NATIONS FUNDS TRUST, 485BPOS, 2000-12-27

NATIONS FUNDS TRUST
485BPOS, 2000-12-27

Previous: BOSTON ADVISORS TRUST, NSAR-A, EX-27, 2000-12-27

Next: NATIONS FUNDS TRUST, 485BPOS, EX-99.23H(9), 2000-12-27

As filed with the Securities and Exchange Commission
on December 27, 2000
Registration No. 333-89661; 811-09645

--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A*

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 6 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 7 [X]

(Check appropriate box or boxes)

-----------------------
NATIONS FUNDS TRUST
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)

--------------------------
Registrant's Telephone Number, including Area Code: (800) 321-7854
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)

With copies to:
Robert M. Kurucza, Esq. Carl Frischling, Esq.
Marco E. Adelfio, Esq. Kramer, Levin, Naftalis
Morrison & Foerster LLP & Frankel
2000 Pennsylvania Ave., N.W. 919 3rd Avenue
Suite 5500 New York, New York 10022
Washington, D.C. 20006

It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing pursuant [ ] on July 19, 2000 pursuant
to Rule 485(b), or to Rule 485(b), or
[ ] 60 days after filing pursuant [ ] on (date) pursuant
to Rule 485(a), or to Rule 485(a).
[ ] 75 days after filing pursuant to [ ] on (date) pursuant to
paragraph (a)(2) paragraph(a)(2) of Rule 485

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

*This post-effective amendment is being executed by the Trustees and principal
officers of Nations Master Investment Trust.

dc-189560
<PAGE>

EXPLANATORY NOTE

The Registrant is filing this Post-Effective Amendment No. 6 to the Nations
Funds Trust (the "Trust") Registration Statement for the purpose of the removal
of performance information from the shell funds' prospectuses previously filed
on October 13, 2000.

dc-189560
<PAGE>

NATIONS FUNDS TRUST
CROSS REFERENCE SHEET

Part A
Item No. Prospectus
-------- ----------

1. Front and Back Cover Pages .................. Front and Back Cover Pages

2. Risk/Return Summary: Investments, Risks
and Performance.............................. About this Prospectus

3. Risk/Return Summary: Fee Tables.............. About the Funds;
Financial Highlights

4. Investment Objectives, Principal
Investment Strategies, and Related Risks..... About the Funds;
Other Important Information

5. Management's Discussion of Fund
Performance.................................. About the Funds

6. Management, Organization, and
Capital Structure............................ What's Inside; About the
Funds; How the Funds Are
Managed; About your
Investment

7. Shareholder Information...................... About the Funds; About your
Investment

8. Distribution Arrangements.................... Information for Investors

9. Financial Highlights Information............. Financial Highlights; About
the Funds

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

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

11. Fund History................................. Introduction

dc-192318

<PAGE>

12. Description of the Fund and Its
Investments and Risks........................ Additional Information on
Portfolio Investments

13. Management of the Funds...................... Trustees And Officers;
Investment Advisory,
Administration, Custody
Transfer Agency,
Shareholder Servicing and
Distribution Agreements
14. Control Persons and Principal
Holders of Securities........................ Not Applicable

15. Investment Advisory and Other Services....... Investment Advisory,
Administration, Custody,
Transfer Agency,
Shareholder Servicing And
Distribution Agreements

16. Brokerage Allocation and Other Practices..... Portfolio Transactions and
Brokerage--General
Brokerage Policy

17. Capital Stock and Other
Securities................................... Description Of Shares;
Investment Advisory,
Administration, Custody,
Transfer Custody, Transfer
Agency, Shareholder
Servicing And Distribution
Agreements

18. Purchase, Redemption and Pricing
of Shares.................................... Net Asset Value --
Purchases And Redemptions;
Distributor

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

20. Underwriters................................. Investment Advisory,
Administration Custody,
Transfer Agency
Shareholder Servicing And
Distribution Agreements;
Distributor

21. Calculation of Performance Data.............. Additional Information on
Performance

22. Financial Statements......................... Independent Accountant and
Reports

Part C

dc-192318

<PAGE>

Item No. Other Information
-------- -----------------

Information required to be included
in Part C is set forth under the
appropriate Item, so numbered, in
Part C of this Document

dc-192318
<PAGE>
[GRAPHIC]

Prospectus
Primary A Shares
December 27, 2000

Domestic Stock Funds
Nations Asset Allocation Fund
Nations Marsico Growth & Income Fund
Nations Marsico Focused Equities Fund

Government & Corporate Bond Fund
Nations Government Securities Fund

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

---------------------
Not FDIC Insured
---------------------
May Lose Value
---------------------
No Bank Guarantee
---------------------

Nations Funds
<PAGE>

An overview of the Funds
--------------------------------------------------------------------------------
[GRAPHIC]

Terms used in this prospectus

In this prospectus, we, us and our refer to the Nations Funds
family (Nations Funds or Nations Funds Family). Some other
important terms we've used may be new to you. These are printed in
italics where they first appear in a section and are described in
Terms used in this prospectus.

[GRAPHIC]
You'll find Terms used
in this prospectus on
page 27.

Your investment in these Funds is not a bank deposit and is not
insured or guaranteed by Bank of America, N. A. (Bank of America),
the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Your investment may lose money.

Affiliates of Bank of America are paid for the services they
provide to the Funds.

This booklet, which is called a prospectus, tells you about two types of
Nations Funds -- Domestic Stock and Government & Corporate Bond Funds. Please
read it carefully, because it contains information that's designed to help you
make informed investment decisions. Although this prospectus describes Nations
Asset Allocation Fund, Nations Marsico Growth & Income Fund, Nations Marsico
Focused Equities Fund and Nations Government Securities Fund, as of the date
of this prospectus, the shares of these Funds are not offered for sale to the
public. It is anticipated that the shares of the Funds will be offered for
sale beginning on or about June 8, 2001.

About the Funds
Each type of Fund has a different investment focus:

o Domestic Stock Funds invest primarily in equity securities of U.S.
companies

o Government & Corporate Bond Funds focus on the potential to earn income by
investing primarily in fixed income securities

The Funds also have different risk/return characteristics because they invest
in different kinds of securities.

Equity securities have the potential to provide you with higher returns than
many other kinds of investments, but they also tend to have the highest risk.

Fixed income securities have the potential to increase in value because when
interest rates fall, the value of these securities tends to rise. When
interest rates rise, however, the value of these securities tends to fall.
Other things can also affect the value of fixed income securities and
municipal securities.

In every case, there's a risk that you'll lose money or you may not earn as
much as you expect.

Choosing the right Funds for you
Not every Fund is right for every investor. When you're choosing a Fund to
invest in, you should consider things like your investment goals, how much
risk you can accept and how long you're planning to hold your investment.

The Domestic Stock Funds all focus on long-term growth. They may be suitable
for you if:

o you have longer-term investment goals

o they're part of a balanced portfolio

o you want to try to protect your portfolio against a loss of buying power
that inflation can cause over time

2
<PAGE>
They may not be suitable for you if:

o you're not prepared to accept or are unable to bear the risks associated
with equity securities, including foreign securities

o you have short-term investment goals

o you're looking for a regular stream of income

The Government & Corporate Fund focuses on the potential to earn income. It
may be suitable for you if:

o you're looking for income

o you have longer-term investment goals

The Government & Corporate Fund may not be suitable for you if:

o you're not prepared to accept or are unable to bear the risks associated
with fixed income securities

You'll find a discussion of each Fund's principal investments, strategies and
risks in the Fund descriptions that start on page 5.

For more information
If you have any questions about the Funds, please call us at 1.800.765.2668 or
contact your investment professional.

You'll find more information about the Funds in the Statement of Additional
Information (SAI). The SAI includes more detailed information about each
Fund's investments, policies, performance and management, among other things.
Please turn to the back cover to find out how you can get a copy.

3
<PAGE>
What's inside
--------------------------------------------------------------------------------

[GRAPHIC]
Banc of America Advisors, Inc.

Banc of America Advisors, Inc. (BAAI) is the investment adviser to
each of the Funds. BAAI is responsible for the overall management
and supervision of the investment management of each Fund. BAAI
and Nations Funds have engaged sub-advisers, which are responsible
for the day-to-day investment decisions for each of the Funds.

[GRAPHIC]

You'll find more about
BAAI and the sub-advisers
starting on page 18.

[GRAPHIC]
About the Funds

Nations Asset Allocation Fund 5
Sub-advisers: Banc of America Capital Management, Inc. and
Chicago Equity Partners LLC
-----------------------------------------------------------
Nations Marsico Growth & Income Fund 8
Sub-adviser: Marsico Capital Management, LLC
-----------------------------------------------------------
Nations Marsico Focused Equities Fund 11
Sub-adviser: Marsico Capital Management, LLC
-----------------------------------------------------------
Nations Government Securities Fund 14
Sub-adviser: Banc of America Capital Management, Inc.
-----------------------------------------------------------
Other important information 17
-----------------------------------------------------------
How the Funds are managed 18

[GRAPHIC]
About your investment

Information for investors
Buying, selling and exchanging shares 22
Distributions and taxes 25
-----------------------------------------------------------
Terms used in this prospectus 27
-----------------------------------------------------------
Where to find more information back cover
</TABLE>

4
<PAGE>
[GRAPHIC]
About the sub-advisers

This Fund is managed by two sub-advisers: BACAP and Chicago Equity
Partners LLC (Chicago Equity). Chicago Equity's Equity Management
Team makes the day-to-day investment decisions for the equity
portion of the Fund. BACAP's Fixed Income Management Team makes
the day-to-day investment decisions for the fixed income and money
market portions of the Fund.

