MANAGERS AMG FUNDS
497, 2000-12-07
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                MANAGERS AMG FUNDS
                  FIRST QUADRANT
             TAX-MANAGED EQUITY FUND
         ------------------------------
                   PROSPECTUS
            DATED NOVEMBER 14, 2000

The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus
is truthful or complete.  Any representation to the contrary
is a criminal offense.

<PAGE>


<TABLE>
<CAPTION>


            TABLE OF CONTENTS

                                                              PAGE
<S>                                                            <C>
KEY  INFORMATION  ABOUT THE FIRST  QUADRANT
  TAX-MANAGED EQUITY FUND                                      2
  Summary    of   the   Goals,    Principal
  Strategies and Principal Risk Factors of the Fund            2


PERFORMANCE SUMMARY                                            4

FEES AND EXPENSES OF THE FUND                                  4
  Fees and Expenses                                            4
  Example                                                      5

FIRST QUADRANT TAX-MANAGED EQUITY FUND                         5
  Objective                                                    5
  Principal Investment Strategies                              5
  Additional Practices and Risks                               6
  Should You Invest in this Fund?                              7

MANAGERS AMG FUNDS                                             8

YOUR ACCOUNT                                                   9
  Minimum Investments in the Fund                              9

HOW TO PURCHASE SHARES                                        11

DISTRIBUTION PLAN                                             12

HOW TO SELL SHARES                                            13

INVESTOR SERVICES                                             14

THE FUND AND ITS POLICIES                                     14

ACCOUNT STATEMENTS                                            15

DIVIDENDS AND DISTRIBUTIONS                                   16

TAX INFORMATION                                               16

</TABLE>
<PAGE>

         KEY INFORMATION ABOUT THE FIRST QUADRANT
                TAX-MANAGED EQUITY FUND

     This Prospectus contains important information for anyone interested in
investing in the FIRST QUADRANT TAX-MANAGED EQUITY FUND (the "Fund"), a
series of MANAGERS AMG FUNDS.  Please read this document carefully before you
invest and keep it for future reference. You should base your purchase of shares
of the Fund on your own goals, risk preferences and investment time
horizons.

SUMMARY OF THE GOALS, PRINCIPAL STRATEGIES AND PRINCIPAL RISK FACTORS OF
THE FUND

     The following is a summary of the goals, principal strategies and
principal risk factors of the Fund.
<TABLE>
<CAPTION>

GOALS       PRINCIPAL          PRINCIPAL
           STRATEGIES          RISK FACTORS
-------    -----------         ------------
<S>          <C>                <C>
The Fund    Invests in a        Market Risk
seeks to    diversified         Management Risk
achieve     portfolio of        Tax-Management Risk
superior    U.S. equity
long-term   securities that
after-tax   reflects the
returns     industry,
            earnings growth,
            valuation and
            similar
            characteristics
            of the Russell
            3000 Index;
            ordinarily
            invests in 150
            to 400 stocks

            Uses quantitative
            models that
            analyze top-down
            (market and
            economic)
            conditions and
            bottom-up (company
            specific) data to
            enhance long-term
            returns through
            the stock
            selection process

            Applies a
            variety of tax-
            sensitive
            investment
            techniques
            designed to
            minimize taxable
            income and
            realized capital
            gains for
            shareholders,
            such as
            investing in
            stocks that pay
            below average
            dividends,
            employing a buy-
            and-hold
            strategy and
            realizing losses
            to offset
            realized gains

</TABLE>
                       2
<PAGE>
     All investments involve some type and level of risk.  Risk is the
possibility that you will lose money or not make any additional money by
investing in the Fund.  Before you invest, please make sure that you have
read, and understand, the risk factors that apply to the Fund.  The following
is a discussion of the principal risk factors of the Fund.

MARKET RISK
     The Fund is subject to the risks generally of investing in stocks,
commonly referred to as "market risk." Market risk includes the risk of sudden
and unpredictable drops in value of the market as a whole and periods of
lackluster performance.  Despite unique influences on individual companies,
stock prices in general rise and fall as a result of investors' perceptions of
the market as a whole.  The consequences of market risk are that if the stock
market drops in value, the value of the Fund's portfolio of investments is also
likely to decrease in value.  The increase or decrease in the value of the
Fund's investments, in percentage terms, may be more or less than the increase
or decrease in the value of the market.

MANAGEMENT RISK
     The Fund is subject to management risk because it is an actively managed
investment portfolio. Management risk is the chance that poor security selection
will cause the Fund to underperform other funds with similar objectives.
The success of the Fund's investment strategy depends significantly on the
skill of First Quadrant, L.P. ("First Quadrant") in assessing the potential of
the securities in which the Fund invests.  First Quadrant will apply its
investment techniques and risk analyses in making investment decisions for the
Fund, but there can be no guarantee that these will produce the desired result.

TAX-MANAGEMENT RISK
     First Quadrant applies a variety of tax-management investment strategies
designed to minimize taxable income and capital gains for shareholders.
Notwithstanding the use of these strategies, the Fund may have taxable
income and may realize taxable capital gains.  The ability of the Fund to avoid
realizing taxable gains may be affected by the timing of cash flows into and out
of the Fund attributable to the payment of expenses and daily net sales and
redemptions.  In addition, investors purchasing shares when the Fund has
large accumulated capital gains could receive a significant part of the
purchase price of their shares back as a taxable capital gain distribution.
Over time, securities with unrealized gains may comprise a substantial
portion of the Fund's assets.

                                   3
<PAGE>
                         PERFORMANCE SUMMARY

     Because the Fund has not completed a full calendar year's operations,
performance information is not included in this Prospectus.


                    FEES AND EXPENSES OF THE FUND

     THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.

FEES AND EXPENSES

     SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

Maximum Sales Charge (Load) Imposed on Purchases
 (as a percentage of the offering price)                            None
Maximum Deferred Sales Charge (Load)                                None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
 and Other Distributions                                            None
Maximum Account Fee                                                 None
<TABLE>
<CAPTION>

     ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS)
<S>                                                                <C>
Management Fee                                                      0.85%
Distribution (12b-1) Fees1                                          0.00%
Other Expenses2                                                     0.44%
                                                                    -----
Total Annual Fund Operating Expenses                                1.29%
Fee Waiver and Reimbursement3                                      (0.29%)
                                                                    -----
Net Annual Fund Operating Expenses                                  1.00%
                                                                    =====

     1 Although the Fund is subject to a Rule  12b-1  Plan  of Distribution  that
permits payments of up to 0.25%  of  the Fund's  average  daily  net  assets,  no
payments have been authorized under  the plan   to  date  and  no  payments   are
expected  to  be authorized  during  the first year of operation.

     2 Because the Fund is new, the "Other Expenses" of the Fund are based
on annualized projected expenses and average net assets for the fiscal year
ending October 31,  2001.

     3 The Managers Funds LLC and First Quadrant have contractually agreed, for
a period of not less than eighteen (18) months, to limit Net Annual Fund
Operating Expenses to 1.00% subject to later reimbursement by the Fund in
certain circumstances.  See "Managers AMG Funds."
</TABLE>

                         4
<PAGE>
EXAMPLE
     The following Example will help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds.  The Example makes certain
assumptions.  It assumes that you invest $10,000 as an initial investment in the
Fund for the time periods indicated and then redeem all of your shares at the
end of those periods. It also assumes that your investment has a 5% total
return each year and the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, based on the above
assumptions, your costs would be+:

         1 YEAR   3 YEARS
         ------   -------
         $102     $155

     +The Example reflects the impact of the Fund's contractual expense
limitation for the initial eighteen (18) month period covered by the Example.

     The Example should not be considered a representation of past or
future expenses, as actual expenses may be greater or lower than those shown.



                  FIRST QUADRANT TAX-MANAGED EQUITY FUND

OBJECTIVE
     The Fund seeks to achieve superior long-term after-tax returns for
investors.

PRINCIPAL INVESTMENT STRATEGIES
     First Quadrant will pursue the Fund's objective by investing in a
diversified portfolio of U.S. equity securities that reflects the
characteristics of the Russell 3000 Index (the "Benchmark") in terms of
industry, earnings growth, valuation and similar measurements.  The
Benchmark measures the performance of the 3,000 largest U.S. companies based
on total market capitalization, which
represents 98% of the investable U.S. equity market.  As of June 30, 2000, the
Benchmark had a total market capitalization range of approximately
$178 million to $520 billion.  The number of stocks in which the Fund invests
will vary depending on market conditions and the size of the
Fund.  The Fund is expected to invest in approximately 150 to 400 stocks.

                              5
<PAGE>
     First Quadrant will use a proprietary quantitative analytical
model to construct the Fund's portfolio to reflect the characteristics of the
Benchmark and will combine a top-down analysis of market and economic
conditions with a bottom-up stock selection review process to enhance
returns.  The top-down analysis will consist of a review of market and
economic data such as interest rates, commodity price changes, market
volatility levels, inflation expectations, credit spreads and foreign
exchange rates to identify those industries and sectors of the U.S.
economy that are likely to benefit from present and future economic conditions.
First Quadrant will modify the industry weightings in the Fund's portfolio
relative to the Benchmark based on the top-down analysis, consistent with
maintaining tax efficiency for investors.  In general, these weightings
will not differ from the industry weightings of the Benchmark by more than
5%.  In addition, consistent with minimizing taxable gains and enhancing
returns, First Quadrant may underweight and overweight the Fund's exposure
(relative to the Benchmark) to specific securities within an industry.
Individual stocks will be selected based upon a bottom-up review of a variety of
security-specific valuation metrics, such as earnings revisions, earnings
surprise signals, insider trading, corporate actions and changes in various
indices.

     First Quadrant will manage the Fund's portfolio to minimize taxable
distributions to shareholders.  First Quadrant will apply a variety of tax-
sensitive investment techniques, including the following:

     *    Investing in stocks that pay below-average dividends;

     *    Employing a buy-and-hold strategy that will avoid realizing short-term
          capital gains and defer as long as possible the realization of long-
          term capital gains; and

     *    Realizing losses on specific securities or specific tax lots of
          securities to offset realized gains.

     The Fund can be expected to distribute a smaller percentage of its
returns each year than other equity mutual funds that are managed without
regard to tax considerations.  There can be no assurance, however, that taxable
distributions can always be avoided.


ADDITIONAL PRACTICES AND RISKS
     For temporary or defensive purposes, the Fund may invest, without
limit, in cash or quality short-term debt securities including repurchase
agreements.  To the extent that the Fund is invested in these instruments, the
Fund will not be pursuing its investment objective.

                             6
<PAGE>
     The Fund may invest in derivatives. Derivatives, a category that includes
options and futures, are financial instruments whose value derives from
another security, an index or a currency.  The Fund may use derivatives
to attempt to maintain exposure to the equity markets while holding cash for
temporary liquidity needs.  There is a risk that a derivative may not perform
as expected, thereby causing a loss for the Fund or amplifying a gain or loss
for the Fund.  With some derivatives, there is also the risk that the
counterparty may fail to honor its contract terms, causing a loss for the
Fund.

SHOULD YOU INVEST IN THIS FUND?
     This Fund MAY be suitable if you:
     *   Are seeking exposure to equity markets

     *   Are seeking an equity portfolio which minimizes the impact of taxes

     *   Are willing to accept a higher degree of risk for the opportunity of
         higher potential returns

     *   Have an investment time horizon of five years or more

     This Fund MAY NOT be suitable if you:

     *   Are seeking stability of principal

     *   Are not required to pay taxes

     *   Are investing with a shorter time horizon in mind

     *   Are uncomfortable with stock market risk

     *   Are seeking current income



                         7
<PAGE>
---------------------------------------------------------------------------
WHAT ARE YOU INVESTING IN? You  are buying  shares  of  a pooled  investment
known   as   a  mutual  fund.    It   is professionally managed and gives you
the opportunity to invest in a wide  variety of  companies, industries  and
markets. This  Fund  is not a complete investment program  and there is no
guarantee  that the Fund will reach its stated goals.
---------------------------------------------------------------------------

                        MANAGERS AMG FUNDS

     Managers AMG Funds is a no-load mutual fund family comprised of
different funds, each having distinct investment management objectives,
strategies, risks and policies.  First Quadrant Tax-Managed Equity Fund is one
of the funds in the fund family.

     The Managers Funds LLC (the "Investment Manager"), a subsidiary of
Affiliated Managers Group, Inc., serves as investment manager to the Fund and is
responsible for the Fund's overall administration and distribution. The
Investment Manager also monitors the performance, security holdings and
investment strategies of First Quadrant, the sub-adviser of the Fund and, when
appropriate, evaluates any potential new asset managers for the fund family.

     First Quadrant has day-to-day responsibility for managing the Fund's
portfolio.  First Quadrant is located at 800 E. Colorado Boulevard, Suite 900,
Pasadena, California, 91101.  Affiliated Managers Group, Inc. indirectly owns a
majority interest in First Quadrant.  As of September 30, 2000, First Quadrant
had assets under management of $22 billion.  Robert D. Arnott and
Christopher G. Luck are the lead portfolio managers for the Fund. Mr.
Arnott is the Managing Partner of First Quadrant, a position he has held since
March 1996, and previously was the Chief Executive Officer of its predecessor,
First Quadrant Corporation, since January 1994.   Mr. Luck is a Partner of
First Quadrant and Director of Equity Portfolio Management, positions he has
held since March 1996, and previously was the Director of Equity Management of
its predecessor, First Quadrant Corporation, since September 1995.

     The Fund is obligated by its investment management agreement to pay an
annual management fee to the Investment Manager of 0.85% of the average daily
net assets of the Fund.  The Investment Manager, in turn, pays First Quadrant
0.85% of the average daily net assets of the Fund for its services as sub-
adviser.  Under its investment management agreement with the Fund, the
Investment Manager provides a variety of administrative services to the Fund
and, under its distribution agreement with the Fund, the Investment Manager
provides a variety of shareholder and marketing services to the Fund.

                             8
<PAGE>
     The Investment Manager receives no additional compensation from the Fund
for these services.

     The Investment Manager has contractually agreed, for a period of
not less than eighteen (18) months, to waive fees and pay or reimburse the Fund
to the extent total expenses of the Fund exceed 1.00% of the Fund's average
daily net assets.  The Fund is obligated to repay the Investment Manager such
amounts waived, paid or reimbursed in future years provided that the repayment
occurs within 3 years after the waiver or reimbursement and that such repayment
would not cause the Fund's expenses in any such future year to exceed 1.00% of
the Fund's average daily net assets.


