POS AM, 2000-06-01

<PAGE>

[LOGO] ASTROP
ADVISORY CORPORATION

--------------------------------------------------------------------------------
ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------

PROSPECTUS

THE ASTROP FIRST INTERNET FUND SEEKS LONG-TERM GROWTH OF CAPITAL.
THE FUND WILL PURSUE THIS OBJECTIVE BY INVESTING PRIMARILY IN THE COMMON
STOCKS OF COMPANIES PRINCIPALLY ENGAGED IN THE INTERNET SECTOR.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

--------------------------------------------------------------------------------
May 3, 2000
<PAGE>

TABLE OF CONTENTS

Risk Return Summary ................................................. 2

Performance Information ............................................. 7

Fees and Expenses ................................................... 7

Investment Advisor .................................................. 8

Shareholder Information ............................................. 9

Pricing of Fund Shares .............................................. 12

Dividends and Distributions ......................................... 13

Tax Consequences .................................................... 13

Rule 12b-1 Fees ..................................................... 13

1
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
RISK RETURN SUMMARY
--------------------------------------------------------------------------------

WHAT IS THE FUND'S INVESTMENT GOAL?

The Fund seeks long-term growth of capital.

Of course, there can be no guarantee that the Fund will achieve its investment
objective. This investment objective may be changed only by approval of the
Fund's shareholders. You will be notified of any other changes that are material
and, if such changes are made, you should consider whether the Fund remains an
appropriate investment for you.

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The Fund primarily invests, under normal circumstances, at least 65% of its
total assets in the common stocks of companies that are principally engaged in
the Internet industry sector. A company is engaged in the Internet industry
sector if at least 50% of its assets, gross income, or net profits are committed
to or derived from, the research, design, development, manufacture, or
distribution of products, processes or services for use with the Internet. The
Internet is a global matrix of computers and computer networks connected by a
high-speed infra-structure, which allows users to communicate quickly and easily
with each other.

There is no limit on the market capitalization of the companies the Fund may
invest in, or in the length of operating history for the companies although the
Fund will significantly invest in companies that are more "seasoned" than other
Internet companies. A seasoned company generally displays one or more of the
following characteristics: it has a major or dominant share of its sub-group
(see below); it has a proven product that gives it a competitive edge over other
companies in its sub-group; it has a superior management team; or it has
reported positive earnings in its most recent fiscal year.

Although it may choose to do so, the Fund will typically not invest in what it
considers an "unseasoned" company. An unseasoned company generally displays one
or more of the following characteristics: it faces heavy competition by other
companies in its sub-group (see below); it has an

2
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
RISK RETURN SUMMARY, Continued
--------------------------------------------------------------------------------

untested product or business model; it has problems managing growth or
attracting superior management talent and personnel; or it has little prospect
of reporting positive earnings. The Fund will invest in an unseasoned company
only if, although it displays a characteristic of an unseasoned company, it also
displays a characteristic of a more seasoned company (I.E., it has heavy
competition in its sub-group but it also has a superior management team and a
superior product).

The Advisor has initially identified four sub-groups that it considers to
operate within the Internet industry sector. These groups include, but are not
limited to:

- Service providers

- E-commerce merchants

- Equipment/network manufacturers; and

- Software developers/manufacturers.

The Advisor may choose to reclassify or invest in companies that are in other
sub-groups as the market changes and the Internet industry sector evolves.

The Advisor will select a "core" position of 30 to 50 common stocks of seasoned
companies. In addition to viewing the above characteristics, the Advisor will
view other information including, but not limited to, company press releases,
government filings and financial reports.

The Advisor will consider selling a stock in the Fund's portfolio when it
perceives there has been an adverse change in the fundamental outlook for the
stock's performance. An example of this would be if the company's product line
has become outdated and a competitor has introduced more advanced technology.
Unlike other mutual funds that invest in Internet companies, the Advisor intends
to hold the stocks in the Fund's portfolio for an extended period of time, which
would result in a low portfolio turnover rate. This means that the Advisor will
not,

3
<PAGE>

under normal circumstances, purchase and sell securities held in the portfolio
in order to realize short-term gains. It also means that the Fund may have lower
transaction costs than funds with higher portfolio turnover rates.

The Fund may invest a limited amount of its total assets in initial public
offerings ("IPOs"). As the assets in the Fund grow, investing in IPOs will
generally make less of a positive impact on the Fund's performance.

Under normal market conditions, the Fund will stay fully invested in common
stocks. However, the Fund may temporarily depart from its principal investment
strategies by making short-term investments in cash equivalents in response to
adverse market, economic, or political conditions. This may result in the Fund
not achieving its investment objective.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

As with all mutual funds, there is the risk that you could lose money on your
investment in the Fund. For example, the following risks could affect the value
of your investment:

MANAGEMENT RISK. Management risk means that your investment in the Fund varies
with the success and failure of the Advisor's investment strategies and the
Advisor's research, analysis and security selection decisions. If the Advisor's
investment strategies do not produce the expected results, your investment could
be diminished or even lost.

MARKET RISK. The value of a share of the Fund - its "net asset value" or "NAV"
depends upon the market value of all of the Fund's investments. The principal
risk of investing in the Fund is that the market value of securities held by the
Fund will move up and down. These up and down fluctuations, which can occur
rapidly and unpredictably, may cause the Fund's investments to be worth less
than the price originally paid, or less than it was worth at an earlier time;
this in turn will affect the Fund's net asset value per share.

4
<PAGE>

Market risk may affect a single company, industry, sector of the economy or the
market as a whole.

INTERNET SECTOR RISK. The Fund will invest primarily in companies engaged in
providing services and facilitating the growth of the Internet. These companies
are particularly vulnerable to rapidly changing technology, and relatively high
risks of obsolescence caused by rapid and significant scientific and
technological advances. In addition, companies that operate in this sector are
subject to extreme competition and may rapidly lose, or be unable to obtain,
market share. The value of the Fund's shares may be volatile and fluctuate more
than shares of a fund investing in a broader range of industries.

SMALL-SIZE COMPANY RISK. Although the Fund will invest in companies of all
sizes, the Internet sector includes many small companies. While smaller
companies generally have potential for rapid growth, they often involve higher
risks because they lack the management experience, financial resources, product
diversification and competitive strengths of larger corporations. The risk of
investing in securities of small-size companies may involve greater risk than
investing in larger companies because they can be subject to more abrupt or
erratic share price change than larger companies. As a result, the share price
of these companies can be extremely volatile.

NON-DIVERSIFICATION RISK. The Fund is non-diversified under the Investment
Company Act of 1940 (the "1940 Act"), which means that there is no restriction
under the 1940 Act on how much the Fund may invest in the securities of any one
issuer. This means that the value of the Fund's shares may be volatile and
fluctuate more than shares of a fund that invests in a broader range of issuers
because the Fund is tied more closely to the adverse economic, political or
regulatory developments affecting that issuer.

INTERNET CONCENTRATION RISK. The Fund may invest more than 25%, and expects to
invest at least 65%, of

5
<PAGE>

its assets in what may be considered a single industry sector - the Internet
industry sector. Accordingly, the Fund may be more susceptible to the effects of
adverse economic, political or regulatory developments affecting the Internet
industry sector than funds that invest in a broader range of industries.

INITIAL PUBLIC OFFERINGS (IPOS). The Fund intends to invest only a limited
amount of its total assets in IPOs. Investing in IPOs involves a greater degree
of risk than the offerings of more seasoned companies because companies involved
in IPOs generally have limited operating histories and their future prospect for
profitability is uncertain. Because IPO shares also are frequently more volatile
in price, the Fund may decide to hold the IPO shares for only a very short
period of time. This may increase the turnover of the Fund's portfolio and may
lead to increased expenses to the Fund, such as commissions and transaction
costs. By selling shares, the Fund may realize taxable capital gains that it
will subsequently distribute to shareholders. Also, over time, as the assets in
the Fund increase, the importance of investments in IPOs may lessen overtime.

WHO MAY WANT TO INVEST IN THE FUND?

The Fund may be appropriate for investors who:

- Are pursuing a long-term investment horizon

- Can accept high volatility of share price

- Want to add an investment in Internet companies to diversify their investment
portfolio

- Can accept the greater risks of investing in a portfolio with significant
holdings in the Internet industry sector

The Fund may not be appropriate for investors who:

- Need regular income or stability of principal

- Are pursuing a short-term goal

- May not want an investment in a portfolio that concentrates its investments in
the Internet industry sector

6
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------

Because the Fund has been in operation for less than a full calendar year, its
total return bar chart and performance table have not been included.

--------------------------------------------------------------------------------
FEES AND EXPENSES
--------------------------------------------------------------------------------

The following tables describe the fees and expenses that a shareholder in the
Fund will pay.

<TABLE>
<CAPTION>
SHAREHOLDER FEES
(Fees paid directly from your investment)
<S> <C>
Maximum sales charge (load) imposed
on purchases ................................... None
Maximum deferred sales charge (load) ............ None

ANNUAL OPERATING EXPENSES
(Expenses that are deducted from Fund assets)

Management Fees ................................. 0.95%
Distribution and Service (12b-1) Fees ........... 0.25%
Other Expenses* ................................. 3.00%
-----

Total Annual Fund Operating Expenses ............ 4.20%
Fee Reduction and/or Expense Reimbursement ...... (1.70)%
Net Expenses .................................... 2.50%
=====
</TABLE>

* Other expenses are estimated for the first fiscal year of the Fund. The
Advisor has contractually agreed to reduce its fees and/or pay expenses of the
Fund for an indefinite period, but not less than one year, to ensure that
Total Annual Fund Operating Expenses will not exceed 2.50% per year. The
Advisor may be reimbursed for any waiver of its fees or expenses paid on
behalf of the Fund if the Fund's expenses are less than the limit agreed to by
the Fund. The Trustees may terminate this expense reimbursement arrangement at
any time.

7
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
FEES AND EXPENSES, Continued
--------------------------------------------------------------------------------

EXAMPLE
Use this Example to compare the costs of investing in the Fund to those of
investing in other funds. Of course, your actual costs may be higher or lower.

This Example assumes that you invest $10,000 in the Fund for the time periods
indicated. The Example also assumes that your investment has a 5% return each
year, that dividends and distributions are reinvested and that the Fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, under the assumptions, your costs would be:
<TABLE>
<S> <C>
One Year ............................... $252
Three Years ............................ $776
</TABLE>

--------------------------------------------------------------------------------
INVESTMENT ADVISOR
--------------------------------------------------------------------------------

Astrop Research Corporation is the investment advisor to the Fund. The
Advisor's address is 3133 Maple Drive, N.E., Suite 200, Atlanta, GA 30305. The
Advisor was established this year by the principals of its affiliate, Astrop
Advisory Corporation, for the purpose of managing the Fund. Founded in 1982,
Astrop Advisory Corporation, provides investment advisory services to individual
and institutional clients with assets under management in excess of $100
million. The Advisor provides the Fund with advice on buying and selling
securities. The Advisor also furnishes the Fund with office space and certain
administrative services and provides most of the personnel needed by the Fund.
For its services, the Fund pays the Advisor a monthly management fee which is
calculated at the annual rate of 0.95% of the Fund's average daily net assets.