[GRAPHIC]
You'll find more about
BACAP and Chicago
Equity, starting on
page 19.

[GRAPHIC]
What is an asset
allocation fund?

This asset allocation fund invests in a mix of equity and fixed
income securities, and cash equivalents.

Each of these "asset classes" has different risk/return
characteris-tics. The portfolio management team changes the mix
based on its assessment of the expected risks and returns of each
class.

Asset allocation funds like this one can provide a diversified
asset mix for you in a single investment.

Nations Asset Allocation Fund

[GRAPHIC]
Investment objective
The Fund seeks to obtain long-term growth from capital appreciation,
and dividend and interest income.

[GRAPHIC]
Principal investment strategies
The Fund invests in a mix of equity and fixed income securities, as
well as cash equivalents, including U.S. government obligations,
commercial paper and other short-term, interest-bearing instruments.

The equity securities the Fund invests in are primarily common stock of blue
chip companies. These companies are well established, nationally known
companies that have a long record of profitability and a reputation for
quality management, products and services.

The fixed income securities the Fund invests in are primarily investment grade
bonds and notes. The Fund normally invests at least 25% of its assets in
senior securities. The Fund may also invest up to 35% of its assets in
mortgage-backed and asset-backed securities.

The Fund may also invest in securities that aren't part of its principal
investment strategies, but it won't hold more than 10% of its assets in any
one type of these securities. These securities are described in the SAI.

The team uses asset allocation as its principal investment approach. The team
actively allocates assets among the three asset classes based on its
assessment of the expected risks and returns of each class.

For the equity portion of the Fund, the team uses quantitative analysis to
analyze fundamental information about securities and identify value. Starting
with a universe of approximately 2,000 common stocks, the team uses a
multi-factor computer model to rank securities, based on the following
criteria, among others:

o changes in actual and expected earnings

o unexpected changes in earnings

o price-to-earnings ratio

o dividend discount model

o price-to-cash flow

The team tries to manage risk by matching the market capitalization, style and
industry weighting characteristics of the S&P SuperComposite 1500. The team
focuses on selecting individual stocks to try to provide higher returns than
the S&P SuperComposite 1500 while maintaining a level of risk similar to the
index.

The team may sell a security when the Fund's asset allocation changes, there
is a deterioration in the issuer's financial situation, when the team believes
other investments are more attractive, or for other reasons.

5
<PAGE>
[GRAPHIC]
You'll find more about
other risks of investing in
this Fund starting on
page 17 and in the SAI.

[GRAPHIC]
Risks and other things to consider
Nations Asset Allocation Fund has the following risks:

o Stock market risk - The value of the stocks the Fund holds can be
affected by changes in U.S. or foreign economies and financial markets,
and the companies that issue the stocks, among other things. Stock prices
can rise or fall over short as well as long periods. In general, stock
markets tend to move in cycles, with periods of rising prices and periods
of falling prices. As of the date of this prospectus, the stock markets,
as measured by the S&P 500 and other commonly used indices, were trading
at historically high levels. There can be no guarantee that these levels
will continue.

o Interest rate risk - The prices of the Fund's fixed income securities
will tend to fall when interest rates rise. In general, fixed income
securities with longer terms tend to fall more in value when interest
rates rise than fixed income securities with shorter terms.

o Credit risk - The Fund could lose money if the issuer of a fixed income
security is unable to pay interest or repay principal when it's due.
Credit risk usually applies to most fixed income securities, but is
generally not a factor for U.S. government obligations.

o Mortgage-related risk - The value of the Fund's mortgage-backed
securities can fall if the owners of the underlying mortgages pay off
their mortgages sooner than expected, which could happen when interest
rates fall, or later than expected, which could happen when interest
rates rise. If the underlying mortgages are paid off sooner than
expected, the Fund may have to reinvest this money in mortgage-backed or
other securities that have lower yields.

o Asset-backed securities risk - Payment of interest and repayment of
principal may be impacted by the cash flows generated by the assets
backing these securities. The value of the Fund's asset-backed securities
may also be affected by changes in interest rates, the availability of
information concerning the interests in and structure of the pools of
purchase contracts, financing leases or sales agreements that are
represented by these securities, the creditworthiness of the servicing
agent for the pool, the originator of the loans or receivables, or the
entities that provide any supporting letters of credit, surety bonds, or
other credit enhancements.

o Changing to a feeder fund - Unlike traditional mutual funds, which invest
in individual securities, a "feeder fund" invests all of its assets in
another fund, called a "master portfolio." Other feeder funds generally
also invest in a master portfolio. The master portfolio invests in
individual securities and has the same investment objective, investment
strategies and principal risks as the feeder funds. This structure can
help reduce a feeder fund's expenses because its assets are combined with
those of other feeder funds. If a master portfolio doesn't attract other
feeder funds, however, a feeder fund's expenses could be higher than
those of a traditional mutual fund.

This Fund may become a feeder fund if the Board of Trustees decides this
would be in the best interests of shareholders. We don't require
shareholder approval to make the change, but we'll notify you if it
happens.

6
<PAGE>
[GRAPHIC]
A look at the Fund's performance

Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC OMITTED]

There are two kinds of fees -- shareholder fees you pay directly,
and annual fund operating expenses that are deducted from a fund's
assets.

[GRAPHIC OMITTED]
What it costs to invest in the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.

<TABLE>
<CAPTION>
Shareholder fees Primary A
(Fees paid directly from your investment) Shares
<S> <C>
Maximum sales charge (load) imposed on purchases none
Maximum deferred sales charge (load) none
Annual Fund operating expenses(1)
(Expenses that are deducted from the Fund's assets)
Management fees 0.65%
Other expenses 0.37%
----
Total annual Fund operating expenses 1.02%
====
</TABLE>

(1)The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

[GRAPHIC OMITTED]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Fund for the time
periods indicated and then sell all of your shares at the end of
those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the
table above

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Primary A Shares $104 $325
</TABLE>

7
<PAGE>
[GRAPHIC]
About the sub-adviser

The Fund does not have its own investment adviser or sub-adviser
because it's a "feeder" fund. A feeder fund typically invests all
of its assets in another fund, which is called a "master
portfolio." Master Portfolio and Fund are sometimes used
interchangeably.

BAAI is the Master Portfolio's investment adviser, and Marsico
Capital Management, LLC (Marsico Capital) is its sub-adviser.
Thomas F. Marsico is its portfolio manager and makes the
day-to-day investment decisions for the Master Portfolio.

[GRAPHIC]
You'll find more about
Marsico Capital and
Mr. Marsico on page 19.

[GRAPHIC]
Why invest in a growth and income fund?

Growth and income funds can invest in a mix of equity and fixed
income securities. This can help reduce volatility and provide the
Fund with the flexibility to shift among securities that offer the
potential for higher returns.

While this Fund invests in a wide range of companies and
industries, it holds fewer investments than other kinds of funds.
This means it can have greater price swings than more diversified
funds. It also means it may have relatively higher returns when
one of its investments performs well, or relatively lower returns
when an investment performs poorly.

Nations Marsico Growth & Income Fund

[GRAPHIC]
Investment objective
The Fund seeks long-term growth of capital with a limited emphasis on
income.

[GRAPHIC]
Principal investment strategies
The Fund invests all of its assets in Nations Marsico Growth & Income
Master Portfolio (the Master Portfolio). The Master Portfolio has the
same investment objective as the Fund.

The Master Portfolio invests primarily in equity securities of large
capitalization companies that are selected for their growth potential. It
invests at least 25% of its assets in securities that are believed to have
income potential, and generally holds 35 to 50 securities. It may hold up to
25% of its assets in foreign securities.

Marsico Capital may shift assets between growth and income securities based on
its assessment of market, financial and economic conditions. The Master
Portfolio, however, is not designed to produce a consistent level of income.

The Master Portfolio may also invest in securities that aren't part of its
principal investment strategies, but it won't hold more than 10% of its assets
in any one type of these securities. These securities are described in the
SAI.

Marsico Capital looks for companies with earnings growth potential that may
not be recognized by other investors, focusing on companies that have some of
the following characteristics:

o products, markets or technologies in flux that can result in
extraordinary growth

o strong brand franchises that can take advantage of a changing global
environment

o global reach that allows the company to generate sales and earnings both
in the United States and abroad. This can give the company added growth
potential and also means the company may be less affected by changes in
local markets

o movement with, not against, the major social, economic and cultural
shifts taking place in the world

Once an investment opportunity is identified, Marsico Capital uses a
disciplined analytical process to assess its potential as an investment. This
process includes a "top-down" analysis that takes into account economic
factors like interest rates, inflation, the regulatory environment, the
industry and global competition.

