BOSTON ADVISORS TRUST, N-1A/A, 2000-03-28

BOSTON ADVISORS TRUST
N-1A/A, 2000-03-28

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<PAGE>

As filed with the Securities and Exchange Commission on March 28, 2000
File Nos. 333-90049 and 811-09675

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]

Pre-Effective Amendment No. 1 [X]

and

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

Amendment No. 1 [X]

BOSTON ADVISORS TRUST
(Exact Name of Registrant as Specified in Charter)

100 Federal Street, Boston, MA 02110
(Address of Principal Executive Offices)(Zip Code)

(617) 348-3100
(Registrant's Telephone Number, including Area Code)

Michael J. Vogelzang
Boston Advisors, Inc.
100 Federal Street
Boston, Massachusetts 02110
(Name and Address of Agent for Service)

Copy to:

Pamela J. Wilson, Esq.
Hale and Dorr, LLP
60 State Street
Boston, Massachusetts 02109

Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of the Registration Statement under the Securities Act of 1933.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
thereafter shall become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

Boston Advisors Trust

P r o s p e c t u s

March 29, 2000

Boston Advisors Cash Reserves Fund

Boston Advisors U.S. Government Money Market Fund

Boston Advisors Tax Free Money Market Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.

Boston Advisors, Inc.

Advest

[LOGO]
Advest
- ------------------------
Advest, Inc.
Member: NASD, NYSE, SIPC

Boston Advisors, Inc.
100 Federal Street
29th Floor
Boston, MA 02110
1-800-523-5903

<PAGE>

Table of Contents
- --------------------------------------------------------------------------------

RISK/RETURN SUMMARY ............................... 3
Boston Advisors Cash Reserves Fund ................ 4
Boston Advisors U.S. Government
Money Market Fund ............................... 6
Boston Advisors Tax Free
Money Market Fund ............................... 8
INVESTMENT ADVISER ................................ 10
INVESTMENT AND ACCOUNT
POLICIES ........................................ 11
Buying Shares ..................................... 12
Redeeming Shares .................................. 13
Other Share Transaction Procedures ................ 14
Dividends, Distributions and Taxes ................ 15
FOR MORE INFORMATION .............................. 16

2
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Risk/Return Summary
- --------------------------------------------------------------------------------

Boston Advisors money market funds

These funds seek the maximum current income that is consistent with maintaining
liquidity and preserving capital. Each fund invests in money market securities
and is designed to maintain a stable $1 share price.

Who may want to invest
These funds may be appropriate if you:
. Are looking for current income
. Need relative stability of principal
. Are investing for a short period of time
. Want to allocate a portion of your investment assets to money
market securities

Boston Advisors Tax Free Money Market Fund may also be appropriate if you are a
taxpayer in a high tax bracket seeking income exempt from federal income tax.

Risks of the funds

An investment in money market funds is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although each fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
funds.

Investment adviser

Each fund is managed by Boston Advisors, Inc. Founded in 1974, Boston Advisors
is a registered investment adviser. Boston Advisors is a wholly-owned subsidiary
of The Advest Group, Inc., a diversified, publicly traded financial services
firm.

3
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Boston Advisors Cash Reserves Fund
- --------------------------------------------------------------------------------

Investment goals
Maximum current income that is consistent with maintaining liquidity and
preserving capital. The fund's board may change these goals without obtaining
the approval of the fund's shareholders. The fund intends to maintain a stable
$1 share price.

Principal investments
The fund invests in U.S. dollar denominated money market securities. These may
include obligations issued by:
. the U.S. government and its agencies and instrumentalities
. corporations, banks and other companies
. multinational organizations such as the World Bank
. non-U.S. governments
. U.S. states and municipalities

The fund may invest in all types of money market securities of U.S. and non-U.S.
issuers, including commercial paper, certificates of deposit, bankers'
acceptances, mortgage-backed and asset-backed securities, repurchase agreements
and other short-term debt securities. These securities may pay interest at
fixed, floating or variable rates.

Minimum credit quality
All investments acquired by the fund will be rated in one of the two highest
short-term rating categories of a nationally recognized statistical rating
organization or, if unrated, will be of equivalent quality.

Maximum maturity
The fund will maintain an average dollar weighted portfolio maturity of 90 days
or less. The fund's individual securities must have a remaining maturity of 397
days or less.

How the adviser selects the fund's investments
The adviser selects for the fund's portfolio those securities that appear to
offer the best relative value based on an analysis of their credit quality,
interest rate sensitivity, yields and prices. Depending on its outlook for
short-term interest rates, the adviser may shorten or lengthen the fund's
average portfolio maturity. To take advantage of changing yield differentials,
the fund may overweight particular sectors of the short-term debt market while
maintaining overall issuer and sector diversification.

4
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Principal risks
The fund might not be able to maintain a $1 share price and investors could lose
money if any of these events occurs:
. The issuer or guarantor of a security owned by the fund defaults
on its payment obligations, becomes insolvent or has its credit
rating downgraded by a rating agency.
. There is a sudden or sharp increase in interest rates.
. The value of the fund's non-U.S. securities goes down because of
unfavorable non-U.S. government actions, political instability or
the more limited availability of accurate information about
non-U.S. issuers.
. The adviser's judgment about the relative value or credit quality
of securities selected for the fund's portfolio proves to be
incorrect.

Fees and expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

Class 1 Class 2
- --------------------------------------------------------------------------------
Shareholder fees
(paid directly from your investment) None None
Annual fund operating expenses
(deducted from fund assets)
Management fees 0.55% 0.55%
Distribution (12b-1) and/or service fees 0.25% None
Other expenses/1/ 0.20% 0.20%
- --------------------------------------------------------------------------------
Total annual fund operating expenses 1.00% 0.75%
Fee waiver and expense reimbursement/2/ 0.10% 0.10%
- --------------------------------------------------------------------------------
Net expenses 0.90% 0.65%
- --------------------------------------------------------------------------------

/1/Based on estimated expenses for year ended 4/30/2001.
/2/The adviser has contractually agreed to waive its advisory fees and reimburse
the fund for its expenses through April 30, 2001 to the extent necessary to
maintain the expense ratios of Class 1 and Class 2 at not more than 0.90% and
0.65% of their average net assets, respectively. These caps may be changed or
terminated at any time after April 30, 2001 and do not apply to brokerage
commissions, taxes, interest and litigation, indemnification and other
extraordinary expenses.

This example is intended to help you compare the cost of investing in shares of
the fund with the cost of investing in other mutual funds.
- --------------------------------------------------------------------------------
The example assumes that:
. You invest $10,000 in the fund for the time periods indicated.
. Your investment has a 5% return each year.
. The fund's operating expenses remain the same.
. You redeem your investment at the end of each period.

Although your actual costs may be higher or lower, under these assumptions your
costs would be:

Class 1 Class 2
- --------------------------------------------------------------------------------
1 year $ 92 $ 66
3 years $308 $230
- --------------------------------------------------------------------------------

5
<PAGE>

Boston Advisors U.S. Government Money Market Fund
- --------------------------------------------------------------------------------

Principal investments
The fund invests exclusively in short-term U.S. government securities and
repurchase agreements based on U.S. government securities. U.S. government
securities include all securities issued or guaranteed by the U.S. government or
any of its agencies or instrumentalities.

Maximum maturity
The fund will maintain an average dollar weighted portfolio maturity of 90 days
or less. The fund's individual securities must have a remaining maturity of 397
days or less.

Principal risks
The fund might not be able to maintain a $1 share price and investors could lose
money if either of these events occurs:

. There is a sudden or sharp increase in interest rates.
. The adviser's judgment about the relative value of securities
selected for the fund's portfolio proves to be incorrect.

Although U.S. government securities and repurchase agreements based on these
securities present a low risk of default, the U.S. government does not guarantee
the value of the fund's investments or shares.

6
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Fees and expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

Although your actual costs may be higher or lower, under these assumptions your
costs would be:
Class 1 Class 2
- --------------------------------------------------------------------------------
1 year $ 92 $ 66
3 years $308 $230
- --------------------------------------------------------------------------------

7
<PAGE>

Boston Advisors Tax Free Money Market Fund
- --------------------------------------------------------------------------------

Investment goals
Maximum current income that is exempt from regular federal income tax,
consistent with maintaining liquidity and preserving capital. The fund's board
may change these goals without obtaining the approval of the fund's
shareholders. The fund intends to maintain a stable $1 share price.

Principal investments
The fund invests at least 80% of its assets in short-term municipal securities.
These include obligations issued by:
. Any of the 50 states and their political subdivisions, agencies
and public authorities
. Other governmental issuers such as Puerto Rico, the U.S. Virgin
Islands and Guam.

The municipal securities in which the fund invests include general obligation
bonds, revenue bonds and notes and municipal leases.

Municipal securities may pay interest at fixed, variable or floating rates. The
interest on these securities is exempt from regular federal income tax and
normally is lower than it would be if the interest were subject to taxation.

The fund can invest up to 20% of its assets in securities whose interest is
federally taxable.

Maximum maturity
The fund will maintain an average dollar weighted portfolio maturity of 90 days
or less. The fund's individual securities must have a remaining maturity of 397
days or less.

How the adviser selects the fund's investments
The adviser selects for the fund's portfolio those securities that appear to
offer the best relative value based on an analysis of their credit quality,
interest rate sensitivity, after-tax yields and prices. Depending on its outlook
for short-term interest rates, the adviser may shorten or lengthen the fund's
average portfolio maturity. To take advantage of changing yield differentials,
the fund may overweight particular sectors of the short term municipal market
while maintaining overall issuer, sector and geographical diversification to
reduce credit risk.

Principal risks
Taxable distributions
Some of the fund's income distributions may be, and distributions of the fund's
gains will be, subject to federal taxation. The fund may realize taxable gains
on the sale of its securities. Some of the fund's income distributions may be
subject to the federal alternative minimum tax. In addition, distributions of
the fund's income and gains generally will be subject to state income taxation.

8
<PAGE>

Investment risks
The fund might not be able to maintain a $1 share price and investors could lose
money if any of these events occurs:
. The issuer or guarantor of a security owned by the fund defaults
on its payment obligations, becomes insolvent or has its credit
rating downgraded by a rating agency.
. New federal or state laws adversely affect the tax-exempt status
of securities held by the fund or the ability of issuers to pay
principal and interest on these securities.
. There is a sudden or sharp increase in interest rates.
. The adviser's judgment about the relative value or credit quality
of securities selected for the fund's portfolio proves to be
incorrect.

Fees and expenses

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

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

Although your actual costs may be higher or lower, under these assumptions your
costs would be:

9
<PAGE>

Investment Advisor
- --------------------------------------------------------------------------------

Boston Advisors
The funds' investment adviser is Boston Advisors, Inc., located at 100 Federal
Street, Boston, Massachusetts 02110. Boston Advisors is a registered investment
adviser established in 1974. It manages fixed income, balanced and equity
portfolios.

Advest Group
The adviser is a wholly-owned subsidiary of The Advest Group, Inc., a
diversified, publicly traded financial services firm with headquarters in
Hartford Connecticut. Through its subsidiaries, The Advest Group, Inc. offers a
comprehensive range of investment products and services to individuals,
business owners and companies. Together with its predecessor companies, The
Advest Group, Inc. has been serving investors since 1898.

Advisory fees
Each fund has agreed to pay the adviser a monthly advisory fee at an annual rate
equal to 0.55% of the fund's average daily net assets.

The adviser has contractually agreed to waive its advisory fee and reimburse
each fund for its expenses through April 30, 2001 to the extent necessary to
maintain the expense ratio of Class 1 shares of each fund at not more than 0.90%
of their respective average net assets and Class 2 shares of each fund at not
more than 0.65% of their respective average net assets. These caps may be
changed or terminated at any time after April 30, 2001 and do not apply to
brokerage commissions, taxes, interest and litigation, indemnification and other
extraordinary expenses.

Distributor
Advest, Inc., a wholly-owned broker-dealer subsidiary of The Advest Group, Inc.,
is the principal distributor of each fund's shares.

Distribution plan
The funds have adopted a rule 12b-1 distribution plan authorizing each fund's
Class 1 shares to pay service fees equal to 0.25% annually of the class' average
daily net assets. These fees are an ongoing expense and, over time, may cost you
more than paying an initial sales charge. Class 2 shares are exempt from the
rule 12b-1 distribution plan and are not subject to these service fees. Class 2
is only available to certain managed IRA and qualified benefit plan accounts.

10
<PAGE>

Investment and Account Policies
- --------------------------------------------------------------------------------

Share price
You may buy, exchange or redeem fund shares at their net asset value next
determined after receipt of your request in good order. Each fund's net asset
value is the value of its assets minus its liabilities for each class of shares.
Each fund calculates its net asset value at the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern time), on each day the
Exchange is open. However, a fund's net asset value may be calculated earlier if
trading on the Exchange is restricted or as permitted by the SEC. The Exchange
is closed on certain holidays listed in the SAI.

Each fund uses the amortized cost method to value its portfolio securities.
Using this method, a fund amortizes over the remaining life of a security the
difference between the principal amount due at maturity and the cost of the
security to the fund.

The funds have purchased insurance to cover certain losses caused by a default
or bankruptcy of issuers of securities owned by the funds. This policy is
designed to guard against fluctuations in a fund's net asset value due to
adverse credit events. Under the limits of this policy, each fund will only be
protected to a maximum loss negotiated with the insurance provider after
subtracting a specific deductible per adverse credit event. While the funds will
pay premiums for this coverage, a fund may incur losses to the extent that the
insurance does not cover them.

Transaction requests
When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information.
. Name of the fund
. Account number
. Class of shares being bought, exchanged or redeemed
. Dollar amount or number of shares being bought, exchanged or
redeemed

Minimum investments
Minimum initial investment requirements vary depending on the nature of your
investment account. There are no minimum requirements for additional investments
in your account.

- --------------------------------------------------------------------------------
Minimum
Initial Investment
- --------------------------------------------------------------------------------
Type of Account Class 1 Class 2
- --------------------------------------------------------------------------------
Regular $1000 None*
- --------------------------------------------------------------------------------
Centennial $5000 None*
- --------------------------------------------------------------------------------
Employee $ 100 None*
- --------------------------------------------------------------------------------
*Class 2 is only available to certain managed IRA and qualified benefit plan
accounts.

11
<PAGE>

Opening an account
You should contact your Financial Advisor at Advest, the fund's distributor, to
open a brokerage account and make arrangements to buy shares. You should pay
for your fund shares through your brokerage account at the time you place your
order.

Adding to your account
By check. Mail or deliver your check or negotiable draft, payable to Advest,
Inc., to your Advest Financial Advisor, who will forward it to the funds. Please
indicate your account number on the check or draft.

By investing cash in your brokerage account. Contact your Advest Financial
Advisor to arrange for cash that has come into your brokerage account to be
invested in a fund.

Through an automatic sweep. If your Advest brokerage account has an automatic
"sweep" feature, cash balances from the account will be automatically invested
in shares of the fund you have selected.

Effective time of purchases
- --------------------------------------------------------------------------------
Purchase is Effective Dividends
Form of Purchase Payment (Eastern time) Begin
- --------------------------------------------------------------------------------
. Payment in federal funds If received At close of On that day
. Having a sufficient cash before 4 p.m.* Exchange
balance in your Advest on that day
account
-------------------------------------------------
If received At close of On the next
after 4 p.m. Exchange on the business day
next business day
- --------------------------------------------------------------------------------
. Other forms of payment At close of Exchange on the On the next
received by Advest, which next business day business day
must be converted into
federal funds
- --------------------------------------------------------------------------------
*Please consult your broker, as it may impose an earlier deadline.

12
<PAGE>

Redeeming Shares
- --------------------------------------------------------------------------------

Through Advest
By contacting your Advest Financial Advisor. Contact your Advest Financial
Advisor to request a redemption of fund shares. You can use the redemption
proceeds to pay for the purchase of securities in your brokerage account, or you
can have Advest, Inc. send a check or wire transfer to you or another person you
designate.

Through an automatic sweep. If your Advest brokerage account has an automatic
"sweep" feature, fund shares will be redeemed automatically to pay for
securities purchased through your account.

Effective time of redemptions

- --------------------------------------------------------------------------------
Redemption Received Redemption is Effective Proceeds Dividends
(Eastern time) (Eastern time) Received Continue
- --------------------------------------------------------------------------------
Before close of At close of Exchange On that day* Through the
Exchange on that day previous
business day
- --------------------------------------------------------------------------------
After close of At close of On the next Through that
Exchange Exchange on the business day* business day
next business day
- --------------------------------------------------------------------------------
*Generally, but not later than the seventh day after redemption is effective.

13
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Other Share Transaction Procedures
- --------------------------------------------------------------------------------

Other transaction policies
Each fund has the right to:

. Waive or change minimum investment amounts
. Reject any purchase order
. Suspend or postpone redemptions of shares to the extent permitted
by the Securities and Exchange Commission
. Pay redemption proceeds by giving you securities. You may pay
transaction costs to dispose of the securities
. Redeem shares held in an Advest brokerage account if you close the
account.

Involuntary redemptions
Each fund may close your account if, for reasons other than investment losses,
the value of fund shares in your account falls below the minimum investment
requirement. After a fund notifies you of the fund's intention to close your
account, you will have 60 days to bring the account back to the minimum level.

14
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Dividends, Distributions and Taxes
- --------------------------------------------------------------------------------

Dividends and distributions
Each fund declares a dividend of substantially all of its net investment income
and short-term capital gain daily and pays the dividends monthly. In addition,
each fund distributes any long-term capital gain annually. Distributions are
expected to be primarily from income. The funds do not expect ordinarily to
distribute any long-term capital gain.

Dividends and capital gain distributions are reinvested in additional shares of
the same fund you hold, unless you tell your Advest Financial Advisor to pay
them in cash.

Taxes
The following table shows the tax status of dividends, distributions and
transactions in fund shares.

Dividends attributable to interest on U.S. Treasury and certain U.S. government
obligations are exempt from state and local income taxes in most states, subject
to state-specific requirements.

- --------------------------------------------------------------------------------
Name of Fund Type of Transaction Tax Status
- --------------------------------------------------------------------------------
Cash Reserves Fund Interest from net Taxable as ordinary
investment income. income.
- --------------------------------------------------------------------------------
U.S. Government Money Interest from net Income exempt from state
Market Fund investment income. tax but subject to
federal tax.
- --------------------------------------------------------------------------------
Tax Free Money Interest designated as Exempt from federal
Market Fund tax-exempt interest. income tax, but may be
subject to alternative
minimum tax and state
and local taxes.
---------------------------------------------------
Interest that is not Taxable as ordinary
designated as income.
tax-exempt interest.
- --------------------------------------------------------------------------------
All funds Distributions of Taxable as ordinary
short-term capital gain. income.
---------------------------------------------------
Distributions of Taxable as long-term
long-term capital gain. capital gain.
---------------------------------------------------
Redemptions or exchanges No gain or loss as long
of fund shares. as the fund maintains a
constant $1 share price.
- --------------------------------------------------------------------------------

After the end of each year, each fund will provide you with information about
the dividends and distributions you received during the previous year.

Taxable dividends and distributions are taxable whether they are received in
cash or additional shares.

If you do not provide the fund with your correct taxpayer identification number
and any required certifications, you may be subject to back-up withholding of
31% of your distributions and taxable dividends.

Because each shareholder's circumstances are different and special tax rules may
apply, you should consult your tax adviser about your investment in the funds.

15
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For More Information
- --------------------------------------------------------------------------------

Boston Advisors Money Market Funds
For investors who want more information about the Boston Advisors money market
funds, the following documents are available free upon request:

Annual/Semi-annual Reports Additional information about each fund's investments
will be available in the funds' annual and semi-annual reports to shareholders.
The funds' annual report will contain a discussion of the market conditions and
investment strategies that significantly affected each fund's performance during
its last fiscal year.

Statement of Additional Information (SAI) The SAI provides more detailed
information about the funds and is incorporated into this prospectus by
reference.

Investors can get free copies of reports and SAIs and request other information
about the funds by contacting the funds at:

Boston Advisors Money Market Funds
100 Federal Street, 29th Floor
Boston, MA 02110
Telephone: 1-800-523-5903
E-mail: [email protected]
Internet: http://www.bostonadvisors.com

Investors can review the funds' semi-annual and annual reports and SAI at the
Public Reference Room of the Securities and Exchange Commission. Investors can
get text-only copies:

. For a fee, by writing to the Public Reference Room of the
Commission, Washington, D.C. 20549-0102

. Free from the Commission's Internet web site at
http://www.sec.gov.

. By electronic request at the following E-mail address:
[email protected].

Investors can get information about the operation of the Public Reference Room
by calling 1-202-942-8090.

If someone makes a statement about the funds that is not in this prospectus, you
should not rely upon that information. Neither the funds nor the distributor is
offering to sell shares of the funds to any person to whom the funds may not
lawfully sell their shares.

Investment Company Act file no. 811-9675

16
<PAGE>

BOSTON ADVISORS TRUST
100 Federal Street
Boston, Massachusetts 02110

STATEMENT OF ADDITIONAL INFORMATION

Boston Advisors Cash Reserves Fund
Boston Advisors U.S. Government Money Market Fund
Boston Advisors Tax Free Money Market Fund

Class 1 and Class 2 shares

March 29, 2000

This statement of additional information is not a prospectus. It should be read
in conjunction with Boston Advisors Trust's prospectus dated March 29, 2000, as
supplemented or revised from time to time. A copy of the prospectus can be
obtained free of charge by calling 1-800-523-5903 or by written request to
Boston Advisors Trust (the "Trust") at 100 Federal Street, Boston, Massachusetts
02110. You can also obtain a copy of the Trust's prospectus from our website at
www.bostonadvisors.com.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. Trust History............................................................ 2
2. Description of the Trust and its Investments and Risks................... 2
3. Management of the Trust.................................................. 11
4. Investment Adviser....................................................... 13
5. Principal Underwriter and Distribution Plan.............................. 14
6. Shareholder Servicing/Transfer Agent..................................... 16
7. Custodian and Administrator.............................................. 16
8. Independent Public Accountants........................................... 16
9. Portfolio Transactions................................................... 16
10. Description of Shares.................................................... 17
11. Pricing of Shares........................................................ 19
12. Tax Status............................................................... 20
13. Investment Results....................................................... 23
14. Financial Statements..................................................... 25
15. Appendix - Description of Short-term Debt Ratings...................... 28
</TABLE>
<PAGE>

1. TRUST HISTORY

The Trust was organized as a Massachusetts business trust on September 30, 1999.

2. DESCRIPTION OF THE TRUST AND ITS INVESTMENTS AND RISKS

The Trust is a diversified open-end management investment company consisting of
three funds: Boston Advisors Cash Reserves Fund ("Cash Reserves Fund"), Boston
Advisors U.S. Government Money Market Fund ("U.S. Government Fund") and Boston
Advisors Tax Free Money Market Fund ("Tax Free Fund") (each a "Fund,"
collectively the "Funds").

The prospectus presents the investment objective and the principal investment
strategies and risks of the Funds. This Statement of Additional Information
supplements the disclosure in the Trust's prospectus and provides additional
information about each Fund's investment policies or restrictions.

Restrictions or policies stated as a maximum percentage of a Fund's assets are
only applied immediately after a portfolio investment to which the policy or
restriction applies. Accordingly, any later increase or decrease resulting from
a change in values, total assets, net assets or other circumstances will not be
considered in determining whether the investment complies with a Fund's
restrictions and policies.

Compliance With Money Market Fund Rule 2a-7. Each Fund intends to comply with
the requirements of Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"), which includes restrictions on, among other things,
the maturity and credit ratings of the Fund's portfolio securities.