The Advisor's Investment Committee manages the Fund. Although the members of
the Investment Committee have substantial experience in investing client assets
in registered investment companies (mutual funds), they do not have previous
experience in managing a mutual fund. Also, it is possible that a client may
choose to have the Advisor invest assets that are not necessarily invested in
the Fund. To the extent that is the case, the client may be charged an
investment advisory fee with respect to its overall assets, in addition to the
fees charged by the Fund.

EXPENSE LIMITATION AGREEMENT
The Fund is responsible for its own operating expenses. The Advisor has
contractually agreed to reduce its fees and/or pay expenses of the Fund for an
indefinite period to ensure that Total Fund Operating Expenses will not exceed
2.50% of average daily net assets annually. Any reduction in advisory fees or
payment of expenses made by the Advisor are subject to reimbursement by the Fund
if requested by the Advisor in subsequent fiscal years. The Fund must pay its
current ordinary operating expenses before the Advisor is entitled to any
reimbursement of fees

8
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
INVESTMENT ADVISOR, Continued
--------------------------------------------------------------------------------

and/or expenses. Under the expense limitation provision of the Investment
Advisory Agreement, reimbursements made by the Advisor in the Fund's first three
years of operation remain eligible for reimbursement as follows: reimbursements
incurred in the first and second years of the Fund's operation are eligible for
reimbursement through the end of the Fund's sixth fiscal year; reimbursements
made in the third year of operation are eligible for reimbursement through the
end of the seventh fiscal year. Before the Advisor may receive any such
reimbursement, the Trustees must review and approve it. The Trustees may
terminate this expense reimbursement arrangement at any time.

--------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------

HOW TO BUY SHARES
You may open a Fund account with $2,500 and add to your account at any time
with $100 or more. You may open a retirement account with $250 and add to your
account at any time with $50 or more. When you open a Fund account, you may also
set the account up to make automatic subsequent monthly investments via an
Automatic Investment Plan. The minimum investment requirements may be waived
from time to time by the Fund.

You may purchase shares of the Fund by check or wire. All purchases by check
must be in U.S. dollars. Third party checks and cash will not be accepted. A
charge may be imposed if your check does not clear. The Fund is not required to
issue share certificates. The Fund reserves the right to reject any purchase in
whole or in part.

BY CHECK
If you are making an initial investment in the Fund, simply complete the
Application Form included with this Prospectus and mail or overnight deliver
(such as FedEx) it with a check (made payable to "Astrop First Internet Fund")
to:

Astrop First Internet Fund
c/o ICA Fund Services Corp.
4455 East Camelback Rd., Ste 261E
Phoenix, AZ 85018

If you are making a subsequent purchase, a stub is attached to the account
statement you will receive after each transaction. Detach the stub from the
statement and mail it together with a check made payable to "Astrop First
Internet Fund" to the Fund in the envelope provided with your statement or to
the address noted above. Your account number should be written on the check.

BY WIRE
If you are making your first investment in the Fund, before you wire funds,
the Transfer Agent must have a completed Account Application. You can mail or
over-night deliver your Account Application to the Transfer Agent at the above
address.

9
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
SHAREHOLDER INFORMATION, Continued
--------------------------------------------------------------------------------

You may also fax the Account Application to the Transfer Agent at
1-602-522-8172. Upon receipt of your completed Account Application, the Transfer
Agent will establish an account for you. Once you have faxed your new account
application, you may instruct your bank to send the wire. Your bank must include
both the name of the Fund you are purchasing and your name so that monies can be
correctly applied. Your bank should transmit immediately available funds by wire
to:

Firstar Bank, N.A. Cinti/Trust
ABA Routing #0420-0001-3
Astrop First Internet Fund
DDA #821638137
Account name (shareholder name)
Shareholder account number

If you are making a subsequent purchase, your bank should wire funds as
indicated above. IT IS ESSENTIAL THAT YOUR BANK INCLUDE COMPLETE INFORMATION
ABOUT YOUR ACCOUNT IN ALL WIRE INSTRUCTIONS. If you have questions about how to
invest by wire, you may call the Transfer Agent at (800) 576- 8229. Your bank
may charge you a fee for sending a wire to the Fund.

You may buy and sell shares of the Fund through certain brokers (and their
agents) that have made arrangements with the Fund to sell its shares. When you
place your order with such a broker or its authorized agent, your order is
treated as if you had placed it directly with the Fund's Transfer Agent, and you
will pay or receive the next price calculated by the Fund. The broker (or agent)
holds your shares in an omnibus account in the broker's (or agent's) name, and
the broker (or agent) maintains your individual ownership records. The Fund may
pay the broker (or its agent) for maintaining these records as well as providing
other shareholder services. The broker (or its agent) may charge you a fee for
handling your order. The broker (or agent) is responsible for processing your
order correctly and promptly, keeping you advised regarding the status of your
individual account, confirming your transactions and ensuring that you receive
copies of the Fund's prospectus.

AUTOMATIC INVESTMENT PLAN
For your convenience, the Fund offers an Automatic Investment Plan. Under this
Plan, after your initial investment, you authorize the Fund to withdraw from
your personal checking account each month an amount that you wish to invest,
which must be at least $100, or $50 for a retirement account. If you wish to
enroll in this Plan, complete the appropriate section in the Account
Application. The Fund may terminate or modify this privilege at any time. You
may terminate your participation in the Plan at any time by notifying the
Transfer Agent in writing.

10
<PAGE>

RETIREMENT PLANS
The Fund offers an Individual Retirement Account ("IRA") plan. You may obtain
information about opening an IRA account by calling (800) 576-8229. If you wish
to open a Keogh, Section 403(b) or other retirement plan, please contact your
securities dealer.

HOW TO SELL SHARES
You may sell (redeem) your Fund shares on any day the New York Stock Exchange
("NYSE") is open for business either directly to the Fund or through your
investment representative.

You may redeem your shares by simply sending a written request to the Transfer
Agent. You should give your account number and state whether you want all or
some of your shares redeemed. The letter should be signed by all of the
shareholders whose names appear on the account registration. Certain redemptions
require a signature guarantee. Call the Transfer Agent for details. You should
send your redemption request to:

Astrop First Internet Fund
c/o ICA Fund Services Corp.
4455 East Camelback Rd., Ste 261E
Phoenix, AZ 85018

If you complete the Redemption by Telephone portion of the Account
Application, you may redeem all or some of your shares by calling the Transfer
Agent at (800) 576-8229 before the close of regular trading on the NYSE. This is
normally 4:00 p.m., Eastern time. Redemption proceeds will be mailed on the next
business day to the address that appears on the Transfer Agent's records. If you
request, redemption proceeds will be wired on the next business day to the bank
account you designated on the Account Application. The minimum amount that may
be wired is $1,000. Wire charges, if any, will be deducted from your redemption
proceeds. Telephone redemptions cannot be made if you notify the Transfer Agent
of a change of address within 30 days before the redemption request. If you have
a retirement account, you may not redeem shares by telephone.

When you establish telephone privileges, you are authorizing the Fund and its
Transfer Agent to act upon the telephone instructions of the person or persons
you have designated on your Account Application. Redemption proceeds will be
transferred to the bank account you have designated on your Account Application.

Before acting upon an instruction received by telephone, the Fund and the
Transfer Agent will use procedures to confirm that the telephone instructions
are genuine. These procedures may include recording the telephone call and
asking the caller for a form of personal identification. If the Fund and the
Transfer Agent follow these procedures, they will not be liable for any loss,
expense, or cost arising out

<PAGE>

of any telephone redemption request that is reasonably believed to be genuine.
This includes any fraudulent or unauthorized request. The Fund may change,
modify or terminate these privileges at any time upon at least 60 days' notice
to shareholders.

You may request telephone redemption privileges after your account is opened
by calling the Transfer Agent at (800) 576-8229 for instructions.

You may have difficulties in making a telephone redemption during periods of
abnormal market activity. If this occurs, you may make your redemption request
in writing.

Payment of your redemption proceeds will be made promptly, but not later than
seven days after the receipt of your written request in proper form. For
example, your redemption may be delayed if you do not sign your written request.
If you made your initial investment by wire, payment of your redemption proceeds
for those shares will not be made until one business day after your completed
Account Application is received by the Fund. If you did not purchase your shares
with a certified check or wire, the Fund may delay payment of your redemption
proceeds for up to 15 days from date of purchase or until your check has
cleared, whichever occurs first.

The Fund may redeem the shares in your account if the value of your account is
less than $1,000 as a result of redemptions you have made. This does not apply
to retirement plan or Uniform Gifts or Transfers to Minors Act accounts. You
will be notified that the value of your account is less than $1,000 before the
Fund makes an involuntary redemption. You will then have 30 days in which to
make an additional investment to bring the value of your account to at least
$1,000 before the Fund takes any action.

The Fund has the right to pay redemption proceeds to you in whole or in part
by a distribution of securities from the Fund's portfolio. It is not expected
that the Fund would do so except in unusual circumstances.

--------------------------------------------------------------------------------
PRICING OF FUND SHARES
--------------------------------------------------------------------------------

The price of the Fund's shares is based on the Fund's net asset value. This is
done by dividing the Fund's assets, minus its liabilities, by the number of
shares outstanding. The Fund's assets are the market value of securities held in
its portfolio, plus any cash and other assets. The Fund's liabilities are fees
and expenses owed by the Fund. The number of Fund shares outstanding is the
amount of shares which have been issued to shareholders. The price you will pay
to buy Fund shares or the amount you will receive when you sell your Fund shares
is based on the net asset value next calculated after your order is received by
the Transfer Agent with complete information and meeting all the requirements
discussed in this Prospectus.

12
<PAGE>

ASTROP FIRST INTERNET FUND
--------------------------------------------------------------------------------
PRICING OF FUND SHARES, Continued
--------------------------------------------------------------------------------

The net asset value of the Fund's shares is determined as of the close of the
regular daily trading session on the NYSE. This is normally 4:00 p.m., Eastern
time. Fund shares will not be priced on days that the NYSE is closed for trading
(including certain U.S. holidays).

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
--------------------------------------------------------------------------------

The Fund will make distributions of dividends and capital gains, if any, at
least annually, typically after year end. The Fund will make another
distribution of any additional undistributed capital gains earned during the
12-month period ended October 31 on or about December 31.