The process also includes a "bottom-up" analysis of a company's financial
situation, as well as individual company characteristics like commitment to
research, market franchise and quality of management.

Marsico Capital may sell a security when it believes there is a deterioration
in the company's financial situation, the security is overvalued, when there
is a negative development in the company's competitive, regulatory or economic
environment, or for other reasons.

8
<PAGE>
[GRAPHIC]
You'll find more about
other risks of investing in
this Fund starting on
page 17 and in the SAI.

[GRAPHIC OMITTED]
Risks and other things to consider

Nations Marsico Growth & Income Fund has the following risks:

o Investment strategy risk - Marsico Capital uses an investment
strategy that tries to identify equities with growth or income
potential. There is a risk that the value of these investments will
not rise as high as Marsico Capital expects, or will fall.

o Stock market risk - The value of the stocks the Master Portfolio
holds can be affected by changes in U.S. or foreign economies and
financial markets, and the companies that issue the stocks, among
other things. Stock prices can rise or fall over short as well as
long periods. In general, stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. As of the
date of this prospectus, the stock markets, as measured by the S&P
500 and other commonly used indices, were trading at historically
high levels. There can be no guarantee that these levels will
continue.

o Technology and technology-related risk - The Master Portfolio may
invest in technology and technology-related companies, which can be
significantly affected by obsolescence of existing technology, short
product cycles, falling prices and profits, and competition from new
market entrants.

o Interest rate risk - The prices of the Master Portfolio's fixed
income securities will tend to fall when interest rates rise and to
rise when interest rates fall. In general, fixed income securities
with longer terms tend to fall more in value when interest rates rise
than fixed income securities with shorter terms.

o Credit risk - The Master Portfolio could lose money if the issuer of
a fixed income security is unable to pay interest or repay principal
when it's due. Credit risk usually applies to most fixed income
securities, but is generally not a factor for U.S. government
obligations.

o Foreign investment risk - Because the Master Portfolio may invest up
to 25% of its assets in foreign securities, it can be affected by the
risks of foreign investing. Foreign investments may be riskier than
U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited financial
information. Withholding taxes also may apply to some foreign
investments.

o Investing in the Master Portfolio - Other mutual funds and eligible
investors can buy shares in the Master Portfolio. All investors in
the Master Portfolio invest under the same terms and conditions as
the Fund and pay a proportionate share of the Master Portfolio's
expenses. Other feeder funds that invest in the Master Portfolio may
have different share prices and returns than the Fund because
different feeder funds typically have varying sales charges, and
ongoing administrative and other expenses.

The Fund could withdraw its entire investment from the Master
Portfolio if it believes it's in the best interests of the Fund to do
so (for example, if the Master Portfolio changed its investment
objective). It is unlikely that this would happen, but if it did, the
Fund's portfolio could be less diversified and therefore less liquid,
and expenses could increase. The Fund might also have to pay
brokerage, tax or other charges.

9
<PAGE>
[GRAPHIC]
A look at the Fund's performance
Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC]

There are two kinds of fees -- shareholder fees you pay directly,
and annual fund operating expenses that are deducted from a fund's
assets.

[GRAPHIC]
What it costs to invest in the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.

<TABLE>
<CAPTION>
Shareholder fees Primary A
(Fees paid directly from your investment) Shares
<S> <C>
Maximum sales charge (load) imposed on purchases none
Maximum deferred sales charge (load) none

Annual Fund operating expenses(1)
(Expenses that are deducted from the Fund's assets)(2)
Management fees 0.75%
Other expenses 0.48%
----
Total annual Fund operating expenses 1.23%
====
</TABLE>

(1)The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(2)These fees and expenses and the example below include the Fund's
portion of the fees and expenses deducted from the assets of the
Master Portfolio.

[GRAPHIC]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Fund for the time
periods indicated and then sell all of your shares at the end of
those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Primary A Shares $125 $390
</TABLE>

10
<PAGE>
[GRAPHIC]
About the sub-adviser

BAAI is the Master Portfolio's investment adviser, and Marsico
Capital is its sub-adviser. Thomas F. Marsico is its portfolio
manager and makes the day-to-day investment decisions for the
Master Portfolio.

[GRAPHIC]
You'll find more about
Marsico Capital and
Mr. Marsico on page 19.

[GRAPHIC]
What is a focused fund?

A focused fund invests in a small number of companies with
earnings that are believed to have the potential to grow
significantly. This Fund focuses on large, established and
well-known U.S. companies.

Because a focused fund holds fewer investments than other kinds of
funds, it can have greater price swings than more diversified
funds. It may earn relatively higher returns when one of its
investments performs well, or relatively lower returns when an
investment performs poorly.

Nations Marsico Focused Equities Fund

[GRAPHIC]
Investment objective
The Fund seeks long-term growth of capital.

[GRAPHIC]
Principal investment strategies
The Fund invests all of its assets in Nations Marsico Focused Equities
Master Portfolio (the Master Portfolio). The Master Portfolio has the
same investment objective as the Fund.

The Master Portfolio normally invests at least 65% of its assets in common
stocks of large companies. The Master Portfolio, which is non-diversified,
generally holds a core position of 20 to 30 common stocks. It may invest up to
25% of its assets in foreign securities.

Marsico Capital looks for companies with earnings growth potential that may
not be recognized by other investors, focusing on companies that have some of
the following characteristics:

o products, markets or technologies in flux that can result in extraordinary
growth

o strong brand franchises that can take advantage of a changing global
environment

o global reach that allows the company to generate sales and earnings both in
the United States and abroad. This can give the company added growth
potential and also means the company may be less affected by changes in
local markets

o movement with, not against, the major social, economic and cultural shifts
taking place in the world

11
<PAGE>
[GRAPHIC]
You'll find more about
other risks of investing in
this Fund starting on
page 17 and in the SAI.

[GRAPHIC]
Risks and other things to consider
Nations Marsico Focused Equities Fund has the following risks:

o Investment strategy risk - There is a risk that the value of the
Master Portfolio's investments will not rise as high as Marsico
Capital expects, or will fall.

o Holding fewer investments - This Master Portfolio is considered to be
non-diversified because it may hold fewer investments than other
kinds of equity funds. This increases the risk that its value could
go down significantly if even only one of its investments performs
poorly. The value of the Master Portfolio will tend to have greater
price swings than the value of more diversified equity funds. The
Master Portfolio may become a diversified fund by limiting the
investments in which more than 5% of its total assets are invested.

o Technology and technology-related risk - The Master Portfolio may
invest in technology and technology-related companies,which can be
significantly affected by obsolescence of existing technology, short
product cycles, falling prices and profits, and competition from new
market entrants.

12
<PAGE>
[GRAPHIC]
A look at the Fund's performance
Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC]

There are two kinds of fees -- shareholder fees you pay directly,
and annual fund operating expenses that are deducted from a fund's
assets.

[GRAPHIC]
What it costs to invest in the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.

<TABLE>
<CAPTION>
Shareholder fees Primary A
(Fees paid directly from your investment) Shares
<S> <C>
Maximum sales charge (load) imposed on purchases none
Maximum deferred sales charge (load) none

Annual Fund operating expenses(1)
(Expenses that are deducted from the Fund's assets)(2)
Management fees 0.75%
Other expenses 0.41%
----
Total annual Fund operating expenses 1.16%
====
</TABLE>

(1)The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(2)These fees and expenses and the example below include the Fund's
portion of the fees and expenses deducted from the assets of the
Master Portfolio.

[GRAPHIC]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Fund for the time
periods indicated and then sell all of your shares at the end of
those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

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

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Primary A Shares $118 $368
</TABLE>
13
<PAGE>
[GRAPHIC]
About the sub-adviser

BACAP is this Fund's sub-adviser. BACAP's Fixed Income Management
Team makes the day-to-day investment decisions for the Fund.

[GRAPHIC]
You'll find more about
BACAP on page 19.

[GRAPHIC]
Mortgage-backed securities

This Fund invests in mortgage-backed securities. Mortgage-backed
securities tend to pay higher income than U.S. Treasury bonds and
other government-backed bonds with similar maturities, but also
have specific risks associated with them. They pay a monthly
amount that includes a portion of the principal on the underlying
mortgages, as well as interest.

Nations Government Securities Fund

[GRAPHIC]
Investment objective
The Fund seeks high current income consistent with moderate fluctuation
of principal.

[GRAPHIC]
Principal investment strategies
This Fund normally invests at least 65% of its assets in U.S.
government obligations and repurchase agreements secured by these
securities.

It may also invest in the following securities rated investment grade at the
time of investment:

o mortgage-related securities issued by governments, their agencies or
instrumentalities, or corporations.

o asset-backed securities or municipal securities.

o corporate debt securities, including bonds, notes and debentures.

Normally, the Fund's average dollar-weighted maturity will be between five and
30 years.