Under normal circumstances, each Fund will invest in high quality money market
securities with a maximum remaining maturity of 397 days from the date of
settlement of the purchase. Each Fund will maintain a dollar-weighted average
maturity of 90 days or less.

Money Market Instruments. The Cash Reserves Fund may invest in short-term money
market instruments including commercial bank obligations and U.S. dollar
denominated commercial paper. Commercial bank obligations include certificates
of deposit, time deposits and bankers' acceptances. Obligations of branches of
U.S. and non-U.S. banks may be general obligations of the parent bank in
addition to the issuing branch, or may be limited to an obligation of that
branch by the terms of a specific obligation and by government regulation. As
with investments in non-U.S. securities generally, investments in the
obligations of foreign branches of U.S. banks and of foreign banks may subject
the Cash Reserves Fund to investment risks that are different from those of
investments in obligations of domestic issuers.

Commercial paper consists of short-term unsecured promissory notes issued by
corporations in order to finance their current operations. The Cash Reserves
Fund also may invest in variable amount master demand notes (which is a type of
commercial paper). Each of these notes is a direct borrowing arrangement
involving periodically fluctuating rates of interest under a letter agreement.
Transfer of these notes is usually restricted by the issuer, and there is no
secondary trading market for these notes.

2
<PAGE>

Certificates of Deposit. The Cash Reserves Fund may invest in certificates of
deposit of banks and savings and loan associations.

Investing in certificates of deposit issued by non-U.S. banks and non-U.S.
branches of U.S. banks involves some risks that are different from those
associated with investing in certificates of deposit issued by U.S. banks. These
risks include the possible imposition of withholding taxes on interest income,
the possible adoption of governmental restrictions which might adversely affect
the payment of principal and interest on such certificates of deposit, or other
adverse political or economic developments. In addition, it might be more
difficult to obtain and enforce a judgment against non-U.S. banks and non-U.S.
branches of U.S. banks.

U.S. Government Securities. U.S. Government Fund may only invest in U.S.
government securities that are direct obligations of the U.S. Treasury. U.S.
government securities in which the Cash Reserves and Tax Free Funds may invest
include debt obligations issued by the U.S. Treasury or issued or guaranteed by
an agency or instrumentality of the U.S. government, including the Central Bank
for Cooperatives, District of Columbia Armory Board, Export-Import Bank of the
U.S., Farmers Home Administration, Federal Farm Credit Banks, Federal Financing
Bank, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"),
Federal National Mortgage Association ("FNMA"), General Services Administration,
Government National Mortgage Association ("GNMA"), Maritime Administration,
Resolution Trust Corporation, Small Business Administration, Student Loan
Marketing Association, Tennessee Valley Authority and various institutions that
previously were or currently are part of the Farm Credit System (which has been
undergoing reorganization since 1987).

Some U.S. government securities, such as U.S. Treasury bills, Treasury notes and
Treasury bonds, which differ only in their interest rates, maturities and times
of issuance, are supported by the full faith and credit of the United States.
Others are supported by: (i) the right of the issuer to borrow from the U.S.
Treasury, such as securities of the Federal Home Loan Banks; (ii) the
discretionary authority of the U.S. government to purchase the agency's
obligations, such as securities of the FNMA; or (iii) only the credit of the
issuer, such as securities of the Student Loan Marketing Association.

No assurance can be given that the U.S. government will provide financial
support in the future to U.S. government agencies, authorities or
instrumentalities that are not supported by the full faith and credit of the
United States. Securities guaranteed as to principal and interest by the U.S.
government, its agencies, authorities or instrumentalities include: (i)
securities for which the payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. government or any of its
agencies, authorities or instrumentalities; and (ii) participations in loans
made to foreign governments or other entities that are so guaranteed. The
secondary market for certain of these participations is limited and, therefore,
may be regarded as illiquid.

U.S. government securities may include zero coupon securities that may be
purchased when yields are attractive and/or to enhance portfolio liquidity. Zero
coupon U.S. government securities are debt obligations that are issued or
purchased at a significant discount from face value. The discount approximates
the total amount of interest the security will accrue and compound over the
period until maturity or the particular interest payment date at a rate of
interest reflecting the market rate of the security at the time of issuance.
Zero coupon U.S. government securities do not require the periodic payment of
interest. These investments benefit the issuer by mitigating its need for cash
to meet debt service, but also require a higher rate of

3
<PAGE>

return to attract investors who are willing to defer receipt of cash. These
investments may experience greater volatility in market value than U.S.
government securities that provide for regular payments of interest. The Funds
accrue income on these investments for tax and accounting purposes, which is
distributable to shareholders. Because no cash is received at the time of
accrual, a Fund may have to liquidate other portfolio securities to satisfy the
Fund's distribution obligations. In this case the Fund will forego the purchase
of additional income producing assets with these proceeds. Zero coupon U.S.
government securities include STRIPS and CUBES, which are issued by the U.S.
Treasury as component parts of U.S. Treasury bonds and represent scheduled
interest and principal payments on the bonds.

Mortgage-Backed Securities. The Cash Reserves Fund may invest in mortgage pass-
through certificates and multiple-class pass-through securities, such as real
estate mortgage investment conduits ("REMIC") pass-through certificates,
collateralized mortgage obligations and stripped mortgage-backed securities
("SMBS"), and other types of "mortgage-backed securities" that may be available
in the future. A mortgage-backed security is an obligation of the issuer backed
by a mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage-backed securities, such as collateralized mortgage
obligations ("CMOs"), provide for payments of both principal and interest at a
variety of intervals; others provide for semiannual interest payments at a
predetermined rate and the repayment of principal at maturity (like a typical
bond). Mortgage-backed securities are based on different types of mortgages
including those on commercial real estate or residential properties.

Mortgage-backed securities often have stated maturities of up to thirty years
when they are issued, depending upon the length of the mortgages underlying the
securities. In practice, however, unscheduled or early payments of principal and
interest on the underlying mortgages may make the securities' effective maturity
shorter than this, and the prevailing interest rates may be higher or lower than
the current yield of a Fund's portfolio at the time a Fund receives the payments
for reinvestment. Mortgage-backed securities may have less potential for capital
appreciation than comparable fixed income securities, due to the likelihood of
increased prepayments of mortgages as interest rates decline. If a Fund buys
mortgage-backed securities at a premium, mortgage foreclosures and prepayments
of principal by mortgagors (which may be made at any time without penalty) may
result in some loss of a Fund's principal investment to the extent of the
premium paid.

Since faster than expected prepayments must usually be invested in lower
yielding securities, mortgage-backed securities are less effective than
conventional bonds at "locking in" a specified interest rate. Conversely, in a
rising interest rate environment, a declining prepayment rate will extend the
average life of many mortgage-backed securities. This possibility is often
referred to as extension risk. Extending the average life of a mortgage-backed
security increases the risk of depreciation due to future increases in market
interest rates.

The value of mortgage-backed securities may also change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities markets as a whole. Non-governmental
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
governmental issues.

Investing in mortgage-backed securities involves certain risks, including the
failure of a counterparty to meet its commitments, adverse interest rate changes
and the effects of

4
<PAGE>

prepayment rates on mortgage cash flows. Prepayment rates are influenced by
changes in current interest rates and a variety of economic, geographic, social
and other factors and cannot be predicted with certainty. Both adjustable rate
mortgage loans and fixed rate mortgage loans may be subject to a greater rate of
principal prepayments in a declining interest rate environment and to a lesser
rate of principal prepayments in an increasing interest rate environment. Under
certain interest rate and prepayment rate scenarios, the Cash Reserves Fund may
fail to recoup fully its investment in mortgage-backed securities
notwithstanding any direct or indirect governmental, agency or other
guarantee.

Asset-Backed Securities. The Cash Reserves Fund may invest in asset-backed
securities, which are securities that represent a participation in, or are
secured by and payable from, a stream of payments generated by particular
assets, most often a pool or pools of similar assets (e.g., trade receivables).
The credit quality of these securities depends primarily upon the quality of the
underlying assets and the level of credit support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which shorten the
securities' weighted average maturity and may lower their return. If the credit
support or enhancement is exhausted, losses or delays in payment may result if
the required payments of principal and interest are not made. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution or trust providing the credit support or
enhancement.

Forward Commitments and When-Issued Securities. Each Fund may purchase
securities on a when-issued basis or purchase or sell securities on a forward
commitment basis. These transactions involve a commitment by the Fund to
purchase or sell securities at a future date. The price of the underlying
securities (usually expressed in terms of yield) and the date when the
securities will be delivered and paid for (the settlement date) are fixed at the
time the transaction is negotiated. When-issued purchases and forward
commitment transactions are negotiated directly with the other party, and such
commitments are not traded on exchanges, but may be traded over-the-counter.

A Fund will purchase securities on a when-issued basis or purchase or sell
securities on a forward commitment basis only with the intention of completing
the transaction and actually purchasing or selling the securities. If deemed
advisable as a matter of investment strategy, however, a Fund may dispose of or
renegotiate a commitment after entering into it. A Fund also may sell securities
it has committed to purchase before those securities are delivered to the Fund
on the settlement date. The Fund may realize a capital gain or loss in
connection with these transactions. For purposes of determining the Fund's
average dollar weighted maturity, the maturity of when-issued or forward
commitment securities will be calculated from the commitment date.

When a Fund purchases securities on a when-issued or forward commitment basis,
the Fund will maintain in a segregated account cash or liquid securities having
a value (determined daily) at least equal to the amount of the Fund's purchase
commitments. In the case of a forward commitment to sell portfolio securities
subject to such commitment, the Fund will hold the portfolio securities while
the commitment is outstanding. These procedures are designed to ensure that the
Fund will maintain sufficient assets at all times to cover its obligations under
when-issued purchases and forward commitments.

5
<PAGE>

Variable Rate and Floating Rate Demand Instruments. The Cash Reserves and Tax
Free Funds may purchase variable and floating rate demand instruments that are
tax exempt municipal obligations or other debt securities that possess a
floating or variable interest rate adjustment formula. These instruments permit
a Fund to demand payment of the principal balance plus unpaid accrued interest
upon a specified number of days' notice to the issuer or its agent. The demand
feature may be backed by a bank letter of credit or guarantee issued with
respect to such instrument.

The terms of the variable or floating rate demand instruments that a Fund may
purchase provide that interest rates are adjustable at intervals ranging from
daily up to six months, and the adjustments are based upon current market
levels, the prime rate of a bank or other appropriate interest rate adjustment
index has provided in the respective instruments. Some of these instruments are
payable on demand on a daily basis or on not more than seven days' notice.
Others, such as instruments with quarterly or semiannual interest rate
adjustments, may be put back to the issuer on designated days on not more than
thirty days' notice. Still others are automatically called by the issuer unless
a Fund instructs otherwise. The Trust, on behalf of a Fund, intends to exercise
the demand feature only (1) upon a default under the terms of the debt security,
(2) as needed to provide liquidity to a Fund, (3) to maintain the respective
quality standards of a Fund's investment portfolio, or (4) to attain a more
optimal portfolio structure.

A Fund will determine the variable or floating rate demand instruments that it
will purchase in accordance with procedures approved by the Trustees to minimize
credit risks. Accordingly, both the long-term and short-term ratings for any
variable or floating rate demand instruments must satisfy a Fund's credit
criteria, except that if credit support is provided, a Fund may rely solely upon
the short-term rating of the variable or floating rate demand instrument. To be
eligible for purchase of a Fund, a variable or floating rate demand instrument
which is unrated must have quality characteristics similar to those of other
obligations in which the Fund may invest. Boston Advisors may determine that an
unrated variable or floating rate demand instrument meets a Fund's quality
criteria by reason of being backed by a letter of credit or guarantee issued by
a bank that meets the quality criteria for a Fund. Thus, the credit of either
the issuer of the obligation or the guarantor bank or both will meet the quality
standards of the Fund.

Cash Reserves and Tax Free Funds may invest in participation interests in
variable or floating rate tax-exempt obligations held by financial institutions
(usually commercial banks). These participation interests provide a Fund with a
specific undivided interest (up to 100%) in the underlying obligation and the
right to demand payment of its proportional interest in the unpaid principal
balance plus accrued interest from the financial institution upon a specific
number of days' notice. In addition, the participation interest generally is
backed by an irrevocable letter of credit or guarantee from the institution. The
financial institution usually is entitled to a fee for servicing the obligation
and providing the letter of credit.

Municipal Obligations. Tax Free Fund invests in municipal obligations. Municipal
obligations are issued by or on behalf of states, territories and possessions of
the United States and their political subdivisions, agencies, authorities and
instrumentalities and the District of Columbia to obtain funds for various
public purposes. The interest on most of these obligations is general exempt
from regular federal income tax. The two principal classifications of municipal
obligations are "notes" and "bonds."

6
<PAGE>

Notes. Municipal notes are generally used to provide for short-term capital
needs and generally have maturities of one year or less. Municipal notes include
tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax
and revenue anticipation notes, construction loan notes, tax-exempt commercial
paper and certain receipts for municipal obligations.

Tax anticipation notes are sold to finance working capital needs to
municipalities. They are generally payable from specific tax revenues expected
to be received at a future date. They are usually general obligations of the
issuer, secured by the taxing power for payment of principal and interest.
Revenue anticipation notes are issued in expectation of receipt of other types
of revenue such as federal revenues available under the Federal Revenue Sharing
Program. Tax anticipation notes and revenue anticipation notes are generally
issued in anticipation of various seasonable revenues such as income, sales, use
and business taxes. Bond anticipation notes are sold to provide interim
financing in anticipation of long-term financing in the market. In most cases,
these monies provided for the repayment of the notes. Construction loan notes
are sold to provide construction financing. These notes are secured by mortgage
notes insured by the Federal Housing Authority; however, the proceeds from the
issuance may be less than the economic equivalent of the payment of principal
and interest on the mortgage note if there had been a default. Tax-exempt
commercial paper consists of short-term unsecured promissory notes issued by a
state or local government or an authority or agency thereof.

The Funds which invest in municipal obligations may also acquire securities in
the form of custodial receipts. These receipts evidence ownership of future
interest payments, principal payments or both on certain state and local
governmental and authority obligations if, in the opinion of bond counsel,
interest payments on these custodial receipts are excluded from gross income for
federal income tax purposes. These obligations are held in custody by a bank on
behalf of the holders of the receipts. These custodial receipts are known by
various names, including "Municipal Receipts" ("Mrs") and "Municipal
Certificates of Accrual on Tax-Exempt Securities" ("M-CATS"). There are a number
of other types of notes issued for different purposes and secured differently
from those described above.

Bonds. Municipal bonds, which generally meet longer term detail needs and have
maturities or more than one year when issued, have two principal
classifications, "general obligation" bonds and "revenue" bonds.

General obligation bonds are issued by entities such as states, counties,
cities, towns and regional districts and are used to fund a wide range of public
projects including the construction or improvement of schools, highways and
roads, water and sewer systems and a variety of other public purposes. The basic
security of general obligation bonds is the issuer's pledge of its faith, credit
and taxing power for the payment of principal and interest. The taxes that can
be levied for the payment of debt service may be limited or unlimited as to rate
or amount or special assessments.

Revenue bonds have been issued to fund a wide variety of capital projects
including: electric, gas, water and sewer systems; highways, bridges and
tunnels; port and airport facilities; colleges and universities; and hospitals.
The principal security for a revenue bond is generally the net revenues derived
from a particular facility or group of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. Although the
principal security behind these bonds varies widely, many provide additional
security in the form of a debt service reserve fund whose monies may also be
used to make principal and interest payments on the

7
<PAGE>

issuer's obligations. Housing finance authorities have a wide range of security
including partially or fully insured, rent subsidized and/or collateralized
mortgages, and/or the net revenues from housing or other public projects. In
addition to a debt service reserve fund, some authorities provide further
security in the form of a state's ability (without obligation) to make up
deficiencies in the debt service reserve fund. Lease rental revenue bonds issued
by a state or local authority for capital projects are secured by annual lease
rental payments from the state or locality to the authority sufficient to cover
debt service on the authority's obligations.

Private activity bonds (a term that includes certain types of bonds, the
proceeds of which are used to a specified extent for the benefit of persons
other than governmental units), although nominally issued by municipal
authorities, are generally not secured by the taxing power of the municipality
but are secured by the revenues of the authority derived from payments by the
industrial user.

Municipal bonds with a series of maturity dates are called serial bonds. The
serial bonds which a Fund may purchase are limited to short-term serial bonds --
those with original or remaining maturities of thirteen months or less. A Fund
may purchase long-term bonds only if they have a remaining maturity of thirteen
months or less. These include bonds called for redemption if the redemption
payment date will occur within thirteen months. A Fund may also purchase long-
term bonds (sometimes referred to as "Put Bonds") that are subject to a mutual
commitment by the Fund and the issuer to redeem the bond at par at a designated
time within thirteen months.

A tender option bond is a municipal obligation (generally held under a custodial
arrangement) having a relatively long maturity and bearing interest at a fixed
rate substantially higher than prevailing short-term tax-exempt rates. The bond
is typically issued in conjunction with the grant by a third party, such as a
bank, broker-dealer or other financial institution, to the security holder the
option, at periodic intervals, to tender its securities to the institution and
receive the security's face value. As consideration for providing the option,
the financial institution receives periodic fees equal to the difference between
the bond's fixed coupon rate and the rate, as determined by a remarketing agent,
that would cause the bond, coupled with the tender option, to trade at par on
the date of this determination. Thus, after payment of this fee, the security
holder effectively holds a demand obligation that bears interest at the
prevailing short-term tax-exempt rate. However, an institution will not be
obligated to accept tendered bonds in the event of certain defaults by, or a
significant downgrade in the credit rating assigned to, the issuer of the
bond.

The tender option will reduce the maturity of tender option bonds and the
average portfolio maturity of each Fund. The liquidity of a tender option bond
depends on the credit quality of both the bond issuer and the financial
institution providing liquidity. Consequently, tender option bonds are deemed to
be liquid unless, in the opinion of Boston Advisors, the credit quality of the
bond issuer and the financial institution is deemed, in light of the relevant
Fund's credit quality requirements, to be inadequate.

In addition to general obligation bonds, revenue bonds and series bonds, there
is a variety of hybrid and special type of municipal obligations as well as
numerous differences in the security of municipal obligations both within and
between the two principal classifications above.

Yields on municipal obligations depend on a variety of factors; including money
market conditions, municipal bond market conditions, the size of a particular
offering, the maturity of

8
<PAGE>

the obligation and the quality of the issue. High quality municipal obligations
tend to have a lower yield than lower rated obligations. Municipal obligations
are subject to the provisions of bankruptcy, insolvency and other laws affecting
the rights and remedies of creditors, such as the Federal Bankruptcy Code, and
laws, if any, which may be enacted by Congress or state legislatures extending
the time of payment of principal or interest, or both, or imposing other
constraints upon enforcement of such obligations or municipalities to levy
taxes. There is also the possibility that as a result of litigation or other
conditions the power or ability of any one or more issuers to pay when due
principal of and interest on its or their municipal obligations may be
materially affected.

Standby Commitments. In order to enhance the liquidity, stability or quality of
municipal obligations, Cash Reserves and Tax Free Funds may each acquire the
right to sell a security to another party at a guaranteed price and date. Such a
right to resell may be referred to as a put, demand feature or "standby
commitment," depending on its characteristics. The aggregate price which a Fund
pays for securities with standby commitments may be higher than the price which
otherwise would be paid for the securities. Standby commitments may not be
available or may not be available on satisfactory terms.

Standby commitments may involve letters of credit issued by U.S. or non-U.S.
banks supporting the other party's ability to purchase the security from the
Fund. The right to sell may be exercisable on demand or at specific intervals,
and may form part of a security or be acquired separately by a Fund. In
considering whether a security meets a Fund's quality standards, Boston Advisors
will look to the creditworthiness of the party providing the Fund with the right
to sell as well as the quality of the security itself.

Illiquid Securities. None of the Funds will invest more than 10% of its net
assets in illiquid and other securities that are not readily marketable.
Repurchase agreements maturing in more than seven days and lacking a demand
feature will be included for purposes of the foregoing limit. Securities subject
to restrictions on resale under the Securities Act of 1933, as amended (the
"1933 Act"), are considered illiquid unless they are eligible for resale
pursuant to Rule 144A, are commercial paper offered in reliance on Section 4(2)
of the 1933 Act or are eligible for another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Boston Advisors.
Boston Advisors determines the liquidity of Rule 144A and other restricted
securities according to procedures adopted by the Board of Trustees. These
procedures require Boston Advisors to consider, among other things, (1) the
frequency of trades and quotes for the security, (2) the number of dealers
willing to buy the security, (3) the number of potential purchasers, (4) dealer
undertakings to make a market in the security, (5) the nature of the security
and (6) the time needed to dispose of the security. The Board of Trustees
monitors Boston Advisors' application of these procedures. The inability of a
Fund to dispose of illiquid investments readily or at reasonable prices could
impair a Fund's ability to raise cash for redemptions or other purposes.

Repurchase Agreements. The Cash Reserves Fund and U.S. Government Fund may enter
into repurchase agreements with broker-dealers, member banks of the Federal
Reserve System and other financial institutions. Repurchase agreements are
arrangements under which a Fund purchases securities and the seller agrees to
repurchase the securities within a specific time and at a specific price. The
repurchase price is generally higher than the Fund's purchase price, with the
difference being income to the Fund. Boston Advisors reviews and monitors the
creditworthiness of any institution that enters into a repurchase agreement with
a Fund. The

9
<PAGE>

counterparty's obligations under the repurchase agreement are collateralized
with U.S. Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily.

Repurchase agreements afford a Fund an opportunity to earn income on temporarily
available cash at low risk. In the event of commencement of bankruptcy or
insolvency proceedings with respect to the seller under an outstanding
repurchase agreement, a Fund may encounter delay and incur costs before being
able to sell the security. Such a delay may involve loss of interest or a
decline in price of the security. If the court characterizes the transaction as
a loan and the Fund has not perfected a security interest in the security, the
Fund may be required to return the security to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
Fund would risk losing some or all of the principal and interest involved in the
transaction.

Asset Segregation. The 1940 Act requires that each Fund segregate assets in
connection with certain types of transactions that may have the effect of
leveraging such Fund's portfolio. If a Fund enters into a transaction requiring
segregation, such as a forward commitment, the custodian or Boston Advisors will
segregate liquid assets in an amount required to comply with the 1940 Act. These
segregated assets will be valued at market daily. If the aggregate value of
these segregated assets declines below the aggregate value required to satisfy
the 1940 Act, additional liquid assets will be segregated.

Investment Restrictions. Each Fund will not purchase securities when outstanding
borrowings exceed 5% of the Fund's total assets.

FUNDAMENTAL INVESTMENT RESTRICTIONS. Each Fund has adopted certain investment
restrictions which, along with that Fund's investment objective, may not be
changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of that Fund. For
this purpose, a majority of the outstanding shares of a Fund means the vote of
the lesser of:

1. 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or

2. more than 50% of the outstanding shares of the Fund.

Each Fund may not:

(1) purchase securities, excluding U.S. government securities and repurchase
agreements, refunded bonds and other securities backed by U.S. government
securities, if this purchase would cause 25% or more of the Fund's total assets
to be invested in securities of issuers conducting their principal business in
the same industry. The Fund may, but is not required to, concentrate in
securities issued by U.S. banks or U.S. branches of foreign banks. Foreign
countries, U.S. territories, states, municipalities and their respective
agencies and instrumentalities are not considered to be industries.

(2) borrow money, except that the Fund may (a) borrow from banks or through
reverse repurchase agreements in an amount up to 33 1/3% of the Fund's total
assets (including the amount borrowed); (b) to the extent permitted by
applicable law, borrow up to an additional 5%

10
<PAGE>

of the Fund's assets for temporary purposes; (c) obtain such short-term credits
as are necessary for the clearance of portfolio transactions; (d) purchase
securities on margin to the extent permitted by applicable law; and (e) engage
in transactions in mortgage dollar rolls that are accounted for as
financings.