All distributions will be reinvested in Fund shares unless you choose one of
the following options: (1) receive dividends in cash while reinvesting capital
gain distributions in additional Fund shares; or (2) receive all distributions
in cash. If you wish to change your distribution option, write to the Transfer
Agent in advance of the payment for the distribution.

--------------------------------------------------------------------------------
TAX CONSEQUENCES
--------------------------------------------------------------------------------

The Fund intends to make distributions of dividends and capital gains.
Dividends are taxable to you as ordinary income. The rate you pay on capital
gain distributions will depend on how long the Fund held the securities that
generated the gains, not on how long you owned your Fund shares. You will be
taxed in the same manner whether you receive your dividends and capital gain
distributions in cash or reinvest them in additional Fund shares.

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

--------------------------------------------------------------------------------
RULE 12b-1 FEES
--------------------------------------------------------------------------------

The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940
Act. This rule allows the Fund to pay distribution fees for the sale and
distribution of its shares and for services provided to shareholders. The plan
provides for the payment of a distribution and service fee at the annual rate of
0.25% of the Fund's average daily net assets which are payable to the Advisor,
as Distribution Coordinator. Because these fees are paid out of the Fund's
assets on an on-going basis, over time these fees will increase the cost of your
investment in Fund shares and may cost you more than paying other types of sales
charges.

13
<PAGE>

NEW ACCOUNT APPLICATION

[LOGO] ASTROP MAIL TO: Astrop First Internet Fund
ADVISORY CORPORATION c/o ICA Fund Services Corp.
ASTROP FIRST INTERNET FUND 4455 E. Camelback Road, Ste. 261-E
Phoenix, AZ 85018
<TABLE>
<S><C>
Use this form only for individual, custodial, trust, profit-sharing, pension or other plan accounts. Do NOT use this form for IRAs
(unless the IRA is a self-directed IRA with another trustee or custodian). A special form is available for IRAs; please call
(toll-free) 800-576-8229 for information or assistance.
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT (FOR INDIVIDUAL
REGISTRATION OR --------------------------------------------------------------------------------------------
JOINT OWNERS First Name Middle Name or Initial Last Name Social Security Number

--------------------------------------------------------------------------------------------
Joint Owner Social Security Number

Registration will be "Joint Tenants with Right of Survivorship" unless otherwise specified:

--------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
(FOR UNIFORM
TRANSFERS/GIFTS --------------------------------------------------------------------------------------------
TO MINORS ACT Custodian's Name (only one allowed)
ACCOUNTS)
--------------------------------------------------------------------------------------------
Minor's Name (only one allowed) Minor's Social Security No.

--------------------------------------------------------------------------------------------
State of Residence
------------------------------------------------------------------------------------------------------------------------------------
(FOR CORPORATE
TRUST OR OTHER --------------------------------------------------------------------------------------------
FIDUCIARY Name of Corporation, Trust, etc.
ACCOUNTS
--------------------------------------------------------------------------------------------
Name and Date of Trust (continued)

--------------------------------------------------------------------------------------------
Name(s) of Trustee(s), Beneficiary, etc. Tax ID Number
------------------------------------------------------------------------------------------------------------------------------------
DUPLICATE
STATEMENTS --------------------------------------------------------------------------------------------
First Name Middle Name or Initial Last Name

--------------------------------------------------------------------------------------------
Number and Street

--------------------------------------------------------------------------------------------
Apartment, Floor or Room Number

--------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)

--------------------------------------------------------------------------------------------
City State Zip Code
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT AMOUNT
/ / By wire (Please call (toll-free) 800-576-8229 for instructions)
$______________________________ / / By check, attached and made payable to "Astrop First Internet Fund"
For minimum initial investment
amount, see Prospectus
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS / / U.S. Citizen / / Other:________________________ (Country of Residence)
--------------------------------------------------------------------------------------------
Dividends and distributions will be reinvested unless a box is checked:
/ / Dividends in cash; capital gain distributions reinvested
/ / Dividends and capital gain distributions in cash

IMPORTANT: THIS FORM IS CONTINUED ON THE REVERSE SIDE
<PAGE>

------------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN

/ / Each month, I would like to have ICA Fund Services Corp. draw an Automatic Clearing House (ACH) debit electronically against the
account of my Financial Institution listed below, to purchase shares of the Fund. I understand that shares of the Fund are purchased
on the day of the debit.

Mark one of your personal checks "VOID" and attach the voided check to this application, or fill in the information below. As soon
as your Financial Institution accepts your authorization, debits will be generated and purchases of Fund shares will begin. Please
note that your financial institution must be able to accept ACH transactions. Please allow one month for processing of this
Automatic Investment Plan option before the first debit occurs.

Please begin Automatic Investing for me and invest $__________ ($100 minimum) in shares of the Fund on the:
/ / 10th
/ / 20th of each month.

------------------------------------------------------------------------------------------------------------------------------------
Name of my Financial Institution Address of my Financial Institution

------------------------------------------------------------------------------------------------------------------------------------
My Financial Institution's ABA Number My Account Number Name(s) on Account

I understand that my ACH debit will be dated each month on the day specified above. I agree that if such debit is not honored upon
presentation, ICA Fund Services Corp. may discontinue this service, and any purchase of Fund shares may be reversed. I further
understand that the net asset value of shares of the Fund at the time of such reversal may be less than the net asset value on the
day of the original purchase. ICA Fund Services Corp. is authorized to redeem sufficient additional full and fractional shares from
my account to make up the deficiency. The Automatic Investment Plan may be discontinued by ICA Fund Services Corp. upon 30 days
written notice or by the investor by written notice to ICA Fund Services Corp. provided the notice is received not later than 5
business days prior to the specified investment date.

------------------------------------------------------------------------------------------------------------------------------------
Signature of Depositor Signature of Co-Depositor (required for joint accounts)
------------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC / / Beginning on ________________, I would like checks sent to me / / monthly or / / quarterly. The amount of each
WITHDRAWAL check should be $____________. I understand that payments will be made by redeeming shares from my account and that if
PLAN the rate of redemption exceeds the rate of growth of the Fund(s), my account may ultimately be depleted.
------------------------------------------------------------------------------------------------------------------------------------
REDEMPTIONS / / I would like to be able to place a redemption order by telephone and have the proceeds mailed to me or wired
BY TELEPHONE directly to my Financial Institution account listed below. I understand that these procedures are offered as a
convenience to me, and I agree that if the identification procedures set forth in the Prospectus are followed, neither
the Fund nor ICA Fund Services Corp. will be liable for any loss, expense or cost arising from one of these
transactions. IF YOU CHOOSE TO HAVE REDEMPTION PROCEEDS WIRED TO YOUR ACCOUNT, PLEASE FILL IN THE FOLLOWING
INFORMATION:

----------------------------------------------------------------------------------------------------------------------
Name of my Financial Institution Address of my Financial Institution

----------------------------------------------------------------------------------------------------------------------
My Financial Institution's ABA Number Account Number Name(s) on Account
------------------------------------------------------------------------------------------------------------------------------------
SIGNATURES: I represent that I am of legal age, have legal capacity to make this purchase and have received and read a prospectus. I
certify under penalty of perjury that: (1) the social security or other tax identification number stated above is correct and (2) I
am not subject to backup withholding because / / the IRS has not informed me that I am subject to backup withholding, or / / the IRS
has notified me that I am no longer subject to backup withholding. (CHECK APPROPRIATE BOX. IF YOU ARE SUBJECT TO BACKUP WITHHOLDING,
STRIKE OUT SECTION 2.)

------------------------------------------------------------------------------------------------------------------------------------
Signature of Owner, Trustee or Custodian Signature of Joint Owner Date
</TABLE>

<PAGE>

--------------------------------------------------------------------------------
ASTROP FIRST INTERNET FUND,
A SERIES OF TRUST FOR INVESTMENT MANAGERS (THE "TRUST")

For investors who want more information about the Fund, the following document
is available free upon request:

STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
Prospectus.

You can get free copies of the SAI, request other information and discuss your
questions about the Fund by contacting the Fund at:

ICA Fund Services Corp.
4455 East Camelback Road
Suite 261E
Phoenix, AZ 85018
Telephone: 1-800-576-8229

You can review and copy information including the Fund's SAI at the Public
Reference Room of the Securities and Exchange Commission in Washington, D.C. You
can obtain information on the operation of the Public Reference Room by calling
1-202-942-8090. Reports and other information about the Fund are also available:

- Free of charge from the Commission's EDGAR database on the Commission's
Internet website at http://www.sec.gov., or

- For a fee, by writing to the Public Reference Room of the Commission,
Washington, DC 20549-0102, or

- For a fee, by electronic request at the following e-mail address:
[email protected].

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

(The Trust's SEC Investment Company Act file number is 811-09393)
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
MAY 3, 2000

ASTROP FIRST INTERNET FUND,
A SERIES OF TRUST FOR INVESTMENT MANAGERS
3133 MAPLE DRIVE, N.E., SUITE 200
ATLANTA, GA 30305
1-800-576-8229

This Statement of Additional Information ("SAI") is not a prospectus and it
should be read in conjunction with the Prospectus dated May 3, 2000, as may be
revised, of the Astrop First Internet Fund (the "Fund"), a series of Trust for
Investment Managers (the "Trust"). Astrop Research Corporation (the "Advisor")
is the advisor to the Fund. A copy of the Fund's Prospectus is available by
calling the telephone number listed above.

TABLE OF CONTENTS

The Trust ..................................................................B-2
Investment Objective and Policies ..........................................B-2
Investment Restrictions ....................................................B-12
Distributions and Tax Information ..........................................B-13
Trustees and Executive Officers ............................................B-15
The Fund's Investment Advisor ..............................................B-17
The Fund's Administrator ...................................................B-18
The Fund's Distributor .....................................................B-18
Execution of Portfolio Transactions ........................................B-19
Portfolio Turnover..........................................................B-21
Additional Purchase and Redemption Information .............................B-21
Determination of Share Price ...............................................B-23
Performance Information ....................................................B-24
General Information ........................................................B-24
Appendix A .................................................................B-24
Appendix B .................................................................B-26

B-1
<PAGE>

THE TRUST

The Trust for Investment Managers (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust may consist
of various series which represent separate investment portfolios. This SAI
relates only to the Fund.

The Trust is registered with the SEC as a management investment company. Such a
registration does not involve supervision of the management or policies of the
Fund. The Prospectus of the Fund and this SAI omit certain of the information
contained in the Registration Statement filed with the SEC. Copies of such
information may be obtained from the SEC upon payment of the prescribed fee.