When selecting individual investments, the team:

o looks at a fixed income security's potential to generate both income
and price appreciation

o allocates assets primarily among U.S. government obligations,
including securities issued by government agencies, mortgage-backed
securities and U.S. Treasury securities, based on how they have
performed in the past, and on how they are expected to perform under
current market conditions. The team may change the allocations when
market conditions change

o selects securities using structure analysis, which evaluates the
characteristics of a security, including its call features, coupons
and expected timing of cash flows

The team may sell a security when it believes the security is overvalued,
there is a deterioration in the security's credit rating or in the issuer's
financial situation, when other investments are more attractive, or for other
reasons.
14
<PAGE>
[GRAPHIC]
You'll find more about
other risks of investing in
this Fund starting on
page 17 and in the SAI.

[GRAPHIC]
Risks and other things to consider
Nations Government Securities Fund has the following risks:

o Investment strategy risk - There is a risk that the value of the
investments that the team chooses will not rise as high as the team
expects, or will fall.

o Interest rate risk - The prices of fixed income securities will tend
to fall when interest rates rise. In general, fixed income securities
with longer terms tend to fall more in value when interest rates rise
than fixed income securities with shorter terms.

o Credit risk - The Fund could lose money if the issuer of a fixed
income security is unable to pay interest or repay principal when
it's due. Credit risk usually applies to most fixed income
securities, but is generally not a factor for U.S. government
obligations.

o Changing distribution levels - The level of monthly income
distributions paid by the Fund depends on the amount of income paid
by the securities the Fund holds. It is not guaranteed and will
change. Changes in the value of the securities, however, generally
should not affect the amount of income they pay.

o Mortgage-related risk - The value of the Fund's mortgage-backed
securities can fall if the owners of the underlying mortgages pay off
their mortgages sooner than expected, which could happen when
interest rates fall, or later than expected, which could happen when
interest rates rise. If the underlying mortgages are paid off sooner
than expected, the Fund may have to reinvest this money in
mortgage-backed or other securities that have lower yields.

o Asset-backed securities risk - Payment of interest and repayment of
principal may be impacted by the cash flows generated by the assets
backing these securities. The value of the Fund's asset-backed
securities may also be affected by changes in interest rates, the
availability of information concerning the interests in and structure
of the pools of purchase contracts, financing leases or sales
agreements that are represented by these securities, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities that provide any
supporting letters of credit, surety bonds, or other credit
enhancements.

o Changing to a feeder fund - Unlike traditional mutual funds, which
invest in individual securities, a "feeder fund" invests all of its
assets in another fund, called a "master portfolio." Other feeder
funds generally also invest in a master portfolio. The master
portfolio invests in individual securities and has the same
investment objective, investment strategies and principal risks as
the feeder funds. This structure can help reduce a feeder fund's
expenses because its assets are combined with those of other feeder
funds. If a master portfolio doesn't attract other feeder funds,
however, a feeder fund's expenses could be higher than those of a
traditional mutual fund.

This Fund may become a feeder fund if the Board of Trustees decides
this would be in the best interests of shareholders. We don't require
shareholder approval to make the change, but we'll notify you if it
happens.

15
<PAGE>
[GRAPHIC]
A look at the Fund's performance
Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC]
There are two kinds of fees -- shareholder fees you pay directly,
and annual fund operating expenses that are deducted from a fund's
assets.

Total net expenses are actual expenses paid by the Fund after
waivers and/or reimbursements.

[GRAPHIC]
What it costs to invest in the Fund

This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.
<TABLE>
<CAPTION>
Shareholder fees Primary A
(Fees paid directly from your investment) Shares
<S> <C>
Maximum sales charge (load) imposed on purchases none
Maximum deferred sales charge (load) none

Annual Fund operating expenses(1)
(Expenses that are deducted from the Fund's assets)
Management fees 0.50%
Other expenses 0.39%
------
Total annual Fund operating expenses 0.89%
Fee waivers and/or reimbursements (0.10)%
------
Total net expenses(2) 0.79%
======
</TABLE>

(1)The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(2)The Fund's investment adviser and/or some of its other service
providers have agreed to waive fees and/or reimburse expenses until
July 31, 2001. The figure shown here is after waivers and/or
reimbursements. There is no guarantee that these waivers and/or
reimbursements will continue after this date.

[GRAPHIC]
This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Fund for the time
periods indicated and then sell all of your shares at the end of
those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the
table above

o the waivers and/or reimbursements shown above expire July 31, 2001
and are not reflected in the 3, 5 and 10 year examples.

Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Primary A Shares $81 $274
</TABLE>
16
<PAGE>
[GRAPHIC]
Other important information

You'll find specific information about each Fund's principal investments,
strategies and risks in the descriptions starting on page 5. The following are
some other risks and information you should consider before you invest:

o Changing investment objectives and policies - The investment
objective and certain investment policies of any Fund can be changed
without shareholder approval. Other investment policies may be
changed only with shareholder approval.

o Holding other kinds of investments - The Funds may hold investments
that aren't part of their principal investment strategies. Please
refer to the SAI for more information. The portfolio managers or
management team can also choose not to invest in specific securities
described in this prospectus and in the SAI.

o Foreign investment risk - Funds that invest in foreign securities may
be affected by changes in currency exchange rates and the costs of
converting currencies; foreign government controls on foreign
investment, repatriation of capital, and currency and exchange;
foreign taxes; inadequate supervision and regulation of some foreign
markets; difficulty selling some investments which may increase
volatility; different settlement practices or delayed settlements in
some markets; difficulty getting complete or accurate information
about foreign companies; less strict accounting, auditing and
financial reporting standards than those in the U.S.; political,
economic or social instability; and difficulty enforcing legal rights
outside the U.S.

o Investing defensively - A Fund may temporarily hold investments that
are not part of its investment objective or its principal investment
strategies to try to protect it during a market or economic downturn
or because of political or other conditions. A Fund may not achieve
its investment objective while it is investing defensively.

o Securities lending program - A Fund may lend portfolio securities to
approved broker-dealers or other financial institutions on a fully
collateralized basis in order to earn additional income. There may be
delays in receiving additional collateral after the loan is made or
in recovering the securities loaned.

o Portfolio turnover - A Fund that replaces -- or turns over -- more
than 100% of its investments in a year is considered to trade
frequently. Frequent trading can result in larger distributions of
short-term capital gains to shareholders. These gains are taxable at
higher rates than long-term capital gains. Frequent trading can also
mean higher brokerage and other transaction costs, which could reduce
the Fund's returns. The Funds generally buy securities for capital
appreciation, investment income, or both, and don't engage in
short-term trading. The annual portfolio turnover rates for Nations
Asset Allocation Fund, Nations Marsico Growth & Income Fund, Nations
Marsico Focused Equities Fund and Nations Government Securities Fund
are expected to be no more than 157%, 150%, 177% and 600%,
respectfully.

17
<PAGE>
[GRAPHIC]
How the Funds are managed

[GRAPHIC]
Banc of America Advisors, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

Investment adviser
BAAI is the investment adviser to over 60 mutual fund portfolios in the
Nations Funds Family, including the Funds described in this prospectus.

BAAI is a registered investment adviser. It's a wholly-owned subsidiary of
Bank of America, which is owned by Bank of America Corporation.

Nations Funds pay BAAI an annual fee for its investment advisory services. The
fee is calculated as a percentage of the average daily net assets of each Fund
and is paid monthly. BAAI uses part of this money to pay investment
sub-advisers for the services they provide to each Fund.

BAAI has agreed to waive fees and/or reimburse expenses for certain Funds
until July 31, 2001. You'll find a discussion of any waiver and/or
reimbursement in the Fund descriptions. There is no assurance that BAAI will
continue to waive and/or reimburse any fees and/or expenses after this date.

The following chart shows the maximum advisory fees BAAI can receive, along
with the actual advisory fees it received during the Funds' last fiscal year,
after waivers and/or reimbursements:

Annual investment advisory fee, as a % of average daily net assets

<TABLE>
<CAPTION>
Maximum Actual fee
advisory paid last
fee(1) fiscal year
<S> <C> <C>
Nations Asset Allocation Fund 0.65% 0.58%
Nations Marsico Growth & Income Fund(2) 0.75% 0.76%
Nations Marsico Focused Equities Fund(2) 0.75% 0.76%
Nations Government Securities Fund 0.50% 0.40%
</TABLE>

(1)These fees are the current contract levels which in some cases, have been
reduced from the contract levels that were in effect during the last fiscal
year.

(2)These funds don't have their own investment adviser because they invest in
Nations Marsico Growth & Income Master Portfolio and Nations Marsico Focused
Equities Master Portfolio, respectively. BAAI is the investment adviser to
these Master Portfolios.
18
<PAGE>
Investment sub-advisers
Nations Funds and BAAI engage one or more investment sub-advisers for each
Fund to make day-to-day investment decisions for the Fund. BAAI retains
ultimate responsibility (subject to Board oversight) for overseeing the
sub-advisers and evaluates the Funds' needs and available sub-advisers' skills
and abilities on an ongoing basis. Based on its evaluations, BAAI may at times
recommend to a Fund's Board that the Fund:

o change, add or terminate one or more sub-advisers;

o continue to retain a sub-adviser even though the sub-adviser's ownership or
corporate structure has changed; or

o materially change a sub-advisory agreement with a sub-adviser.