                           YOUR ACCOUNT

     As an investor, you pay no sales charges to invest in the Fund and you
pay no charges to redeem out of the Fund.  The price at which you purchase
and redeem your shares is equal to the net asset value per share (NAV) next
determined after your purchase or redemption order is received on each day
the New York Stock Exchange (NYSE) is open for trading.  The NAV is equal to
the Fund's net worth (assets minus liabilities) divided by the number of
shares outstanding. The Fund's NAV is calculated at the close of regular
business of the NYSE, usually 4:00 p.m. New York Time.

     The Fund's investments are valued based on market values.  If market
quotations are not readily available for any security, the value of the security
will be based on an evaluation of its fair value, pursuant to procedures
established by the Board of Trustees.

MINIMUM INVESTMENTS IN THE FUND
     Cash investments in the Fund must be in U.S. Dollars.  Third-party checks
which are payable to an existing shareholder who is a natural person (as
opposed to a corporation or partnership) and endorsed over to the Fund or State
Street Bank and Trust Company will be accepted.

     Subject to approval by the Investment Manager and First Quadrant,
you may be permitted to purchase shares of the Fund by means of an in-kind
contribution of securities, which will be valued in accordance with the Fund's
pricing procedures.  As with a cash purchase of shares, an in-kind
contribution will also be subject to the Fund's minimum investment requirements.

                                     9
<PAGE>

     The following provides the minimum initial and additional investments in
the Fund:

                       INITIAL INVESTMENT      ADDITIONAL INVESTMENT
                       ------------------      ---------------------

Regular accounts            $5,000                  $1,000
Traditional IRA              5,000                   1,000
Roth IRA                     5,000                   1,000

     The Fund or the underwriter may, in their discretion, waive the minimum and
initial investment amounts at any time.

------------------------------------------------------------------------------
A  TRADITIONAL  IRA is  an  individual retirement account.  Contributions may
be deductible at certain income levels and  earnings  are tax-deferred  while
your withdrawals and distributions are taxable  in  the year  that  they  are
made.

A    ROTH   IRA   is   an   IRA   with non-deductible    contributions    and
tax-free   growth   of   assets    and distributions.   The account  must  be
held  for five years and certain other conditions  must be met  in  order  to
qualify.

You    should   consult    your    tax professional  for more information  on
IRA accounts.
-----------------------------------------------------------------------------

                                   10
<PAGE>
                        HOW TO PURCHASE SHARES
<TABLE>
<CAPTION>


                      INITIAL PURCHASE            ADDITIONAL PURCHASES
                      --------------------------------------------------
<S>                       <C>                             <C>
THROUGH YOUR          Contact your investment      Send any additional monies
INVESTMENT ADVISOR    advisor or other investment  to your investmentprofessional
                      professional.                at the address appearing on
                                                   your account statement.

----------------------------------------------------------------------------------
ALL SHAREHOLDERS:     Complete the account
                      application.


*BY MAIL              Mail the application and     Write a letter of instruction
                      a check payable to Managers  and a check payable to Managers
                      AMG Funds to:                AMG Funds to:

                      Managers AMG Funds           Managers AMG Funds
                      c/o Boston Financial Data    c/o Boston Financial Data
                        Services, Inc.                Services, Inc.
                      P.O. Box 8517                P.O. Box 8517
                      Boston, MA 02266-8517        Boston, MA 02266-8517

                                                   Include your account # and
                                                   fund name on your check.

*BY TELEPHONE         Not available                If your account has already
                                                   been established, call the
                                                   Transfer Agent at (800) 252-
                                                   0682.  The minimum additional
                                                   investment is $1,000.

*BY INTERNET         Not available                 If your account has already been
                                                   established, see our website at
                                                   http://www.managersamg.com. The
                                                   minimum additional investment is
                                                   $1,000.
------------------------------------------------------------------------------------
</TABLE>
                                   11
<PAGE>


FOR BANK WIRES:  Please call and notify the Fund at (800) 252-0682.  Then
instruct your bank to wire the money to State Street Bank and Trust Company,
Boston, MA 02101; ABA #011000028; BFN Managers AMG Funds A/C 9905-472-8, FBO
Shareholder name, account number and Fund name. Please be aware that your bank
may charge you a fee for this service.

     If you invest through a third party such as a bank, broker-dealer or other
fund distribution organization, rather than directly with the Trust, the
policies, fees and minimum investment amounts may be different than those
described in this Prospectus.  The Funds may also participate in programs with
many national brokerage firms which limit the transaction fees for the
shareholder and may pay fees to these firms for participation in these
programs.


                           DISTRIBUTION PLAN

      The Fund has adopted a distribution plan to pay for the marketing of
shares of the Fund.  Under the plan, the Board of Trustees may authorize
payments at an annual rate of up to 0.25% of the Fund's average daily net
assets.  The Trustees have not authorized the payment of any fees to date.

                                   12
<PAGE>

                         HOW TO SELL SHARES

     You may sell your shares at any time.  Your shares will be sold at the
NAV calculated after the Fund's Transfer Agent receives your order.  Orders
received after 4:00 p.m. New York Time will receive the NAV per share
determined at the close of trading on the next NYSE trading day.
<TABLE>
<CAPTION>


                                      INSTRUCTIONS
--------------------------------------------------------------------
<S>                                       <C>

THROUGH YOUR INVESTMENT            Contact your investment advisor
ADVISOR                            or other investment professional.
---------------------------------------------------------------------

ALL SHAREHOLDERS:

*BY MAIL                           Write a letter of instruction containing:
                                       * the name of the Fund
                                       * dollar amount or number of shares to be
                                         sold
                                       * your name
                                       * your account number
                                       * signatures of all owners on account

                                  Mail letter to:

                                       Managers AMG Funds
                                       c/o Boston Financial Data
                                           Services, Inc.
                                       P.O. Box 8517
                                       Boston, MA 02266-8517

*BY TELEPHONE                     If you elected telephone redemption
                                  privileges on your account application,
                                  call us at (800) 252-0682.

*BY INTERNET                      See our website at
                                  http://www.managersamg.com
------------------------------------------------------------------------
</TABLE>

                               13
<PAGE>

Redemptions of $25,000 and over require a signature guarantee.  A signature
guarantee helps to protect against fraud.  You can obtain one from most
banks and securities dealers.  A notary public cannot provide a signature
guarantee.  In joint accounts, both signatures must be guaranteed.

     Telephone redemptions are available only for redemptions which are below
$25,000.


                         INVESTOR SERVICES

     Automatic Reinvestment Plan allows your dividends and capital gain
distributions to be reinvested in additional shares of the Fund.  You can
elect to receive cash.

     Automatic Investments allows you to make automatic deductions from a
designated bank account.

     Systematic Withdrawals allows you to make automatic monthly withdrawals of
$100 or more.  Withdrawals are normally completed on the 25th day of each month.
If the 25th day of any month is a weekend or a holiday, the withdrawal
will be completed on the next business day.

     Individual Retirement Accounts are available to you at no additional cost.
Call us at (800) 835-3879 for more information and an IRA kit.

     The Fund has an Exchange Privilege which allows you to exchange your shares
of the Fund for shares of any series of Managers AMG Funds, The Managers Funds,
Managers Trust I and Managers Trust II. There is no fee associated with the
Exchange Privilege.  Be sure to read the Prospectus of any series of Managers
AMG Funds, The Managers Funds, Managers Trust I or Managers Trust II that you
wish to exchange into.  You can request your exchange in writing, by telephone
(if elected on the application), by Internet or through your investment
advisor, bank or investment professional.

     The Fund will not be responsible for any losses resulting from
unauthorized transactions (such as purchases, sales or exchanges) if it
follows reasonable security procedures designed to verify the identity of the
investor.  You should verify the accuracy of your confirmation statements
immediately after you receive them.  If you do not want the ability to sell and
exchange by telephone or Internet, call the Fund for instructions.



                      THE FUND AND ITS POLICIES

     The Fund is a series of a "Massachusetts business trust."  The
Board of Trustees may, without the approval of the shareholders, create
additional series at any time.  Also at any time, the Board of Trustees may,

                             14
<PAGE>
without shareholder approval, divide this series or any other series into two
or more classes of shares with different preferences, privileges, and expenses.

     The Fund reserves the right to:

     *    redeem an account if the value of the account falls below $5,000 due
          to redemptions;

     *    suspend redemptions or postpone payments when the NYSE is closed for
          any reason other than its usual weekend or holiday closings or when
          trading is restricted by the Securities and Exchange Commission;

     *    change the minimum investment amounts;

     *    delay sending out redemption proceeds for up to seven days (this
          usually applies to very large redemptions without notice, excessive
          trading or during unusual market conditions);

     *    make a redemption-in-kind (a payment in portfolio securities instead
          of in cash) if we determine that a redemption is too large and/or may
          cause harm to the Fund and its shareholders;

     *    refuse any purchase or exchange request if we determine that such
          request could adversely affect the Fund's NAV, including if such
          person or group has engaged in excessive trading (to be determined
          in our discretion);

     *    after prior warning and notification, close an account due to
          excessive trading; and

     *    terminate or change the Exchange Privilege or impose fees in
          connection with exchanges or redemptions.



                         ACCOUNT STATEMENTS

     You will receive quarterly and yearly statements detailing your account
activity.  All investors (other than IRA accounts) will also receive a Form
1099-DIV in January, detailing the tax characteristics of any dividends and
distributions that you have received in your account, whether taken in cash or

                                      15
<PAGE>
additional shares.  You will also receive a confirmation after each trade
executed in your account.


                      DIVIDENDS AND DISTRIBUTIONS

     Income dividends and net capital gain distributions, if any, are normally
declared and paid annually in December.

     We will automatically reinvest your distributions of dividends and capital
gains unless you tell us otherwise.  You may change your election by writing to
us at least 10 days prior to the scheduled payment date.


                            TAX INFORMATION

     Please be aware that the following tax information is general and refers to
the provisions of the Internal Revenue Code of 1986, as amended, which are in
effect as of the date of this Prospectus.  You should consult a tax
adviser about the status of your distributions from the Fund.

     All dividends and short-term capital gains distributions are
generally taxable to you as ordinary income, whether you receive the
distribution in cash or reinvest it for additional shares.  An exchange of the
Fund's shares for shares of another Fund will be treated as a sale of the Fund's
shares and any gain on the transaction may be subject to federal income tax.

     Keep in mind that distributions may be taxable to you at different rates
depending on the length of time the Fund held the applicable investment and not
the length of time that you held your Fund shares.  When you do sell your Fund
shares, a capital gain may be realized, except for certain tax-deferred
accounts, such as IRA accounts.

     Federal law requires the Fund to withhold taxes on distributions paid to
shareholders who;

     *    fail to provide a social security number or taxpayer identification
          number;

     *    fail to certify that their social security number or taxpayer
          identification number is correct; or

     *    fail to certify that they are exempt from withholding.

                             16
<PAGE>

                     MANAGERS AMG FUNDS

             FIRST QUADRANT TAX-MANAGED EQUITY FUND

INVESTMENT MANAGER AND FUND DISTRIBUTOR
The Managers Funds LLC
40 Richards Avenue
Norwalk, Connecticut  06854-2325
(203) 857-5321 or (800) 835-3879

SUB-ADVISER
First Quadrant, L.P.
800 E. Colorado Boulevard, Suite 900
Pasadena, California 91101

CUSTODIAN
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts  02171

LEGAL COUNSEL
Goodwin, Procter & Hoar  LLP
Exchange Place
Boston, Massachusetts  02109

TRANSFER AGENT
Boston Financial Data Services, Inc.
Attn:  Managers AMG Funds
P.O. Box 8517
Boston, Massachusetts  02266-8517
(800) 252-0682

TRUSTEES
Jack W. Aber
William E. Chapman, II
Sean M. Healey*
Edward J. Kaier
Eric Rakowski

*Interested Person

<PAGE>
For More Information

     Additional information for the Fund, including the Statement of
Additional Information, is available to you without charge and may be requested
as follows:

          By Telephone:       Call 1-800-835-3879

          By Mail:            Managers AMGFunds
                              40 Richards Avenue
                              Norwalk, CT  06854

          On the Internet:    Electronic copies are available
                              on our website at http://www.managersamg.com


     A current Statement of Additional Information is on file with the
Securities and Exchange Commission and is incorporated by reference (is legally
part of this prospectus).  Text-only copies are available on the EDGAR
database of the SEC's website at http://www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address:[email protected], or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102 (202-942-
8090).  Information about the Fund also may be reviewed and copied at the SEC's
Public Reference Room.

INVESTMENT COMPANY ACT REGISTRATION NUMBER 811-9521

<PAGE>









                       MANAGERS AMG FUNDS

             FIRST QUADRANT TAX-MANAGED EQUITY FUND
                  ____________________________

              STATEMENT OF ADDITIONAL INFORMATION

                    DATED NOVEMBER 14, 2000
________________________________________________________________


    You  can  obtain a free copy of the Prospectus of  the  First
Quadrant Tax-Managed Equity Fund (the "Fund") by calling Managers
AMG  Funds at (800) 835-3879.  The Prospectus provides the  basic
information about investing in the Fund.

    This Statement of Additional Information is not a Prospectus.
It  contains additional information regarding the activities  and
operations  of  the Fund.  It should be read in conjunction  with
the Fund's Prospectus.