INVESTMENT OBJECTIVE AND POLICIES

The Fund has the investment objective of seeking long-term growth of capital.
The Fund is nondiversified, which under the Investment Company Act of 1940
("1940 Act") means that there is no restriction under the 1940 Act on how much
the Fund may invest in the securities of any one issuer. In addition, the Fund
may invest more than 25% of its assets in what may be considered a single
industry sector. The following information supplements the discussion of the
Fund's investment objective and policies as set forth in its Prospectus. There
can be no guarantee that the Fund's objective will be attained.

CONVERTIBLE SECURITIES AND WARRANTS. The Fund may invest in convertible
securities and warrants. A convertible security is a fixed-income security (a
debt instrument or a preferred stock) which may be converted at a stated price
within a specified period of time into a certain quantity of the common stock of
the same or a different issuer. Convertible securities are senior to common
stocks in an issuer's capital structure, but are usually subordinated to similar
non-convertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from common stock but lower than that
afforded by a similar nonconvertible security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation attendant upon a market price advance in
the convertible security's underlying common stock.

A warrant gives the holder a right to purchase at any time during a specified
period a predetermined number of shares of common stock at a fixed price. Unlike
convertible debt securities or preferred stock, warrants do not pay a fixed
dividend. Investments in warrants involve certain risks, including the possible
lack of a liquid market for resale of the warrants, potential price fluctuations
as a result of speculation or other factors, and failure of the price of the
underlying security to reach or have reasonable prospects of reaching a level at
which the warrant can be prudently exercised (in which event the warrant may
expire without being exercised, resulting in a loss of the Fund's entire
investment therein).

INVESTMENT COMPANIES. The Fund may invest in shares of other investment
companies in pursuit of its investment objective. This may include investment in
money market mutual funds

B-2
<PAGE>

in connection with the Fund's management of daily cash positions. In addition to
the advisory and operational fees the Fund bears directly in connection with its
own operation, the Fund and its shareholders will also bear the pro rata portion
of each other investment company's advisory and operational expenses.

BORROWING. The Fund is authorized to borrow money from time to time for
temporary, extraordinary or emergency purposes or for clearance of transactions
in amounts not to exceed 33- 1/3% of the value of its total assets at the time
of such borrowings. The use of borrowing by the Fund involves special risk
considerations that may not be associated with other funds having similar
objectives and policies. Since substantially all of the Fund's assets fluctuate
in value, while the interest obligation resulting from a borrowing will be fixed
by the terms of the Fund's agreement with its lender, the net asset value per
share of the Fund will tend to increase more when its portfolio securities
increase in value and to decrease more when its portfolio assets decrease in
value than would otherwise be the case if the Fund did not borrow funds. In
addition, interest costs on borrowings may fluctuate with changing market rates
of interest and may partially offset or exceed the return earned on borrowed
funds. Under adverse market conditions, the Fund might have to sell portfolio
securities to meet interest or principal payments at a time when fundamental
investment considerations would not favor such sales.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities in an
amount not exceeding 33-1/3% of its total assets to financial institutions such
as banks and brokers if the loan is collateralized in accordance with applicable
regulations. Under the present regulatory requirements which govern loans of
portfolio securities, the loan collateral must, on each business day, at least
equal the value of the loaned securities and must consist of cash, letters of
credit of domestic banks or domestic branches of foreign banks, or securities of
the U.S. Government or its agencies. To be acceptable as collateral, letters of
credit must be irrevocable and obligate a bank to pay amounts demanded by the
Fund if the demand meets the terms of the letter. Such terms and the issuing
bank would have to be satisfactory to the Fund. Any loan might be secured by any
one or more of the three types of collateral. The terms of the Fund's loans must
permit the Fund to reacquire loaned securities on three days' notice or in time
to vote on any serious matter and must meet certain tests under the Internal
Revenue Code (the "Code").

SHORT SALES. The Fund is authorized to make short sales of securities. In a
short sale, the Fund sells a security which it does not own, in anticipation of
a decline in the market value of the security. To complete the sale, the Fund
must borrow the security (generally from the broker through which the short sale
is made) in order to make delivery to the buyer. The Fund is then obligated to
replace the security borrowed by purchasing it at the market price at the time
of replacement. The Fund is said to have a "short position" in the securities
sold until it delivers them to the broker. The period during which the Fund has
a short position can range from as little as one day to more than a year. Until
the security is replaced, the proceeds of the short sale are retained by the
broker, and the Fund is required to pay to the broker a negotiated portion of
any dividends or interest which accrue during the period of the loan. To meet
current margin requirements, the Fund is also required to deposit with the
broker additional cash or securities so that the total deposit with the broker
is maintained daily at 150% of the current market value of

B-3
<PAGE>

the securities sold short (100% of the current market value if a security is
held in the account that is convertible or exchangeable into the security sold
short within 90 days without restriction other than the payment of money).

Short sales by the Fund create opportunities to increase the Fund's return but,
at the same time, involve specific risk considerations and may be considered a
speculative technique. Since the Fund in effect profits from a decline in the
price of the securities sold short without the need to invest the full purchase
price of the securities on the date of the short sale, the Fund's net asset
value per share will tend to increase more when the securities it has sold short
decrease in value, and to decrease more when the securities it has sold short
increase in value, than would otherwise be the case if it had not engaged in
such short sales. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium, dividends or interest the Fund
may be required to pay in connection with the short sale. Furthermore, under
adverse market conditions the Fund might have difficulty purchasing securities
to meet its short sale delivery obligations, and might have to sell portfolio
securities to raise the capital necessary to meet its short sale obligations at
a time when fundamental investment considerations would not favor such sales.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. Under such
agreements, the seller of the security agrees to repurchase it at a mutually
agreed upon time and price. The repurchase price may be higher than the purchase
price, the difference being income to the Fund, or the purchase and repurchase
prices may be the same, with interest at a stated rate due to the Fund together
with the repurchase price on repurchase. In either case, the income to the Fund
is unrelated to the interest rate on the U.S. Government security itself. Such
repurchase agreements will be made only with banks with assets of $500 million
or more that are insured by the Federal Deposit Insurance Corporation or with
Government securities dealers recognized by the Federal Reserve Board and
registered as broker-dealers with the Securities and Exchange Commission ("SEC")
or exempt from such registration. The Fund will generally enter into repurchase
agreements of short durations, from overnight to one week, although the
underlying securities generally have longer maturities. The Fund may not enter
into a repurchase agreement with more than seven days to maturity if, as a
result, more than 15% of the value of its net assets would be invested in
illiquid securities including such repurchase agreements.

For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from
the Fund to the seller of the U.S. Government security subject to the repurchase
agreement. It is not clear whether a court would consider the U.S. Government
security acquired by the Fund subject to a repurchase agreement as being owned
by the Fund or as being collateral for a loan by the Fund to the seller. In the
event of the commencement of bankruptcy or insolvency proceedings with respect
to the seller of the U.S. Government security before its repurchase under a
repurchase agreement, the Fund may encounter delays and incur costs before being
able to sell the security. Delays may involve loss of interest or a decline in
price of the U.S. Government security. If a court characterizes the transaction
as a loan and the Fund has not perfected a security interest in the U.S.
Government security, the Fund may be required to return the security to the
seller's estate and be treated as an unsecured creditor of the seller. As an
unsecured creditor, the Fund would be at the risk of losing some or all of the
principal and income involved in the transaction. As with any unsecured debt
instrument purchased for the Fund, the Advisor seeks to minimize the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
other party, in this case the seller of the U.S. Government security.

B-4
<PAGE>

Apart from the risk of bankruptcy or insolvency proceedings, there is also the
risk that the seller may fail to repurchase the security. However, the Fund will
always receive as collateral for any repurchase agreement to which it is a party
securities acceptable to it, the market value of which is equal to at least 100%
of the amount invested by the Fund plus accrued interest, and the Fund will make
payment against such securities only upon physical delivery or evidence of book
entry transfer to the account of its Custodian. If the market value of the U.S.
Government security subject to the repurchase agreement becomes less than the
repurchase price (including interest), the Fund will direct the seller of the
U.S. Government security to deliver additional securities so that the market
value of all securities subject to the repurchase agreement will equal or exceed
the repurchase price. It is possible that the Fund will be unsuccessful in
seeking to impose on the seller a contractual obligation to deliver additional
securities.

ILLIQUID SECURITIES. The Fund may not invest more than 15% of the value of its
net assets in securities that at the time of purchase have legal or contractual
restrictions on resale or are otherwise illiquid. The Advisor will monitor the
amount of illiquid securities in the Fund's portfolio, under the supervision of
the Trust's Board of Trustees, to ensure compliance with the Fund's investment
restrictions.

Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933 (the "Securities Act"), securities
which are otherwise not readily marketable and repurchase agreements having a
maturity of longer than seven days. Securities which have not been registered
under the Securities Act are referred to as private placement or restricted
securities and are purchased directly from the issuer or in the secondary
market. Mutual funds do not typically hold a significant amount of these
restricted or other illiquid securities because of the potential for delays on
resale and uncertainty in valuation. Limitations on resale may have an adverse
effect on the marketability of portfolio securities and the Fund might be unable
to sell restricted or other illiquid securities promptly or at reasonable prices
and might thereby experience difficulty satisfying redemption requests within
seven days. The Fund might also have to register such restricted securities in
order to sell them, resulting in additional expense and delay. Adverse market
conditions could impede such a public offering of securities.

In recent years, however, a large institutional market has developed for certain
securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not reflect the actual liquidity of such
investments. If such securities are subject to purchase by institutional buyers
in accordance with Rule 144A promulgated by the SEC under the Securities Act,
the Trust's Board of Trustees may determine that such securities are not
illiquid securities despite their legal or contractual restrictions on resale.
In all other cases, however, securities subject to restrictions on resale will
be deemed illiquid.

B-5
<PAGE>

FOREIGN SECURITIES. The Fund may invest up to 20% of its total assets the
securities of foreign issuers in the form of American Depositary Receipts
(ADRs"). ADRs are depositary receipts for foreign securities denominated in U.S.
dollars and traded on U.S. securities markets. These are certificates evidencing
ownership of shares of a foreign-based issuer held in trust by a bank or similar
financial institution. Designed for use in U.S. securities markets, ADRs are
alternatives to the purchase of the underlying securities in their national
market and currencies. ADRs may be purchased through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depositary, whereas a depositary may
establish an unsponsored facility without participation by the issuer of the
depositary security. Holders of unsponsored depositary receipts generally bear
all the costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts of the deposited securities.