(3) invest in real estate, except that the Fund may invest in securities of
issuers that invest in real estate or interests therein, securities that are
secured by real estate or interests therein, securities of real estate
investment trusts and mortgage-backed securities.

(4) invest in commodities or commodity futures contracts, excluding transactions
in financial derivative contracts, such as forward currency contracts; financial
futures contracts and options on financial futures contracts; options on
securities, currencies and financial indices; and swaps, caps, floors, collars
and swaptions, to the extent permitted by the fund's prospectus and this
statement of additional information.

(5) make loans to any institution, individual or other person, except by (a)
purchasing a debt obligation in which the Fund is permitted to invest (b)
entering into repurchase agreements and (c) lending portfolio securities;

(6) act as an underwriter, except as it may be deemed to be an underwriter in a
sale of restricted securities;

(7) issue senior securities, except to the extent permitted by the 1940 Act;

(8) purchase a security if that purchase would cause the Fund to be non-
diversified under the 1940 Act.

3. MANAGEMENT OF THE TRUST

The Trust's Board of Trustees provides broad supervision over the affairs of the
Trust. The officers of the Trust are responsible for the Trust's operations. The
Trustees and executive officers of the Trust are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the Trust within the meaning of the
1940 Act.

11
<PAGE>

<TABLE>
<CAPTION>
Name, Address and Age Position(s) Held with Principal Occupation(s) During
Trust Past 5 Years
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Allen G. Botwinick* Chairman of the Board Executive Vice President of
90 State House Square and Trustee Administration and Operations, The
Hartford, CT 06103 Advest Group, Inc. and Advest, Inc.
Age: 57

- ------------------------------------------------------------------------------------------
Michael J. Vogelzang* President, Chief Boston Advisors, Inc., President
100 Federal Street Executive Officer and Chief Investment Officer, 4/99
Boston, MA 02110 and Trustee - present; Senior Vice President
Age: 39 and Chief Investment Officer, 8/97
- 4/99. Freedom Capital Management
Corp., Senior Vice President and
Portfolio Manager, 9/91 - 8/97.

- ------------------------------------------------------------------------------------------
Mone Anathan III Trustee Harvard Divinity School, Student,
99 Garden Street 9/97 - present; President, Filene's
Cambridge, MA 02136 Basement (off-price retailer), 1995
Age: 61 - 8/97.
- ------------------------------------------------------------------------------------------

Hugh A. Dunlap, Jr. Trustee Retired, 5/95 - present; John
29 Lowell Road Hancock Advisors, Inc., Vice
Brookline, MA 02445 Chairman, 11/94 - 5/95.
Age: 69
- ------------------------------------------------------------------------------------------

Ezekiel Russell Peach, Jr. Trustee Robert, Finnegan & Lynah, PC
137 South Street (public accounting),
Boston, MA 02111 partner/principal since 1968.
Age: 66
- ------------------------------------------------------------------------------------------

Todd A. Finkelstein Vice President Boston Advisors, Inc., Senior Vice
100 Federal Street President and Director of Fixed
Boston, MA 02110 Income, 8/98 - present; BankBoston,
Age: 40 Vice President and Senior
Investment Officer, 12/94 - 8/98.

- ------------------------------------------------------------------------------------------
Donna C. McAdam Treasurer and Chief Boston Advisors, Inc., Vice
100 Federal Street Financial Officer President and Chief Operating
Boston, MA 02110 Officer, 4/87 - present.
Age: 53
- ------------------------------------------------------------------------------------------

Susan C. Mosher Secretary Director and Senior Counsel, Mutual
200 Clarendon Street Fund Administration - Investors
Boston, MA 02116 Bank & Trust Company, 1995 -
Age: 45 present.
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Compensation of Officers and Trustees. The Trust pays no salaries or
compensation to any of its officers. The Trust compensates each Trustee who is
not affiliated with Boston Advisors or Advest with a base fee of $10,000. The
table below illustrates the compensation that each unaffiliated Trustee expects
to receive for his services for the fiscal year ending April 30, 2001.

<TABLE>
<CAPTION>
Pension or
Retirement Estimated
Benefits Annual Total Compensation
Aggregate Accrued As Benefits Upon From Trust and
Name of Person, Compensation Part of Fund Retirement Trust Complex Paid
Position From Trust Expenses to Trustees
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mone Anathan III $10,000 -0- -0- $10,000
- ------------------------------------------------------------------------------------------------------------
Hugh A. Dunlap, Jr. $10,000 -0- -0- $10,000
- ------------------------------------------------------------------------------------------------------------
Ezekiel Russell Peach, Jr. $10,000 -0- -0- $10,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>

4. INVESTMENT ADVISER

The Trust has contracted with Boston Advisors to act as its investment adviser.
Boston Advisors is a wholly owned subsidiary of Advest, Inc. ("Advest"), which
is a subsidiary of The Advest Group, Inc. ("Advest Group"). Advest Group is
engaged in the financial services business in the U.S. and other countries.
Certain Trustees or officers of the Trust are also Trustees and/or officers of
Advest and its subsidiaries (see management biographies above).

As the Trust's investment adviser, Boston Advisors provides the Trust with
investment research, advice and supervision and furnishes an investment program
for the Trust consistent with each Fund's investment objective and policies,
subject to the supervision of the Trust's Trustees. Boston Advisors determines
what portfolio securities will be purchased or sold, arranges for the placing of
orders for the purchase or sale of portfolio securities, selects brokers or
dealers to place those orders, maintains books and records with respect to each
Fund's securities transactions, and reports to the Trustees on each Fund's
investments and performance.

Under the terms of its contract with the Trust, Boston Advisors pays all the
operating expenses, including executive salaries and the rental of office space,
relating to its services for the Trust. Except for the services provided by
Boston Advisors, the Trust pays all of its own ordinary and extraordinary
expenses, including, but not limited to: (a) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of Boston Advisors or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (b) the charges and expenses of auditors; (c) the charges and expenses
of any custodian, transfer agent, plan agent, dividend disbursing agent and
registrar appointed by the Trust with respect to the Funds; (d) issue and
transfer taxes, chargeable to the Trust in connection with securities
transactions to which each Fund is a party; (e) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (f) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the SEC, state blue sky
securities agencies and the securities regulators of foreign countries,
including the preparation of prospectuses and statements of additional
information for filing with the SEC; (g) all expenses of shareholders'
<PAGE>

and Trustees' meetings and of preparing, printing and distributing prospectuses,
notices, proxy statements and all reports to shareholders and to governmental
agencies; (h) charges and expenses of legal counsel to the Trust and the
Trustees; (i) any distribution or service fees paid by the Trust in accordance
with Rule 12b-1 under the 1940 Act; (j) compensation of those Trustees of the
Trust who are not affiliated with or interested persons of Boston Advisors or
the Funds (other than as Trustees); (k) the cost of preparing and printing share
certificates; and (l) interest on borrowed money, if any.

In addition to the expenses described above, the Funds will pay brokers' and
underwriting commissions chargeable to the Funds in connection with their
securities transactions. The Trustees' approval of and the terms, continuance
and termination of the management contract are governed by the 1940 Act and the
Investment Advisers Act of 1940, as applicable.

Pursuant to the management contract, Boston Advisors will not be liable for any
error of judgment or mistake of law or for any loss sustained because of the
adoption of any investment policy or the purchase, sale or retention of any
securities on the recommendation of Boston Advisors. Boston Advisors, however,
is not protected against liability by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under the management
contract.

Advisory Fee. As compensation for its management services to the Trust, each
Fund pays Boston Advisors a fee at the annual rate of 0.55% of the Fund's
average daily net assets. This fee is normally computed and accrued daily and
paid monthly. From time to time, Boston Advisors may reduce its fee or make
other arrangements to limit a Fund's expenses to a specified percentage of
average daily net assets. To the extent that a Fund's total expense ratio falls
below its expense limit, Boston Advisors reserves the right to be reimbursed for
management fees waived and fund expenses paid by it during the prior two fiscal
years. Boston Advisors has contractually agreed to limit the Funds' advisory
fees and to reimburse their other fund expenses to reduce each Fund's total
annual operating expenses to 0.90% for Class 1 shares and 0.65% for Class 2
shares of the Fund's average net assets until April 30, 2001.

5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN

Principal Underwriter. Advest, 90 State House Square, Hartford, Connecticut
06103, is the principal underwriter for the Trust in connection with the
continuous offering of its shares. Boston Advisors is an indirect, wholly owned
subsidiary of Advest, which is a subsidiary of Advest Group.

The Trust has entered into an underwriting agreement with Advest, which provides
that Advest will bear expenses for the distribution of the Trust's shares, other
than expenses incurred by Advest for which it is reimbursed or compensated by
the Trust under the distribution plan (discussed below). Advest bears all
expenses it incurs in providing services under the underwriting agreement. These
expenses include compensation to its employees and representatives and to
securities dealers for distribution-related services performed for the Trust.
Advest also pays certain expenses in connection with the distribution of the
Trust's shares, including the cost of preparing, printing and distributing
advertising or promotional materials, and the cost of printing and distributing
prospectuses and supplements to prospective shareholders. The Trust bears the
cost of registering its shares under federal and state securities
<PAGE>

law and the laws of certain foreign countries. Under the underwriting agreement,
Advest will use its best efforts in rendering services to the Trust.

The Trust will not generally issue Fund shares for consideration other than
cash. At the Trust's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.

The redemption price of shares of beneficial interest of the Trust may, at
Boston Advisors' discretion, be paid in cash or portfolio securities. If
redemption proceeds are paid in securities, these securities are valued at the
value employed in determining a Fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of these securities will be made in
such manner as the Board of Trustees deems fair and reasonable.

Distribution Plan. The Trust has adopted a plan of distribution (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act covering each Fund's Class 1 shares.
Under the Plan, a distribution and service fee of 0.25% of each Fund's average
daily net assets attributable to Class 1 shares is paid to Advest. Because of
the Plan, long-term shareholders may pay more than the economic equivalent of
the maximum sales charge permitted by the National Association of Securities
Dealers, Inc. (the "NASD").

Advest may pay up to the entire fee under the Plan to its own representatives or
to other dealers for providing services in connection with the sale of each
Fund's shares. To the extent this fee is not paid to others, Advest may retain
this fee as compensation for its services and expenses incurred in accordance
with the Plan. The Plan is a compensation plan, which provides for payment of a
specified fee without regard to the actual expense incurred by Advest. If its
fee exceeds its expense, Advest will realize a profit. If the Plan was
terminated by Trustees of the Trust and a successor plan was adopted, the Funds
would cease to make payments under the Plan and Advest would be unable to
recover any unreimbursed expenses.
In accordance with the terms of the Plan, Advest provides to the Trustees
for their review a quarterly written report of the amounts expended under the
Plan and the purposes for which these expenditures were made. In the Trustees'
quarterly review of the Plan, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plan provides.

No interested person or Trustee of the Trust has any direct or indirect
financial interest in the operation of the Plan except to the extent that Advest
and certain of its employees are receiving a portion of the payments made by the
Trust under the Plan.

The Plan's adoption, terms, continuance and termination are governed by
Rule 12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plan will benefit the Trust and its current and
future shareholders. The Plan may not be amended to increase materially the
annual percentage rate spent on distribution activities without approval by the
shareholders of the affected Fund. Other material amendments to the Plan must be
approved by the Trustees.
<PAGE>

6. SHAREHOLDER SERVICING/TRANSFER AGENT

The Trust has contracted with Advest Transfer Services, Inc. ("ATS"), a
subsidiary of Advest Group, to act as shareholder servicing and transfer agent
for the Trust. The Trust pays ATS an annual maintenance fee of $20.00 for each
shareholder account.

Under the terms of its contract with the Trust, ATS services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of each Fund; (ii) distributing dividends and capital gains
associated with the each Fund's portfolio; and (iii) maintaining account records
and responding to shareholder inquiries.

7. CUSTODIAN AND ADMINISTRATOR

Investors Bank & Trust Company, 200 Clarendon Street, Boston, Massachusetts
02116, is the custodian of the Trust's assets and serves as administrator of the
Trust. The custodian's responsibilities include safekeeping and controlling the
Trust's cash and securities, handling the receipt and delivery of securities,
and collecting interest and dividends (if any) on the Trust's investments. As
administrator, Investors Bank provides certain administrative services to the
Trust, such as corporate secretarial services, preparation of Board of Trustees'
meeting materials, preparation and filing of regulatory filings with the SEC,
calculating each Fund's standardized performance information, preparing annual
and semi-annual reports to shareholders and the SEC, preparing each Fund's tax
returns, monitoring compliance and performing other administrative duties.

8. INDEPENDENT PUBLIC ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110,
is the Trust's independent public accountant, providing audit services, tax
return review, and assistance and consultation with respect to the preparation
of filings with the SEC.

9. PORTFOLIO TRANSACTIONS

Boston Advisors places the portfolio transactions of the Funds and of all other
accounts managed by Boston Advisors for execution with many firms. Boston
Advisors uses its best efforts to obtain execution of portfolio transactions at
prices which are advantageous to each Fund and at reasonably competitive spreads
or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking effective execution, Boston Advisors will use its
best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the size
and type of the transaction, the nature and character of the market for the
security, the confidentiality, speed and certainty of effective execution
required for the transaction, the general execution and operational capabilities
of the broker-dealer firm, the reputation, reliability, experience and financial
condition of the firm, the value and quality of the services rendered by the
firm in this and other transactions, and the reasonableness of the spread or
commission, if any. Securities purchased and sold by the Funds are generally
traded in the over-the-counter market on a net basis (i.e., without commission)
through dealers and banks acting for their own account rather than as brokers,
or involve transactions directly with the issuer of such securities.
<PAGE>

Boston Advisors and its affiliates are active as investors, dealers and/or
underwriters in many types of municipal and money market instruments. These
activities could affect the markets for those instruments which the Funds buy,
hold or sell. In certain instances there may be securities which are suitable
for a Fund's portfolio as well as for one or more of the other clients of Boston
Advisors. Investment decisions for each Fund and for Boston Advisor's other
clients are made with a view of achieving their respective investment
objectives. It may develop that a particular security is bought or sold for only
one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling the same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment adviser, particularly when the same security is suitable for
the investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could have a detrimental
effect on the price or volume of the security in a particular Fund transaction.
Each Fund believes that over time its ability to participate in volume
transactions will produce better executions for the Funds.

Under certain directed brokerage arrangements with third-party broker-dealers,
these broker-dealers may pay certain of the Trust's custody expenses.

10. DESCRIPTION OF SHARES

As an open-end management investment company, the Trust continuously offers its
shares to the public. Under normal conditions, the Trust must redeem its shares
upon the demand of any shareholder at the next determined net asset value per
share. When issued and paid for in accordance with the terms of the prospectus
and statement of additional information, shares of the Trust are fully paid and
non-assessable by the Trust. Shares will remain on deposit with the Trust's
transfer agent and certificates will not normally be issued.

The Trust's Declaration of Trust, dated September 28, 1999 and filed with the
Secretary of State of the Commonwealth of Massachusetts on September 30, 1999
(the "Declaration"), permits the Board of Trustees to authorize the issuance of
an unlimited number of full and fractional shares of beneficial interest which
may be divided into such separate series as the Trustees may establish.
Currently, the Trust consists of three series: Boston Advisors Cash Reserves
Fund, Boston Advisors U.S. Government Money Market Fund and Boston Advisors Tax
Free Money Market Fund. The Trustees may, however, establish additional series
of shares and may divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
Trust.

The Declaration further authorizes the Trustees to classify or reclassify any
series of the shares into one or more classes. Pursuant thereto, the Trustees
have authorized the issuance of two classes of shares of the Trust, designated
as Class 1 shares and Class 2 shares. Class 2 shares are only available to
certain managed IRA and qualified benefit plan accounts. Each share of a class
of the Trust represents an equal proportionate interest in the assets of the
Trust allocable to that class. Upon liquidation of a Fund, shareholders of each
class of that Fund are entitled to share pro rata in that Fund's net assets
allocable to such class available for distribution to shareholders. The Trust
reserves the right to create and issue additional series or classes of shares.
In this case the shares of each class of a series would participate equally in
the earnings, dividends and assets allocable to that class of the particular
series.
<PAGE>

The shares of each class represent an interest in the same investment portfolio
and Fund. Each class has equal rights as to voting, redemption, dividends and
liquidation, except that each class bears different distribution and transfer
agent fees and may bear other expenses properly attributable to the particular
class. Class 1 shareholders have exclusive rights to vote on the adoption or
amendment of any Class 1 Rule 12b-1 plan.

Shareholders are entitled to one vote for each share held and may vote on the
election of Trustees and other matters submitted to a meeting of shareholders.
Although Trustees are not elected annually by the shareholders, shareholders
have, under certain circumstances, the right to remove one or more Trustees. The
Trust is not required, and does not intend, to hold annual shareholder meetings,
although special meetings may be called for the purpose of electing or removing
Trustees, changing fundamental investment restrictions, approving a management
contract or Rule 12b-1 plan and acting on other proposals.

The shares of each series of the Trust are entitled to vote separately to
approve investment advisory agreements or changes in investment restrictions,
but shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the Trust vote together as a
class on matters that affect all series in substantially the same manner. As to
matters affecting a single series or class, shares of such series or class will
vote separately. No amendment adversely affecting the rights of shareholders
may be made to the Declaration without the affirmative vote of a majority of the
Trust's shares. Shares have no preemptive or conversion rights.

The Declaration governs the Trust's operations. A copy of the Declaration is on
file with the office of the Secretary of State of Massachusetts and included as
an Exhibit to the Trust's registration statement on Form N-1A. The Trust is an
entity of the type commonly known as a "Massachusetts business trust," which is
the form in which many mutual funds are organized. Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for the obligations of the trust. The Declaration
contains an express disclaimer of shareholder liability for acts or obligations
of the Trust. Notice of this disclaimer will normally be given in each
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees. The Declaration provides for indemnification to a shareholder by the
relevant series of the Trust (including each Fund) for any loss suffered by the
shareholder as a result of an obligation of that series. The Declaration also
provides that the Trust will, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the Trust and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which a Fund is
unable to meet its obligations. The Trustees believe that, in view of the above,
the risk of personal liability of shareholders is not material.

The Declaration provides that the Trustees of the Trust will not be liable for
any action taken by them in good faith. The Trustees will be fully protected in
relying in good faith upon the records of the Trust and upon reports made to the
Trust by persons selected in good faith by the Trustees as qualified to make
these reports. The Declaration further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. The Declaration
provides that the Trust will indemnify the Trustees and officers of the Trust
against liabilities and expenses reasonably incurred in connection with
litigation in which they may be involved because of their positions with the
Trust, unless it is determined in the manner provided in the Declaration that
they may
<PAGE>

have not acted in good faith in the reasonable belief that, in the case of
conduct in their official capacity with the Trust, their conduct was in the best
interests of the Trust, and in all other cases, that the conduct was at least
not opposed to the best interest of the Trust (and in the case of any criminal
proceeding, they had no reasonable cause to believe that the conduct was
unlawful). However, nothing in the Declaration or the By-laws protects or
indemnifies a Trustee or officer against any liability to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.

11. PRICING OF SHARES

The net asset value per share of each class of the Funds is determined as of the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on
each day the Exchange is open for trading. As of the date of this Statement of
Additional Information, the Exchange is open for trading every weekday except
for the following holidays: 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 net asset value per share of each class of a Fund is computed by taking the
value of all of a Fund's assets attributable to a class, less the Fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the Fund are accrued daily.

Except as set forth in the following paragraph, each Fund's portfolio
investments are valued on each business day using the amortized cost method.
This method involves valuing an instrument at its cost and, thereafter, assuming
a constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price a Fund would receive if it sold the investment. During periods of
declining interest rates, the yield on shares of a Fund computed as described
below may tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio investments. Thus, if
the use of amortized cost by a Fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in that Fund would be able to
obtain a somewhat higher yield than would result from investment in a fund
utilizing solely market values. The converse would apply in a period of rising
interest rates.

Standby commitments will be valued at zero in determining net asset value.
"When-issued" securities will be valued at the value of the security at the time
the commitment to purchase is entered into.

The valuation of a Fund's portfolio investments based upon their amortized cost
is permitted by Rule 2a-7 under the 1940 Act. Rule 2a-7 requires the Funds to
adhere to certain conditions. The Trustees have established procedures designed
to stabilize, to the extent reasonably possible, the price per share of each
class of the Funds for the purpose of maintaining sales and redemptions at $1.00
per share. There is no guarantee that a Fund will be able to maintain a stable
share price. These procedures will include the review of the Funds' portfolio
holdings by the Trustees, at such intervals as they may deem appropriate, to
determine whether a Fund's net asset value per
<PAGE>

class calculated by using available market quotations deviates from $1.00 per
share and, if so, whether this deviation may result in material dilution or is
otherwise unfair to existing shareholders. If the Trustees determine that such a
deviation exists, they have agreed to take such corrective action as they regard
as necessary and appropriate, including: (1) selling portfolio instruments
before maturity to realize capital gains or losses or to shorten average
portfolio maturity; (2) offsetting each shareholder's pro rata portion of the
deviation between the net asset value and $1 from the shareholder's account and
unpaid dividends; (3) reducing or increasing the number of outstanding shares on
a pro rata basis; or (4) establishing a net asset value per share by using
available market quotations.

12. TAX STATUS

It is each Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") for qualification as a
separate regulated investment company. These requirements relate to the sources
of a Fund's income, the diversification of its assets and the distribution of
its income to shareholders. If a Fund meets all such requirements and
distributes to its shareholders, in accordance with the Code's timing and other
requirements, all investment company taxable income, net tax-exempt interest,
and net capital gain, if any, which it earns, the Fund will be relieved of the
necessity of paying federal income tax.

If a Fund did not qualify as a regulated investment company, it would be treated
as a U.S. corporation subject to federal income tax. Under the Code, each Fund
will be subject to a nondeductible 4% excise tax on a portion of its
undistributed ordinary income (not including tax-exempt interest) and capital
gains if it fails to meet certain distribution requirements with respect to each
calendar year. Each Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.

In order to qualify as a regulated investment company under Subchapter M, each
Fund must, among other things, derive at least 90% of its annual gross income
from interest, gains from the sale or other disposition of securities and
certain other income (the "90% income test"), and satisfy certain annual
distribution and quarterly diversification requirements.

Dividends from any Fund's investment company taxable income, which includes
taxable net investment income and net short-term capital gain in excess of net
long-term capital loss, are taxable as ordinary income, whether received in cash
or reinvested in additional shares. Dividends from any Fund's net long-term
capital gain in excess of net short-term capital loss ("net capital gain"), if
any, whether received in cash or reinvested in additional shares, are taxable to
shareholders as long-term capital gains for federal income tax purposes without
regard to the length of time Fund shares have been held. Each Fund does not
anticipate that it will earn or distribute any net capital gain. The federal
income tax status of all distributions (including exempt-interest dividends, as
described below) will be reported to shareholders annually.

Each Fund's dividends and distributions will not qualify for any dividends-
received deduction that might otherwise be available for certain dividends
received by shareholders that are corporations.

Any dividend declared by a Fund in October, November or December as of a record
date in such a month and paid during the following January will be treated for
federal income tax purposes as received by shareholders on December 31 of the
calendar year in which it is declared.
<PAGE>

Subchapter M of the Code permits the character of tax-exempt interest
distributed by a regulated investment company to flow through as "exempt-
interest dividends" that are treated as tax-exempt interest by its shareholders,
provided that at least 50% of the value of the company's assets at the end of
each quarter of its taxable year is invested in state, municipal and other
obligations the interest on which is excluded from gross income under Section
103(a) of the Code. The Tax Free Fund intends to satisfy this 50% requirement in
order to permit its distributions of tax-exempt interest to be treated as
exempt-interest dividends under the Code. The Tax Free Fund's distributions that
it properly designates as exempt-interest dividends for any taxable year of the
Fund are therefore not subject to regular federal income tax, although they may
be subject to the individual and corporate alternative minimum taxes described
below.