<PAGE>

<TABLE>
<CAPTION>

                       TABLE OF CONTENTS

                                                             Page
									      -------
<S>                                                          <C>
GENERAL INFORMATION                                           1
INVESTMENT OBJECTIVES AND POLICIES                            1
    INVESTMENT TECHNIQUES AND ASSOCIATED RISKS                1
    DIVERSIFICATION REQUIREMENTS FOR THE FUND                 6
    FUNDAMENTAL INVESTMENT RESTRICTIONS                       6
    TEMPORARY DEFENSIVE POSITION                              8
    PORTFOLIO TURNOVER                                        8

BOARD OF TRUSTEES AND OFFICERS OF THE TRUST                   8
    TRUSTEES' COMPENSATION                                   10

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES          10
    CONTROL PERSONS                                          10
    MANAGEMENT OWNERSHIP                                     10

MANAGEMENT OF THE FUND                                       10
   INVESTMENT MANAGER AND SUB-ADVISER                        10
   COMPENSATION OF INVESTMENT MANAGER AND
      SUB-ADVISER BY THE FUND                                11
   FEE WAIVERS AND EXPENSE LIMITATIONS                       11
   INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS         11
   REIMBURSEMENT AGREEMENT                                   12
   CODE OF ETHICS                                            13
   DISTRIBUTION ARRANGEMENTS                                 13
   CUSTODIAN                                                 13
   TRANSFER AGENT                                            13
   INDEPENDENT PUBLIC ACCOUNTANTS                            14

BROKERAGE ALLOCATION AND OTHER PRACTICES                     14

PURCHASE, REDEMPTION AND PRICING OF SHARES                   14
   PURCHASING SHARES                                         14
   REDEEMING SHARES                                          15
   EXCHANGE OF SHARES                                        16
   NET ASSET VALUE                                           16
   DIVIDENDS AND DISTRIBUTIONS                               16
   DISTRIBUTION PLAN                                         17

CERTAIN TAX MATTERS                                          17
   FEDERAL INCOME TAXATION OF FUND-IN GENERAL                17
   TAXATION OF THE FUND'S INVESTMENTS                        18
   FEDERAL INCOME TAXATION OF SHAREHOLDERS                   18
   FOREIGN SHAREHOLDERS                                      19
   STATE AND LOCAL TAXES                                     19
   OTHER TAXATION                                            19

PERFORMANCE DATA                                             19
   TOTAL RETURN                                              19
   PERFORMANCE COMPARISONS                                   20
   MASSACHUSETTS BUSINESS TRUST                              20
   DESCRIPTION OF SHARES                                     21
   ADDITIONAL INFORMATION                                    22

</TABLE>
<PAGE>

                      GENERAL INFORMATION


    This Statement of Additional Information relates only to  the
First Quadrant Tax-Managed Equity Fund (the "Fund").  The Fund is
a  series of shares of beneficial interest of Managers AMG Funds,
a  no-load mutual fund family, formed as a Massachusetts business
trust (the "Trust").  The Trust was organized on June 18, 1999.

    This  Statement  of  Additional  Information  describes   the
financial history, management and operation of the Fund, as  well
as  the Fund's investment objectives and policies.  It should  be
read  in  conjunction  with the Fund's current  Prospectus.   The
Trust's  executive  office  is located  at  40  Richards  Avenue,
Norwalk, CT  06854.

    The  Managers Funds LLC, a subsidiary of Affiliated  Managers
Group,  Inc.,  serves as investment manager to the  Fund  and  is
responsible   for   the   Fund's   overall   administration   and
distribution.  See "Management of the Fund."

               INVESTMENT OBJECTIVES AND POLICIES

    The   following  is  additional  information  regarding   the
investment objectives and policies used by the Fund in an attempt
to  achieve its objective as stated in its Prospectus.  The  Fund
is a diversified open-end management investment company.

     The  Fund  seeks  to  achieve superior  long-term  after-tax
returns  for  investors.  First Quadrant will pursue  the  Fund's
objective by investing in a diversified portfolio of U.S.  equity
securities that reflects the characteristics of the Russell  3000
Index  (the  "Benchmark") in terms of industry, earnings  growth,
valuation  and similar measurements. The Benchmark  measures  the
performance  of the 3,000 largest U.S. companies based  on  total
market  capitalization, which represents 98%  of  the  investable
U.S.  equity  market.  As of June 30, 2000, the Benchmark  had  a
total  market capitalization range of approximately $178  million
to  $520  billion. The number of stocks in which the Fund invests
will  vary  depending on market conditions and the  size  of  the
Fund.  The Fund is expected to invest in approximately 150 to 400
stocks.

     First   Quadrant   will   use  a  proprietary   quantitative
analytical model to construct the Fund's portfolio to reflect the
characteristics  of  the Benchmark and will  combine  a  top-down
analysis of market and economic conditions with a bottom-up stock
selection  review  process  to  enhance  returns.  The   top-down
analysis  will  consist of a review of market and  economic  data
such   as   interest  rates,  commodity  price  changes,   market
volatility  levels,  inflation expectations, credit  spreads  and
foreign  exchange rates to identify those industries and  sectors
of  the U.S. economy that are likely to benefit from present  and
future  economic  conditions.  First  Quadrant  will  modify  the
industry  weightings  in  the Fund's portfolio  relative  to  the
Benchmark  based  on  the  top-down  analysis,  consistent   with
maintaining  tax  efficiency  for investors,  In  general,  these
weightings  will not differ from the industry weightings  of  the
Benchmark   by  more  than  5%.  In  addition,  consistent   with
minimizing  taxable gains and enhancing returns,  First  Quadrant
may  underweight and overweight the Fund's exposure (relative  to
the   Benchmark)  to  specific  securities  within  an  industry.
Individual stocks will be selected based upon a bottom-up  review
of  a  variety  of security-specific valuation metrics,  such  as
earnings  revisions, earnings surprise signals, insider  trading,
corporate actions and changes in various indices.

     The  Fund can be expected to distribute a smaller percentage
of  its returns each year than other equity mutual funds that are
managed  without regard to tax considerations.  There can  be  no
assurance,  however,  that taxable distributions  can  always  be
avoided.

INVESTMENT TECHNIQUES AND ASSOCIATED RISKS

    The  following  are descriptions of the types  of  securities
that  may  be  purchased  by the Fund.   Also  see  "Quality  and
Diversification Requirements of the Fund."

    (1)   Cash  Equivalents.   The  Fund  may  invest   in   cash
equivalents.  Cash equivalents include certificates  of  deposit,
bankers acceptances, commercial paper, short-term corporate  debt
securities and repurchase agreements.

                            1
<PAGE>


    Bankers   Acceptances.   The  Fund  may  invest  in   bankers
acceptances.    Bankers   acceptances   are   short-term   credit
instruments  used  to  finance the import,  export,  transfer  or
storage  of  goods.  These instruments become "accepted"  when  a
bank guarantees their payment upon maturity.

    Eurodollar   bankers  acceptances  are  bankers   acceptances
denominated  in  U.S.  Dollars  and  are  "accepted"  by  foreign
branches of major U.S. commercial banks.

    Certificates of Deposit.  The Fund may invest in certificates
of  deposit.   Certificates of deposit are issues  against  money
deposited  into  a bank (including eligible foreign  branches  of
U.S. banks) for a definite period of time.  They earn a specified
rate of return and are normally negotiable.

    Commercial  Paper.  The Fund may invest in commercial  paper.
Commercial  Paper  refers to promissory notes that  represent  an
unsecured debt of a corporation or finance company.  They have  a
maturity  of  less  than 9 months.  Eurodollar  commercial  paper
refers  to  promissory notes payable in U.S. Dollars by  European
issuers.

    Repurchase  Agreements.  The Fund may enter  into  repurchase
agreements  with brokers, dealers or banks that meet  the  credit
guidelines  which  have  been approved by  the  Fund's  Board  of
Trustees.   In a repurchase agreement, the Fund buys  a  security
from a bank or a broker-dealer that has agreed to repurchase  the
same  security  at a mutually agreed upon date  and  price.   The
resale  price  normally  is the purchase price  plus  a  mutually
agreed  upon interest rate.  This interest rate is effective  for
the  period of time the Fund is invested in the agreement and  is
not  related to the coupon rate on the underlying security.   The
period  of these repurchase agreements will be short, and  at  no
time will the Fund enter into repurchase agreements for more than
seven days.

    Repurchase  agreements  could have  certain  risks  that  may
adversely affect the Fund.  If a seller defaults,  the  Fund  may
incur  a  loss  if  the  value  of the  collateral  securing  the
repurchase agreement declines and may incur disposition costs  in
connection  with  liquidating the collateral.   In  addition,  if
bankruptcy proceedings are commenced with respect to a seller  of
the security, realization of disposition of the collateral by the
Fund may be delayed or limited.

    (2)  Reverse Repurchase Agreements.  The Fund may enter  into
reverse   repurchase   agreements.   In  a   reverse   repurchase
agreement, the Fund sells a security and agrees to repurchase the
same  security  at a mutually agreed upon date  and  price.   The
price  reflects the interest rates in effect for the term of  the
agreement.   For  the purposes of the Investment Company  Act  of
1940, as amended (the "1940 Act"), a reverse repurchase agreement
is  also  considered as the borrowing of money by the  Fund  and,
therefore, a form of leverage which may cause any gains or losses
for the Fund to become magnified.

    The Fund will invest the proceeds of borrowings under reverse
repurchase  agreements.  In addition, the Fund  will  enter  into
reverse repurchase agreements only when the interest income to be
earned  from  the  investment of the proceeds is  more  than  the
interest  expense of the transaction.  The Fund will  not  invest
the  proceeds of a reverse repurchase agreement for a period that
is longer than the reverse repurchase agreement itself.  The Fund
will establish and maintain a separate account with the Custodian
that  contains a segregated portfolio of securities in an  amount
which is at least equal to the amount of its purchase obligations
under the reverse repurchase agreement.

    (3) Emerging Market Securities.  The Fund may invest some  of
its  assets  in  the  securities of  emerging  market  countries.
Investments  in  securities in emerging market countries  may  be
considered  to be speculative and may have additional risks  from
those  associated  with  investing  in  the  securities  of  U.S.
issuers.  There may be limited information available to investors
which  is  publicly  available,  and  generally  emerging  market
issuers  are  not  subject  to uniform accounting,  auditing  and
financial standards and requirements like those required by  U.S.
issuers.

    Investors  should  be  aware that the  value  of  the  Fund's
investments  in  emerging  markets securities  may  be  adversely
affected  by  changes  in  the  political,  economic  or   social
conditions,  expropriation, nationalization,  limitation  on  the
removal  of funds or assets, controls, tax regulations and  other
foreign  restrictions in emerging market countries.  These  risks
may  be  more severe than those experienced in foreign countries.
Emerging  market securities trade with less frequency and  volume
than  domestic  securities and therefore may have  greater  price
volatility  and lack liquidity.  Furthermore, there is  often  no
legal  structure  governing  private  or  foreign  investment  or
private  property  in some emerging market countries.   This  may

                           2
<PAGE>

adversely affect the Fund's operations and the ability to  obtain
a judgement against an issuer in an emerging market country.

    (4)  Foreign  Securities.  The Fund  may  invest  in  foreign
securities either directly or indirectly in the form of  American
Depository  Receipts  or  similar  instruments.   Investments  in
securities  of  foreign  issuers and in obligations  of  domestic
banks   involve  different  and  additional  risks   from   those
associated  with investing in securities of U.S. issuers.   There
may  be  limited  information available  to  investors  which  is
publicly available, and generally foreign issuers are not subject
to  uniform  accounting,  auditing and  financial  standards  and
requirements like those applicable to U.S. issuers.  Any  foreign
commercial  paper must not be subject to foreign withholding  tax
at the time of purchase.

    Investors  should  be  aware that the  value  of  the  Fund's
investments  in foreign securities may be adversely  affected  by
changes in political or social conditions, confiscatory taxation,
diplomatic  relations, expropriation, nationalization, limitation
on  the  removal  of  funds or assets, or  the  establishment  of
exchange   controls  or  other  foreign  restrictions   and   tax
regulations  in  foreign  countries.  In  addition,  due  to  the
differences in the economy of these foreign countries compared to
the  U.S.  economy,  whether favorably or unfavorably,  portfolio
securities  may  appreciate  or depreciate  and  could  therefore
adversely affect the Fund's operations.  It may also be difficult
to  obtain  a  judgement  against a  foreign  creditor.   Foreign
securities  trade  with less frequency and volume  than  domestic
securities  and  therefore  may have  greater  price  volatility.
Furthermore,  changes  in foreign exchange  rates  will  have  an
affect  on  those securities that are denominated  in  currencies
other than the U.S. Dollar.

    Forward  Foreign Currency Exchange Contracts.  The  Fund  may
purchase   or  sell  equity  securities  of  foreign   countries.
Therefore, substantially all of the Fund's income may be  derived
from  foreign  currency.   A  forward foreign  currency  exchange
contract is an obligation to purchase or sell a specific currency
at  a  mutually  agreed  upon date and price.   The  contract  is
usually  between a bank and its customers.  The contract  may  be
denominated  in  U.S.  Dollars  or  may  be  referred  to  as   a
"cross-currency"  contract.   A  cross-currency  contract  is   a
contract which is denominated in another currency other  than  in
U.S. Dollars.

    In  such a contract, the Fund's custodian will segregate cash
or  marketable securities in an amount not less than the value of
the Fund's total assets committed to these contracts.  Generally,
the  Fund will not enter into contracts that are greater than  90
days.

    Forward foreign currency contracts have additional risks.  It
may  be  difficult  to  determine the  market  movements  of  the
currency.   The  value  of  the Fund's assets  may  be  adversely
affected  by  changes  in  foreign currency  exchange  rates  and
regulations  and controls on currency exchange.   Therefore,  the
Fund may incur costs in converting foreign currency.

    If  the  Fund engages in an offsetting transaction, the  Fund
will  experience a gain or a loss determined by the  movement  in
the  contract prices.  An "offsetting transaction" is  one  where
the Fund enters into a transaction with the bank upon maturity of
the  original  contract.  The Fund must sell or purchase  on  the
same  maturity date as the original contract the same  amount  of
foreign currency as the original contract.

    Foreign Currency Considerations.  The Fund may invest some of
its  assets in securities denominated in foreign currencies.  The
Fund will compute and distribute the income earned by the Fund at
the  foreign exchange rate in effect on that date.  If the  value
of  the  foreign currency declines in relation to the U.S. Dollar
between the time that the Fund earns the income and the time that
the  income  is  converted into U.S. Dollars,  the  Fund  may  be
required   to   sell  its  securities  in  order  to   make   its
distributions in U.S. Dollars.  As a result, the liquidity of the
Fund's  securities  may  have an adverse  affect  on  the  Fund's
performance.

    (5)  Futures  Contracts.  The Fund may buy and  sell  futures
contracts and options on future contracts to attempt to  maintain
exposure  to the equity markets while holding cash for  temporary
liquidity  needs,  or protect the value of the  Fund's  portfolio
against  changes  in  the prices of the securities  in  which  it
invests.   When  the Fund buys or sells a futures  contract,  the
Fund  must segregate cash and/or liquid securities equivalent  to
the value of the contract.

    There are additional risks associated with futures contracts.
It  may  be  impossible  to determine the  future  price  of  the
securities, and securities may not be marketable enough to  close
out the contract when the Fund desires to do so.