RISKS OF INVESTING IN FOREIGN SECURITIES. Investments in foreign securities
involve certain inherent risks, including the following:

POLITICAL AND ECONOMIC FACTORS. Individual foreign economies of certain
countries may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and diversification and balance of
payments position. The internal politics of some foreign countries may not be as
stable as those of the United States. Governments in some foreign countries also
continue to participate to a significant degree, through ownership interest or
regulation, in their respective economies. Action by these governments could
include restrictions on foreign investment, nationalization, expropriation of
goods or imposition of taxes, and could have a significant effect on market
prices of securities and payment of interest. The economies of many foreign
countries are heavily dependent upon international trade and are affected by the
trade policies and economic conditions of their trading partners. If these
trading partners enacted protectionist trade legislation, it could have a
significant adverse effect upon the securities markets of such countries.

CURRENCY FLUCTUATIONS. The Fund will invest only in securities denominated in
U.S. dollars. For this reason, the value of the Fund's assets may not be subject
to risks associated with variations in the value of foreign currencies relative
to the U.S. dollar to the same extent as might otherwise be the case. Changes in
the value of foreign currencies against the U.S. dollar may, however, affect the
value of the assets and/or income of foreign companies whose U.S. dollar
denominated securities are held by the Fund. Such companies may also be affected
significantly by currency restrictions and exchange control regulations enacted
from time to time.

LEGAL AND REGULATORY MATTERS. Certain foreign countries may have less
supervision of securities markets, brokers and issuers of securities, and less
financial information available to issuers, than is available in the United
States.

TAXES. The interest and dividends payable on some of the Fund's foreign
portfolio securities may

B-6
<PAGE>

be subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to Fund shareholders.

OPTIONS ON SECURITIES. The Fund may write (sell) covered call options to a
limited extent on its portfolio securities ("covered options") in an attempt to
enhance gain.

When the Fund writes a covered call option, it gives the purchaser of the option
the right, upon exercise of the option, to buy the underlying security at the
price specified in the option (the "exercise price") at any time during the
option period, generally ranging up to nine months. If the option expires
unexercised, the Fund will realize income to the extent of the amount received
for the option (the "premium"). If the call option is exercised, a decision over
which the Fund has no control, the Fund must sell the underlying security to the
option holder at the exercise price. By writing a covered option, the Fund
forgoes, in exchange for the premium less the commission ("net premium") the
opportunity to profit during the option period from an increase in the market
value of the underlying security above the exercise price.

The Fund may terminate its obligation as writer of a call option by purchasing
an option with the same exercise price and expiration date as the option
previously written. This transaction is called a "closing purchase transaction."

Closing sale transactions enable the Fund immediately to realize gains or
minimize losses on its options positions. There is no assurance that a liquid
secondary market on an options exchange will exist for any particular option, or
at any particular time, and for some options no secondary market may exist. If
the Fund is unable to effect a closing purchase transaction with respect to
options it has written, it will not be able to terminate its obligations or
minimize its losses under such options prior to their expiration. If the Fund is
unable to effect a closing sale transaction with respect to options that it has
purchased, it would have to exercise the option in order to realize any profit.

The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price and rate
movements may take place in the underlying markets that cannot be reflected in
the options markets. The purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions.

OPTIONS ON SECURITIES INDICES. The Fund may write (sell) covered call options on
securities indices in an attempt to increase gain. A securities index option
written by the Fund would obligate it, upon exercise of the options, to pay a
cash settlement, rather than to deliver actual securities, to the option holder.
Although the Fund will not ordinarily own all of the securities comprising the
stock indices on which it writes call options, such options will usually be
written on those indices which correspond most closely to the composition of the
Fund's portfolio. As with the writing of covered call options on securities, the
Fund will realize a gain in the amount of the premium received upon writing an
option if the value of the underlying index increases above the exercise price
and the option is exercised, the Fund will be required to pay a cash settlement
that may exceed the amount of the premium received by the Fund. The Fund may
purchase call options in order to terminate its obligations under call options
it has written.

B-7
<PAGE>

The Fund may purchase call and put options on securities indices for the purpose
of hedging against the risk of unfavorable price movements adversely affecting
the value of the Fund's securities or securities the Fund intends to buy.
Securities index options will not be purchased for speculative purposes. Unlike
an option on securities, which gives the holder the right to purchase or sell
specified securities at a specified price, an option on a securities index gives
the holder the right, upon the exercise of the option, to receive a cash
"exercise settlement amount" equal to (i) the difference between the exercise
price of the option and the value of the underlying securities index on the
exercise date multiplied by (ii) a fixed "index multiplier."

A securities index fluctuates with changes in the market value of the securities
included in the index. For example, some securities index options are based on a
broad market index such as the Standard & Poor's 500 or the Value Line Composite
Index, or a narrower market index such as the Standard & Poor's 100. Indices may
also be based on industry or market segments.

The Fund may purchase put options in order to hedge against an anticipated
decline in stock market prices that might adversely affect the value of the
Fund's portfolio securities. If the Fund purchases a put option on a stock
index, the amount of payment it receives on exercising the option depends on the
extent of any decline in the level of the stock index below the exercise price.
Such payments would tend to offset a decline in the value of the Fund's
portfolio securities. If, however, the level of the stock index increases and
remains above the exercise price while the put option is outstanding, the Fund
will not be able to profitably exercise the option and will lose the amount of
the premium and any transaction costs. Such loss may be partially offset by an
increase in the value of the Fund's portfolio securities. The Fund may write put
options on stock indices in order to close out positions in stock index put
options which it has purchased.

The Fund may purchase call options on stock indices in order to participate in
an anticipated increase in stock market prices or to lock in a favorable price
on securities that it intends to buy in the future. If the Fund purchases a call
option on a stock index, the amount of the payment it receives upon exercising
the option depends on the extent of any increase in the level of the stock index
above the exercise price. Such payments would in effect allow the Fund to
benefit from stock market appreciation even though it may not have had
sufficient cash to purchase the underlying stocks. Such payments may also offset
increases in the price of stocks that the Fund intends to purchase. If, however,
the level of the stock index declines and remains below the exercise price while
the call option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio. The Fund may write call options on
stock indices in order to close out positions in stock index call options which
it has purchased.

The effectiveness of hedging through the purchase of options on securities
indices will depend upon the extent to which price movements in the portion of
the securities portfolio being hedged correlate with price movements in the
selected stock index. Perfect correlation is not possible because the securities
held or to be acquired by the Fund will not exactly match the composition

B-8
<PAGE>

of the stock indices on which the options are available. In addition, the
purchase of stock index options involves the risk that the premium and
transaction costs paid by the Fund in purchasing an option will be lost as a
result of unanticipated movements in prices of the securities comprising the
stock index on which the option is based.

FUTURES. The Fund may buy and sell interest rate and stock index futures
contracts. A futures contract is an agreement between two parties to buy and
sell a security or an index for a set price on a future date. Futures contracts
are traded on designated "contract markets" which, through their clearing
corporations, guarantee performance of the contracts.

Entering into a futures contract for the sale of securities has an effect
similar to the actual sale of securities, although sale of the futures contract
might be accomplished more easily and quickly. Entering into futures contracts
for the purchase of securities has an effect similar to the actual purchase of
the underlying securities, but permits the continued holding of securities other
than the underlying securities.

A stock index futures contract may be used as a hedge by the Fund with regard to
market risk as distinguished from risk relating to a specific security. A stock
index futures contract does not require the physical delivery of securities, but
merely provides for profits and losses resulting from changes in the market
value of the contract to be credited or debited at the close of each trading day
to the respective accounts of the parties to the contract. On the contract's
expiration date, a final cash settlement occurs. Changes in the market value of
a particular stock index futures contract reflects changes in the specified
index of equity securities on which the future is based.

There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the portfolio
position which is intended to be protected, the desired protection may not be
obtained and the Fund may be exposed to risk of loss. Further, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the Fund than if it had not entered into any futures on
stock indices.

In addition, the market prices of futures contracts may be affected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the securities
and futures markets. Second, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market may also cause temporary price distortions.

Finally, positions in futures contracts may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. There is no
assurance that a liquid secondary market on an exchange or board of trade will
exist for any particular contract or at any particular time.

B-9
<PAGE>

CORPORATE DEBT SECURITIES. The Fund may invest in debt securities, including
debt securities rated below investment grade. Bonds rated below BBB by S&P or
Baa by Moody's, commonly referred to "junk bonds," typically carry higher coupon
rates than investment grade bonds, but also are described as speculative by both
S&P and Moody's and may be subject to greater market price fluctuations, less
liquidity and greater risk of income or principal including greater possibility
of default and bankruptcy of the issuer of such securities than more highly
rated bonds. Lower rated bonds also are more likely to be sensitive to adverse
economic or company developments and more subject to price fluctuations in
response to changes in interest rates. The market for lower-rated debt issues
generally is thinner and less active than that for higher quality securities,
which may limit the Fund's ability to sell such securities at fair value in
response to changes in the economy or financial markets. During periods of
economic downturn or rising interest rates, highly leveraged issuers of lower
rated securities may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the
possibility of default.

Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after the Fund
has acquired the security. If a security's rating is reduced while it held by
the Fund, the Advisor will consider whether the Fund should continue to hold the
security but is not required to dispose of it. Credit ratings attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial conditions may be better or worse than the rating
indicates. The ratings for corporate debt securities are described in
Appendix A.

MORTGAGE-RELATED SECURITIES. The Fund may invest in mortgage-related securities.
These securities include mortgage pass-through securities, which represent
interests in pools of mortgages in which payments of both interest and principal
on the securities are generally made monthly, in effect "passing through"
monthly payments made by the individual borrowers on the residential mortgage
loans which underlie the securities (net of fees paid to the issuer or guarantor
of the securities). Early repayment of principal on mortgage pass-through
securities (arising from prepayments of principal due to the sale of underlying
property, refinancing, or foreclosure, net of fees and costs which may be
incurred) may expose a Portfolio to a lower rate of return upon reinvestment of
principal. Also, if a security subject to repayment has been purchased at a
premium, in the event of prepayment the value of the premium would be lost.

Payment of principal and interest on some mortgage pass-through securities (but
not the market value of the securities themselves) may be guaranteed by the full
faith and credit of the U. S. Government (in the case of securities guaranteed
by GNMA), or by agencies and instrumentalities of the U.S. Government (in the
case of securities guaranteed by FNMA or the Federal Home Loan Mortgage
Corporation ("FHLMC"), which are supported only by the discretionary authority
of the U.S. Government to purchase the agency's obligations). Mortgage
pass-through securities created by non-governmental issuers (such as commercial
banks, savings and loan institutions, private mortgage insurance companies,
mortgage bankers and other

B-10
<PAGE>

secondary market issuers) may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance, and
letters of credit, which may be issued by governmental entities, private
insurers or the mortgage poolers.