A portion of the income that the Tax Free Fund receives and distributes to
shareholders may require shareholders to pay regular federal, alternative
minimum, state and local income taxes. Taxable income or gains that result in
taxable distributions include, for example, income from repurchase agreements,
interest from U.S. government obligations and gains from the sale of
investments, including when-issued or forward-commitment transactions.
Distributions of accrued market discount that is required to be included in
income with respect to securities acquired at a market discount and a portion of
the discount from certain stripped tax-exempt obligations or their coupons are
also taxable.

Interest on indebtedness incurred by shareholders to purchase or carry shares of
the Tax Free Fund will not be deductible for federal income tax purposes to the
extent it is deemed related to exempt-interest dividends paid by such Fund.
Under rules used by the Internal Revenue Service to determine when borrowed
funds are used for the purpose of purchasing or carrying particular assets, the
purchase of shares may be considered to have been made with borrowed funds even
though the borrowed funds are not directly traceable to the purchase of shares.

Section 147(a) of the Code prohibits exemption from taxation of interest on
certain governmental obligations to persons who are "substantial users" (or
persons related thereto) of facilities financed by such obligations. The Tax
Free Fund will not undertake any investigation as to the users of the facilities
financed by any tax-exempt obligations in its portfolio, and the Fund may not be
an appropriate investment for substantial users (or related persons) of these
facilities.

Exempt-interest dividends are taken into account in computing the portion, if
any, of Social Security and Railroad Retirement benefits subject to federal and,
in some cases, state taxes. Shareholders are required to report their receipt of
tax-exempt interest, including exempt-interest dividends, on their federal
income tax returns.

Any portion of any exempt-interest dividend paid by the Tax Free Fund that is
attributable to interest on private activity bonds held by that Fund issued on
or after August 8, 1986 (or, in certain cases, September 1, 1986), other than
qualified Section 501(c)(3) bonds or refundings of bonds originally issued
before such dates, is an item of tax preference that is subject to the federal
individual alternative minimum tax and the alternative minimum tax on
corporations.

Exempt-interest dividends from interest the Tax Free Fund earns on any tax-
exempt bonds, regardless of when issued, may increase a corporate shareholder's
liability for the federal corporate alternative minimum tax because 75% of the
excess of adjusted current earnings over alternative minimum taxable income is
an adjustment that, except to the extent already taken into

21
<PAGE>

account as private activity bond interest, increases the alternative minimum
taxable income subject to the corporate alternative minimum tax.

For federal income tax purposes, each Fund is permitted to carry forward a net
capital loss for any year to offset its capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent capital gains are
offset by these losses, they would not result in federal income tax liability to
the Fund and therefore are not expected to be distributed as such to
shareholders.

Redemptions and exchanges of shares are taxable events for shareholders that are
subject to tax but generally will not result in any taxable gain or any loss if
the applicable Fund successfully maintains a constant net asset value per share.
Any loss realized by a shareholder upon the redemption, exchange or other
disposition of shares with a tax holding period of six months or less will be
disallowed, in the case of the Tax Free Fund, to the extent of any exempt-
interest dividends paid on the shares disposed of. For each Fund, any such loss
that is not disallowed will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gain with respect
to such shares.

Losses on redemptions or other dispositions of shares of a Fund may be
disallowed under "wash sale" rules in the event of other investments in that
Fund (including those made pursuant to reinvestment of dividends and/or capital
gain distributions) within a period of 61 days beginning 30 days before and
ending 30 days after a redemption or other disposition of shares of that Fund.
In such a case, the disallowed portion of any loss would be included in the
federal tax basis of the shares acquired in the other investments. Shareholders
should consult their own tax advisers about their individual circumstances to
determine whether any particular transaction in Fund shares is properly treated
as a sale for tax purposes, as this discussion assumes, and the tax treatment of
any gains or loses recognized in these transactions.

A Fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gain, with respect
to its investments (if any) in those countries. Tax conventions between certain
countries and the U.S. may reduce or eliminate these taxes in some cases. None
of the Funds will satisfy the requirements for passing through to its
shareholders its pro rata shares of qualified foreign taxes paid by the Fund.
Accordingly, shareholders will not include these taxes in their gross incomes
and will not be entitled to a tax deduction or credit for these taxes on their
own tax returns.

Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions, and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.

A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent a Fund's distributions are
derived from interest on (or, in the case of intangible property taxes, the
value of its assets is attributable to) (i) obligations issued by that state or
certain of its political subdivisions or (ii) certain U.S. government
obligations (not including repurchase agreements), provided in some states that
certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. The Funds will not seek to satisfy any threshold or
reporting requirements that may apply in particular taxing jurisdictions,
although the Trust may in its sole discretion provide relevant information to
shareholders.

22
<PAGE>

Federal law requires that each Fund withhold (as "backup withholding") 31% of
reportable payments, including dividends (other than exempt-interest dividends)
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, shareholders must certify on their Account
Applications, or on separate IRS Forms W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. A Fund may nevertheless be required to withhold
if it receives notice from the IRS or a broker that the number provided is
incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.

If, as anticipated, the Funds qualify as regulated investment companies under
the Code, they will not be required to pay any Massachusetts income, corporate
excise or franchise taxes.

The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e. U.S.
citizens or residents or U.S. corporations, partnerships, trusts or estates, and
who are subject to U.S. federal income tax. This description does not address
the special tax rules that may be applicable to particular types of investors,
such as financial institutions, insurance companies, securities dealers, or tax-
exempt or tax-deferred plans, accounts or entities. Investors other than U.S.
persons may be subject to different U.S. tax treatment, including a possible 30%
non-resident alien U.S. withholding tax (or non-resident alien withholding tax
at a lower treaty rate) on amounts treated as ordinary dividends from a Fund.
Shareholders should consult their own tax advisers on these matters and on
state, local and other applicable tax laws.

13. INVESTMENT RESULTS

Quotations, Comparisons and General Information. From time to time, in
advertisements, in sales literature or in reports to shareholders, the past
performance of the Funds may be illustrated and/or compared with that of other
mutual funds with similar investment objectives and to stock or other relevant
indices. For example, total return of a Fund's classes may be compared to
rankings prepared by Lipper Inc., a widely recognized independent service which
monitors mutual fund performance; the S&P 500, an index of unmanaged groups of
common stock; or the Dow Jones Industrial Average, a recognized unmanaged index
of common stocks of 30 industrial companies listed on the Exchange.

In addition, the performance of the classes of a Fund may be compared to
alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. The Funds may also include
securities industry or comparative performance information in advertising or
materials marketing a Fund's shares. Performance rankings and listings reported
in newspapers or national business and financial publications, such as Barron's,
Business Week, Consumers Digest, Consumer Reports, Financial World, Forbes,
Fortune, Investors Business Daily, Kiplinger's Personal Finance Magazine, Money
Magazine, New York Times, Smart Money, USA Today, U.S. News and World Report,
The Wall Street Journal and Worth may also be cited (if the Funds are listed in
any such publication) or used for comparison. A Fund may also use performance
listings and rankings from various other sources including Bloomberg Financial
Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson Associates,
Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and

23
<PAGE>

Co., Lipper Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.

In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of a Fund.

The Funds may also present, from time to time, historical information depicting
the value of a hypothetical account in one of more classes of a Fund since
inception.

In presenting investment results, the Funds may include references to certain
financial planning concepts, including (a) an investor's need to evaluate his or
her financial assets and obligations to determine how much to invest; (b) an
investor's need to analyze the objectives of various investments to determine
where to invest; and (c) an investor's need to analyze his time frame for future
capital needs to determine how long to invest. The investor controls these three
factors, all of which affect the use of investments in building assets.

Standardized Yield Quotations. From time to time, the Trust may provide yield
quotations for each Fund's shares. These quotations are calculated by standard
methods prescribed by the SEC and may from time to time be used in the Trust's
Prospectus, Statement of Additional Information, advertisements, shareholder
reports or other communications to shareholders. However, these yield quotations
do not necessarily represent the future performance of any Fund. Unlike some
bank deposits or other investments which pay a fixed yield for a stated period
of time, the yields of a Fund will vary based on the type, quality and
maturities of the securities held in its portfolio, fluctuations in short-term
interest rates and changes in its expenses.

A Fund's yield quotations are computed using the appropriate figures for a
particular class as follows: the net change, exclusive of capital changes (i.e.,
realized gains and losses from the sale of securities and unrealized
appreciation and depreciation), in the value of a hypothetical pre-existing
Class 1 or Class 2 account having a balance of one share at the beginning of the
seven-day base period is determined by subtracting a hypothetical charge
reflecting expense deductions from the hypothetical account, and dividing the
net change in value by the value of the share at the beginning of the base
period. This base period return is then multiplied by 365/7 with the resulting
yield figure carried to the nearest 100th of 1%. The determination of net change
in account value reflects the value of additional shares purchased with
dividends from the original share, dividends declared on both the original share
and any such additional shares, and all fees that are charged to a Fund, in
proportion to the length of the base period and the Fund's average account size
(for any fees that vary with the size of an account).

The Trust may also advertise quotations of each Fund's effective yield.
Effective yield is computed by compounding the unannualized base period return
determined as in the preceding paragraph by adding 1 to the base period return,
raising the sum to a power equal to 365 divided by 7, and subtracting one from
the result, according to the following formula:

Effective Yield = (base period return + 1) 365/7 - 1

The Tax Free Fund may advertise its tax equivalent current and effective yields.
The Tax Free Fund's tax equivalent current yield is calculated by dividing that
portion of the Tax Free Fund's

24
<PAGE>

yield that is tax-exempt by 1 minus a stated income tax rate and adding the
quotient to that portion, if any, of the Tax Free Fund's yield that is not tax-
exempt. The Tax Free Fund's tax equivalent effective yield is calculated by
dividing that portion of the Tax Free Fund's effective yield that is tax-exempt
by 1 minus a stated income tax rate and adding the quotient to that portion, if
any, of the Tax Free Fund's effective yield that is not tax-exempt.

All yields are calculated in accordance with SEC mandated standard formulas.

25
<PAGE>

14. FINANCIAL STATEMENTS

A Statement of Assets and Liabilities of each of the Funds as of March 15,
2000, and related footnotes is set forth below.

Statements of Assets and Liabilities
March 15, 2000

Boston Advisors Boston Advisors
Boston Advisors U.S. Government Tax Free
Cash Reserves Money Market Money Market
Fund Fund Fund
Assets
Cash $50,000 $25,000 $25,000
======= ======= =======

Net Assets $50,000 $25,000 $25,000
======= ======= =======

Net Assets Consist of:
Paid in Capital $50,000 $25,000 $25,000
======= ======= =======

Net Assets
Class 1 $50,000 $25,000 $25,000

Shares Outstanding
Class 1 50,000 25,000 25,000

Net Asset Value, Offering Price
and Redemption Price per Share
($50,000/50,000 shares, $25,000/25,000 shares,
and $25,000/25,000 shares, for Boston Advisors Cash Reserves Fund
Boston Advisors U.S. Government Money Market Fund,
and Boston Advisors Tax Free Money Market Fund, respectively)

Class 1 $ 1.00 $ 1.00 $ 1.00

Note 1:

Boston Advisors Trust (the "Trust"), is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust was established as a Massachusetts business trust on
September 30, 1999. The Trust currently offers three Funds: Boston Advisors Cash
Reserves Fund, Boston Advisors U.S. Government Money Market Fund, and Boston
Advisors Tax Free Money Market Fund (each, a "Fund"). The Trust had no
operations other than registration and organizational matters, including the
sale and issuance of 50,000 shares of the Boston Advisors Cash Reserves Fund,
25,000 shares of the Boston Advisors U.S. Government Money Market Fund, and
25,000 shares of the Boston Advisors Tax Free Money Market Fund to Boston
Advisors, Inc. for an aggregate sales price of $100,000. These financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States which require management to make certain estimates
and assumptions at the date of the financial statements.

Note 2:

Boston Advisors, Inc. (the "Advisor"), the Funds' investment adviser, will bear
all organizational expenses except the fees for registering and qualifying the
Funds and the Funds' shares for distribution under Federal and state securities
laws, which will be borne by the Funds and amortized over one year. The Funds
will purchase insurance to cover certain loss events caused by a default or
bankruptcy of issuers of securities owned by the Funds. While the Funds will pay
the premiums for this insurance coverage, a fund may incur losses to the extent
that the insurance does not cover them.

Note 3:

The Funds have agreed to pay the Advisor, a wholly owned subsidiary of The
Advest Group, Inc., a monthly advisory fee at an annual rate of 0.55% of each
Fund's average daily net assets. The Advisor has agreed to waive its advisory
fee and reimburse each Fund for its expenses through April, 30, 2001 to the
extent necessary that the total expenses of the Fund do not exceed 0.90% of the
average daily net assets of Class 1 and 0.65% of the average daily net assets of
Class 2. The Advisor reserves the right to be reimbursed for management fees
waived and fund expenses paid by it during the prior two years to the extent
that a Fund's expense ratio falls below any expense limitations. The Funds have
adopted a Rule 12b-1 distribution plan authorizing each Fund's Class 1 shares to
pay service fees equal to 0.25% of the Class 1 average daily net assets.

Report of Independent Accountants

To the Shareholder of Boston Advisors Cash Reserves Fund, Boston Advisors U.S.
Government Money Market Fund, and Boston Advisors Tax Free Money Market Fund
and Board of Trustees of Boston Advisors Trust

In our opinion, the accompanying statements of assets and liabilities present
fairly, in all material respects, the financial position of Boston Advisors Cash
Reserves Fund, Boston Advisors U.S. Government Money Market Fund, and Boston
Advisors Tax Free Money Market Fund (each a fund of Boston Advisors Trust,
hereafter referred to as the "Fund") at March 15, 2000, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with auditing
standards generally accepted in the Unites States which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Boston, Massachusetts
March 24, 2000

26
<PAGE>

15. APPENDIX - DESCRIPTION OF SHORT-TERM DEBT RATINGS/1/

Moody's Investors Service, Inc. ("Moody's") Prime Rating System

Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well-established industries. High rates of return on
funds employed. Conservative capitalization structure with moderate reliance on
debt and ample asset protection. Broad margins in earnings coverage of fixed
financial charges and high internal cash generation. Well-established access to
a range of financial markets and assured sources of alternate liquidity.

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

Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch
obligations are rated at the lower of the bank's rating or Moody's Sovereign
Rating for Bank Deposits for the country in which the branch is located.

When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.

If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are

_____________________________
/1/ The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the Trust's fiscal year-end.

27
<PAGE>

listed within the parenthesis beneath the name of the issuer, or there is a
footnote referring the reader to another page for the name or names of the
supporting entity or entities. In assigning ratings to such issuers, Moody's
evaluates the financial strength of the affiliated corporations, commercial
banks, insurance companies, foreign governments or other entities, but only as
one factor in the total rating assessment.

Moody's Debt Ratings

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

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

Moody's bond ratings, where specified, are applicable to financial contracts,
senior bank obligations and insurance company senior policyholder and claims
obligations with an original maturity in excess of one year. Obligations relying
upon support mechanisms such as letters-of-credit and bonds of indemnity are
excluded unless explicitly rated. Obligations of a branch of a bank are
considered to be domiciled in the country in which the branch is located.

Unless noted as an exception, Moody's rating on a bank's ability to repay senior
obligations extends only to branches located in countries which carry a Moody's
Sovereign Rating for Bank Deposits. Such branch obligations are rated at the
lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits for
the country in which the branch is located. When the currency in which an
obligation is denominated is not the same as the currency of the country in
which the obligation is domiciled, Moody's ratings do not incorporate an opinion
as to whether payment of the obligation will be affected by the actions of the
government controlling the currency of denomination. In addition, risk
associated with bilateral conflicts between an investor's home country and
either the issuer's home country or the country where an issuer branch is
located are not incorporated into Moody's ratings.

Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the 1933 Act or issued in
conformity with any other applicable law or regulation. Nor does Moody's
represent any specific bank or insurance company obligation is legally
enforceable or a valid senior obligation of a rated issuer.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

28
<PAGE>

Standard & Poor's Short-Term Issue Credit Ratings

A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

Standard & Poor's Long-Term Issue Credit Ratings

Issue credit ratings are based, in varying degrees, on the following
considerations:

Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation; Nature of and provisions of the obligation; Protection afforded by,
and relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.

The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.

AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA: An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

29
<PAGE>

PART C: OTHER INFORMATION

Item 23. Exhibits

(a)(1) Declaration of Trust/1/

(a)(2) Amendment to Declaration of Trust/2/

(b) By-Laws/1/

(d) Investment Adviser Agreement/1/

(e) Form of Distribution Agreement/2/

(f) Not Applicable

(g) Form of Custodian Agreement/2/

(h) (1) Form of Administration Agreement/2/

(2) Form of Transfer Agency and Service Agreement/2/

(3) Form of Expense Limitation Agreement/2/

(i) Opinion and Consent of Counsel/2/

(j) Consent of Independent Auditors/2/

(k) Not Applicable

(l) Initial Capital Agreement/2/

(m) Rule 12b-1 Plan/1/

(n) Rule 18f-3 Plan/1/

(o) Powers of Attorney/2/
_____________________________________

/1/ Incorporated herein by reference to the Registrant's initial Registration
Statement filed with the Securities and Exchange Commission (File Nos. 333-
90049, 811-09675) on November 1, 1999.

/2/ Filed herewith.

Item 24. Persons Controlled by or Under Common Control with Boston Advisors
Trust (the "Trust")

Following is a list of subsidiaries of The Advest Group, Inc., the ultimate
parent of Boston Advisors, Inc., the Trust's investment adviser:
<PAGE>

<TABLE>
<CAPTION>
Name Jurisdiction Where Percent Ownership
Incorporated
<S> <C> <C>
A. B. Realty Corp. Connecticut 100%

Advest, Inc. Delaware 100%
Advest Insurance Agency, Inc. Massachusetts 100%
Balanced Capital Services, Inc. Connecticut 100%

Advest Bank and Trust Company Connecticut 100%

Advest Capital, Inc. Connecticut 100%

Advest Mortgages, Inc. Delaware 100%

Advest Properties, Inc. Delaware 100%

Bank Street Management Company Connecticut 100%

Billings and Company, Inc. Connecticut 100%
Billings Management Co. Connecticut 100%

Boston Advisors, Inc. Massachusetts 100%

Vercoe Insurance Agency, Inc. Ohio 100%
</TABLE>

Ultimate control of The Advest Group, Inc. is illustrated by the table below,
which sets forth information regarding all persons known to The Advest Group,
Inc. to be the beneficial owner of more than 5% of the Common Stock of The
Advest Group, Inc. as of December 1, 1999:

Name and Address Number of Shares Percentage of Class

Mr. Peter R. Kellogg 1,564,500/(1)/ 17.53%
c/o Spear, Leeds & Kellogg ------
120 Broadway
New York, NY 10271

The Advest Thrift Plan 590,132/(2)/ 6.61%
Advest, Inc., as Fiduciary -----
90 State House Square
Hartford, CT 06103

/(1)/ Such information as to beneficial ownership is derived from a Report on
Form 4 for the month of November 1993 filed by Mr. Kellogg. In that Form 4, Mr.
Kellogg reported direct beneficial ownership of 500,000 shares. In addition, Mr.
Kellogg reported indirect beneficial ownership as follows: 910,000 shares held
by a corporation of which Mr. Kellogg is the sole holder of voting stock;
100,000 shares held by Mr. Kellogg's spouse; 20,000 shares held by a non-profit
corporation of which Mr. Kellogg is a trustee; and 34,500 shares held by a firm
of which Mr. Kellogg is a senior Managing Director. Mr. Kellogg disclaimed
beneficial ownership of such indirect holdings. Mr. Kellogg has advised The
Advest Group, Inc. that, pursuant to an arrangement with the Office of Thrift
Supervision, at the Annual Meeting all of these shares will be voted in
proportion to the votes cast by all other shareholders.

2
<PAGE>

/(2)/ Represents shares held by the Advest Thrift Plan of The Advest Group, Inc.
(the "ATP") in participant ESOP accounts (444,089 shares) and 401(k) accounts
(146,043). Advest, Inc. acts as trustee for the ATP. Participants may direct the
voting of shares held in their ATP ESOP and 401(k) accounts. Participants may
elect to acquire or dispose of shares in their 401(k) accounts. Disposition of
shares in ESOP accounts is permitted only pursuant to a diversification election
available to individuals who have attained aged 55 and participated in the ESOP
for at least 10 years.

Item 25. Indemnification

As a Massachusetts business trust, the Trust's operations are governed by the
Declaration of Trust. The Trust is an entity of the type commonly known as a
"Massachusetts business trust", which is the form in which many mutual funds are
organized. The Declaration of Trust provides that the Trustees of the Trust
shall not be liable for any action taken by them in good faith, and that they
shall be fully protected in relying in good faith upon the records of the Trust
and upon reports made to the Trust by persons selected in good faith by the
Trustees as qualified to make such reports. The Declaration of Trust further
provides that the Board of Trustees will not be liable for errors of judgment or
mistakes of fact or law. The Declaration of Trust provides that the Trust will
indemnify the Trustees and officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their positions with the Trust, unless it is determined in
the manner provided in the Declaration of Trust that they may have not acted in
good faith in the reasonable belief that, in the case of conduct in their
official capacity with the Trust, such conduct was in the best interests of the
Trust, and in all other cases, that the conduct was at least not opposed to the
best interest of the Trust (and in the case of any criminal proceeding, they had
no reasonable cause to believe that the conduct was unlawful). However, nothing
in the Declaration of Trust or the By-laws protects or indemnifies a Trustee or
officer against any liability to which they would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office.

Item 26. Business and Other Connections of the Investment Adviser

All of the information required by this item is set forth in the Form ADV of the
Trust's investment adviser, Boston Advisors, Inc. (File No. 801-18130). The
following sections of the Form ADV are incorporated herein by reference:

(a) Items 1 and 2 of Part 2; and

(b) Item 6, Business Background, of each Schedule D.

Item 27. Principal Underwriter

(a) Advest, Inc. ("Advest") does not act as principal underwriter for any
investment companies other than the Trust.