Applicable law requires a Fund to obtain shareholder approval in order to act
on most of these types of recommendations, even if the Fund's Board has
approved the proposed action and believes that the action is in shareholders'
best interests. BAAI and the Funds have applied for relief from the SEC to
permit the Funds to act on many of BAAI's recommendations with approval only
by the Funds' Board and not by Fund shareholders. BAAI or a Fund would inform
the Fund's shareholders of any actions taken in reliance on this relief. Until
BAAI and the Funds obtain the relief, each Fund will continue to submit these
matters to shareholders for their approval to the extent required by
applicable law.

[GRAPHIC]
Banc of America Capital Management, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

Banc of America Capital Management, Inc.
BACAP is a registered investment adviser and a wholly-owned subsidiary of Bank
of America. Its management expertise covers all major domestic asset classes,
including equity and fixed income securities, and money market instruments.

Currently managing more than $125 billion, BACAP has over 200 institutional
clients and is sub-adviser to more than 65 mutual funds in the Nations Funds
Family. BACAP takes a team approach to investment management. Each team has
access to the latest technology and analytical resources.

BACAP is the investment sub-adviser to the Funds shown in the table below. The
table also tells you which internal BACAP asset management team is responsible
for making the day-to-day investment decisions for each Fund.
<TABLE>
<CAPTION>
Fund BACAP Team
<S> <C>
Nations Asset Allocation Fund Fixed Income Management Team
for the fixed income and money market
portions of the Fund
Nations Government Securities Fund Fixed Income Management Team
</TABLE>

[GRAPHIC]
Marsico Capital
Management, LLC

1200 17th Street
Suite 1300
Denver, Colorado 80202

Marsico Capital Management, LLC
Marsico Capital is a full service investment advisory firm founded by Thomas
F. Marsico in September 1997. It is a registered investment adviser and
currently has over $16 billion in assets under management.

Marsico Management Holdings, LLC, a wholly-owned subsidiary of Bank of America
Corporation, indirectly owns the equity of Marsico Capital.

19
<PAGE>
Marsico Capital is the investment sub-adviser to:

o Nations Marsico Growth & Income Master Portfolio

o Nations Marsico Focused Equities Master Portfolio

Thomas F. Marsico, Chairman and Chief Executive Officer of Marsico Capital, is
the portfolio manager responsible for making the day-to-day investment
decisions for Nations Marsico Growth & Income Master Portfolio and Nations
Marsico Focused Equities Master Portfolio. Mr. Marsico was an executive vice
president and portfolio manager at Janus Capital Corporation from 1988 until
he formed Marsico Capital in September 1997. He has more than 20 years of
experience as a securities analyst and portfolio manager.

Performance of other domestic stock funds managed by Thomas Marsico
Nations Marsico Focused Equities Fund and Nations Marsico Growth & Income Fund
have been in operation since December 31, 1997, so they have a relatively
short performance history. The tables below are designed to show you how
similar domestic stock funds managed by Thomas Marsico performed in the past.

The Janus Twenty Fund has an investment objective, policies and strategies
that are substantially similar to Nations Marsico Focused Equities Fund. Mr.
Marsico managed the Janus Twenty Fund from January 31, 1988 through August 11,
1997. He had full discretionary authority for selecting investments for that
fund, which had approximately $6 billion in net assets on August 11, 1997.

The table below shows the returns for the Janus Twenty Fund compared with the
S&P 500 for the periods ending August 7, 1997. The returns reflect deductions
of fees and expenses, and assume all dividends and distributions have been
reinvested.

Average annual total returns as of August 7, 1997
<TABLE>
<CAPTION>
Janus Twenty
Fund (%) S&P 500 (%)
<S> <C> <C>
one year 48.21 46.41
three years 32.07 30.63
five years 20.02 20.98
during the period of Mr. Marsico's management
(January 31, 1988 to August 7, 1997) 23.38 18.20
</TABLE>

This information is designed to show the historical track record of Mr.
Marsico. It does not indicate how the Fund has performed or will perform in
the future.

Performance will vary based on many factors, including market conditions, the
composition of the Fund's holdings and the Fund's expenses.

The Janus Growth and Income Fund has an investment objective, policies and
strategies that are substantially similar to Nations Marsico Growth & Income
Fund. Mr. Marsico managed the Janus Growth and Income Fund from its inception
on May 31, 1991 through August 11, 1997. He had full discretionary authority
for selecting investments for that fund, which had approximately $1.7 billion
in net assets on August 11, 1997.

20
<PAGE>
The table below shows the returns for the Janus Growth and Income Fund
compared with the S&P 500 for the period ending August 7, 1997. The returns
reflect deductions of fees and expenses, and assume all dividends and
distributions have been reinvested.

Average annual total returns as of August 7, 1997
<TABLE>
<CAPTION>
Janus
Growth and
Income Fund (%) S&P 500 (%)
<S> <C> <C>
one year 47.77 46.41
three years 31.13 30.63
five years 21.16 20.98
during the period of Mr. Marsico's management
(May 31, 1991 to August 7, 1997) 21.19 18.59
</TABLE>

This information is designed to show the historical track record of Mr.
Marsico. It does not indicate how the Fund has performed or will perform in
the future.

Performance will vary based on many factors, including market conditions, the
composition of the Fund's holdings and the Fund's expenses.

[GRAPHIC]
Chicago Equity Partners LLC

180 North LaSalle
Suite 3800
Chicago, Illinois 60601

Chicago Equity Partners LLC
Chicago Equity is a registered investment adviser and is owned by the firm's
senior management. Chicago Equity is the investment sub-adviser to Nations
Blue Chip Master Portfolio, and is one of two sub-advisers to Nations Asset
Allocation Fund.

Chicago Equity's Equity Management Team is responsible for making the
day-to-day investment decisions for the equity portion of Nations Asset
Allocation Fund.

[GRAPHIC]
Stephens Inc.

111 Center Street
Little Rock, Arkansas 72201

Other service providers
The Funds are distributed and co-administered by Stephens Inc., a registered
broker/dealer.

BAAI is also co-administrator of the Funds, and assists in overseeing the
administrative operations of the Funds. The Funds pay BAAI and Stephens a
combined fee for their services, plus certain out-of-pocket expenses. The fee
is calculated as an annual percentage of the average daily net assets of the
Funds and is paid monthly, as follows:
<TABLE>
<S> <C>
Domestic Stock Funds 0.23%
Government and Corporate Bond Fund 0.22%
</TABLE>

BAAI and Stephens may pay amounts from their own assets to selling or
servicing agents of the Funds for services they provide.

[GRAPHIC]
PFPC Inc.

400 Bellevue Parkway
Wilmington, Delaware 19809

PFPC Inc. (PFPC) is the transfer agent for the Funds' shares. Its
responsibilities include processing purchases, sales and exchanges,
calculating and paying distributions, keeping shareholder records, preparing
account statements and providing customer service.

21
<PAGE>
About your investment
--------------------------------------------------------------------------------

[GRAPHIC]

When you sell shares of a mutual fund, the fund is effectively
"buying" them back from you. This is called a redemption.

[GRAPHIC]
Buying, selling and exchanging shares

This prospectus offers Primary A Shares of the Funds. Here are some general
rules about this class of shares:

o Primary A Shares are available to certain financial institutions and
intermediaries for their own accounts, and for certain client accounts
for which they act as a fiduciary, agent or custodian. These include:

o Bank of America and certain of its affiliates

o certain other financial institutions and intermediaries, including
financial planners and investment advisers

o institutional investors

o charitable foundations

o endowments

o other Funds in Nations Funds Family

o The minimum initial investment is $250,000. Financial institutions or
intermediaries can total the investments they make on behalf of their
clients to meet the minimum initial investment amount. Client accounts
for which the financial institution or intermediary no longer acts as
fiduciary, agent or custodian may no longer be eligible to purchase or
hold Primary A Shares.

o There is no minimum amount for additional investments.

o There are no sales charges for buying, selling or exchanging these
shares.

You'll find more information about buying, selling and exchanging Primary A
Shares on the pages that follow. You should also ask your financial
institution or intermediary about its limits, fees and policies for buying,
selling and exchanging shares, which may be different from those described
here, and about its related programs or services.

The Funds also offer other classes of shares, with different features and
expense levels, which you may be eligible to buy. Please contact your
investment professional, or call us at 1.800.765.2668 if you have any
questions, or you need help placing an order.

22
<PAGE>
[GRAPHIC]

A business day is any day that the New York Stock Exchange (NYSE)
is open. A business day ends at the close of regular trading on
the NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes
early, the business day ends as of the time the NYSE closes.

The NYSE is closed on weekends and on the following national
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.

How shares are priced
All transactions are based on the price of a Fund's shares -- or its net asset
value per share. We calculate net asset value per share for each class of each
Fund at the end of each business day. First, we calculate the net asset value
for each class of a Fund by determining the value of the Fund's assets in the
class and then subtracting its liabilities. Next, we divide this amount by the
number of shares that investors are holding in the class.