Collateralized mortgage obligations ("CMO's") are hybrid instruments with
characteristics of both mortgage-backed bonds and mortgage pass-through
securities. Similar to a bond, interest and prepaid principal on a CMO are paid,
in most cases, semi-annually. CMO's may be collateralized by whole mortgage
loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, FHLMC, or FNMA. CMO's are structured
into multiple classes, with each class bearing a different stated maturity.
Monthly payments of principal, including prepayments, are first returned to
investors holding the shortest maturity class. Investors holding the longer
maturity classes receive principal only after the first class has been retired.
Other mortgage related securities include those that directly or indirectly
represent a participation in or are secured by and payable from mortgage loans
on real property, such as CMO residuals or stripped mortgage-backed securities,
and may be structured in classes with rights to receive varying proportions of
principal and interest. Certain of these government interest-only and
principal-only fixed mortgage-backed securities may be considered liquid under
guidelines to be established by the Board of Trustees, if, under such
procedures, they can be disposed of promptly in the ordinary course of business
at a value reasonably close to that used in the calculation of net asset value
per share. Any interest-only and principal-only securities not determined to be
liquid under these guidelines will be subject to the Fund's limitations on
illiquid securities as set forth under "Illiquid Securities," above.

SHORT-TERM INVESTMENTS. The Fund may invest in any of the following securities
and instruments:

CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES AND TIME DEPOSITS. The Fund may
acquire certificates of deposit, bankers' acceptances and time deposits.
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Certificates of deposit and bankers' acceptances acquired by the Fund will be
dollar-denominated obligations of domestic banks, savings and loan associations
or financial institutions which, at the time of purchase, have capital, surplus
and undivided profits in excess of $100 million (including assets of both
domestic and foreign branches), based on latest published reports, or less than
$100 million if the principal amount of such bank obligations are fully insured
by the U.S. Government.

In addition to purchasing certificates of deposit and bankers' acceptances, to
the extent permitted under its investment objective and policies stated above
and in its prospectus, the Fund may make interest-bearing time or other
interest-bearing deposits in commercial or savings banks. Time deposits are
non-negotiable deposits maintained at a banking institution for a specified
period of time at a specified interest rate.

B-11
<PAGE>

COMMERCIAL PAPER AND SHORT-TERM NOTES. The Fund may invest a portion of its
assets in commercial paper and short-term notes. Commercial paper consists of
unsecured promissory notes issued by corporations. Issues of commercial paper
and short-term notes will normally have maturities of less than nine months and
fixed rates of return, although such instruments may have maturities of up to
one year.

Commercial paper and short-term notes will consist of issues rated at the time
of purchase "A-2" or higher by Standard & Poor's Ratings Group, "Prime-1" or
"Prime-2" by Moody's Investors Service, Inc., or similarly rated by another
nationally recognized statistical rating organization or, if unrated, will be
determined by the Adviser to be of comparable quality. These rating symbols are
described in Appendix B.

INVESTMENT RESTRICTIONS

The following policies and investment restrictions have been adopted by the Fund
and (unless otherwise noted) are fundamental and cannot be changed without the
affirmative vote of a majority of the Fund's outstanding voting securities as
defined in the 1940 Act.

1. The Fund may not make loans to others, except (a) through the purchase of
debt securities in accordance with its investment objectives and policies,
(b) to the extent the entry into a repurchase agreement is deemed to be a loan.

2. The Fund may not:

(a) Borrow money, except as stated in the Prospectus and this SAI. Any such
borrowing will be made only if immediately thereafter there is an asset coverage
of at least 300% of all borrowings.

(b) Mortgage, pledge or hypothecate any of its assets except in connection
with any such borrowings.

3. The Fund may not purchase securities on margin, participate on a joint or
joint and several basis in any securities trading account, or underwrite
securities. (Does not preclude the Fund from obtaining such short-term credit as
may be necessary for the clearance of purchases and sales of its portfolio
securities).

4. The Fund may not purchase or sell real estate, commodities or commodity
contracts. (As a matter of operating policy, the Board of Trustees may authorize
the Fund in the future to engage in certain activities regarding futures
contracts for bona fide hedging purposes; any such authorization will be
accompanied by appropriate notification to shareholders).

5. The Fund may not issue senior securities, as defined in the 1940 Act, except
that this restriction shall not be deemed to prohibit the Fund from (a) making
any permitted borrowings,

B-12
<PAGE>

mortgages or pledges, or (b) entering into options, futures, forward or
repurchase transactions.

6. The Fund may concentrate more than 25% of its assets in the securities of
companies engaged in the Internet industry sector.

7. The Fund is non-diversified, i.e., as to 50% of the value of its total
assets: (i) no more than 5% of the value of its total assets may be invested in
the securities of any one issuer (other than U.S. Government securities); and
(ii) the Fund may not purchase more than 10% of the outstanding voting
securities an issuer.

The Fund observes the following policies, which are not deemed fundamental and
which may be changed without shareholder vote.

1. The Fund may not invest in any issuer for purposes of exercising control or
management.

2. The Fund may not invest in securities of other investment companies except as
permitted under the 1940 Act.

3. The Fund may not invest, in the aggregate, more than 15% of its net assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable and repurchase agreements with more than seven days
to maturity.

4. With respect to fundamental investment restriction 2(a) above, the Fund will
not purchase portfolio securities while outstanding borrowings exceed 5% of its
assets.

If a percentage restriction described in the Prospectus or in this SAI is
adhered to at the time of investment, a subsequent increase or decrease in a
percentage resulting from a change in the values of assets will not constitute a
violation of that restriction, except with respect to borrowing or the purchase
of restricted or illiquid securities.

DISTRIBUTIONS AND TAX INFORMATION

DISTRIBUTIONS. Dividends from net investment income and distributions from net
profits from the sale of securities are generally made annually. Also, the Fund
expects to distribute any undistributed net investment income on or about
December 31 of each year. Any net capital gains realized through the period
ended October 31 of each year will also be distributed by December 31 of each
year.

Each distribution by the Fund is accompanied by a brief explanation of the form
and character of the distribution. In January of each year the Fund will issue
to each shareholder a statement of the federal income tax status of all
distributions.

TAX INFORMATION. Each series of the Trust is treated as a separate entity for
federal income tax purposes. The Fund intends to continue to qualify and elect
to be treated as a "regulated

B-13
<PAGE>

investment company" under Subchapter M of the Code, provided that it complies
with all applicable requirements regarding the source of its income,
diversification of its assets and timing of distributions. It is the Fund's
policy to distribute to its shareholders all of its investment company taxable
income and any net realized capital gains for each fiscal year in a manner that
complies with the distribution requirements of the Code, so that the Fund will
not be subject to any federal income tax or excise taxes based on net income. To
avoid the excise tax, the Fund must also distribute (or be deemed to have
distributed) by December 31 of each calendar year (i) at least 98% of its
ordinary income for such year, (ii) at least 98% of the excess of its realized
capital gains over its realized capital losses for the one-year period ending on
October 31 during such year and (iii) any amounts from the prior calendar year
that were not distributed and on which the Fund paid no federal excise tax.

The Fund's ordinary income generally consists of interest and dividend income,
less expenses. Net realized capital gains for a fiscal period are computed by
taking into account any capital loss carryforward of the Fund.

Distributions of net investment income and net short-term capital gains are
taxable to shareholders as ordinary income. In the case of corporate
shareholders, a portion of the distributions may qualify for the intercorporate
dividends-received deduction to the extent the Portfolio designates the amount
distributed as a qualifying dividend. This designated amount cannot, however,
exceed the aggregate amount of qualifying dividends received by the Portfolio
for its taxable year. The deduction, if any, may be reduced or eliminated if
Portfolio shares held by a corporate investor are treated as debt-financed or
are held for fewer than 46 days.

Any long-term capital gain distributions are taxable to shareholders as
long-term capital gains regardless of the length of time they have held their
shares. Capital gains distributions are not eligible for the dividends-received
deduction referred to in the previous paragraph. Distributions of any ordinary
income and net realized capital gains will be taxable as described above,
whether received in shares or in cash. Shareholders who choose to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.

Under the Code, the Fund will be required to report to the Internal Revenue
Service all distributions of ordinary income and capital gains as well as gross
proceeds from the redemption of Portfolio shares, except in the case of exempt
shareholders, which includes most corporations. Pursuant to the backup
withholding provisions of the Code, distributions of any taxable income and
capital gains and proceeds from the redemption of Fund shares may be subject to
withholding of federal income tax at the current maximum federal tax rate of 31
percent in the case of non-exempt shareholders who fail to furnish the Fund with
their taxpayer identification numbers and with required certifications regarding
their status under the federal income tax law.

B-14
<PAGE>

If the backup withholding provisions are applicable, any such distributions and
proceeds, whether taken in cash or reinvested in additional shares, will be
reduced by the amounts required to be withheld. Corporate and other exempt
shareholders should provide the Fund with their taxpayer identification numbers
or certify their exempt status in order to avoid possible erroneous application
of backup withholding. The Fund reserves the right to refuse to open an account
for any person failing to certify the person's taxpayer identification number.

The Fund will not be subject to corporate income tax in the State of Delaware as
long as its qualifies as regulated investment companies for federal income tax
purposes. Distributions and the transactions referred to in the preceding
paragraphs may be subject to state and local income taxes, and the tax treatment
thereof may differ from the federal income tax treatment.

The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts and estates. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting ordinary income.

In addition, the foregoing discussion of tax law is based on existing provisions
of the Code, existing and proposed regulations thereunder, and current
administrative rulings and court decisions, all of which are subject to change.
Any such charges could affect the validity of this discussion. The discussion
also represents only a general summary of tax law and practice currently
applicable to the Fund and certain shareholders therein, and, as such, is
subject to change. In particular, the consequences of an investment in shares of
the Fund under the laws of any state, local or foreign taxing jurisdictions are
not discussed herein. Each prospective investor should consult his or her own
tax advisor to determine the application of the tax law and practice in his or
her own particular circumstances.

TRUSTEES AND EXECUTIVE OFFICERS

The Trustees of the Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Fund. The Trustees, in turn, elect the officers of the Trust, who are
responsible for administering the day-to-day operations of the Trust and its
separate series. The current Trustees and officers, their affiliations, dates of
birth and principal occupations for the past five years are set forth below.
Unless noted otherwise, each person has held the position listed for a minimum
of five years.
<TABLE>
<CAPTION>
Name, Address Position(s) Held Principal Occupation(s) During
and Age With Trust Past Five Years
------------- ---------------- ------------------------------
<S> <C> <C>
George J. Rebhan, 7/10/34 Trustee Retired. Formerly, President Hotchkis
1920 Mission St. and Wiley Fund (mutual funds) from
South Pasadena, CA 91030 1985 to 1993.