(b) The following is a list of the executive officers and directors of
Advest. The principal business address of the individuals listed below is 90
State House Square, Hartford, Connecticut 06103 unless otherwise indicated:

3
<PAGE>

<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Advest Positions and Offices
Address with the Trust
<S> <C> <C>
Grant W. Kurtz Director; President & Chief Executive Officer

George A. Boujoukos Director; Senior Executive VP & Director Capital Markets
40 Rector Street
New York, NY 10006

Harold H. Branning Director; Senior Executive VP & Director Private Client
Group

John C. Giesea Director; Senior Executive VP & Director of Capital
Markets

Allen G. Botwinick Director; Executive Vice President of Administration & Trustee and Chairman
Operations

Lee G. Kuckro Director; Executive Vice President, Secretary and
General Counsel

Martin M. Lilienthal Director; Executive Vice President & Chief Financial
Officer

Daniel J. Mullane Director; Executive Vice President & National Sales
100 Federal Street Manager
Boston, MA 02110

Eleanor Etter Director; Senior Vice President & Director of Marketing
and Affluent Business Development

Gay B. Foster Director; Senior Vice President of Branch Administration

Robert A. Fogliano Senior Vice President

Bernard T. Gacona Senior Vice President and Director of Insurance and
Mutual Funds

David A. Horowitz Senior Vice President, Assistant Secretary and Assistant
General Counsel

Kenneth S. Hyne Director; Senior Vice President and Director of
Investment Management

James R. Orvis Senior Vice President and Director of Operations

Robert W. Rulevich Senior Vice President and Director of Human Resources

Donna L. Sawan Director; Senior Vice President, Treasurer and Assistant
Secretary

Ernest R. Smith Director; Senior Vice President and Director of
Information Service
</TABLE>

4
<PAGE>

<TABLE>
<S> <C>
Mary S. Block Vice President and Supervisory Compliance Officer

Chris Drucker Vice President of New York Stock Exchange Operations
40 Rector Street
New York, NY 10006

William C. Freitag Vice President and Chief Compliance Officer

Nicholas G. Hano Vice President of New York Stock Exchange Operations
40 Rector Street
New York, NY 10006

Robert T. Keane, Jr. Vice President of Corporate Syndicate

Sandy Price Vice President of Centennial Marketing

Robert B. Maggiacomo Vice President of Direct Investments

Lawrence F. McIntosh Vice President and Supervisory Compliance Officer

Thomas P. Byrne Assistant General Counsel

Megan G. Sansons Vice President of Public Finance
100 Federal Street
Boston, MA 02110

Laurie Andrews Assistant Secretary

John A. King Assistant Secretary

Warren F. Pavlik Assistant Secretary
40 Rector Street
New York, NY 10006

James B. Fellus Director; Senior Managing Director of Capitol Markets
40 Rector Street
New York, NY 10006

Stephen M. Hampton Senior Managing Director of Municipal Division
40 Rector Street
New York, NY 10006

Michael Mayes Managing Director of Investment Banking

Philip M. Skidmore Director; Senior Managing Director of Syndicate
40 Rector Street
New York, NY 10006

Alexander M. Clark Managing Director of Investment Banking

Douglas McConnell Managing Director of Investment Banking
</TABLE>

5
<PAGE>

<TABLE>
<S> <C>
Suite 2250
311 S. Wacker Drive
Chicago, IL 60606

Thomas G. Rudkin Managing Director of Investment Banking

Andrew M. Sadosky Managing Director of Investment Banking
One Rockefeller Plaza
New York, NY 10020

Joseph Blair Managing Director of Public Finance
100 Federal Street
Boston, MA 02110

Scott Gibson Managing Director of Public Finance

David I. Weprin Managing Director of Public Finance

George Bevis Managing Director of Institutional Sales & Sales Trading
One Rockefeller Plaza
New York, NY 10020

Kristen K. Wold Associate Managing Director of Investment Banking

William R. Burns Director

Harry H. Canavesi Director
300 State Street
Erie, PA 16507

Donald J. Cristo Director
17 West Main Street
Avon, CT 06001

Edward Fernberger, Jr. Director
Benjamin Fox Pavillion
Jenkintown, PA 19103

Allan M. Fink Director
12 East 49th Street
New York, NY 10001

Stephen Hampton Director
40 Rector Street
New York, NY 10006

Garry L Hogan Director
3300 One Oxford Center
Pittsburgh, PA 15219

Judith A. Johnson Director
Middlesex Corp. Center
Suite 605
213 Court Street
</TABLE>

6
<PAGE>

<TABLE>
<S> <C>
Middletown, CT 06457

James Keim, Jr. Director
300 State Street
Erie, PA 16507

Robert D. Meyers Director
250 E. Broad Street, 12th Floor
Columbus, OH 43215

Steven M. Nussbaum Director
10 Sasco Hill Road
Fairfield, CT 06430

James R. Orvis Director

James M. Pucci Director

Richard E. Ryall Director
1441 Main Street
Springfield, MA 01111

Jay M. Salkin Director
110 Heaver Plaza
Lutherville, MD

John H. Shaughnessy Director
100 Federal Street
Boston, MA 02110

Paul Skydell Director
2 Jericho Plaza
Jericho, NY 11753

Bernard A.G. Taradash Director
386 High Street
Fall River, MA 02722

Doran Young Director
One Rockefeller Plaza
New York, NY 10020

Chris Wilkinson Director
</TABLE>

7
<PAGE>

Item 28. Location of Accounts and Records

The accounts and records of the Trust are located, in whole or in part, at the
office of Boston Advisors, Inc. and the locations set forth below:

(Custody, Fund Accounting and Administration)
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116

(Transfer Agent)
Advest Transfer Services, Inc.
90 State House Square
Hartford, CT 06103

Item 29. Management Services

Not applicable.

Item 30. Undertakings

The Trust undertakes to file an Amendment to this Registration Statement using
certified financial statements showing the initial capital received.

8
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, Boston Advisors Trust has duly
caused this Pre-Effective Amendment to its Registration Statement to be signed
on its behalf by the undersigned, duly authorized, in the City of Boston and
Commonwealth of Massachusetts, on the 28th day of March, 2000.

BOSTON ADVISORS TRUST

/s/ Michael J. Vogelzang*
------------------------
Michael J. Vogelzang
President

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Pre-Effective Amendment to its Registration Statement has been signed by the
following persons in the capacities indicated on the 28th day of March, 2000.

Signature Title
- --------- -----

/s/ Allen G. Botwinick* Chairman and Trustee
- ----------------------
Allen G. Botwinick

/s/ Michael J. Vogelzang* Trustee and President
- ------------------------ (principal executive officer)
Michael J. Vogelzang

/s/ Donna C. McAdam Treasurer
- ------------------- (principal financial and accounting officer)
Donna C. McAdam

/s/ Mone Anathan III* Trustee
- --------------------
Mone Anathan III

/s/ Ezekiel Russell Peach, Jr.* Trustee
- -----------------------------
Ezekiel Russell Peach, Jr.

/s/ Hugh A. Dunlap, Jr.* Trustee
- ----------------------
Hugh A. Dunlap, Jr.

*/s/ John M. Del Prete
- ----------------------
John M. Del Prete as Attorney-in-fact

Executed by John M. Del Prete on behalf of those indicated pursuant to Power of
Attorney dated March 1, 2000 filed herewith as an exhibit to Registrant's Pre-
Effective Amendment No. 1
<PAGE>

BOSTON ADVISORS TRUST

Exhibit Index
-------------

Exhibit No. Exhibit
- ----------- -------

(a)(2) Amendment to Declaration of Trust

(e) Form of Distribution Agreement

(g) Form of Custodian Agreement

(h)(1) Form of Administration Agreement

(h)(2) Form of Transfer Agency and Service Agreement

(h)(3) Form of Expense Limitation Agreement

(i) Opinion and Consent of Counsel

(j) Consent of Independent Auditors

(l) Initial Capital Agreement

(o) Powers of Attorney

<PAGE>

Exhibit (a)(2)

BOSTON ADVISORS TRUST
100 Federal Street
Boston, Massachusetts 02110

Certificate of Amendment
------------------------

The undersigned, being the President of Boston Advisors Trust (the
"Trust"), a trust with transferable shares of the type commonly called a
Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the
authority conferred upon the Trustees of the Trust by Section 8.4 of the
Declaration of Trust, dated September 28, 1999, as amended (as so amended, the
"Declaration of Trust"), and by the affirmative vote of a Majority of the
Trustees at a meeting duly called and held on March 1, 2000, Section 5.5 of the
Declaration of Trust is hereby amended as set forth below:

1. The names of the series of the Trust designated "Advisors Money Market Fund
is hereby changed to "Boston Advisors Cash Reserves Fund," "Advisors U.S.
Government Money Market Fund" is hereby changed to "Boston Advisors U.S.
Government Money Market Fund" and the "Advisors Tax Free Money Market Fund"
is hereby changed to "Boston Advisors Tax Free Money Market Fund."

That said Amendment to the Declaration of Trust shall be effective
immediately.

The Trustees further direct that, upon the execution of this Certificate of
Amendment, the Trust take all necessary action to file an original copy of this
Certificate of Amendment with the Secretary of State of The Commonwealth of
Massachusetts and at any other place required by law or by the Declaration of
Trust.

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
17th day of March, 2000.

/s/ Michael J. Vogelzang
-----------------------------
By: Michael J. Vogelzang
Its: President
<PAGE>

ACKNOWLEDGMENT
--------------

M A S S A C H U S E T T S

SUFFOLK, SS.: March, 17, 2000

Then personally appeared the above-named President of Boston Advisors Trust
and acknowledged the foregoing instrument to be his free act and deed.

Before me,

/s/ Marian K. Dalton
--------------------
Notary Public

My commission expires: 4/8/2005
---------

-2-

<PAGE>

Exhibit (e)

DISTRIBUTION AGREEMENT

Boston Advisors Trust
100 Federal Street
Boston, Massachusetts 02110

March 1, 2000

Advest, Inc.
90 State House Square
Hartford, Connecticut 06103

Dear Sirs:

This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company, Boston Advisors Trust (the
"Trust"), has agreed that you shall be, for the period of this Agreement, the
distributor of shares of each Series of the Trust set forth on Exhibit A hereto,
as such Exhibit may be revised from time to time (each, a "Series"). For
purposes of this Agreement the term "Shares" shall mean the authorized shares of
the relevant Series.

1. Services as Distributor

1.1 You will act as agent for the distribution of Shares covered by, and
in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended (the "1933 Act"), and will transmit
promptly any orders received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Trust of which the Trust has
notified you in writing.

1.2 You agree to use your best efforts to solicit orders for the sale of
Shares. It is contemplated that you may enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.

1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitations, the
Investment Company Act of 1940, as amended (the "1940 Act"), the 1933 Act, the
Securities Exchange Act of 1934, as amended and the National Association of
Securities Dealers, Inc.'s (the "NASD") Conduct Rules, Constitution and By-Laws.
You represent and warrant that you are a broker-dealer registered with the
Securities and Exchange Commission (the "SEC") and that you are registered with
the relevant securities regulatory agencies in all fifty states, the District of
Columbia and Puerto Rico. You also represent and warrant that you are a member
of the NASD.

1
<PAGE>

1.4 You shall file Trust advertisements, sales literature and other
marketing and sales related materials with the appropriate regulatory agencies
and shall obtain such approvals for their use as may be required by the SEC, the
NASD and/or state securities administrators.

1.5 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of a Series' Shares not in the best
interest of the Trust, the parties hereto may decline to accept any orders for,
or make any sales of, any Shares until such time as those parties deem it
advisable to accept such orders and to make such sales and each party shall
advise promptly the other party of any such determination.

1.6 The Trust agrees to pay all costs and expenses in connection with the
registration of Shares under the 1933 Act and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and for supplying
information, prices and other data to be furnished by the Trust hereunder, and
all expenses in connection with the preparation and printing of the Trust's
prospectuses and statements of additional information for regulatory purposes
and for distribution to shareholders; provided however, that the Trust shall not
pay any of the costs of advertising or promotion for the sale of Shares, except
as authorized by a plan adopted pursuant to Rule 12b-1 under the 1940 Act. You
shall also be entitled to compensation for your services as provided in any
Distribution Plan adopted as to any Series and class of the such Series' Shares
pursuant to Rule 12b-1.

1.7 The Trust agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Trust's officers in connection with the
qualification of Shares for sale in such states as you may designate to the
Trust and the Trust may approve, and the Trust agrees to pay all expenses which
may be incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a dealer under state or
Federal laws and, except as otherwise specifically provided in this Agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this Agreement.

1.8 The Trust shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to the Trust or any
relevant Series and the Shares as you may reasonably request, all of which shall
be signed by one or more of the Trust's duly authorized officers; and the Trust
warrants that the statements contained in any such information, when so signed
by the Trust's officers, shall be true and correct. The Trust also shall
furnish you upon request with: (a) semi-annual reports and annual audited
reports of the Trust's books and accounts made by independent public accountants
regularly retained by the Trust, (b) quarterly earnings statements prepared by
the Trust, (c) a monthly itemized list of the securities in each Series'
portfolio, (d) monthly balance sheets as soon as practicable after the end of
each month, and (e) from time to time such additional information regarding the
Trust's financial condition as you may reasonably request.

1.9 The Trust represents to you that all registration statements and
prospectuses filed by the Trust with the SEC under the 1933 Act and under the
1940 Act with respect to the Shares have been carefully prepared in conformity
with the requirements of said Acts and rules and regulations of the SEC
thereunder. As used in this Agreement the terms "registration statement"

2
<PAGE>

and "prospectus" shall mean any registration statement and prospectus, including
the statement of additional information incorporated by reference therein, filed
with the SEC and any amendments and supplements thereto which at any time shall
have been filed with the SEC. The Trust represents and warrants to you that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of the SEC; that all
statements of fact contained in any such registration statement and prospectus
will be true and correct when such registration statement becomes effective; and
that neither any registration statement nor any prospectus when such
registration statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Trust may, but
shall not be obligated to, propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus as, in the light of future developments, may, in the opinion of
the Trust's counsel, be necessary or advisable. If the Trust shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Trust of a written request from you to do so, you may,
at your option, terminate this Agreement or decline to make offers of the
Trust's securities until such amendments are made. The Trust shall not file any
amendment to any registration statement or supplement to any prospectus without
giving you reasonable notice thereof in advance; provided, however, that nothing
contained in this Agreement shall in any way limit the Trust's right to file at
any time such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Trust may deem advisable, such right
being in all respects absolute and unconditional.

1.10 The Trust authorizes you and any dealers with whom you have entered
into dealer agreements to use any prospectus in the form furnished by the Trust
in connection with the sale of Shares. The Trust agrees to indemnify, defend
and hold you, your several officers and directors, and any person who controls
you within the meaning of Section 15 of the 1933 Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
reasonable cost of investigating or defending such claims, demands or
liabilities and any reasonable counsel fees incurred in connection therewith)
which you, your officers and directors, or any such controlling persons, may
incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out
of or on the basis of any untrue statement, or alleged untrue statement, of a
material fact required to be stated in either any registration statement or any
prospectus or any statement of additional information, or arising out of or
based upon any omission, or alleged omission, to state a material fact required
to be stated in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any of them not
misleading, except that the Trust's agreement to indemnify you, your officers or
directors, and any such controlling person will not be deemed to cover any such
claim, demand, liability or expense to the extent that it arises out of or is
based upon any such untrue statement, alleged untrue statement, omission or
alleged omission made in any registration statement, any prospectus or any
statement of additional information in reliance upon information furnished by
you, your officers, directors or any such controlling person to the Trust or its
representatives for use in the preparation thereof, and except that the Trust's
agreement to indemnify you and the Trust's representations and warranties set
out in paragraph 1.9 of this Agreement will not be deemed to cover any liability
to the Series or their shareholders to which you would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in

3
<PAGE>

the performance of your duties, or by reason of your reckless disregard of your
obligations and duties under this Agreement ("Disqualifying Conduct"). The
Trust's agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust's
being notified of any action brought against you, your officers or directors, or
any such controlling person, such notification to be given by letter, by
facsimile or by telegram addressed to the Trust at its address set forth above
within a reasonable period of time after the summons or other first legal
process shall have been served. The failure so to notify the Trust of any such
action shall not relieve the Trust from any liability which the Trust may have
to the person against whom such action is brought by reason of any such untrue,
or alleged untrue, statement or omission, or alleged omission, otherwise than on
account of the Trust's indemnity agreement contained in this paragraph 1.10. The
Trust will be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, such defense shall be
conducted by counsel of good standing chosen by the Trust and approved by you.
In the event the Trust elects to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case the Trust does not elect to assume the defense of any such
suit, the Trust will reimburse you, your officers and directors, or the
controlling person or persons named as defendant or defendants in such suit, for
the reasonable fees and expenses of any counsel retained by you or them. The
Trust's indemnification agreement contained in this paragraph 1.10 and the
Trust's representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of you, your officers and directors, or any controlling person, and shall
survive the delivery of any Shares. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your several officers and
directors, and their respective estates, and to the benefit of any controlling
persons and their successors. The Trust agrees promptly to notify you of the
commencement of any litigation or proceedings against the Trust or any of its
officers or Board members in connection with the issue and sale of Shares.

1.11 You agree to indemnify, defend and hold the Trust, its several
officers and Board members, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act free and harmless from and against any and
all claims, demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Trust, its
officers or Board members, or any such controlling person, may incur under the
1933 Act, the 1940 Act, or under common law or otherwise, but only to the extent
that such liability or expense incurred by the Trust, its officers or Board
members, or such controlling person resulting from such claims or demands, (a)
shall arise out of or be based upon any unauthorized sales literature,
advertisements, information, statements or representations or any Disqualifying
Conduct in connection with the offering and sale of any Shares, or (b) shall
arise out of or be based upon any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing by you to the Trust
specifically for use in the Trust's registration statement and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such information furnished
in writing by you to the Trust and required to be stated in such answers or
necessary to make such information not misleading. Your agreement to indemnify
the Trust, its officers and Board members, and any such controlling person, as
aforesaid, is expressly conditioned upon your

4
<PAGE>

being notified of any action brought against the Trust, its officers or Board
members, or any such controlling person, such notification to be given by
letter, by facsimile or by telegram addressed to you at your address set forth
above within a reasonable period of time after the summons or other first legal
process shall have been served. You shall have the right to control the defense
of such action, with counsel of your own choosing, satisfactory to the Trust, if
such action is based solely upon such alleged misstatement or omission on your
part, and in any other event the Trust, its officers or Board members, or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which you may have to
the Trust, its officers or Board members, or to such controlling person by
reason of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement contained in
this paragraph 1.11. This agreement of indemnity will inure exclusively to the
Trust's benefit, to the benefit of the Trust's officers and Board members, and
their respective estates, and to the benefit of any controlling persons and
their successors. You agree promptly to notify the Trust of the commencement of
any litigation or proceedings against you or any of your officers or directors
in connection with the issue and sale of Shares.

1.12 No Shares shall be offered by either you or the Trust under any of
the provisions of this Agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act, or if and so long as a current prospectus as required by Section 10 of said
Act, as amended, is not on file with the SEC; provided, however, that nothing
contained in this paragraph 1.12 shall in any way restrict or have an
application to or bearing upon the Trust's obligation to repurchase any Shares
from any shareholder in accordance with the provisions of the Trust's prospectus
or charter documents.

1.13 The Trust agrees to advise you immediately in writing:

(a) of any request by the SEC for amendments to the registration
statement or prospectus then in effect or for additional information;

(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or prospectus
then in effect or the initiation of any proceeding for that purpose;

(c) of the happening of any event which makes untrue any statement
of a material fact made in the registration statement or prospectus then in
effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not
misleading; and

(d) of all actions of the SEC with respect to any amendments to any
registration statement or prospectus which may from time to time be filed
with the SEC.

5
<PAGE>

2. Offering Price

Shares of any class of a Series offered for sale by you shall be offered at
a price per share (the "offering price") approximately equal to (a) the net
asset value (determined in the manner set forth in the Trust's charter
documents) plus (b) a sales charge, if any and except to those persons set forth
in the then-current prospectus, which shall be the percentage of the offering
price of such Shares as set forth in the Trust's then-current prospectus. The
offering price, if not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Trust offered for sale by
you may be subject to a contingent deferred sales charge as set forth in the
Trust's then-current prospectus. You shall be entitled to receive any sales
charge or contingent deferred sales charge in respect of the Shares. Any
payments to dealers shall be governed by a separate agreement between you and
such dealer and the Trust's then-current prospectus.

3. Term

This Agreement shall become effective with respect to the Trust as of the
date hereof and will continue until April 30, 2002 and will continue thereafter
so long as such continuance is specifically approved at least annually (i) by
the Trust's Board or (ii) by a vote of a majority of the Shares of the relevant
Series, provided that its continuance also is approved by a majority of the
Board members who are not "interested persons" of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable with respect to a Series, without
penalty, on not less than sixty days' notice, by the Trust's Board of Trustees,
by vote of a majority of the outstanding voting securities of such Series, or by
you. This Agreement will automatically and immediately terminate in the event
of its "assignment." (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" shall have
the same meanings as such terms have in the 1940 Act). You agree to notify the
Trust immediately upon the event of your expulsion or suspension by the NASD.
This Agreement will automatically and immediately terminate in the event of your
expulsion or suspension by the NASD.

4. Miscellaneous

4.1 The Trust recognizes that, except to the extent otherwise agreed to by
the parties hereto, your directors, officers and employees may from time to time
serve as directors, trustees, officers and employees of corporations and
business trusts (including other investment companies), and that you or your
affiliates may enter into distribution or other agreements with such other
corporations and trusts.

4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.

4.3 This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts without giving effect to principles of conflicts
of laws.

6
<PAGE>

4.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.

4.5 The Distributor understands that the obligations of the Trust under
this Agreement are not binding upon any Trustee or shareholder of the Trust
personally, but bind only the Trust and the Trust's property. Each Fund shall
be liable only for its own obligations and shall not be liable for the
obligations of any other Fund hereunder.

Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.

Very truly yours,

BOSTON ADVISORS TRUST

By: _________________________________

Name: Michael J. Vogelzang

Title: President

Accepted:

ADVEST, INC.

By: __________________________

Name:

Title:

7
<PAGE>

EXHIBIT A

Series of the Trust
-------------------

Boston Advisors Cash Reserves Fund
Boston Advisors U.S. Government Money Market Fund
Boston Advisors Tax Free Money Market Fund

<PAGE>

Exhibit (g)

CUSTODIAN AGREEMENT

AGREEMENT made as of this ___ day of __________, 2000, between Boston
Advisors Trust, a business trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts
trust company (the "Bank").

The Fund, an open-end management investment company [on behalf of the
portfolios/series listed on Appendix A hereto (as such Appendix A may be amended
---------- ----------
from time to time) (each a "Portfolio" and collectively, the "Portfolios")],
desires to place and maintain all of its portfolio securities and cash in the
custody of the Bank. The Bank has at least the minimum qualifications required
by Section 17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") to
act as custodian of the portfolio securities and cash of the Fund, and has
indicated its willingness to so act, subject to the terms and conditions of this
Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:

1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
------------------------
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix B
----------
hereto.

2. Definitions. Whenever used herein, the terms listed below will
-----------
have the following meaning:

2.1 Authorized Person. Authorized Person will mean any of the
-----------------
persons duly authorized to give Proper Instructions or otherwise act on behalf
of the Fund by appropriate resolution of its Board, and set forth in a
certificate as required by Section 4 hereof.

2.2 Board. Board will mean the Board of Directors or the Board of
-----
Trustees of the Fund, as the case may be.

2.3 Security. The term security as used herein will have the same
--------
meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing, and
futures, forward contracts, options, .swaps, caps, floors and swaptions on any
of the foregoing.
<PAGE>

2.4 Portfolio Security. Portfolio Security will mean any security
------------------
owned by the Fund.

2.5 Officers' Certificate. Officers' Certificate will mean, unless
---------------------
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.

2.6 Book-Entry System. Book-Entry System shall mean the Federal
-----------------
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.

2.7 Depository. Depository shall mean The Depository Trust Company
----------
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.

2.8 Proper Instructions. Proper Instructions shall mean (i)
-------------------
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
The Bank shall act upon and comply with any subsequent Proper Instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act, the Fund shall give the Bank specific Proper Instructions as to
the action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Board accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing that such procedures afford adequate
safeguards for the Fund's assets.

3. Separate Accounts. If the Fund has more than one Portfolio, the Bank
-----------------
will segregate the assets of each Portfolio to which this Agreement relates into
a separate account for each such Portfolio containing the assets of such
Portfolio (and all investment earnings thereon). Unless the context otherwise
requires, any reference in this Agreement to any actions to be taken by the Fund
shall be deemed to refer to the Fund acting on behalf of one or more of its
Portfolios, any reference in this Agreement to any assets of the Fund,
including, without limitation, any portfolio securities and cash and earnings
thereon, shall be deemed to refer only to assets of the applicablePortfolio, any
duty or obligation of the Bank hereunder to the Fund shall be deemed to refer to
duties and obligations with respect to such individual Portfolio and any
obligation or liability of the Fund hereunder shall be binding only with respect
to such individual Portfolio, and shall be discharged only out of the assets of
such Portfolio.