Valuing securities in a Fund
The value of a Fund's assets is based on the total market value of all of the
securities it holds. The prices reported on stock exchanges and securities
markets around the world are usually used to value securities in a Fund. If
prices aren't readily available, or the value of a security has been
materially affected by events occurring after a foreign exchange closes, we'll
base the price of a security on its fair value. When a Fund uses fair value to
price securities it may value those securities higher or lower than another
fund that uses market quotations to price the same securities. We use the
amortized cost method, which approximates market value, to value short-term
investments maturing in 60 days or less. International markets may be open on
days when U.S. markets are closed. The value of foreign securities owned by a
Fund could change on days when Fund shares may not be bought or sold.

How orders are processed
Orders to buy, sell or exchange shares are processed on business days. Orders
received by Stephens, PFPC or their agents before the end of a business day
(usually 4:00 p.m. Eastern time, unless the NYSE closes early) will receive
that day's net asset value per share. Orders received after the end of a
business day will receive the next business day's net asset value per share.
The business day that applies to your order is also called the trade date. We
may refuse any order to buy or exchange shares. If this happens, we'll return
any money we've received.

[GRAPHIC]
Buying shares

Here are some general rules for buying shares:

o Investors buy Primary A Shares at net asset value per share.

o If we don't receive payment within three business days of receiving
an order, we'll refuse the order. We'll return any payment received
for orders that we refuse.

o Financial institutions and intermediaries are responsible for
sending us orders for their clients and for ensuring that we receive
payment on time.

o Shares purchased are recorded on the books of the Fund. We don't
issue certificates.

o Financial institutions and intermediaries are responsible for
recording the beneficial ownership of the shares of their clients,
and for reporting this ownership on account statements they send to
their clients.

23
<PAGE>
[GRAPHIC OMITTED]
Selling shares

Here are some general rules for selling shares:

o We normally send the sale proceeds by federal funds wire within
three business days after Stephens, PFPC or their agents receive the
order.

o If shares were paid for with a check that wasn't certified, we'll
hold the sale proceeds when those shares are sold for at least 15
days after the trade date of the purchase, or until the check has
cleared, whichever is later.

o Financial institutions and intermediaries are responsible for
sending us orders for their clients and for depositing the sale
proceeds to their accounts on time.

o Under certain circumstances allowed under the Investment Company Act
of 1940 (1940 Act), we can pay you in securities or other property
when you sell your shares.

o We can delay payment of the sale proceeds for up to seven days.

o Other restrictions may apply to retirement plan accounts. For more
information about these restrictions, please contact your retirement
plan administrator.

We may sell shares:

o if the value of an investor's account falls below $500. We'll
provide 60 days notice in writing if we're going to do this

o if a financial institution or intermediary tells us to sell the
shares for a client under arrangements it has made with its clients

o under certain other circumstances allowed under the 1940 Act

[GRAPHIC]

You should make sure you understand the investment objective and
principal investment strategies of the Fund you're exchanging
into. Please read its prospectus carefully.

[GRAPHIC]
Exchanging shares

Investors can sell shares of a Fund to buy shares of another Nations
Fund. This is called an exchange, and may be appropriate if investment
goals or tolerance for risk changes.

Here's how exchanges work:

o Investors can exchange Primary A Shares of a Fund for Primary A
Shares of any other Nations Fund. In some cases, the only Money
Market Fund option is Trust Class Shares of Nations Reserves Money
Market Funds.

o The rules for buying shares of a Fund, including any minimum
investment requirements, apply to exchanges into that Fund.

o Exchanges can only be made into a Fund that is legally sold in the
investor's state of residence.

o Exchanges can generally only be made into a Fund that is accepting
investments.

o We may limit the number of exchanges that can be made within a
specified period of time.

o We may change or cancel the right to make an exchange by giving the
amount of notice required by regulatory authorities (generally 60
days for a material change or cancellation).

24
<PAGE>

[GRAPHIC OMITTED]

Distributions and taxes

[GRAPHIC OMITTED]

The power of compounding

Reinvesting your distributions buys you more shares of a
Fund -- which lets you take advantage of the potential for
compound growth.

Putting the money you earn back into your investment means it, in
turn, may earn even more money. Over time, the power of
compounding has the potential to significantly increase the value
of your investment. There is no assurance, however, that you'll
earn more money if you reinvest your distributions.

About distributions
A mutual fund can make money two ways:

o It can earn income. Examples are interest paid on bonds and dividends paid
on common stocks.

o A fund can also have capital gain if the value of its investments
increases. If a fund sells an investment at a gain, the gain is realized.
If a fund continues to hold the investment, any gain is unrealized.

A mutual fund is not subject to income tax as long as it distributes its net
investment income and realized capital gain to its shareholders. The Funds
intend to pay out a sufficient amount of their income and capital gain to
their shareholders so the Funds won't have to pay any income tax. When a Fund
makes this kind of a payment, it's split equally among all shares, and is
called a distribution.

All of the Funds distribute any net realized capital gain at least once a
year. The frequency of distributions of net investment income varies by Fund:

<TABLE>
<CAPTION>
Frequency of
Fund income distributions
<S> <C>
Nations Asset Allocation Fund quarterly
Nations Marsico Growth & Income Fund quarterly
Nations Marsico Focused Equities Fund quarterly
Nations Government Securities Fund monthly
</TABLE>

The distribution you receive is based on the number of shares you hold on the
record date, which is usually the day the distribution is declared (daily
dividend Funds) or the day before the distribution is declared (all other
Funds). Shares are eligible to receive distributions from the settlement date
(daily dividend Funds) or the trade date (all other Funds) of the purchase up
to and including the day before the shares are sold.

Different share classes of a Fund usually pay different distribution amounts,
because each class has different expenses. Each time a distribution is made,
the net asset value per share of the share class is reduced by the amount of
the distribution.

We'll automatically reinvest distributions in additional shares of the same
Fund unless you tell us you want to receive your distributions in cash. You
can do this by writing to us at the address on the back cover, or by calling
us at 1.800.765.2668.

We generally pay cash distributions within five business days after the end of
the month, quarter or year in which the distribution was made. If you sell all
of your shares, we'll normally pay any distribution that applies to those
shares in cash within five business days after the sale was made.

25
<PAGE>

If you buy shares of a Fund shortly before it makes a distribution, you will,
in effect, receive part of your purchase back in the distribution, which is
subject to tax. Similarly, if you buy shares of a Fund that holds securities
with unrealized capital gain, you will, in effect, receive part of your
purchase back if and when the Fund sells those securities and realizes and
distributes the gain. This distribution is also subject to tax. Some Funds
have built up, or have the potential to build up, high levels of unrealized
capital gain.

[GRAPHIC OMITTED]

This information is a summary of how federal income taxes may
affect your investment in the Funds. It is not intended as a
substitute for careful tax planning. You should consult with your
own tax adviser about your situation, including any foreign, state
and local taxes that may apply.

[GRAPHIC OMITTED]

For more information about
taxes, please see the SAI.

How taxes affect your investment
Distributions that come from net investment income, net foreign currency gain
and any excess of net short-term capital gain over net long-term capital loss,
generally are taxable to you as ordinary income. A portion of such
distributions to corporate shareholders may qualify for the dividends received
deduction.

Distributions that come from net capital gain (generally the excess of net
long-term capital gain over net short-term capital loss) generally are taxable
to you as net capital gain.

In general, all distributions are taxable to you when paid, whether they are
paid in cash or automatically reinvested in additional shares of the Fund.
However, any distributions declared in October, November or December of one
year and distributed in January of the following year will be taxable as if
they had been paid to you on December 31 of the first year.

We'll send you a notice every year that tells you how much you've received in
distributions during the year and their federal tax status. Foreign, state and
local taxes may also apply to these distributions.

Withholding tax
We're required by federal law to withhold tax of 31% on any distributions and
redemption proceeds paid to you (including amounts to be paid for in
securities or other property and exchanges) if:

o you haven't given us a correct Taxpayer Identification Number (TIN) and
haven't certified that the TIN is correct and withholding doesn't apply

o the Internal Revenue Service (IRS) has notified us that the TIN listed on
your account is incorrect according to its records

o the IRS informs us that you are otherwise subject to backup withholding

The IRS may also impose penalties against you if you don't give us a correct
TIN.

Amounts we withhold are applied to your federal income tax liability. You may
receive a refund from the IRS if the withholding tax results in an overpayment
of taxes.

We're also normally required by federal law to withhold tax (at a rate of 30%,
or a lower rate if a treaty applies) on distributions paid to foreign
shareholders.

Taxation of redemptions and exchanges
Your redemptions (including redemptions paid in securities or other property)
and exchanges of Fund shares will usually result in a taxable capital gain or
loss to you, depending on the amount you receive for your shares (or are
deemed to receive in the case of exchanges) and the amount you paid (or are
deemed to have paid) for them.