                               3
<PAGE>

    Equity  Index  Futures Contracts.  The Fund  may  enter  into
equity  index futures contracts.  An equity index future contract
is  an agreement for the Fund to buy or sell an index relating to
equity  securities  at  a mutually agreed upon  date  and  price.
Equity  index  futures contracts are often used to hedge  against
anticipated changes in the level of stock prices.  When the  Fund
enters  into  this  type of contract, the Fund  makes  a  deposit
called an "initial margin." This initial margin must be equal  to
a specified percentage of the value of the contract.  The rest of
the payment is made when the contract expires.

    (6)  Illiquid  Securities,  Private  Placements  and  Certain
Unregistered  Securities.   The  Fund  may  invest  in  privately
placed,  restricted, Rule 144A or other unregistered  securities.
The  Fund may not acquire illiquid holdings if, as a result, more
than  15%  of  the  Fund's  total assets  would  be  in  illiquid
investments.  Subject to this Fundamental policy limitation,  the
Fund  may  acquire investments that are illiquid or have  limited
liquidity, such as private placements or investments that are not
registered  under  the Securities Act of 1933,  as  amended  (the
"1933  Act") and cannot be offered for public sale in the  United
States  without first being registered under the  1933  Act.   An
investment  is considered "illiquid" if it cannot be disposed  of
within  seven  (7)  days  in the normal  course  of  business  at
approximately  the  same amount at which it  was  valued  in  the
Fund's  portfolio.  The price the Fund's portfolio  may  pay  for
illiquid securities or receives upon resale may be lower than the
price  paid or received for similar securities with a more liquid
market.   Accordingly,  the valuations of these  securities  will
reflect any limitations on their liquidity.

    The  Fund may purchase Rule 144A securities eligible for sale
without registration under the 1933 Act.  These securities may be
determined  to  be  illiquid in accordance  with  the  guidelines
established  by  The  Managers Funds  LLC  and  approved  by  the
Trustees.   The  Trustees  will monitor  these  guidelines  on  a
periodic basis.

    Investors should be aware that the Fund may be subject  to  a
risk  if the Fund should decide to sell these securities  when  a
buyer  is  not  readily available and at a price which  the  Fund
believes  represents the security's value.  In the case where  an
illiquid security must be registered under the 1933 Act before it
may  be sold, the Fund may be obligated to pay all or part of the
registration expenses.  Therefore, a considerable time may elapse
between  the time of the decision to sell and the time  the  Fund
may   be   permitted  to  sell  a  security  under  an  effective
registration statement.  If, during such a period, adverse market
conditions  develop, the Fund may obtain a less  favorable  price
than  was  available  when  it had  first  decided  to  sell  the
security.

    (7)  Obligations  of Domestic and Foreign Banks.   Banks  are
subject to extensive governmental regulations.  These regulations
place  limitations on the amounts and types of  loans  and  other
financial  commitments which may be made  by  the  bank  and  the
interest  rates and fees which may be charged on these loans  and
commitments.   The profitability of the banking industry  depends
on the availability and costs of capital funds for the purpose of
financing   loans  under  prevailing  money  market   conditions.
General  economic  conditions  also  play  a  key  role  in   the
operations  of  the banking industry.  Exposure to credit  losses
arising  from  potential financial difficulties of borrowers  may
affect  the ability of the bank to meet its obligations  under  a
letter of credit.

    (8) Option Contracts.

    Covered  Call  Options.  The Fund may write ("sell")  covered
call  options  on individual stocks, equity indices  and  futures
contracts,  including  equity index futures  contracts.   Written
call options must be listed on a national securities exchange  or
a futures exchange.

    A  call option is a short-term contract that is generally for
no  more  than nine months.  This contract gives a buyer  of  the
option,  in  return  for a paid premium, the  right  to  buy  the
underlying security or contract at an agreed upon price prior  to
the  expiration  of  the  option.  The  buyer  can  purchase  the
underlying  security or contract regardless of its market  price.
A call option is considered "covered" if the Fund that is writing
the  option  owns  or  has  a right to  immediately  acquire  the
underlying security or contract.

    The  Fund  may terminate an obligation to sell an outstanding
option by making a "closing purchase transaction." The Fund makes
a  closing purchase transaction when it buys a call option on the
same  security or contract with has the same price and expiration
date.   As  a result, the Fund will realize a loss if the  amount
paid  is  less than the amount received from the sale.  A closing

                               4
<PAGE>

purchase transaction may only be made on an exchange that  has  a
secondary  market  for  the  option  with  the  same  price   and
expiration date.  There is no guarantee that the secondary market
will have liquidity for the option.

    There are risks associated with writing covered call options.
The  Fund  is  required to pay brokerage fees in order  to  write
covered call options as well as fees for the purchases and  sales
of   the  underlying  securities  or  contracts.   The  portfolio
turnover rate of the Fund may increase due to the Fund writing  a
covered call option.

    Covered Put Options.  The Fund may write ("sell") covered put
options   on  individual  stocks,  equity  indices  and   futures
contracts, including equity index futures contracts.

    A  put option is a short-term contract that is generally  for
no  more  than nine months.  This contract gives a buyer  of  the
option,  in  return  for a paid premium, the right  to  sell  the
underlying security or contract at an agreed upon price prior  to
the  expiration of the option.  The buyer can sell the underlying
security or contract at the option price regardless of its market
price.  A put option is considered "covered" if the Fund which is
writing the option owns or has a right to immediately acquire the
underlying  security or contract.  The seller  of  a  put  option
assumes  the risk of the decrease of the value of the  underlying
security.  If the underlying security decreases, the buyer  could
exercise the option and the underlying security or contract could
be  sold to the seller at a price that is higher than its current
market value.

    The  Fund  may terminate an obligation to sell an outstanding
option by making a "closing purchase transaction." The Fund makes
a  closing purchase transaction when it buys a put option on  the
same  security  or  contract with the same price  and  expiration
date.   As  a result, the Fund will realize a loss if the  amount
paid  is  less than the amount received from the sale.  A closing
purchase transaction may only be made on an exchange that  has  a
secondary  market  for  the  option  with  the  same  price   and
expiration date.  There is no guarantee that the secondary market
will have liquidity for the option.

    There  are risks associated with writing covered put options.
The  Fund  is  required to pay brokerage fees in order  to  write
covered  put options as well as fees for the purchases and  sales
of   the  underlying  securities  or  contracts.   The  portfolio
turnover rate of the Fund may increase due to the Fund writing  a
covered put option.

    Dealer   Options.    Dealer  Options  are   also   known   as
Over-the-Counter options ("OTC").  Dealer options  are  puts  and
calls where the strike price, the expiration date and the premium
payment  are  privately negotiated.  The bank's  creditworthiness
and financial strength are judged by the Sub- Adviser and must be
determined to be as good as the creditworthiness and strength  of
the banks to whom the Fund lends its portfolio securities.

    Puts  and  Calls.   The  Fund may buy options  on  individual
stocks, equity indices and equity futures contracts.  The  Fund's
purpose  in  buying  these puts and calls is  to  protect  itself
against  an  adverse affect in changes of the  general  level  of
market prices in which the Fund operates.  A put option gives the
buyer the right upon payment to deliver a security or contract at
an agreed upon date and price.  A call option gives the buyer the
right upon payment to ask the seller of the option to deliver the
security or contract at an agreed upon date and price.

    (9)  Rights  and Warrants.  The Fund may purchase rights  and
warrants.    Rights   are   short-term  obligations   issued   in
conjunction with new stock issues.  Warrants give the holder  the
right  to  buy  an issuer's securities at a stated  price  for  a
stated time.

    (10)     Securities Lending.  The Fund may lend its portfolio
securities  in order to realize additional income.  This  lending
is  subject  to  the Fund's investment policies and restrictions.
Any loan of portfolio securities must be secured at all times  by
collateral  that  is equal to or greater than the  value  of  the
loan.   If a seller defaults, the Fund may use the collateral  to
satisfy the loan.  However, if the buyer defaults, the buyer  may
lose  some  rights  to  the  collateral  securing  the  loans  of
portfolio securities.

    (11)     Segregated  Accounts.  The  Fund  will  establish  a
segregated  account with its Custodian after it has entered  into
either  a  repurchase agreement or certain options,  futures  and
forward  contracts.   The segregated account will  maintain  cash
and/or  liquid  securities  that  are  equal  in  value  to   the
obligations in the agreement.

                         5
<PAGE>

    (12)     Short  Sales.  The Fund may enter into short  sales.
The  Fund enters into a short sale when it sells a security  that
it  does  not  own.  A broker retains the proceeds of  the  sales
until the Fund replaces the sold security. The Fund arranges with
the  broker  to borrow the security.  The Fund must  replace  the
security at its market price at the time of the replacement.   As
a  result,  the  Fund  may have to pay a premium  to  borrow  the
security and the Fund may, but will not necessarily, receive  any
interest on the proceeds of the sale.  The Fund must pay  to  the
broker  any  dividends or interest payable on the security  until
the  security is replaced.  Collateral, consisting  of  cash,  or
marketable securities, is used to secure the Fund's obligation to
replace  the  security.   The collateral is  deposited  with  the
broker.  If the price of the security sold increases between  the
time of the sale and the time the Fund replaces the security, the
Fund  will  incur  a  loss.  If the price  declines  during  that
period,  the Fund will realize a capital gain.  The capital  gain
will  be  decreased by the amount of transaction  costs  and  any
premiums,  dividends or interest the Fund will  have  to  pay  in
connection  with the short sale.  The loss will be  increased  by
the  amount  of transaction costs and any premiums, dividends  or
interest  the Fund will have to pay in connection with the  short
sale.   For  tax  planning reasons, the Fund may also  engage  in
short  sales  with respect to a security that the Fund  currently
holds or has a right to acquire, commonly referred to as a "short
against the box."

    (13)      When-Issued  Securities.   The  Fund  may  purchase
securities  on a when-issued basis.  The purchase price  and  the
interest rate payable, if any, on the securities are fixed on the
purchase  commitment date or at the time the settlement  date  is
fixed.   The  value  of  these securities is  subject  to  market
fluctuation.  For fixed-income securities, no interest accrues to
the  Fund  until a settlement takes place.  At the time the  Fund
makes a commitment to purchase securities on a when-issued basis,
the Fund will record the transaction, reflect the daily value  of
the  securities when determining the net asset value of the Fund,
and  if  applicable, calculate the maturity for the  purposes  of
determining   the  average  maturity  from  the   date   of   the
Transaction.   At the time of settlement, a when-issued  security
may be valued below the amount of the purchase price.

    To  facilitate these transactions, the Fund will  maintain  a
segregated account with the Custodian that will include cash,  or
marketable  securities, in an amount which is at least  equal  to
the  commitments.  On the delivery dates of the transactions, the
Fund  will meet its obligations from maturities or sales  of  the
securities held in the segregated account and/or from cash  flow.
If  the  Fund  chooses  to  dispose of the  right  to  acquire  a
when-issued security prior to its acquisition, it could  incur  a
loss  or a gain due to market fluctuation.  Furthermore, the Fund
may  be  at  a disadvantage if the other party to the transaction
defaults.  When-issued transactions may allow the Fund  to  hedge
against unanticipated changes in interest rates.

DIVERSIFICATION REQUIREMENTS FOR THE FUND

    The Fund intends to meet the diversification requirements  of
the 1940 Act as currently in effect.  Investments not subject  to
the  diversification requirements could involve an increased risk
to  an  investor  should an issuer, or a  state  or  its  related
entities,  be  unable to make interest or principal  payments  or
should the market value of such securities decline.

FUNDAMENTAL INVESTMENT RESTRICTIONS

    The  following investment restrictions have been  adopted  by
the  Trust with respect to the Fund.  Except as otherwise stated,
these  investment  restrictions are  "fundamental"  policies.   A
"fundamental" policy is defined in the 1940 Act to mean that  the
restriction cannot be changed without the vote of a "majority  of
the  outstanding voting securities" of the Fund.  A  majority  of
the  outstanding voting securities is defined in the 1940 Act  as
the lesser of (a) 67% or more of the voting securities present at
a  meeting  if  the holders of more than 50% of  the  outstanding
voting  securities are present or represented by  proxy,  or  (b)
more than 50% of the outstanding voting securities.

    The Fund may not:

    (1)   Issue   senior  securities.   For  purposes   of   this
restriction,  borrowing  money, making  loans,  the  issuance  of
shares of beneficial interest in multiple classes or series,  the
deferral  of  Trustees' fees, the purchase or  sale  of  options,
futures  contracts, forward commitments and repurchase agreements
entered  into in accordance with the Fund's investment  policies,
are not deemed to be senior securities.

                           6
<PAGE>

    (2) Borrow money, except (i) in amounts not to exceed 33 1/3%
of  the  value of the Fund's total assets (including  the  amount
borrowed)  taken  at market value from banks or  through  reverse
repurchase agreements or forward roll transactions, (ii) up to an
additional  5% of its total assets for temporary purposes,  (iii)
in connection with short-term credits as may be necessary for the
clearance of purchases and sales of portfolio securities and (iv)
the  Fund  may  purchase  securities  on  margin  to  the  extent
permitted  by  applicable law.  For purposes of  this  investment
restriction,  investments  in  short  sales,  roll  transactions,
futures  contracts, options on futures contracts,  securities  or
indices and forward commitments, entered into in accordance  with
the Fund's investment policies, shall not constitute borrowing.

    (3) Underwrite the securities of other issuers, except to the
extent  that,  in  connection with the disposition  of  portfolio
securities, the Fund may be deemed to be an underwriter under the
Securities Act of 1933.

    (4)  Purchase or sell real estate, except that the  Fund  may
(i) acquire or lease office space for its own use, (ii) invest in
securities  of  issuers that invest in real estate  or  interests
therein,  (iii)  invest in securities that are  secured  by  real
estate  or  interests therein, (iv) purchase and  sell  mortgage-
related securities and (v) hold and sell real estate acquired  by
the Fund as a result of the ownership of securities.

    (5)  Purchase  or  sell  commodities or commodity  contracts,
except  the  Fund  may purchase and sell options  on  securities,
securities indices and currency, futures contracts on securities,
securities  indices  and currency and options  on  such  futures,
forward foreign currency exchange contracts, forward commitments,
securities  index put or call warrants and repurchase  agreements
entered into in accordance with the Fund's investment policies.