B-15
<PAGE>

Ashley T. Rabun 5/10/52 Trustee Founder and Chief Executive Officer,
2161 India St. InvestorReach, Inc. (financial services
San Diego, CA 92101 and marketing and distribution
Consulting). Formerly, Partner and
Director, Nicholas-Applegate Capital
Management (investment management)
from 1992 to 1996.

James Clayburn LaForce 12/28/28 Trustee Dean Emeritus, John E. Anderson
P.O. Box 1595 Graduate School of Management,
San Diego, CA 92101 University of California, Los Angeles.

B-16

<PAGE>

Robert H. Wadsworth* 1/25/40 Trustee and President of Investment Company
4455 Camelback Rd. President Administration, LLC ("ICA") (mutual
Phoenix, AZ 85018 fund administrator and the Trust's
Administrator) and First Fund
Distributors, Inc. (registered broker-dealer
and the Trust's Distributor).

Robert M. Slotky* 6/16/47 Treasurer Senior Vice President, ICA since May 1997.
2020 E. Financial Way Formerly, instructor of accounting at
Glendora, CA 91741 California State University-Northridge
(1997); Chief Financial Officer, Wanger
Asset Management L.P. and Treasurer of
Acorn Investment Trust (1992-1996).
</TABLE>
----------------------------
*Indicates an "interested person" of the Trust as defined in the 1940 Act.

Set forth below is the rate of compensation received by the following Trustees
from all portfolios of the Trust. This total amount is allocated among the
portfolios. Disinterested Trustees receive an annual retainer of $7,500. The
Trustees also receive a fee of $750 for any special meeting or committee meeting
attended on a date other than that of a regularly scheduled meeting.
Disinterested trustees are also reimbursed for expenses in connection with each
Board meeting attended. No other compensation or retirement benefits were
received by any Trustee or officer from the portfolios of the Trust.
<TABLE>
<CAPTION>
Name of Trustee Total Annual Compensation
--------------- -------------------------
<S> <C>
George J. Rebhan $7,500
Ashley T. Rabun $7,500
James Clayburn LaForce $7,500
</TABLE>
As of the date of this SAI, the Trustees and officers of the Trust as a group
did not own more than 1% of the outstanding shares of the Fund.

THE FUND'S INVESTMENT ADVISOR

As stated in the Prospectus, investment advisory services are provided to the
Fund by Astrop Research Corporation, the Advisor, pursuant to an Investment
Advisory Agreement. (the "Advisory Agreement"). As compensation, the Fund pays
the Advisor a monthly management fee (accrued daily) based upon the average
daily net assets of the Fund at the annual rate of 0.95%.

The Advisory Agreement continues in effect for successive annual periods so long
as such continuation is approved at least annually by the vote of (1) the Board
of Trustees of the Trust (or a majority of the outstanding shares of the Fund,
and (2) a majority of the Trustees who are not interested persons of any party
to the Advisory Agreement, in each case cast in person at a meeting called for
the purpose of voting on such approval. The Advisory Agreement may be

B-17
<PAGE>

terminated at any time, without penalty, by either party to the Advisory
Agreement upon sixty days' written notice and is automatically terminated in the
event of its "assignment," as defined in the 1940 Act.

THE FUND'S ADMINISTRATOR

The Fund has an Administration Agreement with Investment Company Administration,
LLC (the "Administrator"), a corporation owned and controlled in part by Mr.
Wadsworth with offices at 4455 E. Camelback Rd., Ste. 261-E, Phoenix, AZ 85018.
The Administration Agreement provides that the Administrator will prepare and
coordinate reports and other materials supplied to the Trustees; prepare and/or
supervise the preparation and filing of all securities filings, periodic
financial reports, prospectuses, statements of additional information, marketing
materials, tax returns, shareholder reports and other regulatory reports or
filings required of the Fund; prepare all required notice filings necessary to
maintain the Fund's ability to sell shares in all states where the Fund
currently does, or intends to do business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund related expenses;
monitor and oversee the activities of the Fund's servicing agents (i.e.,
transfer agent, custodian, fund accountants, etc.); review and adjust as
necessary the Fund's daily expense accruals; and perform such additional
services as may be agreed upon by the Fund and the Administrator. For its
services, the Administrator receives a monthly fee at the following annual rate:
<TABLE>
<CAPTION>
Average Net Assets Fee or Fee Rate
------------------ ---------------
<S> <C>
Less than $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%
</TABLE>
THE FUND'S DISTRIBUTOR

First Fund Distributors, Inc., (the "Distributor"), a corporation partially
owned by Mr. Wadsworth, acts as the Fund's principal underwriter in a continuous
public offering of the Fund's shares. After its initial two year term, the
Distribution Agreement between the Fund and the Distributor continues in effect
for periods not exceeding one year if approved at least annually by (I) the
Board of Trustees or the vote of a majority of the outstanding shares of the
Fund (as defined in the 1940 Act) and (ii) a majority of the Trustees who are
not interested persons of any such party, in each case cast in person at a
meeting called for the purpose of voting on such approval. The Distribution
Agreement may be terminated without penalty by the parties thereto upon sixty
days' written notice, and is automatically terminated in the event of its
assignment as defined in the 1940 Act.

The Trust, on behalf of the Fund, has adopted a Distribution Plan in accordance
with Rule 12b-1

B-18
<PAGE>

(the "Plan") under the 1940 Act that permits the Fund to pay distribution fees
for the sale and distribution of its shares. The Plan provides that the Fund
will pay a fee to the Adviser as Distribution Coordinator at an annual rate of
up to 0.25% of the Fund's average daily net assets. The Plan provides for the
compensation to the Adviser as Distribution Coordinator regardless of the Fund's
distribution expenses.

The Plan allows excess distribution expenses to be carried forward by the
Adviser as Distribution Coordinator and resubmitted in a subsequent fiscal year,
provided that (i) distribution expenses cannot be carried forward for more than
three years following initial submission; (ii) the Trustees have made a
determination at the time of initial submission that the distribution expenses
are appropriate to be carried forward and (iii) the Trustees make a further
determination, at the time any distribution expenses which have been carried
forward are submitted for payment, that payment at the time is appropriate,
consistent with the objectives of the Plan and in the current best interests of
shareholders.

Under the Plan, the Trustees will be furnished quarterly with information
detailing the amount of expenses paid under the Plan and the purposes for which
payments were made. The Plan may be terminated at any time by vote of a majority
of the Trustees of the Trust who are not interested persons. Continuation of the
Plan is considered by such Trustees no less frequently than annually.

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Advisory Agreement, the Advisor determines which securities are
to be purchased and sold by the Fund and which broker-dealers are eligible to
execute the Fund's portfolio transactions. Purchases and sales of securities in
the over-the-counter market will generally be executed directly with a
"market-maker" unless, in the opinion of the Advisor, a better price and
execution can otherwise be obtained by using a broker for the transaction.

Purchases of portfolio securities for the Fund also may be made directly from
issuers or from underwriters. Where possible, purchase and sale transactions
will be effected through dealers (including banks) which specialize in the types
of securities which the Fund will be holding, unless better executions are
available elsewhere. Dealers and underwriters usually act as principal for their
own accounts. Purchases from underwriters will include a concession paid by the
issuer to the underwriter and purchases from dealers will include the spread
between the bid and the asked price. If the execution and price offered by more
than one dealer or underwriter are comparable, the order may be allocated to a
dealer or underwriter that has provided research or other services as discussed
below.

In placing portfolio transactions, the Advisor will use its reasonable efforts
to choose broker-dealers capable of providing the services necessary to obtain
the most favorable price and execution available. The full range and quality of
services available will be considered in making these determinations, such as
the size of the order, the difficulty of execution, the operational facilities
of the firm involved, the firm's risk in positioning a block of securities, and
other factors. In those instances where it is reasonably determined that more
than one

B-19
<PAGE>

broker-dealer can offer the services needed to obtain the most favorable price
and execution available, consideration may be given to those broker-dealers
which furnish or supply research and statistical information to the Advisor that
it may lawfully and appropriately use in its investment advisory capacities, as
well as provide other services in addition to execution services. The Advisor
considers such information, which is in addition to and not in lieu of the
services required to be performed by it under its Agreement with the Fund, to be
useful in varying degrees, but of indeterminable value. Portfolio transactions
may be placed with broker-dealers who sell shares of the Fund subject to rules
adopted by the National Association of Securities Dealers, Inc.

While it is the Fund's general policy to seek first to obtain the most favorable
price and execution available in selecting a broker-dealer to execute portfolio
transactions for the Fund, weight is also given to the ability of a
broker-dealer to furnish brokerage and research services to the Fund or to the
Advisor, even if the specific services are not directly useful to the Fund and
may be useful to the Advisor in advising other clients. In negotiating
commissions with a broker or evaluating the spread to be paid to a dealer, the
Fund may therefore pay a higher commission or spread than would be the case if
no weight were given to the furnishing of these supplemental services, provided
that the amount of such commission or spread has been determined in good faith
by the Advisor to be reasonable in relation to the value of the brokerage and/or
research services provided by such broker-dealer. The standard of reasonableness
is to be measured in light of the Advisor's overall responsibilities to the
Fund.

Investment decisions for the Fund are made independently from those of other
client accounts or mutual funds ("Funds") managed or advised by the Advisor.
Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts or Funds.
In such event, the position of the Fund and such client account(s) or Funds in
the same issuer may vary and the length of time that each may choose to hold its
investment in the same issuer may likewise vary. However, to the extent any of
these client accounts or Funds seeks to acquire the same security as the Fund at
the same time, the Fund may not be able to acquire as large a portion of such
security as it desires, or it may have to pay a higher price or obtain a lower
yield for such security. Similarly, the Fund may not be able to obtain as high a
price for, or as large an execution of, an order to sell any particular security
at the same time. If one or more of such client accounts or Funds simultaneously
purchases or sells the same security that the Fund is purchasing or selling,
each day's transactions in such security will be allocated between the Fund and
all such client accounts or Funds in a manner deemed equitable by the Advisor,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as the Fund is
concerned. In other cases, however, it is believed that the ability of the Fund
to participate in volume transactions may produce better executions for the
Fund.

The Fund does not effect securities transactions through brokers in accordance
with any formula, nor does it effect securities transactions through brokers
solely for selling shares of the Fund, although the Fund may consider the sale
of shares as a factor in allocating brokerage. However, as stated above,
broker-dealers who execute brokerage transactions may effect purchase of shares

B-20
<PAGE>

of the Fund for their customers.