26
<PAGE>

[GRAPHIC OMITTED]

This glossary includes explanations of the important terms that
may be used in this prospectus. Some of the terms explained may
apply to Nations Funds not included in this prospectus.

[GRAPHIC OMITTED]

Terms used in this prospectus

Asset-backed security - a debt security that gives you an interest in a pool
of assets that is collateralized or "backed" by one or more kinds of assets,
including real property, receivables or mortgages, generally issued by banks,
credit card companies or other lenders. Some securities may be issued or
guaranteed by the U.S. government or its agencies, authorities or
instrumentalities. Asset-backed securities typically make periodic payments,
which may be interest or a combination of interest and a portion of the
principal of the underlying assets.

Average dollar-weighted maturity - the average length of time until the debt
securities held by a Fund reach maturity. In general, the longer the average
dollar-weighted maturity, the more a Fund's share price will fluctuate in
response to changes in interest rates.

Bank obligation - a money market instrument issued by a bank, including
certificates of deposit, time deposits and bankers' acceptances.

Capital gain or loss - the difference between the purchase price of a security
and its selling price. You realize a capital gain when you sell a security for
more than you paid for it. You realize a capital loss when you sell a security
for less than you paid for it.

Cash equivalents - short-term, interest-bearing instruments, including
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities, bank obligations, asset-backed securities, foreign
government securities and commercial paper issued by U.S. and foreign issuers
which, at the time of investment, is rated at least Prime-2 by Moody's
Investor Services, Inc. (Moody's), A-2 by S&P, or F-1 by Fitch IBCA (Fitch).

Collateralized mortgage obligation (CMO) - a debt security that is backed by
real estate mortgages. CMO payment obligations are covered by interest and/or
principal payments from a pool of mortgages. In addition, the underlying
assets of a CMO are typically separated into classes, called tranches, based
on maturity. Each tranche pays a different rate of interest. CMOs are not
generally issued by the U.S. government, its agencies or instrumentalities.

Commercial paper - a money market instrument issued by a large company.

Common stock - a security that represents part equity ownership in a company.
Common stock typically allows you to vote at shareholder meetings and to share
in the company's profits by receiving dividends.

Convertible debt - a debt security that can be exchanged for common stock (or
another type of security) on a specified basis and date.

Convertible security - a security that can be exchanged for common stock (or
another type of security) at a specified rate. Convertible securities include
convertible debt, rights and warrants.

27
<PAGE>

Corporate obligation - a money market instrument issued by a corporation or
commercial bank.

Crossing networks - an electronic system where anonymous parties can match buy
and sell transactions. These transactions don't affect the market, and
transaction costs are extremely low.

CS First Boston High Yield Index - the Credit Suisse First Boston Global High
Yield Index is an unmanaged, trader priced portfolio constructed to mirror the
high yield debt market. The index is not available for investment.

Debt security - when you invest in a debt security, you are typically lending
your money to a governmental body or company (the issuer) to help fund their
operations or major projects. The issuer pays interest at a specified rate on
a specified date or dates, and repays the principal when the security matures.
Short-term debt securities include money market instruments such as treasury
bills. Long-term debt securities include fixed income securities such as
government and corporate bonds, and mortgage-backed and asset-backed
securities.

Depositary receipts - evidence of the deposit of a security with a custodian
bank. American Depositary Receipts (ADRs), for example, are certificates
traded in U.S. markets representing an interest of a foreign company. They
were created to make it possible for foreign issuers to meet U.S. security
registration requirements. Other examples include ADSs, GDRs and EDRs.

Dividend yield - rate of return of dividends paid on a common or preferred
stock. It equals the amount of the annual dividend on a stock expressed as a
percentage of the stock's current market value.

Dollar roll transaction - the sale by a Fund of mortgage-backed or other
asset-backed securities, together with a commitment to buy similar, but not
identical, securities at a future date.

Duration - a security's or portfolio's sensitivity to changes in interest
rates. For example, if interest rates rise by one percentage point, the share
price of a fund with a duration of five years would decline by about 5%. If
interest rates fall by one percentage point, the fund's share price would rise
by about 5%.

Equity security - an investment that gives you an equity ownership right in a
company. Equity securities (or "equities") include common and preferred stock,
rights and warrants.

First Boston Convertible Index - a widely-used unmanaged index that measures
the performance of convertible securities. The index is not available for
investment.

First-tier security - under Rule 2a-7 under the 1940 Act, a debt security that
is an eligible investment for money market funds and has the highest
short-term rating from a nationally recognized statistical rating organization
(NRSRO), or if unrated, is determined by the fund's portfolio management team
to be of

28
<PAGE>

comparable quality, or is a money market fund issued by a registered
investment company, or is a government security.

Fixed income security - an intermediate to long-term debt security that
matures in more than one year.

Foreign security - a debt or equity security issued by a foreign company or
government.

Forward foreign currency contracts - a forward foreign currency contract
includes an obligation to purchase or sell a foreign currency at a specified
future date.

Fundamental analysis - a method of securities analysis that tries to evaluate
the intrinsic, or "true," value of a particular stock. It includes a study of
the overall economy, industry conditions and the financial condition and
management of a company.

Futures contract - a contract to buy or sell an asset or an index of
securities at a specified price on a specified future date. The price is set
through a futures exchange.

Guaranteed investment contract - an investment instrument issued by a rated
insurance company in return for a payment by an investor.

High quality - includes municipal securities that are rated in the top two
highest short-term debt categories according to NRSROs such as S&P and
Moody's. The portfolio management team may consider an unrated municipal
security if it is determined to be of comparable quality, based upon
guidelines approved by the Fund's Board of Trustees. Please see the SAI for
more information about credit ratings.

High-yield debt security - debt securities that, at the time of investment by
the sub-adviser, are rated "BB" or below by S&P or "Ba" or below by Moody's,
or that are unrated and determined to be of comparable quality.

Interest rate swap - an agreement between two parties to exchange periodic
interest payments based on some predetermined dollar principal.

Investment grade - a debt security that has been given a medium to high credit
rating (Baa or higher by Moody's, BBB or higher by S&P or a comparable rating
by other NRSROs) based on the issuer's ability to pay interest and repay
principal on time. The portfolio management team may consider an unrated debt
security to be investment grade if the team believes it is of comparable
quality. Please see the SAI for more information about credit ratings.

Lehman 3-Year Municipal Bond Index - a broad-based, unmanaged index of
investment grade bonds with maturities of two to four years. All dividends are
reinvested.

29
<PAGE>

Lehman 7-Year Municipal Bond Index - a broad-based, unmanaged index of
investment grade bonds with maturities of seven to eight years. All dividends
are reinvested.

Lehman Aggregate Bond Index - an index made up of the Lehman
Government/Corporate Index, the Asset-Backed Securities Index and the
Mortgage-Backed Securities Index. These indices include U.S. government agency
and U.S. Treasury securities, corporate bonds and mortgage-backed securities.
All dividends are reinvested.

Lehman Government Bond Index - an index of government bonds with an average
maturity of approximately nine years. All dividends are reinvested.

Lehman Government/Corporate Bond Index - an index of U.S. government, U.S.
Treasury and agency securities, and corporate and Yankee bonds. All dividends
are reinvested.

Lehman Intermediate Government Bond Index - an index of U.S. government agency
and U.S. Treasury securities. All dividends are reinvested.

Lehman Intermediate Treasury Index - an index of U.S. Treasury securities with
maturities of three to 10 years. All dividends are reinvested.

Lehman Municipal Bond Index - a broad-based, unmanaged index of 8,000
investment grade bonds with long-term maturities. All dividends are
reinvested.

Liquidity - a measurement of how easily a security can be bought or sold at a
price that is close to its market value.

Merrill Lynch 1-3 Year Treasury Index - an index of U.S. Treasury bonds with
maturities of 1 to 3 years. All dividends are reinvested.

Money market instrument - a short-term debt security that is considered to
mature in 13 months or less. Money market instruments include U.S. Treasury
obligations, U.S. government obligations, certificates of deposit, bankers'
acceptances, commercial paper, repurchase agreements and certain municipal
securities.

Mortgage-backed security or Mortgage-related security - a debt security that
gives you an interest in, and is backed by, a pool of residential mortgages
issued by the U.S. government or by financial institutions. The underlying
mortgages may be guaranteed by the U.S. government or one of its agencies,
authorities or instrumentalities. Mortgage-backed securities typically make
monthly payments, which are a combination of interest and a portion of the
principal of the underlying mortgages.

MSCI EAFE Index - Morgan Stanley Capital International Europe, Australasia and
Far East Index, an index of over 1,100 stocks from 21 developed markets in
Europe, Australia, New Zealand and Asia. The index reflects the relative size
of each market.

30
<PAGE>

Municipal security (obligation) - a debt security issued by state or local
governments or governmental authorities to pay for public projects and
services. "General obligations" are typically backed by the issuer's full
taxing and revenue-raising powers. "Revenue securities" depend on the income
earned by a specific project or authority, like road or bridge tolls, user
fees for water or revenues from a utility. Interest income from these
securities is exempt from federal income taxes and is generally exempt from
state taxes if you live in the state that issued the security. If you live in
the municipality that issued the security, interest income may also be exempt
from local taxes.