    (6)  Make  loans, except that the Fund may (i) lend portfolio
securities  in accordance with the Fund's investment policies  up
to 33 1/3% of the Fund's total assets taken at market value, (ii)
enter into repurchase agreements, (iii) purchase all or a portion
of   an   issue  of  debt  securities,  bank  loan  participation
interests,  bank  certificates of deposit, bankers'  acceptances,
debentures  or other securities, whether or not the  purchase  is
made  upon the original issuance of the securities and (iv)  lend
portfolio  securities  and participate in  an  interfund  lending
program with other series of the Trust provided that no such loan
may  be  made if, as a result, the aggregate of such loans  would
exceed 33 1/3% of the value of the Fund's total assets.

    (7)  With  respect  to  75%  of its  total  assets,  purchase
securities  of  an  issuer (other than the U.S.  Government,  its
agencies,   instrumentalities  or   authorities   or   repurchase
agreements collateralized by U.S. Government securities and other
investment  companies), if:  (a) such purchase would  cause  more
than  5% of the Fund's total assets taken at market value  to  be
invested  in the securities of such issuer; or (b) such  purchase
would  at  the  time result in more than 10% of  the  outstanding
voting securities of such issuer being held by the Fund.

    (8)  Invest  more  than  25%  of  its  total  assets  in  the
securities  of  one  or more issuers conducting  their  principal
business  activities  in the same industry  (excluding  the  U.S.
Government or its agencies or instrumentalities).

    If any percentage restriction described above for the Fund is
adhered  to  at the time of investment, a subsequent increase  or
decrease  in the percentage resulting from a change in the  value
of  the  Fund's  assets will not constitute a  violation  of  the
restriction.

    Unless   otherwise  provided,  for  purposes  of   investment
restriction  (8) above, the term "industry" shall be  defined  by
reference to the SEC Industry Codes set forth in the Directory of
Companies Required to File Annual Reports with the Securities and
Exchange Commission.

                          7
<PAGE>

TEMPORARY DEFENSIVE POSITION

     For  temporary or defensive purposes, the Fund  may  invest,
without  limit,  in  cash or quality short-term  debt  securities
including repurchase agreements.  To the extent that the Fund  is
invested in these instruments, the Fund will not be pursuing  its
investment objective.

PORTFOLIO TURNOVER

    Generally,  the  Fund  purchases  securities  for  investment
purposes  and  not for short-term trading profits.  However,  the
Fund  may  sell securities without regard to the length  of  time
that  the  security  is held in the portfolio  if  such  sale  is
consistent  with  the  Fund's investment  objectives.   A  higher
degree of portfolio activity may increase brokerage costs to  the
Fund.

    The  portfolio  turnover  rate is computed  by  dividing  the
dollar  amount  of  the securities which are  purchased  or  sold
(whichever  amount  is  smaller) by  the  average  value  of  the
securities owned during the year.  Short-term investments such as
commercial  paper,  short-term  U.S.  Government  securities  and
variable rate securities (those securities with intervals of less
than  one-year) are not considered when computing  the  portfolio
turnover rate.


           BOARD OF TRUSTEES AND OFFICERS OF THE TRUST


     The  Board  of  Trustees and Officers of  the  Trust,  their
business addresses, principal occupations and dates of birth  are
listed  below.  The Board of Trustees provides broad  supervision
over  the  affairs  of the Trust and the Fund.  Unless  otherwise
noted, the address of the Trustees and Officers is the address of
the Trust:  40 Richards Avenue, Norwalk, CT  06854.

JACK  W.  ABER - Trustee; Professor of Finance, Boston University
School  of Management since 1972.  He has served as a Trustee  of
the  Trust since June 1999.  He also serves as a Trustee  of  The
Managers  Funds, The Managers Trust I and The Managers Trust  II.
His  address  is  595 Commonwealth Avenue, Boston,  Massachusetts
02215.  His date of birth is September 9, 1937.

WILLIAM  E. CHAPMAN, II - Trustee; President and Owner,  Longboat
Retirement Planning Solutions.  From 1990 to 1998, he served in a
variety  of  roles  with  Kemper Funds, the  last  of  which  was
President  of  the  Retirement Plans  Group.   Prior  to  joining
Kemper,  he  spent  24  years  with CIGNA  in  investment  sales,
marketing  and  general management roles.  He  has  served  as  a
Trustee  of  the  Trust since June 1999.  He  also  serves  as  a
Trustee  of  The  Managers Funds, The Managers Trust  I  and  The
Managers  Trust  II.  His address is 380 Gulf  of  Mexico  Drive,
Longboat Key, Florida 34228.  His date of birth is September  23,
1941.

SEAN  M. HEALEY(1) - Trustee; President and Chief Operating Officer
of  Affiliated  Managers Group, Inc. since  October  1999.   From
April  1995  to October 1999, he was Executive Vice President  of
Affiliated  Managers Group, Inc.  From August 1987 through  March
1995,  he  served  in  a  variety of roles  in  the  Mergers  and
Acquisitions  Department of Goldman, Sachs &  Co.,  the  last  of
which  was  as  Vice President.  His address is Two International
Place,  23rd Floor, Boston, Massachusetts  02110.  He has  served
as  a Trustee of the Trust since June 1999.  He also serves as  a
Trustee  of  The  Managers Funds, The Managers Trust  I  and  The
Managers Trust II.  His date of birth is May 9, 1961.

EDWARD  J.  KAIER - Trustee; Partner, Hepburn Willcox Hamilton  &
Putnam since 1977.  He has served as a Trustee of the Trust since
June  1999.   He also serves as a Trustee of The Managers  Funds,
The  Managers Trust I and The Managers Trust II.  His address  is
1100 One Penn Center, Philadelphia, Pennsylvania 19103.  His date
of birth is September 23, 1945.
---------------------------
(1) Mr. Healey is an "interested person" (as defined in the 1940
Act) of the Trust.

                             8
<PAGE>


ERIC RAKOWSKI - Trustee;  Professor, University of California  at
Berkeley  School of Law since 1990.  Visiting Professor,  Harvard
Law  School 1998-1999.  He has served as a Trustee of  the  Trust
since  June  1999.  He also serves as a Trustee of  The  Managers
Funds,  The  Managers  Trust I and The Managers  Trust  II.   His
address   is   1535   Delaware   Street,   Berkeley,   California
94703-1281. His date of birth is June 5, 1958.

PETER  M.  LEBOVITZ - President; President of The Managers  Funds
LLC.  From September 1994 to April 1999, he was Managing Director
of  The  Managers  Funds, L.P. (the predecessor to  The  Managers
Funds LLC).  From June 1993 to June 1994, he was the Director  of
Marketing for Hyperion Capital Management, Inc.  From April  1989
to  June  1993, he was Senior Vice President for Greenwich  Asset
Management, Inc.  His date of birth is January 18, 1955.

DONALD  S.  RUMERY - Treasurer and Principal Accounting  Officer;
Chief  Financial Officer of The Managers Funds LLC (formerly  The
Managers  Funds, L.P.) since December 1994.  From March  1990  to
December  1994,  he  was a Vice President of Signature  Financial
Group.  From August 1980 to March 1990, he held various positions
with  The Putnam Companies, the last of which was Vice President.
His date of birth is May 29, 1958.

JOHN  KINGSTON,  III  - Secretary; Vice President  of  Affiliated
Managers  Group,  Inc.  since March  1999.   From  June  1998  to
February  1999, he served in a general counseling  capacity  with
Morgan  Stanley  Dean  Witter Investment  Management  Inc.   From
September 1994 to May 1998 he was an Associate with Ropes & Gray.
His date of birth is October 23, 1965.

PETER M. MCCABE - Assistant Treasurer; Portfolio Administrator of
The  Managers Funds LLC (formerly The Managers Funds, L.P.) since
August  1995.  From July 1994 to August 1995, he was a  Portfolio
Administrator at Oppenheimer Capital, L.P.  His date of birth  is
September 8, 1972.

LAURA   A.  PENTIMONE  -  Assistant  Secretary;  Legal/Compliance
Officer  of The Managers Funds LLC (formerly The Managers  Funds,
L.P.)  since September 1997.  From August 1994 to June 1997,  she
was a law student.  Her date of birth is November 10, 1970.

                               9
<PAGE>

TRUSTEES' COMPENSATION

     COMPENSATION TABLE:

                                                    Total Compensation
                                                        from the
                          Aggregate   Aggregate        Fund and the
Name of                  Compensation Compensation       Fund Complex
  Trustee               from the Fund from the Trust(a) Paid to Trustees(b)
----------      ---------------------------------------------------

Jack W. Aber              ---            $4,000            $26,000
William E. Chapman, II    ---            $4,000            $26,000
Sean M. Healey            none            none              none
Edward K. Kaier           ---            $4,000            $26,000
Eric Rakowski             ---            $4,000            $26,000

____________________

(a)  Compensation is estimated for the Fund's fiscal year  ending
     October 31, 2001.  The Fund does not provide any pension  or
     retirement benefits for the Trustees.

(b)  Total  compensation  includes estimated compensation  to  be
     paid during the 12-month period ending December 31, 2000 for
     services  as  Trustees of The Managers Funds,  The  Managers
     Trust I and The Managers Trust II.


       CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

CONTROL PERSONS

     As  of  November 14, 2000, through its ownership of 100%  of
the  shares of the Fund, Affiliated Managers Group, Inc.  ("AMG")
"controlled" (within the meaning of the 1940 Act) the  Fund.   An
entity  or  person which "controls" a particular Fund could  have
effective voting control over that Fund.

     No other person or entity owned shares of the Fund.

MANAGEMENT OWNERSHIP

     As  of  November  14, 2000, all management personnel  (i.e.,
Trustees and Officers) as a group owned beneficially less than 1%
of the outstanding shares of the Fund.


                     MANAGEMENT OF THE FUND

INVESTMENT MANAGER AND SUB-ADVISER

     The  Trustees provide broad supervision over the  operations
and  affairs of the Trust and the Fund.  The Managers  Funds  LLC
(the  "Investment Manager") serves as investment manager  to  and
distributor of the Fund.  The Managers Funds LLC is a  subsidiary
of AMG, and AMG serves as the Managing Member of the LLC.  AMG is
located   at   Two  International  Place,  23rd  Floor,   Boston,
Massachusetts 02110.

     The  Investment Manager and its corporate predecessors  have
had  over  20 years of experience in evaluating sub-advisers  for
individuals and institutional investors.  As part of its services
to  the  Fund under an investment management agreement  with  the
Trust   dated  November  14,  2000  (the  "Investment  Management
Agreement"),  the Investment Manager also carries out  the  daily

                       10
<PAGE>

administration  of  the  Trust  and  Fund.   For  its  investment
management   services,  the  Investment   Manager   receives   an
investment management fee from the Fund.  All or a portion of the
investment  management  fee paid by the Fund  to  the  Investment
Manager is used to pay the advisory fees of First Quadrant, L.P.,
the  sub-adviser which manages the assets of the Fund (the  "Sub-
Adviser"  or "First Quadrant").  The Investment Manager  receives
no  additional  compensation from the Fund for its administration
services.  First Quadrant was selected by the Investment Manager,
subject  to  the  review  and approval of  the  Trustees.   First
Quadrant  is  the  successor firm to First Quadrant  Corporation,
which  was  formed  in  1998.   AMG indirectly  owns  a  majority
interest  in  First Quadrant.  As of September  30,  2000,  First
Quadrant's  assets  under  management totaled  approximately  $22
billion.   First Quadrant's address is 800 E. Colorado Boulevard,
Suite  900,  Pasadena, California, 91101.  Robert D.  Arnott  and
Christopher G. Luck are the lead portfolio managers for the Fund.

     The  Sub-Adviser has discretion, subject to oversight by the
Trustees  and  the  Investment  Manager,  to  purchase  and  sell
portfolio   assets,   consistent  with  the   Fund's   investment
objectives,  policies and restrictions.  Generally, the  services
which  the Sub-Adviser provides to the Fund are limited to  asset
management  and related recordkeeping services.  The  Sub-Adviser
may also serve as a discretionary or non-discretionary investment
adviser to management or advisory accounts which are unrelated in
any manner to the Investment Manager or its affiliates.

COMPENSATION OF INVESTMENT MANAGER AND SUB-ADVISER BY THE FUND

     As  compensation  for  the  investment  management  services
rendered  and  related  expenses under the Investment  Management
Agreement,  the Fund has agreed to pay the Investment Manager  an
investment management fee, which is computed daily as percentages
of the average of the value of the net assets of the Fund and may
be  paid  monthly.  As compensation for the investment management
services  rendered  and related expenses under  the  Sub-Advisory
Agreement,  the  Investment  Manager  has  agreed  to   pay   the
Sub-Adviser  a fee (net of all mutually agreed upon  fee  waivers
and  reimbursements required by applicable law) for managing  the
portfolio,  which is also computed daily and paid  monthly.   The
fee paid to the Sub-Adviser is paid out of the fee the Investment
Manager receives from the Fund and does not increase the expenses
of the Fund.

FEE WAIVERS AND EXPENSE LIMITATIONS

     The  Investment  Manager  has contractually  agreed,  for  a
period  of  no  less than eighteen (18) months,  to  limit  total
annual  fund  operating  expenses  to  1.00%;  subject  to  later
reimbursement  by the Fund in certain circumstances.  The  waiver
may,  at  the discretion of the Investment Manager, be  continued
beyond  such  point.  See "Managers AMG Funds" in the  Prospectus
for further information.

     The Investment Manager has decided to waive all or a portion
of its fees from the Fund or reimburse expenses to the Fund for a
variety  of  reasons, including attempting  to  make  the  Fund's
performance more competitive as compared to similar  funds.   The
effect  of the expense limitation in effect at the date  of  this
Statement of Additional Information on the management fees  which
are  expected  to  be  payable by the Fund is  reflected  in  the
Expense Information located at the front of the Fund's Prospectus

INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS

     The  Managers Funds LLC serves as investment manager to  the
Fund  under  the Investment Management Agreement.  The Investment
Management Agreement permits the Investment Manager to from  time
to  time  engage  one  or  more sub-advisers  to  assist  in  the
performance   of  its  services.   Pursuant  to  the   Investment
Management Agreement, the Investment Manager has entered  into  a
sub-advisory agreement with First Quadrant, L.P., dated  November
14, 2000 (the "Sub-Advisory Agreement").