PORTFOLIO TURNOVER

Although the Fund generally will not invest for short-term trading purposes,
portfolio securities may be sold without regard to the length of time they have
been held when, in the opinion of the Advisor, investment considerations warrant
such action. Portfolio turnover rate is calculated by dividing (1) the lesser of
purchases or sales of portfolio securities for the fiscal year by (2) the
monthly average of the value of portfolio securities owned during the fiscal
year. A 100% turnover rate would occur if all the securities in the Fund's
portfolio, with the exception of securities whose maturities at the time of
acquisition were one year or less, were sold and either repurchased or replaced
within one year. A high rate of portfolio turnover (100% or more) generally
leads to transaction costs and may result in a greater number of taxable
transactions. See "Execution of Portfolio Transactions."

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The information provided below supplements the information contained in the
Fund's Prospectus regarding the purchase and redemption of Fund shares.

HOW TO BUY SHARES. The public offering price of Fund shares is the net asset
value. The Fund receives the net asset value. Shares are purchased at the public
offering price next determined after the Transfer Agent receives your order in
proper form. In most cases, in order to receive that day's public offering
price, the Transfer Agent must receive your order in proper form before the
close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00
p.m., Eastern time.

The NYSE annually announces the days on which it will not be open for trading.
The most recent announcement indicates that it will not be open on the following
days: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
However, the NYSE may close on days not included in that announcement.

The Trust reserves the right in its sole discretion (i) to suspend the continued
offering of the Fund's shares, (ii) to reject purchase orders in whole or in
part when in the judgment of the Advisor or the Distributor such rejection is in
the best interest of the Fund, and (iii) to reduce or waive the minimum for
initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.

HOW TO SELL SHARES. You can sell your Fund shares any day the NYSE is open for
regular trading. The Fund may require documentation for the sale of shares by a
corporation, partnership, agent or fiduciary, or a surviving joint owner.
Contact the Transfer Agent for details.

B-21
<PAGE>

SIGNATURE GUARANTEES. If you sell shares having a net asset value of $10,000 a
signature guarantee is required. Certain other transactions, including
redemptions, also require a signature guarantee. Signature guarantees may be
obtained from a bank, broker-dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency or savings
institution. A notary public cannot provide a signature guarantee.

DELIVERY OF REDEMPTION PROCEEDS. Payments to shareholders for shares of the Fund
redeemed directly from the Fund will be made as promptly as possible but no
later than seven days after receipt by the Fund's Transfer Agent of the written
request in proper form, with the appropriate documentation as stated in the
Prospectus, except that the Fund may suspend the right of redemption or postpone
the date of payment during any period when (a) trading on the NYSE is restricted
as determined by the SEC or the NYSE is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable; or (c) for such other period as the SEC may permit for the
protection of the Fund's shareholders. Under unusual circumstances, the Fund may
suspend redemptions, or postpone payment for more than seven days, but only as
authorized by SEC rules.

The value of shares on redemption or repurchase may be more or less than the
investor's cost, depending upon the market value of the Fund's portfolio
securities at the time of redemption or repurchase.

TELEPHONE REDEMPTIONS. Shareholders must have selected telephone transactions
privileges on the Account Application when opening a Fund account. Upon receipt
of any instructions or inquiries by telephone from a shareholder or, if held in
a joint account, from either party, or from any person claiming to be the
shareholder, the Fund or its agent is authorized, without notifying the
shareholder or joint account parties, to carry out the instructions or to
respond to the inquiries, consistent with the service options chosen by the
shareholder or joint shareholders in his or their latest Account Application or
other written request for services, including purchasing or redeeming shares of
the Fund and depositing and withdrawing monies from the bank account specified
in the Bank Account Registration section of the shareholder's latest Account
Application or as otherwise properly specified to the Fund in writing.

The Transfer Agent will employ these and other reasonable procedures to confirm
that instructions communicated by telephone are genuine; if it fails to employ
reasonable procedures, the Fund and the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. If these procedures are
followed, an investor agrees, however, that to the extent permitted by
applicable law, neither the Fund nor its agents will be liable for any loss,
liability, cost or expense arising out of any redemption request, including any
fraudulent or unauthorized request. For information, consult the Transfer Agent.

During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Transfer Agent by telephone. In this event,
you may wish to submit a written redemption request, as described in the
Prospectus. The Telephone Redemption Privilege may

B-22
<PAGE>

be modified or terminated without notice.

REDEMPTIONS-IN-KIND. The Trust has filed an election under SEC Rule 18f-1
committing to pay in cash all redemptions by a shareholder of record up to
amounts specified by the rule (in excess of the lesser of (i) $250,000 or (ii)
1% of the Fund's assets). The Fund has reserved the right to pay the redemption
price of its shares in excess of the amounts specified by the rule, either
totally or partially, by a distribution in kind of portfolio securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares being
sold. If a shareholder receives a distribution in kind, the shareholder could
incur brokerage or other charges in converting the securities to cash.

AUTOMATIC INVESTMENT PLAN. As discussed in the Prospectus, the Fund provides an
Automatic Investment Plan for the convenience of investors who wish to purchase
shares of the Fund on a regular basis. All record keeping and custodial costs of
the Automatic Investment Plan are paid by the Fund. The market value of the
Fund's shares is subject to fluctuation, so before undertaking any plan for
systematic investment, the investor should keep in mind that this plan does not
assure a profit nor protect against depreciation in declining markets.

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value and offering price of shares of
the Fund will be determined once daily as of the close of public trading on the
NYSE (normally 4:00 p.m., Eastern time) on each day that the NYSE is open for
trading. The Fund does not expect to determine the net asset value of its shares
on any day when the NYSE is not open for trading even if there is sufficient
trading in its portfolio securities on such days to materially affect the net
asset value per share. However, the net asset value of the Fund's shares may be
determined on days the NYSE is closed or at times other than 4:00 p.m. if the
Board of Trustees decides it is necessary.

In valuing the Fund's assets for calculating net asset value, readily marketable
portfolio securities listed on a national securities exchange or on NASDAQ are
valued at the last sale price on the business day as of which such value is
being determined. If there has been no sale on such exchange or on NASDAQ on
such day, the security is valued at the closing bid price on such day. Readily
marketable securities traded only in the over-the-counter market and not on
NASDAQ are valued at the current or last bid price. If no bid is quoted on such
day, the security is valued by such method as the Board of Trustees of the Trust
shall determine in good faith to reflect the security's fair value. All other
assets of the Fund are valued in such manner as the Board of Trustees in good
faith deems appropriate to reflect their fair value.

The net asset value per share of the Fund is calculated as follows: all
liabilities incurred or accrued are deducted from the valuation of total assets
which includes accrued but undistributed income; the resulting net assets are
divided by the number of shares of the Fund outstanding at the time of the
valuation and the result (adjusted to the nearest cent) is the net asset value
per share.

B-23
<PAGE>

PERFORMANCE INFORMATION

From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
will be accompanied by information on the Fund's average annual compounded rate
of return for the most recent one, five and ten year periods, or shorter periods
from inception, through the most recent calendar quarter. The Fund may also
advertise aggregate and average total return information over different periods
of time.

The Fund's total return may be compared to relevant indices, including Standard
& Poor's 500 Composite Stock Index and indices published by Lipper Analytical
Services, Inc. From time to time, evaluations of the Fund's performance by
independent sources may also be used in advertisements and in information
furnished to present or prospective investors in the Fund.

Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any period should
not be considered as a representation of what an investment may earn or what an
investor's total return may be in any future period.

The Fund's average annual compounded rate of return is determined by reference
to a hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:

n
P(1+T) = ERV

Where: P = a hypothetical initial purchase order of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 purchase at the end of
the period

Aggregate total return is calculated in a similar manner, except that the
results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress through periodic
reports. Financial statements certified by independent public accountants will
be submitted to shareholders at least annually.

Firstar Institutional Custody Services, located at 425 Walnut St., Cincinnati,
Ohio 45201 acts as Custodian of the securities and other assets of the Fund. ICA
Fund Services Corp., 4455 East Camelback Rd., Ste. 261-E, Phoenix, AZ 85018,
acts as the Fund's transfer and shareholder

B-24
<PAGE>

service agent. The Custodian and Transfer Agent do not participate in decisions
relating to the purchase and sale of securities by the Fund.

Tait, Weller & Baker, 8 Penn Center Plaza, Philadelphia, PA 19103, are the
independent auditors for the Fund.

Paul, Hastings, Janofsky & Walker LLP, 345 California Street, 29th Floor, San
Francisco, California 94104, are legal counsel to the Fund.

The Trust was organized as a Delaware business trust on April 27, 1999. The
Agreement and Declaration of Trust permits the Board of Trustees to issue an
limited number of full and fractional shares of beneficial interest, without par
value, which may be issued in any number of series. The Board of Trustees may
from time to time issue other series, the assets and liabilities of which will
be separate and distinct from any other series.

Shares issued by the Fund have no preemptive, conversion, or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (e.g., approval of the Advisory
Agreement); all series of the Trust vote as a single class on matters affecting
all series jointly or the Trust as a whole (e.g., election or removal of
Trustees). Voting rights are not cumulative, so that the holders of more than
50% of the shares voting in any election of Trustees can, if they so choose,
elect all of the Trustees. While the Trust is not required and does not intend
to hold annual meetings of shareholders, such meetings may be called by the
Trustees in their discretion, or upon demand by the holders of 10% or more of
the outstanding shares of the Trust, for the purpose of electing or removing
Trustees.

The Boards of the Trust, the Advisor and the Distributor have adopted Codes of
Ethics under Rule 17j-1 of the 1940 Act. These Codes permit, subject to certain
conditions, personnel of the Advisor and Distributor to invest in securities
that may be purchased or held by the Fund.

APPENDIX A
CORPORATE BOND RATINGS

MOODY'S INVESTORS SERVICE, INC.

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

Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities

B-25
<PAGE>

or fluctuations or protective elements may be of greater amplitude or there may
be other elements present which make long-term risks appear somewhat larger than
in Aaa securities.

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

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

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

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

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

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

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

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

STANDARD & POOR'S RATINGS GROUP

AAA: Bonds rated AAA are highest grade debt obligations. This rating
indicates an extremely strong capacity to pay principal and interest.

AA: Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay

B-26
<PAGE>

principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.

BB, B, CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded on balance
as predominantly speculative with respect to capacity to pay interest and repay
principal BB indicates the least degree of speculation and C the highest. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.

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

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

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

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

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

D: Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
are jeopardized.

B-27
<PAGE>

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
additional of a plus or minus sign to show relative standing with the major
categories.

APPENDIX B
COMMERCIAL PAPER RATINGS

MOODY'S INVESTORS SERVICE, INC.

Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have
a superior ability for repayment of senior short-term debt obligations.
"Prime-1" repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of
alternate liquidity.

Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have
a strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is maintained.

STANDARD & POOR'S RATINGS GROUP

A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.

A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

B-28