4. Certification as to Authorized Persons. The Secretary or Assistant
--------------------------------------
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be

2
<PAGE>

acceptable to the Bank, of (i) the names and signatures of the Authorized
Persons and (ii) the names of the members of the Board, it being understood that
upon the occurrence of any change in the information set forth in the most
recent certification on file (including without limitation any person named in
the most recent certification who is no longer an Authorized Person as
designated therein), the Secretary or Assistant Secretary of the Fund will sign
a new or amended certification setting forth the change and the new, additional
or omitted names or signatures. The Bank will be entitled to rely and act upon
any Officers' Certificate given to it by the Fund which has been signed by
Authorized Persons named in the most recent certification received by the Bank.

5. Custody of Cash. As custodian for the Fund, the Bank will open and
---------------
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit account
upon which the Bank reserves the right to require seven (7) days notice prior to
withdrawal of cash from such an account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding shares of beneficial interest
("shares") of the Fund, notification from the Fund's transfer agent as provided
in Section 7, requesting such payment, designating the payee or the account or
accounts to which the Bank will release funds for deposit, and stating that it
is for a purpose permitted under the terms of this Section 5, specifying the
applicable subsection, the Bank will make payments of cash held for the accounts
of the Fund, insofar as funds are available for that purpose, only as permitted
in subsections 5.1-5.9 below.

5.1 Purchase of Securities. Upon the purchase of securities for the
----------------------
Fund, against contemporaneous receipt of such securities by the Bank or against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction report in the case of Book Entry Paper (as
that term is defined in Section 6.6 hereof)) of purchase of the securities
received by the Bank before such payment is made, as confirmed in the Proper
Instructions received by the Bank before such payment is made.

5.2 Redemptions. In such amount as may be necessary for the
-----------
repurchase or redemption of shares of the Fund offered for repurchase or
redemption in accordance with Section 7 of this Agreement.

5.3 Distributions and Expenses of Fund. For the payment on the
----------------------------------
account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, distribution fees, fees of the Bank for its services hereunder
and reimbursement of the expenses and liabilities of the Bank as provided
hereunder, fees of any transfer agent, fees for legal, accounting, and auditing
services, or other operating expenses of the Fund.

5.4 Payment in Respect of Securities. For payments in connection
--------------------------------
with the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Fund held by or to be delivered to the Bank.

3
<PAGE>

5.5 Repayment of Loans. To repay loans of money made to the Fund,
------------------
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;

5.6 Repayment of Cash. To repay the cash delivered to the Fund for
-----------------
the purpose of collateralizing the obligation to return to the Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.

5.7 Foreign Exchange Transactions.
-----------------------------

(a) For payments in connection with foreign exchange contracts
or options to purchase and sell foreign currencies for spot and future delivery
as well as currency swaps (collectively, "Foreign Exchange Agreements")which may
be entered into by the Bank on behalf of the Fund upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or banking
institution (which may be the Bank, or any other subcustodian or agent
hereunder, acting as principal) with which the contract or option is made, and
the Bank shall have no duty with respect to the selection of such currency
brokers or banking institutions with which the Fund deals or for their failure
to comply with the terms of any contract, option or swap.

(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party acting
on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of the
Fund on the Bank's books.

5.8 Other Authorized Payments. For other authorized transactions of
-------------------------
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper corporate purpose.

5.9 Termination: Upon the termination of this Agreement as
-----------
hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.

6. Securities.
----------

6.1 Segregation and Registration. Except as otherwise provided
----------------------------
herein, and except for securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive and
hold pursuant to the provisions hereof, in a separate account or accounts and
physically segregated at all times from those of other persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
account of the Fund. All such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. Subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities

4
<PAGE>

(unless otherwise directed by Proper Instructions or an Officers' Certificate),
in the name of a registered nominee of the Bank as defined in the Internal
Revenue Code and any Regulations of the Treasury Department issued thereunder,
and will execute and deliver all such certificates in connection therewith as
may be required by such laws or regulations or under the laws of any state.

The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.

6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank will
------------------
vote any of the Portfolio Securities held hereunder, except in accordance with
Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Fund all notices, proxies
and proxy soliciting materials delivered to the Bank with respect to such
Securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.

6.3 Corporate Action. If at any time the Bank is notified that an issuer
----------------
of any Portfolio Security has taken or intends to take a corporate action (a
"Corporate Action") that affects the rights, privileges, powers, preferences,
qualifications or ownership of a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which Corporate Action requires an affirmative response or action on
the part of the holder of such Portfolio Security (a "Response"), the Bank shall
notify the Fund promptly of the Corporate Action, the Response required in
connection with the Corporate Action and the Bank's deadline for receipt from
the Fund of Proper Instructions regarding the Response (the "Response
Deadline"). The Bank shall forward to the Fund via telecopier and/or overnight
courier all notices, information statements or other materials relating to the
Corporate Action promptly after receipt of such materials by the Bank.

(a) The Bank shall act upon a required Response only after receipt by
the Bank of Proper Instructions from the Fund no later than 5:00 p.m. on the
date specified as the Response Deadline and only if the Bank (or its agent or
subcustodian hereunder) has actual possession of all necessary Securities,
consents and other materials no later than 5:00 p.m. on the date specified as
the Response Deadline.

(b) The Bank shall have no duty to act upon a required Response if
Proper Instructions relating to such Response and all necessary Securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. on the date specified as the Response Deadline.
Notwithstanding, the Bank may, in its sole discretion, use its best efforts to
act upon a Response for which Proper Instructions and/or necessary Securities,
consents or other materials are received by the Bank after 5:00 p.m. on the date
specified as the Response Deadline, it being acknowledged and agreed by the
parties that any undertaking by the Bank to use its best efforts in such
circumstances shall in no way create any duty upon the Bank to complete such
Response prior to its expiration.

(c) In the event that the Fund notifies the Bank of a Corporate
Action requiring a Response and the Bank has received no other notice of such
Corporate Action, the Response Deadline shall be 48 hours prior to the Response
expiration time set by the depository processing such Corporate Action.

5
<PAGE>

(d) Section 14.3(e) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by a Selected Foreign Sub-
Custodian.

6.4 Book-Entry System. Provided (i) the Bank has received a certified
-----------------
copy of a resolution of the Board specifically approving deposits of Fund assets
in the Book-Entry System, and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:

(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;

(b) The records of the Bank (and any such agent) with respect to the
Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other securities deposited in the Account and shall at all times during the
regular business hours of the Bank (or such agent) be open for inspection by
duly authorized officers, employees or agents of the Fund. Where securities are
transferred to the Fund's account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of securities in a
fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve
Bank;

(c) The Bank (or its agent) shall pay for securities purchased for
the account of the Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Bank (or its agent) to reflect
such payment and transfer for the account of the Fund. The Bank (or its agent)
shall transfer securities sold or loaned for the account of the Fund upon

(i) receipt of advice from the Book-Entry System that payment
for securities sold or payment of the initial cash collateral against the
delivery of securities loaned by the Fund has been transferred to the Account;
and

(ii) the making of an entry on the records of the Bank (or its
agent) to reflect such transfer and payment for the account of the Fund. Copies
of all advices from the Book-Entry System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for the Fund by the
Bank and be provided to the Fund at its request. The Bank shall send the Fund a
confirmation, as defined by Rule 17f-4 under the 1940 Act, of any transfers to
or from the account of the Fund;

(d) The Bank will promptly provide the Fund with any report obtained
by the Bank or its agent on the Book-Entry System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Book-Entry System;

6.5 Use of a Depository. Provided (i) the Bank has received a certified
-------------------
copy of a resolution of the Board specifically approving deposits in DTC or
other such Depository and (ii) for any subsequent changes to such arrangements
following such approval, the Board has reviewed and approved the arrangement and
has not delivered an Officer's Certificate to the Bank indicating that the Board
has withdrawn its approval:

6
<PAGE>

(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and remit
to the Bank on behalf of the Fund all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof;

(b) Registration of Portfolio Securities may be made in the name of
any nominee or nominees used by such Depository;

(c) Payment for securities purchased and sold may be made through the
clearing medium employed by such Depository for transactions of participants
acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the securities to or for the account of the Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the Securities to or for the account of
the Fund; and upon any sale of Portfolio Securities, delivery of the Securities
will be made only against payment therefor or, in the event Portfolio Securities
are loaned, delivery of Securities will be made only against receipt of the
initial cash collateral to or for the account of the Fund; and

(d) The Bank shall use its best efforts to provide that:

(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to the
Bank upon its request;

(ii) Proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded immediately to
the Bank for prompt transmittal to the Fund;

(iii) Such Depository promptly forwards to the Bank confirmation
of any purchase or sale of Portfolio Securities and of the appropriate book
entry made by such Depository to the Fund's account;

(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and duties
hereunder as may be necessary for the Fund to comply with the recordkeeping
requirements of Section 31(a) of the 1940 Act and Rule 31(a) thereunder; and

(v) Such Depository delivers to the Bank all internal
accounting control reports, whether or not audited by an independent public
accountant, as well as such other reports as the Fund may reasonably request in
order to verify the Portfolio Securities held by such Depository.

6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the Bank
---------------------------------------------
has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that the Fund has purchased such Issuer's Book-Entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a book-
entry agreement (the "Issuers"). In maintaining procedures for Book-Entry Paper,
the Bank agrees that:

7
<PAGE>

(a) The Bank will maintain all Book-Entry Paper held by the Fund in
an account of the Bank that includes only assets held by it for customers;

(b) The records of the Bank with respect to the Fund's purchase of
Book-Entry Paper through the Bank will identify, by book-entry, commercial paper
belonging to the Fund which is included in the Book-Entry System and shall at
all times during the regular business hours of the Bank be open for inspection
by duly authorized officers, employees or agents of the Fund;

(c) The Bank shall pay for Book-Entry Paper purchased for the account
of the Fund upon contemporaneous (i) receipt of advice from the Issuer that such
sale of Book-Entry Paper has been effected, and (ii) the making of an entry on
the records of the Bank to reflect such payment and transfer for the account of
the Fund;

(d) The Bank shall cancel such Book-Entry Paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been transferred to the Fund, and (ii) the making of
an entry on the records of the Bank to reflect such payment for the account of
the Fund; and

(e) The Bank will send to the Fund such reports on its system of
internal accounting control with respect to the Book-Entry Paper as the Fund may
reasonably request from time to time.

6.7 Use of Immobilization Programs. Provided (i) the Bank has received a
------------------------------
certified copy of a resolution of the Board specifically approving the
maintenance of Portfolio Securities in an immobilization program operated by a
bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and (ii)
for each year following such approval the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such bank acting as a subcustodian hereunder.

6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
--------------
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to the Fund and that the books of the Bank identify the European Branch holding
such Portfolio Securities. Notwithstanding any other provision of this Agreement
to the contrary, except as stated in the first sentence of this subsection 6.8,
the Bank shall be under no other duty with respect to such Eurodollar CDs
belonging to the Fund.

6.9 Options, Swaps and Futures Transactions.
---------------------------------------

(a) Puts, Calls and Swaps Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.

(i) The Bank shall take action as to put options ("puts") and
call options ("calls") purchased or sold (written) and swaps entered into by the
Fund regarding escrow or other arrangements (i) in accordance with the
provisions of any agreement entered into upon receipt of Proper Instructions
among the Bank, any broker-dealer registered with the National Association of
Securities Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to
the compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations.

8
<PAGE>

(ii) Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or is
maintaining adequate margin, if required, with any broker in connection with any
option or swap, nor shall the Bank be under duty or obligation to present such
option to the broker for exercise unless it receives Proper Instructions from
the Fund. The Bank shall have no responsibility for the legality of any put or
call purchased or sold or swap entered into on behalf of the Fund, the propriety
of any such purchase, sale or transaction, or the adequacy of any collateral
delivered to a broker in connection with an option or swap or deposited to or
withdrawn from a Segregated Account (as defined in subsection 6.10 below). The
Bank specifically, but not by way of limitation, shall not be under any duty or
obligation to: (i) periodically check or notify the Fund that the amount of such
collateral held by a broker or held in a Segregated Account is sufficient to
protect such broker or the Fund against any loss; (ii) effect the return of any
collateral delivered to a broker; or (iii) advise the Fund that any option it
holds, has or is about to expire. Such duties or obligations shall be the sole
responsibility of the Fund.

(b) Puts, Calls and Futures Traded on Commodities Exchanges

(i) The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Fund in accordance with the
provisions of any agreement entered into upon the receipt of Proper Instructions
among the Fund, the Bank and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund.

(ii) The responsibilities of the Bank as to futures, puts and
calls traded on commodities exchanges, any Futures Commission Merchant account
and the Segregated Account shall be limited as set forth in subparagraph (a)(ii)
of this Section 6.9 as if such subparagraph referred to Futures Commission
Merchants rather than brokers, and Futures and puts and calls thereon instead of
options.

6.10 Segregated Account. The Bank shall upon receipt of Proper Instructions
------------------
establish and maintain a Segregated Account or Accounts for and on behalf of the
Fund.

(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account upon receipt of Proper Instructions in the following
circumstances:

(i) in accordance with the provisions of any agreement among
the Fund, the Bank and a broker-dealer registered under the Exchange Act and a
member of the NASD or any Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered Contract Market, or of
any similar organizations regarding escrow or other arrangements in connection
with transactions by the Fund;

(ii) for the purpose of segregating cash or securities in
connection with options purchased or written by the Fund, commodity futures
purchased or written by the Fund or swaps or forward contracts entered into by
the Fund;

(iii) for the deposit of liquid assets, such as cash, U.S.
Government securities or other liquid securities, having a market value (marked
to market on a daily basis) at all times equal to not less than the aggregate
purchase price due on the settlement dates of all the Fund's then outstanding
forward commitment or "when-issued" agreements relating to the purchase of
Portfolio Securities and all

9
<PAGE>

the Fund's then outstanding commitments under reverse repurchase agreements
entered into with broker-dealer firms;

(iv) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;

(v) for other proper corporate purposes, but only, in the case
of this clause (v), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the executive committee of
the Board signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such Segregated
Account and declaring such purposes to be proper corporate purposes.

(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:

(i) with respect to assets deposited in accordance with the
provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;

(ii) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued agreements for the purchase of
Portfolio Securities and under reverse repurchase agreements;

(iii) for exchange for other liquid assets of equal or greater
value deposited in the Segregated Account;

(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of portfolio securities or
reverse repurchase agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in the
Segregated Account;

(v) for delivery upon settlement of a forward commitment or
when-issued agreement for the sale of Portfolio Securities; or

(vi) with respect to assets deposited pursuant to (a)(v) above,
in accordance with the purposes of such account as set forth in Proper
Instructions.

6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon receipt
--------------------------------------
of Proper Instructions relating to the purchase by the Fund of interest-bearing
fixed-term and call deposits, transfer cash, by wire or otherwise, in such
amounts and to such bank or banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Fund appropriate notation as to the amount of each such deposit, the
banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. Such deposits shall be deemed
Portfolio Securities of the Fund and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect of
other Portfolio Securities of the Fund.

6.12 Transfer of Securities. The Bank will transfer, exchange, deliver or
----------------------
release Portfolio Securities held by it hereunder, insofar as such Securities
are available for such purpose, provided that

10
<PAGE>

before making any transfer, exchange, delivery or release under this Section
6.12 only upon receipt of Proper Instructions. The Proper Instructions shall
state that such transfer, exchange or delivery is for a purpose permitted under
the terms of this Section 6.12, and shall specify the applicable subsection, or
describe the purpose of the transaction with sufficient particularity to permit
the Bank to ascertain the applicable subsection. After receipt of such Proper
Instructions, the Bank will transfer, exchange, deliver or release Portfolio
Securities only in the following circumstances:

(a) Upon sales of Portfolio Securities for the account of the Fund,
against contemporaneous receipt by the Bank of payment therefor in full, or
against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale received by the Bank before such payment is made,
as confirmed in the Proper Instructions received by the Bank before such payment
is made;

(b) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan of merger, consolidation,
reorganization, share split-up, change in par value, recapitalization or
readjustment or otherwise, upon exercise of subscription, purchase or sale or
other similar rights represented by such Portfolio Securities, or for the
purpose of tendering shares in the event of a tender offer therefor, provided,
however, that in the event of an offer of exchange, tender offer, or other
exercise of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender in a
timely manner unless such Proper Instructions are received by the Bank at least
two business days prior to the date required for tender, and unless the Bank (or
its agent or subcustodian hereunder) has actual possession of such Security at
least two business days prior to the date of tender;

(d) For the purpose of redeeming in-kind shares of the Fund upon
authorization from the Fund;

(e) In the case of option contracts owned by the Fund, for
presentation to the endorsing broker;

(f) When such Portfolio Securities are called, redeemed or retired or
otherwise become payable;

(g) For the purpose of effectuating the pledge of Portfolio Securities
held by the Bank in order to collateralize loans made to the Fund by any bank,
including the Bank; provided, however, that such Portfolio Securities will be
released only upon payment to the Bank for the account of the Fund of the moneys
borrowed, provided further, however, that in cases where additional collateral
is required to secure a borrowing already made, and such fact is made to appear
in the Proper Instructions, Portfolio Securities may be released for that
purpose without any such payment. In the event that any pledged Portfolio
Securities are held by the Bank, they will be so held for the account of the
lender, and after notice to the Fund from the lender in accordance with the
normal procedures of the lender and any loan agreement between the Fund and the
lender that an event of deficiency or default on the loan has occurred, the Bank
may deliver such pledged Portfolio Securities to or for the account of the
lender;

11
<PAGE>

(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the fair
market value of such security, as set forth in the Proper Instructions received
by the Bank before such payment is made;

(i) for the purpose of delivering securities lent by the Fund to
a bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such securities
entered into by the Fund;

(j) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the Bank
will also receive a certified copy of resolutions of the Board, signed by an
authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and

(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 16 of this Agreement.

As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.

7. Redemptions. In the case of payment of assets of the Fund held by the
-----------
Bank in connection with redemptions and repurchases by the Fund of outstanding
shares, the Bank will rely on notification by the Fund's transfer agent of
receipt of a request for redemption and certificates, if issued, in proper form
for redemption before such payment is made. Payment shall be made in accordance
with the Declaration of Trust and By-laws of the Fund (the "Articles"), from
assets available for said purpose.

8. Merger, Dissolution, etc. of Fund. In the case of the following
---------------------------------
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities held
by it under this Agreement and disburse cash only upon the order of the Fund set
forth in an Officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees through
the end of the then current term of this Agreement, and disbursements and
expenses of the Bank, this Agreement will terminate and the Bank shall be
released from any and all obligations hereunder.

9. Actions of Bank Without Prior Authorization. Notwithstanding anything
-------------------------------------------
herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following actions without
prior authorization or instruction of the Fund or the transfer agent:

9.1 Endorse for collection and collect on behalf of and in the name
of the Fund all checks, drafts, or other negotiable or transferable instruments
or other orders for the payment of money received by it for the account of the
Fund and hold for the account of the Fund all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio Securities
held thereunder;

12
<PAGE>

9.2 Present for payment all coupons and other income items held by it
for the account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the account of the Fund;

9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.

9.4 Execute as agent on behalf of the Fund all necessary ownership
and other certificates and affidavits required by the Internal Revenue Code or
the regulations of the Treasury Department issued thereunder, or by the laws of
any state, now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
The Bank will execute and deliver such certificates in connection with Portfolio
Securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;

9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of the Fund; and

9.6 Exchange interim receipts or temporary securities for definitive
securities.

10. Collections and Defaults. The Bank will use reasonable efforts to
------------------------
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for redemption,
offer of exchange, right of subscription, reorganization or other proceedings
affecting such Securities. If Portfolio Securities upon which such income is
payable are in default or payment is refused after due demand or presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.

11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terms and conditions of this Agreement, and in compliance with
the applicable rules and regulations of the 1940 Act. The books and records of
the Bank pertaining to its actions under this Agreement and reports by the Bank
or its independent accountants concerning its accounting system, procedures for
safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors employed by
the Fund and will be preserved by the Bank in the manner and in accordance with
the applicable rules and regulations under the 1940 Act.

The Bank shall perform fund accounting and shall keep the books of account
and render statements or copies from time to time as reasonably requested by the
Treasurer or any executive officer of the Fund.

The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.

13
<PAGE>

12. Fund Evaluation and Yield Calculation
-------------------------------------

12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
---------------
directed by the Board, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board, the net asset value and the public offering price of a share of the
Fund, such determination to be made in accordance with the provisions of the
Articles and By-laws of the Fund and the Prospectus and Statement of Additional
Information relating to the Fund, as they may from time to time be amended, and
any applicable resolutions of the Board at the time in force and applicable; and
promptly to notify the Fund, the proper exchange and the NASD or such other
persons as the Fund may request of the results of such computation and
determination. In computing the net asset value hereunder, the Bank may rely in
good faith upon information furnished to it by any Authorized Person in respect
of (i) the manner of accrual of the liabilities of the Fund and in respect of
liabilities of the Fund not appearing on its books of account kept by the Bank,
(ii) reserves, if any, authorized by the Board or that no such reserves have
been authorized, (iii) the source of the quotations to be used in computing the
net asset value, (iv) the value to be assigned to any security for which no
price quotations are available, and (v) the method of computation of the public
offering price on the basis of the net asset value of the shares, and the Bank
shall not be responsible for any loss occasioned by such reliance or for any
good faith reliance on any quotations received from a source pursuant to (iii)
above.

12.2. Yield Calculation. The Bank will compute the performance results
-----------------
of the Fund (the "Yield Calculation") in accordance with the provisions of
Release No. 33-6753 and Release No. IC-16245 (February 2, 1988) (the "Releases")
promulgated by the Securities and Exchange Commission, and any subsequent
amendments to, published interpretations of or general conventions accepted by
the staff of the Securities and Exchange Commission with respect to such
releases or the subject matter thereof ("Subsequent Staff Positions"), subject
to the terms set forth below:

(a) The Bank shall compute the Yield Calculation for the Fund
for the stated periods of time as shall be mutually agreed upon, and communicate
in a timely manner the result of such computation to the Fund.

(b) In performing the Yield Calculation, the Bank will derive
the items of data necessary for the computation from the records it generates
and maintains for the Fund pursuant Section 11 hereof. The Bank shall have no
responsibility to review, confirm, or otherwise assume any duty or liability
with respect to the accuracy or correctness of any such data supplied to it by
the Fund, any of the Fund's designated agents or any of the Fund's designated
third party providers.

(c) At the request of the Bank, the Fund shall provide, and the
Bank shall be entitled to rely on, written standards and guidelines to be
followed by the Bank in interpreting and applying the computation methods set
forth in the Releases or any Subsequent Staff Positions as they specifically
apply to the Fund. In the event that the computation methods in the Releases or
the Subsequent Staff Positions or the application to the Fund of a standard or
guideline is not free from doubt or in the event there is any question of
interpretation as to the characterization of a particular security or any aspect
of a security or a payment with respect thereto (e.g., original issue discount,
participating debt security, income or return of capital, etc.) or otherwise or
as to any other element of the computation which is pertinent to the Fund, the
Fund or its designated agent shall have the full responsibility for making the
determination of how the security or payment is to be treated for purposes of
the computation and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to make
independent determinations with respect to any item which is covered by this

14
<PAGE>

Section, and shall not be responsible for its computations made in accordance
with such determinations so long as such computations are mathematically
correct.