     The  Investment  Management Agreement and  the  Sub-Advisory
Agreement provide for an initial term of two years and thereafter
shall  continue  in  effect from year to year  so  long  as  such
continuation  is specifically approved at least annually  (i)  by
either the Trustees of the Trust or by vote of a majority of  the
outstanding voting securities (as defined in the 1940 Act) of the
Fund,  and (ii) in either event by the vote of a majority of  the
Trustees  of  the Trust who are not parties to the agreements  or
"interested  persons" (as defined in the 1940 Act)  of  any  such
party,  cast  in  person at a meeting called for the  purpose  of

                               11
<PAGE>

voting  on such continuance.  The Investment Management Agreement
and   the  Sub-Advisory  Agreement  may  be  terminated,  without
penalty, by the Board of Trustees, by vote of a majority  of  the
outstanding voting securities (as defined in the 1940 Act) by the
Investment Manager or (in the case of the Sub-Advisory Agreement)
by  the  Sub-Adviser on not more than 60 days' written notice  to
the  other  party  and  to the Fund.  The  Investment  Management
Agreement  and the Sub-Advisory Agreement terminate automatically
in  the  event of assignment, as defined under the 1940  Act  and
regulations thereunder.

     The   Investment  Management  Agreement  provides  that  the
Investment Manager is specifically responsible for:

     * developing and furnishing continuously an investment program
       and  strategy for the Fund in compliance with  the  Fund's
       investment objective and policies as set forth in the Trust's
       current Registration Statement;

     * providing research and analysis relative to the investment
       program and investments of the Fund;

     * determining (subject to the overall supervision and review
       of the Board of Trustees of the Trust) what investments shall be
       purchased, held, sold or exchanged by the Fund and what portion,
       if any, of the assets of the Fund shall be held in cash or cash
       equivalents; and

     * making changes on behalf of the Trust in the investments of
       the Fund.

     Under   the   Sub-Advisory  Agreement,  First  Quadrant   is
responsible  for  performing substantially  these  same  advisory
services for the Investment Manager and the Fund.

     The  Investment Management Agreement also provides that  the
Investment Manager shall furnish the Fund with office  space  and
facilities,  services of executives and administrative  personnel
and   certain  other  administrative  services.   The  Investment
Manager  compensates  all executive and  clerical  personnel  and
Trustees  of  the  Trust if such persons  are  employees  of  the
Investment Manager or its affiliates.

     The  Fund  pays  all  expenses not borne by  its  Investment
Manager or Sub-Adviser including, but not limited to, the charges
and   expenses  of  the  Fund's  custodian  and  transfer  agent,
independent  auditors  and legal counsel for  the  Fund  and  the
Trust's  independent Trustees, 12b-1 fees, if any, all  brokerage
commissions  and  transfer  taxes in  connection  with  portfolio
transactions,  all taxes and filing fees, the fees  and  expenses
for registration or qualification of its shares under federal and
state   securities  laws,  all  expenses  of  shareholders'   and
Trustees' meetings and of preparing, printing and mailing reports
to  shareholders  and the compensation of Trustees  who  are  not
directors, officers or employees of the Investment Manager,  Sub-
Adviser  or  their  affiliates, other than affiliated  registered
investment companies.

     The  Sub-Advisory  Agreement  requires  the  Sub-Adviser  to
provide fair and equitable treatment to the Fund in the selection
of   portfolio  investments  and  the  allocation  of  investment
opportunities.  However, it does not obligate the Sub-Adviser  to
acquire  for the Fund a position in any investment which  any  of
the Sub-Adviser's other clients may acquire.  The Fund shall have
no first refusal, co-investment or other rights in respect of any
such investment, either for the Fund or otherwise.

     Although the Sub-Adviser makes investment decisions for  the
Fund  independent of those for its other clients,  it  is  likely
that similar investment decisions will be made from time to time.
When   the   Fund  and  another  client  of  a  Sub-Adviser   are
simultaneously  engaged  in the purchase  or  sale  of  the  same
security,  the  transactions  are, to  the  extent  feasible  and
practicable,  averaged as to price and the  amount  is  allocated
between  the Fund and the other client(s) pursuant to  a  formula
considered equitable by the Sub-Adviser.  In specific cases, this
system could have an adverse affect on the price or volume of the
security  to  be  purchased or sold by the  Fund.   However,  the
Trustees believe, over time, that coordination and the ability to
participate in volume transactions should benefit the Fund.

REIMBURSEMENT AGREEMENT

     Under  the  Investment Management Agreement, the  Investment
Manager provides a variety of administrative services to the Fund

                             12
<PAGE>

and,  under  its  distribution  agreement  with  the  Fund,   the
Investment   Manager  provides  a  variety  of  shareholder   and
marketing services to the Fund.  The Investment Manager  receives
no  additional  compensation from the Fund  for  these  services.
Pursuant  to  a  Reimbursement Agreement between  the  Investment
Manager  and  First  Quadrant,  First  Quadrant  reimburses   the
Investment Manager for the costs the Investment Manager bears  in
providing such services to the Fund.

CODE OF ETHICS

     The  Trustees have adopted a Code of Ethics under Rule 17j-1
of  the  1940 Act on behalf of the Trust.  The Code of Ethics  of
the  Trust  incorporates  the code of ethics  of  the  Investment
Manager  (applicable to "access persons" of the  Trust  that  are
also  employees of the Investment Manager) and the code of ethics
of  the Sub-Adviser (applicable to "access persons" of the  Trust
that  are  also  employees of the Sub-Adviser).  In  combination,
these  codes  of  ethics  generally  require  access  persons  to
preclear   any  personal  securities  investment  (with   limited
exceptions  such  as  government securities).   The  preclearance
requirement  and associated procedures are designed  to  identify
any  substantive  prohibition  or limitation  applicable  to  the
proposed  investment.  The restrictions also  include  a  ban  on
trading securities based on information about the trading  within
a Fund.

DISTRIBUTION ARRANGEMENTS

     Under  a  distribution agreement between the  Fund  and  The
Managers Funds (the "Distribution Agreement"), The Managers Funds
LLC  serves as distributor (the "Distributor") in connection with
the  offering  of  the  Fund's shares on a  no-load  basis.   The
Distributor   bears   certain  expenses   associated   with   the
distribution  and  sale of shares of the Fund.   The  Distributor
acts  as  agent  in arranging for the sale of the  Fund's  shares
without sales commission or other compensation.

     The   Distribution  Agreement  between  the  Trust  and  the
Distributor  may  be  terminated by either  party  under  certain
specified  circumstances  and  will  automatically  terminate  on
assignment  in  the  same  manner as  the  Investment  Management
Agreement.  The Distribution Agreement may be continued  annually
so  long  as such continuation is specifically approved at  least
annually (i) by either the Trustees of the Trust or by vote of  a
majority of the outstanding voting securities (as defined in  the
1940 Act) of the Fund, and (ii) in either event by the vote of  a
majority of the Trustees of the Trust who are not parties to  the
agreement or "interested persons" (as defined in the 1940 Act) of
any  such  party,  cast  in person at a meeting  called  for  the
purpose of voting on such continuance.

CUSTODIAN

     State  Street Bank and Trust Company ("State Street" or  the
"Custodian"),  1776 Heritage Drive, North Quincy,  Massachusetts,
is the Custodian for the Fund.  It is responsible for holding all
cash  assets and all portfolio securities of the Fund,  releasing
and   delivering  such  securities  as  directed  by  the   Fund,
maintaining bank accounts in the names of the Fund, receiving for
deposit  into  such  accounts payments for shares  of  the  Fund,
collecting income and other payments due the Fund with respect to
portfolio  securities  and paying out monies  of  the  Fund.   In
addition,  when  the Fund trades in futures contracts  and  those
trades would require the deposit of initial margin with a futures
commission merchant ("FCM"), the Fund will enter into a  separate
special custodian agreement with a custodian in the name  of  the
FCM  which  agreement will provide that the FCM will be permitted
access  to  the  account only upon the Fund's default  under  the
contract.

     The  Custodian  is  authorized  to  deposit  securities   in
securities   depositories  or  to  use  the  services   of   sub-
custodians,  including  foreign  sub-custodians,  to  the  extent
permitted by and subject to the regulations of the Securities and
Exchange Commission.

TRANSFER AGENT

     Boston Financial Data Services, Inc., P.O. Box 8517, Boston,
Massachusetts  02266-8517, is the transfer agent  (the  "Transfer
Agent") for the Fund.

                           13
<PAGE>

INDEPENDENT PUBLIC ACCOUNTANTS

     PricewaterhouseCoopers  LLP,  160  Federal  Street,  Boston,
Massachusetts 02110, is the independent public accountant for the
Fund.  PricewaterhouseCoopers LLP conducts an annual audit of the
financial  statements  of the Fund, assists  in  the  preparation
and/or review of each of the Fund's federal and state income  tax
returns  and  consults with the Fund as to matters of  accounting
and federal and state income taxation.


            BROKERAGE ALLOCATION AND OTHER PRACTICES

     The  Sub-Advisory  Agreement provides that  the  Sub-Adviser
place  all  orders for the purchase and sale of securities  which
are  held  in  the  Fund's  portfolio.   In  executing  portfolio
transactions and selecting brokers or dealers, it is  the  policy
and principal objective of the Sub-Adviser to seek best price and
execution.   It  is expected that securities will  ordinarily  be
purchased in the primary markets.  The Sub-Adviser shall consider
all  factors that it deems relevant when assessing best price and
execution  for the Fund, including the breadth of the  market  in
the  security, the price of the security, the financial condition
and  execution  capability  of  the  broker  or  dealer  and  the
reasonableness  of  the  commission, if  any  (for  the  specific
transaction and on a continuing basis).

      In addition, when selecting brokers to execute transactions
and in evaluating the best available net price and execution, the
Sub-Adviser  is  authorized  by  the  Trustees  to  consider  the
"brokerage and research services" (as those terms are defined  in
Section  28(e)  of  the  Securities  Exchange  Act  of  1934,  as
amended),  provided  by  the broker.   The  Sub-Adviser  is  also
authorized to cause the Fund to pay a commission to a broker  who
provides  such  brokerage and research services for  executing  a
portfolio  transaction  which is  in  excess  of  the  amount  of
commission  another broker would have charged for effecting  that
transaction.   The  Sub-Adviser must  determine  in  good  faith,
however, that such commission was reasonable in relation  to  the
value  of the brokerage and research services provided viewed  in
terms  of  that  particular transaction or in terms  of  all  the
accounts   over   which  the  Sub-Adviser  exercises   investment
discretion.  Brokerage and research services received  from  such
brokers  will be in addition to, and not in lieu of, the services
required  to  be  performed by each Sub-Adviser.   The  Fund  may
purchase  and  sell  portfolio  securities  through  brokers  who
provide the Fund with research services.

     The  Trustees will periodically review the total  amount  of
commissions paid by the Fund to determine if the commissions paid
over  representative periods of time were reasonable in  relation
to commissions being charged by other brokers and the benefits to
the  Fund of using particular brokers or dealers.  It is possible
that   certain  of  the  services  received  by  the  Sub-Adviser
attributable  to a particular transaction will primarily  benefit
one  or  more  other accounts for which investment discretion  is
exercised by the Sub-Adviser.

     The  fees  of the Sub-Adviser are not reduced by  reason  of
their   receipt   of   such  brokerage  and  research   services.
Generally, the Sub-Adviser does not provide any services  to  the
Fund  except portfolio investment management and related  record-
keeping services.


           PURCHASE, REDEMPTION AND PRICING OF SHARES

PURCHASING SHARES

     Investors  may  open  accounts with the Fund  through  their
financial  planners or investment professionals, or  through  the
Trust  in  limited circumstances as described in the  Prospectus.
Shares  may  also be purchased through bank trust departments  on
behalf  of  their clients, other investors such as  corporations,
endowment   funds  and  charitable  foundations,  and  tax-exempt
employee welfare, pension and profit-sharing plans.  There are no
charges by the Trust for being a customer for this purpose.   The
Trust  reserves the right to determine which customers and  which
purchase orders the Trust will accept.

     Certain  investors may purchase or sell Fund shares  through
broker-dealers or through other processing organizations who  may
impose transaction fees or other charges in connection with  this
service.  Shares purchased in this way may be treated as a single

                           14
<PAGE>

account for purposes of the minimum initial investment.  The Fund
may  from  time  to time make payments to such broker-dealers  or
processing  organizations  for  certain  recordkeeping  services.
Investors  who  do  not  wish  to  receive  the  services  of   a
broker-dealer  or processing organization may consider  investing
directly with the Trust.  Shares held through a broker-dealer  or
processing  organization may be transferred into  the  investor's
name  by  contacting the broker-dealer or processing organization
or  the  Transfer  Agent.  Certain processing  organizations  may
receive  compensation from the Trust's Investment Manager  and/or
the Sub-Adviser.

     Purchase  orders received by the Fund before 4:00  p.m.  New
York  Time,  c/o  Boston  Financial Data Services,  Inc.  at  the
address listed in the Prospectus on any Business Day will receive
the  net  asset  value computed that day.  Orders received  after
4:00  p.m. by certain processing organizations which have entered
into  special arrangements with the Investment Manager will  also
receive  that  day's offering price.  The broker-dealer,  omnibus
processor or investment professional is responsible for  promptly
transmitting  orders  to the Trust.  Orders  transmitted  to  the
Trust at the address indicated in the Prospectus will be promptly
forwarded to the Transfer Agent.

     Federal Funds or Bank Wires used to pay for purchase  orders
must  be  in  U.S.  dollars and received in advance,  except  for
certain  processing organizations which have entered into special
arrangements with the Trust. Purchases made by check are effected
when  the  check  is  received,  but  are  accepted  subject   to
collection at full face value in U.S. funds and must be drawn  in
U.S. Dollars on a U.S. bank.

     To   ensure   that  checks  are  collected  by  the   Trust,
redemptions  of  shares which were purchased  by  check  are  not
effected until the clearance of the check, which may take  up  to
15  days after the date of purchase unless arrangements are  made
with the Investment Manager.  However, during this 15 day period,
such  shareholder  may exchange such shares into  any  series  of
Managers AMG Funds, The Managers Funds, The Managers Trust  I  or
The Managers Trust II.  The 15 day holding period for redemptions
would still apply to such exchanges.

     If the check accompanying any purchase order does not clear,
or  if  there  are insufficient funds in your bank  account,  the
transaction will be canceled and you will be responsible for  any
loss  the  Trust incurs.  For current shareholders, the Fund  can
redeem shares from any identically registered account in the Fund
as  reimbursement for any loss incurred.  The Trust has the right
to  prohibit or restrict all future purchases in the Trust in the
event of any nonpayment for shares.  Third party checks which are
payable  to  an existing shareholder who is a natural person  (as
opposed to a corporation or partnership) and endorsed over to the
Fund or State Street Bank and Trust Company will be accepted.

     In   the   interest   of  economy  and  convenience,   share
certificates  will  not  be  issued.   All  share  purchases  are
confirmed  to  the  record holder and credited to  such  holder's
account on the Trust's books maintained by the Transfer Agent.

REDEEMING SHARES

     Any redemption orders received by the Trust before 4:00 p.m.
New  York  Time  on any Business Day will receive the  net  asset
value  determined at the close of trading on the New  York  Stock
Exchange (the "NYSE") on that day.

     Redemption orders received after 4:00 p.m.  will be redeemed
at  the net asset value determined at the close of trading on the
next Business Day.  Redemption orders transmitted to the Trust at
the   address  indicated  in  the  Prospectus  will  be  promptly
forwarded  to the Transfer Agent.  If you are trading  through  a
broker-dealer or investment adviser, such investment professional
is  responsible for promptly transmitting orders.   There  is  no
redemption  charge.   The  Fund  reserves  the  right  to  redeem
shareholder accounts (after 60 days notice) when the value of the
Fund  shares in the account falls below $5000 due to redemptions.
Whether  the  Fund will exercise its right to redeem  shareholder
accounts  will  be  determined by the  Investment  Manager  on  a
case-by-case basis.

     If  the Fund determines that it would be detrimental to  the
best  interest of the remaining shareholders of the Fund to  make
payment wholly or partly in cash, payment of the redemption price
may  be  made in whole or in part by a distribution  in  kind  of
securities from the Fund, in lieu of cash, in conformity with the
applicable rule of the SEC.  If shares are redeemed in kind,  the
redeeming shareholder might incur transaction costs in converting
the  assets  to cash.  The method of valuing portfolio securities

                         15
<PAGE>

is described under the "Net Asset Value," and such valuation will
be made as of the same time the redemption price is determined.

     Investors should be aware that redemptions from the Fund may
not  be  processed  if a redemption request is not  submitted  in
proper form.  To be in proper form, the request must include  the
shareholder's  taxpayer  identification number,  account  number,
Fund   number  and  signatures  of  all  account  holders.    All
redemptions  will  be  mailed to the address  of  record  on  the
shareholder's  account.  In addition, if a  shareholder  sends  a
check  for  the  purchase of shares of the Fund  and  shares  are
purchased  before  the  check  has cleared,  the  transmittal  of
redemption proceeds from the shares will occur upon clearance  of
the  check  which may take up to 15 days.  The Fund reserves  the
right to suspend the right of redemption and to postpone the date
of  payment  upon  redemption beyond seven days as  follows:  (i)
during  periods when the NYSE is closed for other  than  weekends
and  holidays  or  when  trading on the  NYSE  is  restricted  as
determined by the SEC by rule or regulation, (ii) during  periods
in  which  an  emergency, as determined by the SEC,  exists  that
causes  disposal by the Fund of, or evaluation of the  net  asset
value   of,   portfolio   securities  to   be   unreasonable   or
impracticable,  or (iii) for such other periods as  the  SEC  may
permit.

EXCHANGE OF SHARES

     An investor may exchange shares from the Fund into shares of
any  series  of  Managers  AMG Funds,  The  Managers  Funds,  The
Managers Trust I or The Managers Trust II without any charge.  An
investor may make such an exchange if following such exchange the
investor  would  continue to meet the Fund's  minimum  investment
amount.  Shareholders should read the Prospectus of the series of
Managers AMG Funds, The Managers Funds, The Managers Trust  I  or
The  Managers  Trust II they are exchanging into.  Investors  may
exchange only into accounts that are registered in the same  name
with the same address and taxpayer identification number.  Shares
are  exchanged on the basis of the relative net asset  value  per
share.  Since exchanges are purchases of a series of Managers AMG
Funds,  The Managers Funds, The Managers Trust I or The  Managers
Trust  II  and  redemptions of the Fund, the usual  purchase  and
redemption  procedures and requirements apply to  each  exchange.
Shareholders are subject to federal income tax and may  recognize
capital  gains or losses on the exchange for federal  income  tax
purposes.  Settlement on the shares of any series of Managers AMG
Funds,  The Managers Funds, The Managers Trust I or The  Managers
Trust  II  will  occur when the proceeds from  redemption  become
available.  The Trust reserves the right to discontinue, alter or
limit the exchange privilege at any time.

NET ASSET VALUE

     The  Fund computes its Net Asset value once daily on  Monday
through Friday on each day on which the NYSE is open for trading,
at  the close of business of the NYSE, usually 4:00 p.m. New York
Time.   The net asset value will not be computed on the  day  the
following  legal  holidays are observed: New Year's  Day,  Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas  Day.
The  Fund  may close for purchases and redemptions at such  other
times as may be determined by the Board of Trustees to the extent
permitted  by  applicable  law.  The time  at  which  orders  are
accepted  and shares are redeemed may be changed in  case  of  an
emergency  or if the NYSE closes at a time other than  4:00  p.m.
New York Time.

     The net asset value of the Fund is equal to the value of the
Fund  (assets minus liabilities) divided by the number of  shares
outstanding.  Fund securities listed on an exchange are valued at
the  last quoted sale price on the exchange where such securities
are  principally traded on the valuation date, prior to the close
of trading on the NYSE, or, lacking any sales, at the last quoted
bid  price  on  such principal exchange prior  to  the  close  of
trading  on  the  NYSE.   Over-the-counter securities  for  which
market  quotations are readily available are valued at  the  last
sale price or, lacking any sales, at the last quoted bid price on
that  date prior to the close of trading on the NYSE.  Securities
and other instruments for which market quotations are not readily
available  are valued at fair value, as determined in good  faith
and pursuant to procedures established by the Trustees.

DIVIDENDS AND DISTRIBUTIONS

     The  Fund  declares and pays dividends and distributions  as
described in the Prospectus.

                          16
<PAGE>


     If  a  shareholder  has elected to receive dividends  and/or
their  distributions  in cash and the postal  or  other  delivery
service  is  unable  to deliver the checks to  the  shareholder's
address  of  record,  the  dividends  and/or  distribution   will
automatically  be  converted  to  having  the  dividends   and/or
distributions reinvested in additional shares.  No interest  will
accrue  on amounts represented by uncashed dividend or redemption
checks.

DISTRIBUTION PLAN

     The  Trust  has adopted a "Plan of Distribution Pursuant  to
Rule  12b-1" (the "Distribution Plan") under which the Trust  may
engage,  directly  or  indirectly, in  financing  any  activities
primarily  intended  to result in the sale of shares,  including,
but   not  limited  to,  (1)  making  payments  to  underwriters,
securities  dealers  and others engaged in the  sale  of  shares,
including  payments to the Distributor to compensate or reimburse
other  persons  for engaging in such activities  and  (2)  paying
expenses  or providing reimbursement of expenditures incurred  by
the Distributor or other persons in connection with the offer  or
sale  of  shares, including expenses relating to the  formulation
and   implementation  of  marketing  strategies  and  promotional
activities such as direct mail promotions and television,  radio,
newspaper,  magazine  and  other  mass  media  advertising,   the
preparation,  printing and distribution of sales  literature  and
reports  for recipients other than existing shareholders  of  the
Trust, and obtaining such information, analyses and reports  with
respect  to  marketing  and promotional activities  and  investor
accounts  as  the  Trust may, from time to time, deem  advisable.
The Trust and the Fund are authorized to engage in the activities
listed  above,  and  in  other activities primarily  intended  to
result  in  the sale of shares, either directly or through  other
persons with which the Trust has entered into agreements pursuant
to the Distribution Plan.  Under the Distribution Plan, the Board
of  Trustees  may authorize payments which may not exceed  on  an
annual basis 0.25% of the average annual net assets of the  Fund.
The Trustees have not authorized the payment of any fees to date.

                       CERTAIN TAX MATTERS

FEDERAL INCOME TAXATION OF FUND-IN GENERAL

     The  Fund  intends to qualify and elect to be  treated  each
taxable   year   as  a  "regulated  investment   company"   under
Subchapter  M  of the Internal Revenue Code of 1986,  as  amended
(the "Code"), although it cannot give complete assurance that  it
will  qualify to do so.  Accordingly, the Fund must, among  other
things,  (a)  derive  at least 90% of its gross  income  in  each
taxable  year from dividends, interest, payments with respect  to
securities  loans,  gains from the sale or other  disposition  of
stock,   securities  or  foreign  currencies,  or  other   income
(including,  but not limited to, gains from options,  futures  or
forward  contracts)  derived  with respect  to  its  business  of
investing  in  such  stock, securities or  currencies  (the  "90%
test"); and (b) satisfy certain diversification requirements on a
quarterly basis.

     If the Fund should fail to qualify as a regulated investment
company  in any year, it would lose the beneficial tax  treatment
accorded regulated investment companies under Subchapter M of the
Code  and  all of its taxable income would be subject to  tax  at
regular  corporate rates without any deduction for  distributions
to  shareholders,  and  such distributions  will  be  taxable  to
shareholders  as  ordinary income to the  extent  of  the  Fund's
current   or  accumulated  earnings  and  profits.    Also,   the
shareholders,  if  they  received a  distribution  in  excess  of
current  or  accumulated earnings and profits,  would  receive  a
return of capital that would reduce the basis of their shares  of
the Fund to the extent thereof.  Any distribution in excess of  a
shareholder's basis in the shareholder's shares would be  taxable
as gain realized from the sale of such shares.

     The Fund will be liable for a nondeductible 4% excise tax on
amounts  not distributed on a timely basis in accordance  with  a
calendar year distribution requirement.  To avoid the tax, during
each calendar year the Fund must distribute an amount equal to at
least  98%  of  the sum of its ordinary income (not  taking  into
account  any capital gains or losses) for the calendar year,  and
its  net  capital gain income for the 12-month period  ending  on
October  31,  in  addition to any undistributed  portion  of  the
respective  balances from the prior year.  For that purpose,  any
income  or gain retained by the Fund that is subject to corporate
tax will be considered to have been distributed by year end.  The
Fund  intends to make sufficient distributions to avoid  this  4%
excise tax.

                             17
<PAGE>

TAXATION OF THE FUND'S INVESTMENTS

     Original  Issue  Discount;  Market  Discount.   For  federal
income tax purposes, debt securities purchased by the Fund may be
treated  as  having  original  issue  discount.   Original  issue
discount represents interest for federal income tax purposes  and
can  generally be defined as the excess of the stated  redemption
price  at  maturity of a debt obligation over  the  issue  price.
Original  issue  discount  is  treated  for  federal  income  tax
purposes as income earned by the Fund, whether or not any  income
is   actually   received,  and  therefore  is  subject   to   the
distribution requirements of the Code.  Generally, the amount  of
original  issue discount is determined on the basis of a constant
yield  to  maturity which takes into account the  compounding  of
accrued  interest.  Under Section 1286 of the Code, an investment
in  a  stripped  bond or stripped coupon may result  in  original
issue discount.

     Debt  securities may be purchased by the Fund at a  discount
that  exceeds the original issue discount plus previously accrued
original issue discount remaining on the securities, if  any,  at
the  time  the  Fund purchases the securities.   This  additional
discount  represents  market  discount  for  federal  income  tax
purposes.  In the case of any debt security issued after July 18,
1984, having a fixed maturity date of more than one year from the
date  of  issue and having market discount, the gain realized  on
disposition will be treated as interest to the extent it does not
exceed  the  accrued market discount on the security (unless  the
Fund elects to include such accrued market discount in income  in
the  tax  year  to which it is attributable).  Generally,  market
discount  is accrued on a daily basis.  The Fund may be  required
to  capitalize, rather than deduct currently, part or all of  any
direct  interest  expense incurred or continued  to  purchase  or
carry  any debt security having market discount, unless the  Fund
makes the election to include market discount currently.  Because
the  Fund must include original issue discount in income, it will
be more difficult for the Fund to make the distributions required
for  the  Fund  to maintain its status as a regulated  investment
company under Subchapter M of the Code or to avoid the 4%  excise
tax described above.

     Options  and  Futures Transactions.  Certain of  the  Fund's
investments  may be subject to provisions of the  Code  that  (i)
require  inclusion of unrealized gains or losses  in  the  Fund's
income  for  purposes of the 90% test, and require  inclusion  of
unrealized gains in the Fund's income for purposes of the  excise
tax  and  the  distribution requirements applicable to  regulated
investment companies; (ii) defer recognition of realized  losses;
and  (iii) characterize both realized and unrealized gain or loss
as  short-term  and long-term gain, irrespective of  the  holding
period  of  the investment.  Such provisions generally apply  to,
among  other investments, options on debt securities, indices  on
securities  and  futures contracts.  The Fund  will  monitor  its
transactions and may make certain tax elections available  to  it
in  order  to  mitigate  the impact of these  rules  and  prevent
disqualification of the Fund as a regulated investment company.

FEDERAL INCOME TAXATION OF SHAREHOLDERS

     General.  Dividends paid by the Fund may be eligible for the
70%   dividends-received   deduction   for   corporations.    The
percentage  of  the  Fund's  dividends  eligible  for  such   tax
treatment may be less than 100% to the extent that less than 100%
of  the  Fund's gross income may be from qualifying dividends  of
domestic corporations. Any dividend declared in October, November
or  December  and made payable to shareholders of record  in  any
such  month  is  treated  as  received  by  such  shareholder  on
December  31,  provided that the Fund pays  the  dividend  during
January of the following calendar year.

     Distributions by the Fund can result in a reduction  in  the
fair  market  value of the Fund's shares.  Should a  distribution
reduce  the  fair market value below a shareholder's cost  basis,
such  distribution nevertheless may be taxable to the shareholder
as  ordinary  income  or   capital gain,  even  though,  from  an
investment  standpoint, it may constitute  a  partial  return  of
capital.   In particular, investors should be careful to consider
the  tax  implications of buying shares just prior to  a  taxable
distribution.   The  price  of  shares  purchased  at  that  time
includes  the  amount  of  any forthcoming  distribution.   Those
investors  purchasing shares just prior to a taxable distribution
will  then receive a return of investment upon distribution which
will nevertheless be taxable to them.