(d) The Fund shall keep the Bank informed of all publicly
available information and of any non-public advice, or information obtained by
the Fund from its independent auditors or by its personnel or the personnel of
its investment adviser, or Subsequent Staff Positions related to the
computations to be undertaken by the Bank pursuant to this Agreement and the
Bank shall not be deemed to have knowledge of such information (except as
contained in the Releases) unless it has been furnished to the Bank in writing.

13. Additional Services. The Bank shall perform the additional services
-------------------
for the Fund as are set forth on Appendix C hereto. Appendix C may be amended
---------- ----------
from time to time upon agreement of the parties to include further additional
services to be provided by the Bank to the Fund, at which time the fees set
forth in Appendix B shall be appropriately increased.
----------

14. Duties of the Bank.
------------------

14.1 Performance of Duties and Standard of Care. In performing its
------------------------------------------
duties hereunder and any other duties listed on any Schedule hereto, if any, the
Bank will be entitled to receive and act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will be without
liability for any action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice.

The Bank will be under no duty or obligation to inquire into and will not
be liable for:

(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;

(b) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are sold;

(d) the legality of the repurchase of any shares of the Fund or
the propriety of the amount to be paid therefor;

(e) the legality of the declaration of any dividend by the Fund
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; and

(f) any property or moneys of the Fund unless and until received
by it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.

Moreover, the Bank will not be under any duty or obligation to ascertain
whether any Portfolio Securities at any time delivered to or held by it for the
account of the Fund are such as may properly be held by the Fund under the
provisions of its Articles, By-laws, any federal or state statutes or any rule
or regulation of any governmental agency.

14.2 Agents and Subcustodians with Respect to Property of the Fund
-------------------------------------------------------------
Held in the United States. The Bank may employ agents of its own selection in
- -------------------------
the performance of its duties hereunder and shall be

15
<PAGE>

responsible for the acts and omissions of such agents as if performed by the
Bank hereunder. Without limiting the foregoing, certain duties of the Bank
hereunder may be performed by one or more affiliates of the Bank.

Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such subcustodian
meets at least the minimum qualifications required by Section 17(f)(1) of the
1940 Act to act as a custodian of the Fund's assets with respect to property of
the Fund held in the United States. The Bank shall have no liability to the Fund
or any other person by reason of any act or omission of any such subcustodian
and the Fund shall indemnify the Bank and hold it harmless from and against any
and all actions, suits and claims, arising directly or indirectly out of the
performance of any subcustodian. Upon request of the Bank, the Fund shall assume
the entire defense of any action, suit, or claim subject to the foregoing
indemnity. The Fund shall pay all fees and expenses of any subcustodian.

14.3 Duties of the Bank with Respect to Property of the Fund Held Outside
--------------------------------------------------------------------
of the United States.
- --------------------

(a) Appointment of Foreign Custody Manager.
--------------------------------------

(i) If the Fund has appointed the Bank Foreign Custody Manager
(as that term is defined in Rule 17f-5 under the 1940 Act), the Bank's duties
and obligations with respect to the Fund's Portfolio Securities and other assets
maintained outside the United States shall be, to the extent not set forth
herein, as set forth in the Delegation Agreement between the Fund and the Bank
(the "Delegation Agreement").

(ii) If the Fund has appointed any other person or entity
Foreign Custody Manager, the Bank shall act only upon Proper Instructions from
the Fund with regard to any of the Fund's Portfolio Securities or other assets
held or to be held outside of the United States, and the Bank shall be without
liability for any Claim (as that term is defined in Section 15 hereof) arising
out of maintenance of the Fund's Portfolio Securities or other assets outside of
the United States. The Fund also agrees that it shall enter into a written
agreement with such Foreign Custody Manager that shall obligate such Foreign
Custody Manager to provide to the Bank in a timely manner all information
required by the Bank in order to complete its obligations hereunder. The Bank
shall not be liable for any Claim arising out of the failure of such Foreign
Custody Manager to provide such information to the Bank.

(b) Segregation of Securities. The Bank shall identify on its books
-------------------------
as belonging to the Fund the Foreign Portfolio Securities held by each foreign
sub-custodian (each an "Eligible Foreign Custodian") selected by the Foreign
Custody Manager, subject to receipt by the Bank of the necessary information
from such Eligible Foreign Custodian if the Foreign Custody Manager is not the
Bank.

(c) Access of Independent Accountants of the Fund. If the Bank is
---------------------------------------------
the Fund's Foreign Custody Manager, upon request of the Fund, the Bank will use
its best efforts to arrange for the independent accountants of the Fund to be
afforded access to the books and records of any foreign banking institution
employed as an Eligible Foreign Custodian insofar as such books and records
relate to the performance of such foreign banking institution with regard to the
Fund's Portfolio Securities and other assets.

(d) Reports by Bank. If the Bank is the Fund's Foreign Custody
---------------
Manager, the Bank will supply to the Fund the reports required under the
Delegation Agreement.

16
<PAGE>

(e) Transactions in Foreign Custody Account. Transactions with
---------------------------------------
respect to the assets of the Fund held by an Eligible Foreign Custodian shall be
effected pursuant to Proper Instructions from the Fund to the Bank and shall be
effected in accordance with the applicable agreement between the Foreign Custody
Manager and such Eligible Foreign Custodian. If at any time any Foreign
Portfolio Securities shall be registered in the name of the nominee of the
Eligible Foreign Custodian, the Fund agrees to hold any such nominee harmless
from any liability by reason of the registration of such securities in the name
of such nominee.

Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for Foreign Portfolio Securities received for the account
of the Fund and delivery of Foreign Portfolio Securities maintained for the
account of the Fund may be effected in accordance with the customary established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer.

In connection with any action to be taken with respect to the
Foreign Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights, exchange
rights, conversion rights or tender rights, or any other action in connection
with any other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank by the
Eligible Foreign Custodian, and shall promptly forward to the applicable
Eligible Foreign Custodian any instructions, forms or certifications with
respect to such Rights, and any instructions relating to the actions to be taken
in connection therewith, as the Bank shall receive from the Fund pursuant to
Proper Instructions. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the determination of
whether any action proposed to be taken with respect to such Rights by the Fund
or by the applicable Eligible Foreign Custodian will comply with all applicable
terms and conditions of any such Rights or any applicable laws or regulations,
or market practices within the market in which such action is to be taken or
omitted.

(f) Tax Law. The Bank shall have no responsibility or liability for
-------
any obligations now or hereafter imposed on the Fund or the Bank as custodian of
the Fund by the tax laws of any jurisdiction, and it shall be the responsibility
of the Fund to notify the Bank of the obligations imposed on the Fund or the
Bank as the custodian of the Fund by the tax law of any non-U.S. jurisdiction,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Eligible Foreign Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any claim
for exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.

14.4 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.

14.5. Fees and Expenses of the Bank. The Fund will pay or reimburse the
-----------------------------
Bank from time to time for any transfer taxes payable upon transfer of Portfolio
Securities made hereunder, and for all necessary proper disbursements, expenses
and charges made or incurred by the Bank in the performance of this Agreement
(including any duties listed on any Schedule hereto, if any) including any
indemnities for any loss, liabilities or expense to the Bank as provided above.
For the services rendered by the Bank

17
<PAGE>

hereunder, the Fund will pay to the Bank such compensation or fees at such rate
and at such times as shall be agreed upon in writing by the parties from time to
time. The Bank will also be entitled to reimbursement by the Fund for all
reasonable expenses incurred in conjunction with termination of this Agreement.

14.6 Advances by the Bank. The Bank may, in its sole discretion, advance
--------------------
funds on behalf of the Fund to make any payment permitted by this Agreement upon
receipt of any proper authorization required by this Agreement for such payments
by the Fund. Should such a payment or payments, with advanced funds, result in
an overdraft (due to insufficiencies of the Fund's account with the Bank, or for
any other reason) this Agreement deems any such overdraft or related
indebtedness a loan made by the Bank to the Fund payable on demand. Such
overdraft shall bear interest at the current rate charged by the Bank for such
loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
security interest to the extent of any overdraft or indebtedness and to the
extent required by law, in and to any property at any time held by it for the
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any overdraft or indebtedness, together with
interest due thereon, against any balance of account standing to the credit of
the Fund on the Bank's books.

15. Limitation of Liability.
-----------------------

15.1 Notwithstanding anything in this Agreement to the contrary, in no
event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Bank and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "Claim") arising as
a result of any act or omission of the Bank or any Indemnified Party under this
Agreement, except for any Claim resulting solely from the negligence, willful
misfeasance or bad faith of the Bank or any Indemnified Party. Without limiting
the foregoing, neither the Bank nor the Indemnified Parties shall be liable for,
and the Bank and the Indemnified Parties shall be indemnified against, any Claim
arising as a result of:

(a) Any act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, telegram, telecopier, notice,
request, certificate or other instrument reasonably believed by the Bank to
genuine;

(b) Any act or omission of any subcustodian selected by or at the
direction of the Fund;

(c) Any act or omission of any Foreign Custody Manager other than the
Bank or any act or omission of any Eligible Foreign Custodian if the Bank is not
the Foreign Custody Manager;

(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not been
registered in the name of the Bank or its nominee;

(e) Any Corporate Action requiring a Response for which the Bank has
not received Proper Instructions or obtained actual possession of all necessary
Securities, consents or other materials by 5:00 p.m. on the date specified as
the Response Deadline;

18
<PAGE>

(f) Any act or omission of any European Branch of a U.S. banking
institution that is the issuer of Eurodollar CDs in connection with any
Eurodollar CDs held by such European Branch;

(g) Information relied on in good faith by the Bank and supplied by
any Authorized Person in connection with the calculation of (i) the net asset
value and public offering price of the shares of the Fund or (ii) the Yield
Calculation; or

(h) Any acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software) and
computer facilities, the unavailability of energy sources and other similar
happenings or events.

15.2 Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank or the Indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any activities hereunder.

16. Termination.
-----------

16.1 The term of this Agreement shall be three years commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
After the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive three-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered by the non-renewing party to the other
party no later than ninety days prior to the expiration of the Initial Term or
any Renewal Term, as the case may be.

Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term or any Renewal Term in the event the other party
violates any material provision of this Agreement, provided that the non-
violating party gives written notice of such violation to the violating party
and the violating party does not cure such violation within 90 days of receipt
of such notice.

16.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. If
the Fund does not select a successor custodian within ninety (90) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subsection 16.3, deliver the Portfolio Securities and cash of the
Fund held by the Bank to a bank or trust company of the Bank's own selection
which meets the requirements of Section 17(f)(1) of the 1940 Act and has a
reported capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held as the property of the Fund under terms similar to those
on which they were held by the Bank, whereupon such bank or trust company so
selected by the Bank will become the successor custodian of such assets of the
Fund with the same effect as though selected by the Board. Thereafter, the Bank
shall be released from any and all obligations under this Agreement.

16.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to act
upon reasonable and customary terms and that there has been submitted to the

19
<PAGE>

shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
In that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfactory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.

16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement by the
Fund [why should the Fund pay termination costs if the termination was initiated
by the Bank?].

16.5 At any time after the termination of this Agreement, the Fund may,
upon written request, have reasonable access to the records of the Bank relating
to its performance of its duties as custodian.

17. Confidentiality. Both parties hereto agree than any non-public
---------------
information obtained hereunder from and concerning the other party is
confidential and may not be disclosed without the consent of the other party,
except as may be required by applicable law or by an order of or at the request
of a court or governmental agency. The parties further agree that a breach of
this provision would irreparably damage the other party and accordingly agree
that each of them is entitled, in addition to all other remedies at law or in
equity to an injunction or injunctions without bond or other security to prevent
breaches of this provision.

18. Notices. Any notice or other instrument in writing authorized or
-------
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (I) United
States Postal Service registered mail, (ii) telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office at
the address set forth below, namely:

(a) In the case of notices sent to the Fund to:

[ ]

(b) In the case of notices sent to the Bank to:

Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, Massachusetts 02117-9130
Attention: __________________, Director - Client
Management
With a copy to: John E. Henry, General Counsel

or at such other place as such party may from time to time
designate in writing.

19. Amendments. This Agreement may not be altered or amended, except by
----------
an instrument in writing, executed by both parties.

20. Parties. This Agreement will be binding upon and shall inure to the
-------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Board; and provided further
that termination

20
<PAGE>

proceedings pursuant to Section 16 hereof will not be deemed to be an assignment
within the meaning of this provision.

21. Governing Law. This Agreement and all performance hereunder will be
-------------
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.

22. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

23. Entire Agreement. This Agreement, together with its Appendices,
----------------
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.

24. Limitation of Liability. The Bank agrees that the obligations assumed
-----------------------
by the Fund hereunder shall be limited in all cases to the assets of the Fund
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Fund.

25. Several Obligations of the Portfolios. This Agreement is an agreement
-------------------------------------
entered into between the Bank and the Fund with respect to each Portfolio. With
respect to any obligation of the Fund on behalf of any Portfolio arising out of
this Agreement, the Bank shall look for payment or satisfaction of such
obligation solely to the assets of the Portfolio to which such obligation
relates as though the Bank had separately contracted with the Fund by separate
written instrument with respect to each Portfolio.

[Remainder of Page Intentionally Left Blank]

21
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.

BOSTON ADVISORS TRUST

By: _______________________________
Name:
Title:

INVESTORS BANK & TRUST COMPANY

By: _______________________________
Name:
Title:

22
<PAGE>

Appendices
----------

Appendix A.......................................... Portfolios

Appendix B.......................................... Fee Schedule

Appendix C.......................................... Additional Services

23
<PAGE>

Appendix A

Series of the Trust
-------------------

Boston Advisors Cash Reserves Fund
Boston Advisors U.S. Government Money Market Fund
Boston Advisors Tax Free Money Market Fund

<PAGE>

Exhibit (h)(1)

ADMINISTRATION AGREEMENT

AGREEMENT made as of ____________, 2000 by and between Boston
Advisors Trust, a business trust organized under the laws of Massachusetts (the
"Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the
"Bank").

WHEREAS, the Fund, a registered investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), consisting of the
separate portfolios listed on Appendix A hereto; and
----------

WHEREAS, the Fund desires to retain the Bank to render certain
administrative services to the Fund and the Bank is willing to render such
services.

NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, it is agreed between the parties hereto as follows:

1. Appointment. The Fund hereby appoints the Bank to act as
-----------
Administrator of the Fund on the terms set forth in this Agreement. The Bank
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.

2. Delivery of Documents. The Fund has furnished the Bank with
---------------------
copies properly certified or authenticated of each of the following:

(a) Resolutions of the Fund's Board of Trustees authorizing the
appointment of the Bank to provide certain administrative services to the Fund
and approving this Agreement;

(b) The Fund's Declaration of Trust filed with the Commonwealth
of Massachusetts on September 30, 1999 and all amendments thereto (the
"Articles");

(d) The Fund's agreements with all service providers which
include any investment advisory agreements, sub-investment advisory agreements,
custody agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");

(e) The Fund's most recent Registration Statement on Form N-1A
(the "Registration Statement") under the Securities Act of 1933 and under the
1940 Act and all amendments thereto; and

(f) The Fund's most recent prospectus and statement of
additional information (the "Prospectus"); and

(g) Such other certificates, documents or opinions as may
mutually be deemed necessary or appropriate for the Bank in the proper
performance of its duties hereunder.

The Fund will immediately furnish the Bank with copies of all
amendments of or supplements to the foregoing. Furthermore, the Fund will
notify the Bank as soon as possible of any matter which may materially affect
the performance by the Bank of its services under this Agreement.

3. Duties of Administrator. Subject to the supervision and direction of
------------------------
the Board of the Fund, the Bank, as Administrator, will assist in conducting
various aspects of the Fund's administrative operations and undertakes to
perform the services described in Appendix B hereto. The Bank may, from time to
----------
time, perform additional duties and functions which shall be set forth in an
amendment to such
<PAGE>

Appendix B executed by both parties. At such time, the fee schedule included in
- ----------
Appendix C hereto shall be appropriately amended.
- ----------

In performing all services under this Agreement, the Bank shall act in
conformity with the Fund's Declaration of Trust and By-Laws and the 1940 Act,
as the same may be amended from time to time, and the investment objectives,
investment policies and other practices and policies set forth in the Fund's
Registration Statement, as the same may be amended from time to time.
Notwithstanding any item discussed herein, the Bank has no discretion over the
Fund's assets or choice of investments and cannot be held liable for any problem
relating to such investments.

4. Duties of the Fund.
------------------

(a) The Fund is solely responsible (through its transfer agent or
otherwise) for (i) providing timely and accurate reports ("Daily Sales Reports")
which will enable the Bank as Administrator to monitor the total number of
shares sold in each state on a daily basis and (ii) identifying any exempt
transactions ("Exempt Transactions") which are to be excluded from the Daily
Sales Reports.

(b) The Fund agrees to make its legal counsel available to the Bank
for instruction with respect to any matter of law arising in connection with the
Bank's duties hereunder, and the Fund further agrees that the Bank shall be
entitled to rely on such instruction without further investigation on the part
of the Bank.

5. Fees and Expenses.
-----------------

(a) For the services to be rendered and the facilities to be
furnished by the Bank, as provided for in this Agreement, the Fund will
compensate the Bank in accordance with the fee schedule attached as Appendix C
----------
hereto. Such fees do not include out-of-pocket disbursements (as delineated on
the fee schedule or other expenses with the prior approval of the Fund's
management) of the Bank for which the Bank shall be entitled to bill the Fund
separately and for which the Fund shall reimburse the Bank.

(b) The Bank shall not be required to pay any expenses incurred by
the Fund.

6. Limitation of Liability.
-----------------------

(a) The Bank, its directors, officers, employees and agents shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the performance of its obligations and duties
under this Agreement, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of such obligations and duties, or by
reason of its reckless disregard thereof. The Fund will indemnify the Bank, its
directors, officers, employees and agents against and hold it and them harmless
from any and all losses, claims, damages, liabilities or expenses (including
legal fees and expenses) resulting from any claim, demand, action or suit (i)
arising out of the actions or omissions of the Fund, including, but not limited
to, inaccurate Daily Sales Reports and misidentification of Exempt Transactions;
(ii) arising out of the offer or sale of any securities of the Fund in violation
of (x) any requirement under the federal securities laws or regulations, (y) any
requirement under the securities laws or regulations of any state, or (z) any
stop order or other determination or ruling by any federal or state agency with
respect to the offer or sale of such securities; or (iii) not resulting from the
willful misfeasance, bad faith or negligence of the Bank in the performance of
such obligations and duties or by reason of its reckless disregard thereof.

(b) The Bank may apply to the Fund at any time for instructions and
may consult counsel for the Fund, or its own counsel, and with accountants and
other experts with respect to any matter arising in connection with its duties
hereunder, and the Bank shall not be liable or accountable for any action taken
or omitted by it in good faith in accordance with such instruction, or with the
opinion of

2
<PAGE>

such counsel, accountants, or other experts. The Bank shall not be liable for
any act or omission taken or not taken in reliance upon any document,
certificate or instrument which it reasonably believes to be genuine and to be
signed or presented by the proper person or persons. The Bank shall not be held
to have notice of any change of authority of any officers, employees, or agents
of the Fund until receipt of written notice thereof has been received by the
Bank from the Fund.

(c) In the event the Bank is unable to perform, or is delayed in
performing, its obligations under the terms of this Agreement because of acts of
God, strikes, legal constraint, government actions, war, emergency conditions,
interruption of electrical power or other utilities, equipment or transmission
failure or damage reasonably beyond its control or other causes reasonably
beyond its control, the Bank shall not be liable to the Fund for any damages
resulting from such failure to perform, delay in performance, or otherwise from
such causes.

(d) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank be liable for special, incidental or consequential damages,
even if advised of the possibility of such damages.

7. Termination of Agreement.
------------------------

(a) The term of this Agreement shall be three years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive three-year terms (each a "Renewal
Term") unless notice of non-renewal is delivered by the non-renewing party to
the other party no later than ninety days prior to the expiration of the Initial
Term or any Renewal Term, as the case may be.

Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term or any Renewal Term in the event the other party
violates any material provision of this Agreement, provided that the violating
party does not cure such violation within ninety days of receipt of written
notice from the non-violating party of such violation.

(b) At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as Administrator.

8. Miscellaneous.
-------------

(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or the Bank shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.

To the Fund:

To the Bank:

Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, MA 02117-9130
Attention: _____________, Director, Client Management
With a copy to: John E. Henry, General Counsel

3
<PAGE>

(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other party.

(c) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.

(d) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.

(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.

9. Confidentiality. All books, records, information and data pertaining
---------------
to the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.

10. Use of Name. The Fund shall not use the name of the Bank or any of its
-----------
affiliates in any prospectus, sales literature or other material relating to the
Fund in a manner not approved by the Bank prior thereto in writing; provided
however, that the approval of the Bank shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or any
state securities authority or any other appropriate regulatory, governmental or
judicial authority; provided further, that in no event shall such approval be
----------------
unreasonably withheld or delayed.

[Remainder of Page Intentionally Left Blank]

4
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.

BOSTON ADVISORS TRUST

By:__________________________________
Name:
Title:

INVESTORS BANK & TRUST COMPANY

By:__________________________________
Name:
Title:

5
<PAGE>

Appendices
----------

Appendix A........................................ Portfolios

Appendix B........................................ Services

Appendix C........................................ Fee Schedule
<PAGE>

Appendix A

Series of the Trust
-------------------

Boston Advisors Cash Reserves Fund
Boston Advisors U.S. Government Money Market Fund
Boston Advisors Tax Free Money Market Fund

<PAGE>

Exhibit (h)(2)

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the 1st day of May, 2000, by and between BOSTON
ADVISORS TRUST, a Massachusetts business trust having its principal office and
place of business at 100 Federal Street, Boston, Massachusetts 02110 (the
"Trust"), and ADVEST TRANSFER SERVICES, INC. ("ATS"), a Delaware corporation
having its principal office and place of business at 90 State House Square,
Hartford, CT 06103.

W I T N E S S E T H:

WHEREAS, Boston Advisors Cash Reserves Money Market Fund, Boston Advisors
U.S. Government Money Market Fund and Boston Advisors Tax Free Money Market Fund
(singly a "Fund" and collectively, the "Funds") are each separate series of the
Trust, an open-ended management investment company registered as such with the
Securities and Exchange Commission (the "SEC") pursuant to the Investment
Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Trust desires to appoint ATS as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and ATS
desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

Article 1. Terms of Appointment; Duties of ATS

1.01. Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints ATS to act as, and ATS agrees to act as,
transfer agent for the Trust's authorized and issued shares of beneficial
interest without par value ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans provided to the
shareholders of the Trust ("Shareholders") and set out in the prospectus and
statement of additional information of the Trust corresponding to the date of
this Agreement.

1.02. ATS agrees that it will perform the following services:

(a) In accordance with procedures established from time to time by
agreement between the Trust and ATS, ATS shall:

(i) receive for acceptance and processing, orders for the purchase of
Shares, and payment therefor, and promptly deliver payment and
appropriate documentation therefor to the custodian of the Trust
authorized pursuant to the Trust's governing documents (the
"Custodian");

(ii) pursuant to purchase orders or other appropriate instructions, issue
the appropriate number of Shares and hold such Shares in the
appropriate Shareholder account, and, if requested and properly
authorized, issue appropriate certificates therefor;

(iii) receive for acceptance and processing, redemption requests and
redemption directions, and deliver the appropriate documentation
therefor to the Custodian;

(iv) at the appropriate time as and when it receives monies paid to it by
the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by
the redeeming Shareholders;

(v) effect transfers of Shares by the registered owners thereof upon
receipt of appropriate documentation;
<PAGE>

Page 2

(vi) prepare and transmit payments for dividends (if any) and
distributions declared by the Trust; and

(vii) maintain records of account for and advise the Trust and its
Shareholders as to the foregoing.