                      18
<PAGE>

FOREIGN SHAREHOLDERS

     Dividends  of  net  investment income  and  distribution  of
realized net short-term gain in excess of net long-term loss to a
shareholder who is a nonresident alien individual, fiduciary of a
foreign   trust  or  estate,  foreign  corporation   or   foreign
partnership  (a  "foreign shareholder") will be subject  to  U.S.
withholding tax at the rate of 30% (or lower treaty rate)  unless
the  dividends  are effectively connected with a  U.S.  trade  or
business of the shareholder, in which case the dividends will  be
subject  to  tax  on  a net income basis at the  graduated  rates
applicable   to   U.S.  individuals  or  domestic   corporations.
Distributions  treated  as  long-term capital  gains  to  foreign
shareholders  will  not  be  subject  to  U.S.  tax  unless   the
distributions  are  effectively connected with the  shareholder's
trade  or  business in the United States or, in  the  case  of  a
shareholder   who   is  a  nonresident  alien   individual,   the
shareholder  was present in the United States for more  than  182
days  during  the taxable year and certain other  conditions  are
met.

     In  the  case  of a foreign shareholder who is a nonresident
alien  individual or foreign entity, the Fund may be required  to
withhold U.S. federal income tax as "backup withholding"  at  the
rate of 31% from distributions treated as long-term capital gains
and   from  the  proceeds  of  redemptions,  exchanges  or  other
dispositions  of  the  Fund's  shares  unless  IRS  Form  W-8  is
provided.   Transfers by gift of shares of the Fund by a  foreign
shareholder  who is a non-resident alien individual will  not  be
subject to U.S. federal gift tax, but the value of shares of  the
Fund  held  by  such  shareholder at his or  her  death  will  be
includible in his or her gross estate for U.S. federal estate tax
purposes.

STATE AND LOCAL TAXES

     The Fund may also be subject to state and/or local taxes  in
jurisdictions  in which the Fund is deemed to be doing  business.
In  addition,  the treatment of the Fund and its shareholders  in
those  states  which  have  income tax  laws  might  differ  from
treatment under the federal income tax laws.  Shareholders should
consult  with  their  own tax advisers concerning  the  foregoing
state and local tax consequences of investing in the Fund.

OTHER TAXATION

     The  Fund  is  a  series of a Massachusetts business  trust.
Under  current law, neither the Trust nor the Fund is liable  for
any income or franchise tax in The Commonwealth of Massachusetts,
provided  that  the  Fund  continues to qualify  as  a  regulated
investment company under Subchapter M of the Code.

     Shareholders  should consult their tax  advisers  about  the
application  of  the  provisions of tax  law  described  in  this
Statement  of Additional Information in light of their particular
tax situations.


                        PERFORMANCE DATA

     From  time to time, the Fund may quote performance in  terms
of   yield,   actual  distributions,  total  return  or   capital
appreciation  in  reports, sales literature,  and  advertisements
published  by  the Fund.  Since the Fund commenced operations  on
November  14,  2000, there is no current performance  information
for the Fund.

TOTAL RETURN

     The  Fund  may  advertise performance in  terms  of  average
annual  total return for 1-, 5- and 10-year periods, or for  such
lesser  periods  that  the Fund has been in  existence.   Average
annual  total  return is computed by finding the  average  annual
compounded rates of return over the periods that would equate the
initial amount invested to the ending redeemable value, according
to the following formula:

                       P (1 + T) N = ERV

In  the  above  formula, P = a hypothetical  initial  payment  of
$1,000

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<PAGE>

T = average annual total return
N = number of years
ERV  = ending redeemable value of the hypothetical $1,000 payment
made at the beginning of the 1-, 5- or 10-year periods at the end
of the year or period

     The figure is then annualized.  The formula assumes that any
charges  are deducted from the initial $1,000 payment and assumes
that  all  dividends and distributions by the Fund are reinvested
at  the price stated in the Prospectus on the reinvestment  dates
during the period

PERFORMANCE COMPARISONS

     The  Fund may compare its performance to the performance  of
other  mutual  funds having similar objectives.  This  comparison
must  be  expressed as a ranking prepared by independent services
or  publications that monitor the performance of  various  mutual
funds  such  as  Lipper, Inc. ("Lipper") and  Morningstar,  Inc.,
("Morningstar").  Lipper prepares the "Lipper Composite Index," a
performance  benchmark  based upon  the  average  performance  of
publicly offered stock funds, bond funds, and money market  funds
as  reported  by Lipper.  Morningstar, a widely used  independent
research  firm,  also ranks mutual funds by overall  performance,
investment objectives and assets. The Fund's performance may also
be  compared to the performance of various unmanaged indices such
as  the  Russell 3000 Index, Wilshire 5000 Equity Index,  Russell
3000  Growth Index, Russell 1000 Growth Index, Standard &  Poor's
500  Composite  Stock  Price Index, the  Standard  &  Poor's  400
Composite Stock Price Index or the Dow Jones Industrial Average.

MASSACHUSETTS BUSINESS TRUST

     The Fund is a series of a "Massachusetts business trust."  A
copy of the Declaration of Trust for the Trust is on file in  the
office  of  the  Secretary of The Commonwealth of  Massachusetts.
The  Declaration  of  Trust  and the By-Laws  of  the  Trust  are
designed  to  make  the  Trust similar  in  most  respects  to  a
Massachusetts  business corporation.  The  principal  distinction
between  the  two  forms concerns shareholder liability  and  are
described below.

     Under  Massachusetts law, shareholders of such a trust  may,
under  certain  circumstances,  be  held  personally  liable   as
partners for the obligations of the trust.  This is not the  case
for   a   Massachusetts  business  corporation.    However,   the
Declaration  of Trust of the Trust provides that the shareholders
shall  not be subject to any personal liability for the  acts  or
obligations  of  the  Fund  and  that  every  written  agreement,
obligation, instrument or undertaking made on behalf of the  Fund
shall contain a provision to the effect that the shareholders are
not personally liable thereunder.

     No  personal liability will attach to the shareholders under
any undertaking containing such provision when adequate notice of
such  provision is given, except possibly in a few jurisdictions.
With  respect to all types of claims in the latter jurisdictions,
(i)  tort  claims,  (ii)  contract  claims  where  the  provision
referred  to  is omitted from the undertaking, (iii)  claims  for
taxes,   and   (iv)  certain  statutory  liabilities   in   other
jurisdictions, a shareholder may be held personally liable to the
extent that claims are not satisfied by the Fund.  However,  upon
payment  of  such liability, the shareholder will be entitled  to
reimbursement from the general assets of the Fund.  The  Trustees
of  the Trust intend to conduct the operations of the Trust in  a
way  as  to avoid, as far as possible, ultimate liability of  the
shareholders of the Fund.

     The  Declaration of Trust further provides that the name  of
the Trust refers to the Trustees collectively as Trustees, not as
individuals or personally, that no Trustee, officer, employee  or
agent  of  the  Fund or to a shareholder, and  that  no  Trustee,
officer,  employee  or agent is liable to any  third  persons  in
connection with the affairs of the Fund, except if the  liability
arises from his or its own bad faith, willful misfeasance,  gross
negligence  or  reckless disregard of his or its duties  to  such
third  persons.   It also provides that all third  persons  shall
look  solely to the property of the Fund for any satisfaction  of
claims arising in connection with the affairs of the Fund.   With
the  exceptions stated, the Trust's Declaration of Trust provides
that  a  Trustee, officer, employee or agent is  entitled  to  be
indemnified against all liability in connection with the  affairs
of the Fund.

     The  Trust shall continue without limitation of time subject
to   the  provisions  in  the  Declaration  of  Trust  concerning
termination  by action of the shareholders or by  action  of  the
Trustees upon notice to the shareholders.

                        20
<PAGE>

DESCRIPTION OF SHARES

     The  Trust  is  an  open-end management  investment  company
organized  as  a Massachusetts business trust in which  the  Fund
represents  a  separate series of shares of beneficial  interest.
See "Massachusetts Business Trust" above.

     The  Declaration of Trust permits the Trustees to  issue  an
unlimited number of full and fractional shares ($0.001 par value)
of  one or more series and to divide or combine the shares of any
series,   if   applicable,  without  changing  the  proportionate
beneficial interest of each shareholder in the Fund or assets  of
another series, if applicable.  Each share of the Fund represents
an equal proportional interest in the Fund with each other share.
Upon  liquidation of the Fund, shareholders are entitled to share
pro rata in the net assets of the Fund available for distribution
to  such shareholders.  See "Massachusetts Business Trust" above.
Shares  of  the Fund have no preemptive or conversion rights  and
are  fully paid and nonassessable.  The rights of redemption  and
exchange are described in the Prospectus and in this Statement of
Additional Information.

     The  shareholders of the Trust are entitled to one vote  for
each  dollar  of  net asset value (or a proportionate  fractional
vote  in  respect of a fractional dollar amount), on  matters  on
which  shares of the Fund shall be entitled to vote.  Subject  to
the 1940 Act, the Trustees themselves have the power to alter the
number and the terms of office of the Trustees, to lengthen their
own  terms, or to make their terms of unlimited duration  subject
to  certain removal procedures, and appoint their own successors,
provided  however,  that immediately after such  appointment  the
requisite  majority  of the Trustees have  been  elected  by  the
shareholders of the Trust.  The voting rights of shareholders are
not  cumulative so that holders of more than 50%  of  the  shares
voting  can,  if  they choose, elect all Trustees being  selected
while the shareholders of the remaining shares would be unable to
elect any Trustees.  It is the intention of the Trust not to hold
meetings  of  shareholders  annually.   The  Trustees  may   call
meetings of shareholders for action by shareholder vote as may be
required by either the 1940 Act or by the Declaration of Trust of
the Trust.

     Shareholders  of  the  Trust  have  the  right,   upon   the
declaration  in  writing or vote of more than two-thirds  of  its
outstanding  shares,  to  remove  a  Trustee  from  office.   The
Trustees  will call a meeting of shareholders to vote on  removal
of  a  Trustee upon the written request of the record holders  of
10%  of  the shares of the Trust.  In addition, whenever  ten  or
more  shareholders of record who have been shareholders of record
for at least six months prior to the date of the application, and
who  hold in the aggregate either shares of the Fund having a net
asset  value  of at least $25,000 or at least 1% of  the  Trust's
outstanding  shares,  whichever  is  less,  shall  apply  to  the
Trustees  in writing, stating that they wish to communicate  with
other shareholders with a view to obtaining signatures to request
a  meeting for the purpose of voting upon the question of removal
of any of the Trustees and accompanies by a form of communication
and  request  which  they wish to transmit,  the  Trustees  shall
within  five  business  days after receipt  of  such  application
either:  (1)  afford to such applicants access to a list  of  the
names  and addresses of all shareholders as recorded on the books
of the Trust; or (2) inform such applicants as to the approximate
number  of  shareholders of record, and the approximate  cost  of
mailing  to them the proposed shareholder communication and  form
of  request.   If  the Trustees elect to follow the  latter,  the
Trustees, upon the written request of such applicants accompanied
by  a  tender  of  the material to be mailed and  the  reasonable
expenses of mailing, shall, with reasonable promptness, mail such
material  to  all  shareholders of record at their  addresses  as
recorded  on  the books, unless within five business  days  after
such  tender the Trustees shall mail to such applicants and  file
with  the SEC, together with a copy of the material to be mailed,
a written statement signed by at least a majority of the Trustees
to the effect that in their opinion either such material contains
untrue  statements of fact or omits to state facts  necessary  to
make the statements contained therein not misleading, or would be
in  violation of applicable law, and specifying the basis of such
opinion.  After  opportunity  for  hearing  upon  the  objections
specified  in the written statements filed, the SEC may,  and  if
demanded  by the Trustees or by such applicants shall,  enter  an
order  either  sustaining one or more objections or  refusing  to
sustain  any  of such objections, or if, after the  entry  of  an
order  sustaining  one or more objections, the  SEC  shall  find,
after  notice and opportunity for a hearing, that all  objections
so  sustained  have  been  met,  and  shall  enter  an  order  so
declaring, the Trustees shall mail copies of such material to all
shareholders with reasonable promptness after the entry  of  such
order and the renewal of such tender.

     The  Trustees have authorized the issuance and sale  to  the
public  of  shares of one series of the Trust.  The Trustees  may
authorize  the issuance of additional series of the  Trust.   The
proceeds  from  the issuance of any additional  series  would  be
invested  in  separate,  independently  managed  portfolios  with
distinct  investment objectives, policies and  restrictions,  and

                            21
<PAGE>

share  purchase, redemption and net asset value procedures.   All
consideration received by the Trust for shares of any  additional
series,  and all assets in which such consideration is  invested,
would  belong  to  that series, subject only  to  the  rights  of
creditors  of  the Trust and would be subject to the  liabilities
related  thereto.   Shareholders of the  additional  series  will
approve  the  adoption  of any management contract,  distribution
agreement and any changes in the investment policies of the Fund,
to the extent required by the 1940 Act.

ADDITIONAL INFORMATION

     This  Statement of Additional Information and the Prospectus
do  not  contain all of the information included in  the  Trust's
Registration  Statement filed with the SEC under  the  1933  Act.
Pursuant  to  the  rules  and regulations  of  the  SEC,  certain
portions   have  been  omitted.   The  Registration   Statements,
including  the Exhibits filed therewith, may be examined  at  the
office of the SEC in Washington DC.

     Statements   contained  in  the  Statement   of   Additional
Information  and  the Prospectus concerning the contents  or  any
contract or other document are not necessarily complete,  and  in
each instance, reference is made to the copy of such contract  or
other document filed as an Exhibit to the applicable Registration
Statement.   Each such statement is qualified in all respects  by
such reference.

      No dealer, salesman or any other person has been authorized
to  give  any  information or to make any representations,  other
than  those  contained  in the Prospectus or  this  Statement  of
Additional Information, in connection with the offer of shares of
the  Fund  and,  if given or made, such other representations  or
information must not be relied upon as having been authorized  by
the  Trust, the Fund or the Distributor.  The Prospectus and this
Statement of Additional Information do not constitute an offer to
sell  or  solicit  an offer to buy any of the securities  offered
thereby  in any jurisdiction to any person to whom it is unlawful
for  the  Fund  or  the Distributor to make such  offer  in  such
jurisdictions.

                            22
<PAGE>

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