(b) In addition to and not in lieu of the services set forth in
paragraph (a) above, ATS shall perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program), including but not
limited to (i) maintaining all Shareholder accounts, (ii) preparing Shareholder
meeting lists, (iii) mailing proxies, (iv) receiving and tabulating proxies, (v)
mailing Shareholder reports and prospectuses and, if requested, statements of
additional information to current Shareholders, (vi) withholding taxes on U.S.
residents and non-resident alien accounts where applicable, (vii) preparing and
filing U.S. Treasury Department Forms 1099 and other appropriate forms required
with respect to dividends and distributions by federal authorities for all
registered Shareholders, (viii) preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and redemptions of
Shares and other confirmable transactions in Shareholder accounts, (ix)
preparing and mailing activity statements for Shareholders, and (x) providing
Shareholder account information. The Trust shall provide ATS with any
information required in connection with the furnishing of the foregoing
services.

(c) Procedures applicable to the services provided under this
Agreement may be established from time to time by agreement between the Trust
and ATS.

Article 2. Fees and Expenses

2.01. For performance by ATS pursuant to this Agreement, the Trust agrees
to pay ATS an annual maintenance fee for each Shareholder account as set out in
the initial fee schedule attached hereto. Such fees and out-of-pocket expenses
and advances identified under Section 2.02. below may be changed from time to
time subject to mutual written agreement between the Trust and ATS.

2.02. In addition to the fee paid pursuant to Section 2.01. above, the
Trust agrees to reimburse ATS for out of pocket expenses or advances incurred by
ATS for the items set out in the fee schedule attached hereto. Reimbursable
expenses include but are not limited to postage, forms, telephone, microfilm and
microfiche In addition, any other expenses incurred by ATS at the request or
with the consent of the Trust will be reimbursed by the Trust.

2.03. The Trust agrees to pay all fees and reimbursable expenses promptly;
the terms, method and procedures for which are detailed on the attached fee
schedule. Reimbursable expenses include but are not limited to postage, forms,
telephone, microfilm, microfiche, and expenses incurred at the specific
direction of the Trust.

Article 3. Representations and Warranties of ATS

ATS represents and warrants to the Trust that:

3.01. It is a corporation duly organized and existing and in good standing
under the laws of Delaware.

3.02. It is duly qualified to carry on its business in all jurisdictions
where such qualification is required.

3.03. It is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement.

3.04. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
<PAGE>

Page 3

3.05. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.

3.06. It is and will continue to be registered with the Securities and
Exchange Commission as a transfer agent in accordance with Section 17A(c) and
(d) of the Securities Exchange Act of 1934 and the rules thereunder.

Article 4. Representations and Warranties of the Trust

The Trust represents and warrants to ATS that:

4.01. It is an unincorporated business trust duly organized and existing
and in good standing under the laws of the Commonwealth of Massachusetts.

4.02. It is empowered under applicable laws and by its governing documents
to enter into and perform this Agreement.

4.03. All proceedings required by said governing documents have been taken
to authorize it to enter into and perform this agreement.

4.04. It is an investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act").

4.05. A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made with respect to all
Shares of the Trust being offered for sale; information to the contrary will
result in immediate notification to ATS.

Article 5. Indemnification

5.01. ATS shall not be responsible for, and the Trust shall indemnify and
hold ATS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:

(a) all actions of ATS or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct;

(b) the Trust's refusal or failure to comply with the terms of this
Agreement, or the Trust's lack of good faith, negligence or willful misconduct,
or the breach of any representation or warranty of the Trust hereunder;

(c) the reliance on or use by ATS or its agents or subcontractors
of information, records or documents which (i) are received by ATS or its agents
or subcontractors and furnished to it by or on behalf of the Trust, and (ii)
have been prepared and/or maintained by the Trust or any other person or firm
(other than ATS or its agents or subcontractors) on behalf of the Trust;

(d) the reliance on, or the carrying out by ATS or its agents or
subcontractors of, any instructions or requests of the Trust's representatives;
or

(e) the offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state, or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
<PAGE>

Page 4

5.02. ATS shall indemnify and hold the Trust harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to ATS's refusal or failure to comply
with the terms of this Agreement, or ATS's lack of good faith, negligence or
willful misconduct, or the breach of any representation or warranty of ATS
hereunder.

5.03. At any time ATS may apply to any officer of the Trust designated by
the President of the Trust in a written notice to ATS for instructions, and may
consult with the Trust's legal counsel with respect to any matter arising in
connection with the services to be performed by ATS under this Agreement, and
ATS and its agents or subcontractors shall not be liable and shall be
indemnified by the Trust for any action taken or omitted by it in reliance upon
such instructions or upon the opinion of such counsel. ATS, its agents and
subcontractors shall be protected and indemnified in acting upon any papers or
documents furnished by or on behalf of the Trust, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instructions, information, data, reports or documents provided ATS or its agents
or subcontractors by telephone, in person, or by machine readable input, telex,
CRT data entry or other similar means authorized by the Trust., and ATS, its
agents and subcontractors shall not be held to have notice of any change of
authority of any person until receipt of written notice thereof from the Trust.
ATS, its agents and subcontractors shall also be protected and indemnified in
recognizing Share certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Trust, and the proper
countersignature of any former transfer agent or registrar, or of a co-transfer
agent or co- registrar.

5.04. In the event either party is unable to perform its obligations under
this Agreement because of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other causes reasonably
beyond its control, such party shall not be liable to the other for any damages
resulting from such failure to perform or otherwise from such causes.

5.05. Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.

5.06. In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.

Article 6. Covenants of the Trust and ATS

6.01. The Trust shall promptly furnish to ATS the following:

(a) A certified copy of the resolution of the Board of Trustees of
the Trust authorizing the appointment of ATS and the execution and delivery of
this Agreement.

(b) A copy of the Declaration of Trust and Bylaws of the Trust and
all amendments thereto.

6.02. ATS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of Share
certificates (if any), check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices. Promptly after the date of this agreement ATS
will notify the Trust of such procedures it has established and, from time to
time thereafter, ATS will notify the Trust of any change in such procedures.
Any procedures specified in such notifications will be deemed accepted by the
Trust unless the Trust delivers notice to ATS to the contrary (such notice
delivered by the Trust to specify the respects in which such procedures are not
acceptable).
<PAGE>

Page 5

6.03. ATS shall keep records relating to the services to be performed
hereunder in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, and the rules and regulations
promulgated thereunder, ATS agrees that all such records prepared or maintained
by ATS relating to the services to be performed by ATS hereunder are the
property of the Trust and will be preserved, maintained at the expense of the
Trust and made available in accordance with such section, rules and regulations,
and will be surrendered promptly to the Trust at its request. ATS hereby agrees
that it will not use or employ, or permit any other person or entity within its
control to use or employ, any such books, records, information or data for any
purpose not authorized by the Board of Trustees of the Trust. ATS acknowledges
that its services under this Agreement (including, without limitation, the
mailing of any shareholder communications) are subject to the direction of the
Trust and agrees that it will accept direction only from the President of the
Trust, or from other persons designated in writing by the President of the Trust
or authorized by action of the Board of Trustees.

6.04 ATS and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except to that party's directors, trustees, officers, employees, legal counsel,
accountants, administrator, custodian or other consultants or service providers
that need this confidential information to perform their duties to that party
and as may be required by law.

6.05. In case of any requests or demands for the inspection of the
Shareholder records of the Trust, ATS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. ATS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, unless the
Trust indemnifies ATS to its reasonable satisfaction against such liability.
ATS will make all reasonable efforts to consult with an authorized officer of
the Trust personnel and obtain such indemnification prior to any such
disclosure.

Article 7. Termination of Agreement

7.01. This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall remain in full force and
effectfor two years from the date hereof until April 30, 2002 and shall
continue in full force and effect for successive periods of one year thereafter,
but only so long as each such continuance is approved (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 Trust, and, in either event, (ii) by vote of a
majority of the Trustees of the Trust who are not parties to this 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 approval.

7.02. This Agreement may be terminated at any time without the payment of
any penalty by vote of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Trust or by
ATS, on sixty days' written notice to the other party.

Article 8. Assignment

8.01. Except as provided in Section 8.03. below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.

8.02. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.

8.03. ATS may, without further consent on the part of the Trust,
subcontract for the performance hereof with any ATS affiliate duly registered as
a transfer agent, provided, however, that ATS shall be as fully responsible to
the Trust for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
<PAGE>

Page 6

Article 9. Amendment

9.01. This Agreement may be amended or modified by a written agreement
executed by both parties.

Article 10. Massachusetts Law to Apply

10.01. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

Article 11. Merger of Agreement

11.01. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.

Article 12. Limitation of Liability

12.01. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts and notice is hereby
given that this Agreement is executed on behalf of the Trustees of the Trust as
trustees and not individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of Shares individually but are binding only
upon the assets or property of the Trust. No Fund will be liable for the
obligations incurred by any other Fund under this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.

BOSTON ADVISORS TRUST

By_____________________________
Michael J. Vogelzang
President
Attest:

_________________________
Susan C. Mosher
Secretary

ADVEST TRANSFER SERVICES, INC.

By_____________________________

President
Attest:

_________________________

Secretary
<PAGE>

Page 7

ADVEST TRANSFER SERVICES, INC.

Fee Information for Services as
Plan, Transfer and Dividend Disbursing Agent
Initial Fee Schedule

BOSTON ADVISORS TRUST

________________________________________________________________________________
________

General

Fees are based on an annual per shareholder account charge for account
maintenance plus out-of-pocket expenses. Annual maintenance charges for
the Trust are given below.

Annual Maintenance Charges

The annual maintenance charge includes the processing of all transactions
and correspondence. The fee is billable on a monthly basis at the rate of
1/12 of the annual fee. A charge is made for an account in the month that
an account opens or closes. The annual per account fee includes the
processing of an unlimited number of dividend distributions and share
transactions.

Basic annual per account fee $20.00

Out-of-Pocket Expenses

Out-of-Pocket expenses include but are not limited to: postage, forms,
telephone, microfilm, microfiche, and expenses incurred at the specific
direction of the Trust.

Payment

The above fees will be charged against the Trust's custodian checking
account five (5) days after the invoice is mailed to the Trust's offices.

BOSTON ADVISORS TRUST ADVEST TRANSFER SERVICES, INC.

By:__________________________ By:___________________________
Michael J. Vogelzang
President President

<PAGE>

Exhibit (h)(3)

EXPENSE LIMITATION AGREEMENT

This EXPENSE LIMITATION AGREEMENT is made as of the __th day of _____, ____ by
and between BOSTON ADVISORS TRUST, a Massachusetts business trust (the "Trust")
on behalf of its series Boston Advisors Cash Reserves Fund, Boston Advisors U.S.
Government Money Market Fund and Boston Advisors Tax Free Money Market Fund
(each, a "Fund" and collectively, the "Funds"), and BOSTON ADVISORS, INC., a
Massachusetts corporation (the "Adviser"), with respect to the following:

WHEREAS, the Adviser serves as the Investment Adviser to each Fund pursuant to
an Investment Adviser Agreement between the Trust on behalf of each Fund and the
Adviser, dated May 1, 2000; and

WHEREAS, the Adviser has voluntarily agreed to waive its fees and reimburse
expenses so that the total operating expenses for each Fund will not exceed the
percentage of average daily net assets as set forth on Exhibit A; and
---------

WHEREAS, the Trust and the Adviser desire to formalize this voluntary fee waiver
and expense reimbursement arrangement for the period beginning May 1, 2000
through April 30, 2001.

NOW, in consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:

1. The Adviser agrees to waive its fees and reimburse expenses for the period
from May 1, 2000 to April 30, 2001 to the extent necessary to maintain the
expense ratios of Class 1 and Class 2 shares at not more than 0.90% and
0.75%, respectively, of their average net assets.

2. Upon the termination of any Investment Adviser Agreement as to any Fund,
this Agreement will automatically terminate as to that Fund.

3. Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of
the Investment Company Act of 1940 (the "1940 Act") will be resolved by
reference to that term or provision of the 1940 Act and to interpretations
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the Securities and Exchange Commission ("SEC") issued pursuant to the 1940
Act. In addition, if the effect of a requirement of the 1940 Act reflected
in any provision of this Agreement is revised by rule, regulation or order
of the SEC, that provision will be deemed to incorporate the effect of that
rule, regulation or order. Otherwise, the provisions of this Agreement
will be interpreted in accordance with the substantive laws of
Massachusetts.
<PAGE>

4. This expense cap may be changed at any time after April 30, 2001 and does
not apply to brokerage commissions, taxes, interest and litigation,
indemnification and other extraordinary expenses.

5. To the extent that a Fund's total expense ratio falls below its expense
limit, the Adviser reserves the right to be reimbursed for advisory fees
waived and Fund expenses paid by it during the current fiscal year.

-2-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.

BOSTON ADVISORS TRUST

Attest:____________________ By:____________________________
Name: Name: ________________________
Title: _______________________

BOSTON ADVISORS, INC.

Attest:____________________ By:____________________________
Name: Name:
Title:
________________________________________________________________________________

-3-

<PAGE>

Exhibit (i)

[LETTERHEAD OF HALE AND DORR LLP]

March 27, 2000

Boston Advisors Trust
100 Federal Street
Boston, Massachusetts 02110

Ladies and Gentlemen:

Boston Advisors (the "Trust"), is a Massachusetts business trust
created under a Declaration of Trust dated September 28, 1999 and filed with the
Secretary of State of the Commonwealth of Massachusetts on September 30, 1999 in
Boston, Massachusetts (the "Declaration of Trust"). The beneficial interests
thereunder are represented by transferable shares of beneficial interest without
par value.

The Trustees have the powers set forth in the Declaration of Trust,
subject to the terms, provisions and conditions therein provided. Pursuant to
Article V, Section 5.1 of the Declaration of Trust, the number of shares of
beneficial interest authorized to be issued under the Declaration of Trust is
unlimited and the Trustees are authorized to divide the shares into one or more
series of shares and one or more classes thereof as they deem necessary or
desirable. Pursuant to Article V, Section 5.4 of the Declaration of Trust, the
Trustees are empowered in their discretion to issue shares of any series for
such consideration, whether cash or other property, and on such terms as the
Trustees may determine, all without action or approval of the shareholders.
Pursuant to Article V, Section 5.5 of the Declaration of Trust, the trustees
have established three series, designated "Boston Advisors Cash Reserves Fund,
Boston Advisors U.S. Government Money Market Fund and Boston Advisors Tax Free
Money Market Fund (the "Existing Series"). The Existing Series consist of two
classes of shares - Class 1 Shares and Class 2 Shares.

We have examined the Declaration of Trust as amended and By-Laws of the
Trust and such other documents as we have deemed necessary or appropriate for
the purposes of this opinion, including, but not limited to, originals, or
copies certified or otherwise identified to our satisfaction, of such documents,
Trust records and other instruments. In our examination of the above documents,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified of photostatic copies.

For purposes of this opinion letter, we have not made an independent
review of the laws of any state or jurisdiction other than The Commonwealth of
Massachusetts and express no opinion with respect to the laws of any
jurisdiction other than the laws of The Commonwealth of Massachusetts. Further,
we express no opinion as to compliance with any state or federal securities
laws, including the securities laws of The Commonwealth of Massachusetts.

Our opinion below, as it relates to the non-assessability of the shares
of the Trust, is qualified to the extent that under Massachusetts law,
shareholders of a Massachusetts business trust may be held personally liable for
the obligations of the Trust. In this regard, however,
<PAGE>

Boston Advisors Trust
March 27, 2000
Page 2

please be advised that the Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and permits notice of such disclaimer to be
given in each written obligation, contract, instrument, certificate, share,
other security of the Trust or a series thereof or undertaking made or issued by
the Trustees of the Trust. Also, the Declaration of Trust provides for
indemnification out of Trust property for all loss and expense of any
shareholder held personally liable for the obligations of the Trust.

In rendering the opinion below, insofar as it relates to the good
standing and valid existence of the Trust, we have relied solely on certificates
of the Secretary of State of the Commonwealth of Massachusetts, dated as of a
recent date, and such opinion is limited accordingly and is rendered as of the
respective dates of such certificates.

Subject to the foregoing, we are of the opinion that the Trust is a
duly organized and validly existing business trust in good standing under the
laws of the Commonwealth of Massachusetts and that the shares of beneficial
interest of the Trust, when issued in accordance with the terms, conditions,
requirements and procedures set forth in the Declaration of Trust, the Trust's
Registration Statement on Form N-1A and the Distribution Agreement between the
Trust and Advest, Inc., will constitute legally and validly issued, fully paid
and non-assessable shares of beneficial interest in the Trust, subject to
compliance with the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, and the applicable state laws regulating the sale of
securities.

We are opining only as to the specific legal issues expressly set forth
herein, and no opinion should be inferred as to any other matters. We are
opining on the date hereof as to the law in effect on the date hereof, and we
disclaim any obligation to advise you of any change in any of these sources of
law or subsequent legal or factual developments that might affect any matters or
opinions set forth herein. Further, we are expressing no opinion as to shares
previously issued by the Trust and currently outstanding.

This opinion is furnished to you solely for your use and may not be
quoted to or relied upon by any other person or entity or used for any other
purpose, without our prior written consent.

We consent to your filing this opinion with the Securities and Exchange
Commission (the "Commission") as an exhibit to any amendments to the Trust's
registration statement with the Commission. Except as provided in this
paragraph, this opinion may not be relied upon by, or filed with, any other
parties or for any other purpose.

Very truly yours,

/s/ Hale and Dorr LLP

Hale and Dorr LLP

<PAGE>

Exhibit (j)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Pre-Effective Amendment No. 1 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated March
24, 2000, relating to the Statements of Assets and Liabilities of Boston
Advisors Cash Reserves Fund, Boston Advisors U.S. Government Money Market Fund,
and Boston Advisors Tax Free Money Market Fund dated March 15, 2000, which
appear in such Statement of Additional Information, and to the incorporation by
reference of our report into the Prospectus which constitutes part of this
Registration Statement. We also consent to the reference to us under the heading
"Independent Public Accountants" in such Statement of Additional Information.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 24, 2000

<PAGE>

EXHIBIT L

SHARE PURCHASE AGREEMENT

This Agreement is made as of the 15th day of March, 2000 between Boston
Advisors, Inc. ("Boston Advisors"), and Boston Advisors Cash Reserves Fund (the
"Fund"), a series of Boston Advisors Trust, a Massachusetts business trust (the
"Trust"). The Trust is a diversified open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act").

WHEREAS, the Fund wishes to sell to Boston Advisors and Boston Advisors wishes
to purchase from the Fund $50,000 of Class 1 shares of beneficial interest of
the Fund (50,000 shares) at a purchase price of $1.00 per share (collectively,
the "Shares"); and

WHEREAS, Boston Advisors is purchasing the Shares to provide a portion of the
initial capitalization of the Trust as required by the 1940 Act;

NOW, THEREFORE, the parties hereto agree as follows:

1. Simultaneously with the execution of this Agreement, Boston Advisors is
delivering to the Trust funds in the amount of $50,000 in full payment for the
Shares.

2. Boston Advisors represents and warrants to the Trust that it is
purchasing the Shares for investment; that it has no present intention of
redeeming or reselling the Shares and that it is not acquiring the shares for
the purpose of distribution.

3. This Agreement has been executed on behalf of the Trust by the
undersigned officer of the Trust in his or her capacity as an officer of the
Trust. The Fund's obligations under this Agreement shall be binding only upon
the assets and property of the Fund and not upon the assets and property of any
other series of the Trust or any Trustee, officer or shareholder of the Trust.

4. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but such counterparts shall together constitute only
one instrument.

Executed as of the date first set forth above.

BOSTON ADVISORS, INC.

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President

BOSTON ADVISORS TRUST
on behalf of Boston Advisors Cash Reserves Fund

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President
<PAGE>

SHARE PURCHASE AGREEMENT

This Agreement is made as of the 15th day of March, 2000 between Boston
Advisors, Inc. ("Boston Advisors"), and Boston Advisors U.S. Government Money
Market Fund (the "Fund"), a series of Boston Advisors Trust, a Massachusetts
business trust (the "Trust"). The Trust is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act").

WHEREAS, the Fund wishes to sell to Boston Advisors and Boston Advisors wishes
to purchase from the Fund $25,000 of Class 1 shares of beneficial interest of
the Fund (25,000 shares) at a purchase price of $1.00 per share (collectively,
the "Shares"); and

WHEREAS, Boston Advisors is purchasing the Shares to provide a portion of the
initial capitalization of the Trust as required by the 1940 Act;

NOW, THEREFORE, the parties hereto agree as follows:

1. Simultaneously with the execution of this Agreement, Boston Advisors is
delivering to the Trust funds in the amount of $25,000 in full payment for the
Shares.

4. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but such counterparts shall together constitute only
one instrument.

Executed as of the date first set forth above.

BOSTON ADVISORS, INC.

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President

BOSTON ADVISORS TRUST
on behalf of Boston Advisors U.S. Government
Money Market Fund

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President

-2-
<PAGE>

SHARE PURCHASE AGREEMENT

This Agreement is made as of the 15th day of March, 2000 between Boston
Advisors, Inc. ("Boston Advisors"), and Boston Advisors Tax Free Money Market
Fund (the "Fund"), a series of Boston Advisors Trust, a Massachusetts business
trust (the "Trust"). The Trust is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act").

WHEREAS, Boston Advisors is purchasing the Shares to provide a portion of the
initial capitalization of the Trust as required by the 1940 Act;

NOW, THEREFORE, the parties hereto agree as follows:

1. Simultaneously with the execution of this Agreement, Boston Advisors is
delivering to the Trust funds in the amount of $25,000 in full payment for the
Shares.

4. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but such counterparts shall together constitute only
one instrument.

Executed as of the date first set forth above.

BOSTON ADVISORS, INC.

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President

BOSTON ADVISORS TRUST
on behalf of Boston Advisors Tax Free
Money Market Fund

/s/ Michael J. Vogelzang
------------------------
By: Michael J. Vogelzang
Its: President

-3-

<PAGE>

Exhibit (o)

BOSTON ADVISORS TRUST
Power of Attorney

The undersigned, as Trustees of Boston Advisors Trust (the "Trust"),
hereby constitute and appoint David C. Phelan, Pamela J. Wilson, Susan C.
Mosher, John M. DelPrete and Michael J. Vogelzang, and each of them, with full
powers of substitution as their true and lawful attorneys and agents to execute
in their name and on their behalf in any and all capacities the Registration
Statement on Form N-1A, and any and all amendments thereto, filed by the Trust,
with the Securities and Exchange Commission (the "Commission") under the
Investment Company Act of 1940, as amended, and the Securities Act of 1933, as
amended, and any and all instruments which such attorneys and agents, or any of
them, deem necessary or advisable to enable the Trust to comply with such Acts,
the rules, regulations and requirements of the Commission, and the securities or
Blue Sky laws of any state or other jurisdiction, and the undersigned hereby
ratify and confirm as their own act and deed any and all acts that such
attorneys and agents, or any of them, shall do or cause to be done by virtue
hereof. Any one of such attorneys and agents have, and may exercise, all of the
powers hereby conferred.

IN WITNESS WHEREOF, the undersigned have hereunto set their hand this
1st day of March, 2000.

/s/ Allen G. Botwinick
----------------------
Allen G. Botwinick

/s/ Michael J. Vogelzang
------------------------
Michael J. Vogelzang

/s/ Mone Anathan III
--------------------
Mone Anathan III

/s/ Ezekiel Russel Peach, Jr.
-----------------------------
Ezekiel Russell Peach, Jr.

/s/ Hugh A. Dunlap, Jr.
-----------------------
Hugh A. Dunlap, Jr.