Non-diversified - a fund that holds securities of fewer issuers than other
kinds of funds. Non-diversified funds tend to have greater price swings than
more diversified funds because events affecting one or more of its securities
may have a disproportionately large effect on the fund.

Options - An option is the right to buy or sell a security based on an agreed
upon price at a specified time. For example, an option may give the holder of
a stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options may also be
based on the movement of an index such as the S&P 500.

Over-the-counter market - a market where dealers trade securities through a
telephone or computer network rather than through a public stock exchange.

Participation - a pass-through certificate representing a share in a pool of
debt obligations or other instruments.

Pass-through certificate - securitized mortgages or other debt securities with
interest and principal paid by a servicing intermediary shortly after interest
payments are received from borrowers.

Pre-refunded bond - a bond that is repaid before its maturity date. The
repayment is generally financed by a new issue. Issuers generally pre-refund
bonds during periods of lower interest rates to reduce their interest costs.

Price-to-earnings ratio (P/E ratio) - the current price of a share divided by
its actual or estimated earnings per share. The P/E ratio is one measure of
the value of a company.

Private activity bond - a municipal security that is used to finance private
projects or other projects that aren't qualified for tax purposes. Private
activity bonds are generally taxable, unless their use is specifically
exempted, or may be treated as tax preference items.

31
<PAGE>

Private placement - a private placement is the sale of stocks, bonds or other
investments directly to a qualified investor without having to register the
offering with the U.S. Securities and Exchange Commission or other comparable
foreign regulatory authorities. Qualified investors are typically large
institutional investors rather than individuals. Securities acquired through
private placements generally may not be resold.

Quantitative analysis - an analysis of financial information about a company
or security to identify securities that have the potential for growth or are
otherwise suitable for a fund to buy.

Real Estate Investment Trust (REIT) - a portfolio of real estate investments
which may include office buildings, apartment complexes, hotels and shopping
malls, and real-estate-related loans or interests.

Repurchase agreement - a short-term (often overnight) investment arrangement.
The investor agrees to buy certain securities from the borrower and the
borrower promises to buy them back at a specified date and price. The
difference between the purchase price paid by the investor and the repurchase
price paid by the borrower represents the investor's return. Repurchase
agreements are popular because they provide very low-risk return and can
virtually eliminate credit difficulties.

Reverse repurchase agreement - a repurchase agreement in which an investor
sells a security to another party, like a bank or dealer, in return for cash,
and agrees to buy the security back at a specified date and price.

Right - a temporary privilege allowing investors who already own a common
stock to buy additional shares directly from the company at a specified price
or formula.

Russell 1000 Growth Index - an unmanaged index which measures the performance
of the largest U.S. companies based on total market capitalization, with high
price-to-book ratios and forecasted growth rates relative to the Russell 1000
Index as a whole.

Russell 2000 - an unmanaged index of 2,000 of the smallest stocks representing
approximately 11% of the U.S. equity market. The index is weighted by market
capitalization, and is not available for investment.

S&P 500(1) - Standard & Poor's 500 Composite Stock Price Index, an unmanaged
index of 500 widely held common stocks. It is not available for investment.

S&P/BARRA Value Index(1) - an unmanaged index of a group of stocks from the S&P
500 that have low price-to-book ratios relative to the S&P 500 as a whole.

S&P/IFC Investables Index - an unmanaged index that tracks more than 1,400
stocks in 25 emerging markets in Asia, Latin America, Eastern Europe, Africa
and the Middle East. The index is weighted by market capitalization.

S&P MidCap 400(1) - an unmanaged index of 400 domestic stocks chosen for market
size, liquidity and industry representation. The index is weighted by market
value, and is not available for investment.

32
<PAGE>

S&P SmallCap 600(1) - Standard & Poor's SmallCap 600 Index, an unmanaged index
of 600 common stocks, weighted by market capitalization. It is not available
for investment.

S&P SuperComposite 1500(1) - an index created by Standard & Poors combining the
companies represented in three other indices -- the S&P 500, MidCap 400, and
SmallCap 600. The index represents 87% of the total capitalization of U.S.
equity markets.

Salomon Brothers Mortgage Index - an index of 30-year and 15-year GNMA, FNMA
and FHLMC securities, and FNMA and FHLMC balloon mortgages.

Second-tier security - under Rule 2a-7 under the 1940 Act, a debt security
that is an eligible investment for money market funds, but is not a first-tier
security.

Senior security - a debt security that allows holders to receive their share
of a company's remaining assets in a bankruptcy before other bondholders,
creditors, and common and preferred shareholders.

Settlement date - the date on which an order is settled either by payment or
delivery of securities.

Special purpose issuer - an entity organized solely to issue asset-backed
securities on a pool of assets it owns.

Trade date - the effective date of a purchase, sale or exchange transaction,
or other instructions sent to us. The trade date is determined by the day and
time we receive the order or instructions in a form that's acceptable to us.

U.S. government obligations - a wide range of debt securities issued or
guaranteed by the U.S. government or its agencies, authorities or
instrumentalities.

U.S. Treasury obligation - a debt security issued by the U.S. Treasury.

Warrant - a certificate that gives you the right to buy common shares at a
specified price within a specified period of time.

Wilshire 5000 Equity Index - an index that measures the performance of the
equity securities of all companies headquartered in the U.S. that have readily
available price data -- over 7, 000 companies. The index is weighted by market
capitalization and is not available for investment.

Zero-coupon bond - a bond that makes no periodic interest payments. Zero
coupon bonds are sold at a deep discount to their face value and mature at
face value. The difference between the face value at maturity and the purchase
price represents the return.

(1)S&P and BARRA have not reviewed any stock included in the S&P SuperComposite
1500, S&P 500, S&P SmallCap 600, S&P MidCap 400 Index or BARRA Value Index
for its investment merit. S&P and BARRA determine and calculate their
indices independently of the Funds and are not a sponsor or affiliate of the
Funds. S&P and BARRA give no information and make no statements about the
suitability of investing in the Funds or the ability of their indices to
track stock market performance. S&P and BARRA make no guarantees about the
indices, any data included in them and the suitability of the indices or
their data for any purpose. "Standard and Poor's," "S&P 500" and "S&P 600"
are trademarks of The McGraw-Hill Companies, Inc.

33
<PAGE>

(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>

[GRAPHIC OMITTED]

Where to find more information

You'll find more information about the Domestic Stock and Government &
Corporate Bond Funds in the following documents:

Annual and semi-annual reports

The annual and semi-annual reports contain information about Fund
investments and performance, the financial statements and the
independent accountants' reports. The annual report also includes a
discussion about the market conditions and investment strategies that
had a significant effect on each Fund's performance during the period
covered.

[GRAPHIC OMITTED]

Statement of Additional Information

The SAI contains additional information about the Funds and their
policies. The SAI is legally part of this prospectus (it's incorporated
by reference). A copy has been filed with the SEC.

You can obtain a free copy of these documents, request other
information about the Funds and make shareholder inquiries by
contacting Nations Funds:

By telephone: 1.800.765.2668

By mail:
Nations Funds
c/o Stephens Inc.
One Bank of America Plaza
33rd Floor
Charlotte, NC 28255

On the Internet: www.nations-funds.com

Information about the Funds can be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. Information on the operation
of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. The reports and other information about the Funds are
available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov, and copies of this information may be obtained,
after paying a duplicating fee, by electronic request at the following
E-mail address: [email protected], or by writing the SEC's Public
Reference Section, Washington, D.C. 20549-0102.

SEC file number:
Nations Funds Trust, 811-09645

[NATIONS FUNDS GRAPHIC OMITTED]

COMPROPA-12/00

<PAGE>

[GRAPHIC OMITTED]

Prospectus
Investor A, B and C Shares
December 27, 2000

Domestic Stock Funds
Nations Asset Allocation Fund
Marsico Growth & Income Fund
Nations Marsico Focused Equities Fund

Government & Corporate Bond Fund
Nations Government Securities Fund

-----------------------
Not FDIC Insured
-----------------------
May Lose Money
-----------------------
No Bank Guarantee
-----------------------
Nations Funds

<PAGE>

An overview of the Funds
--------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Terms used in this prospectus

[GRAPHIC OMITTED]

You'll find Terms used in
this prospectus on page 49.

Your investment in these Funds is not a bank deposit and is not
insured or guaranteed by Bank of America, N.A. (Bank of America),
the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Your investment may lose money.

Affiliates of Bank of America are paid for the services they
provide to the Funds.

About the Funds

Each type of Fund has a different investment focus:

o Domestic Stock Funds invest primarily in equity securities of U.S.
companies

o Government & Corporate Bond Funds focus on the potential to earn income by
investing primarily in fixed income securities

The Funds also have different risk/return characteristics because they invest
in different kinds of securities.

Equity securities have the potential to provide you with higher returns than
many other kinds of investments, but they also tend to have the highest risk.

In every case, there's a risk that you'll lose money or you may not earn as
much as you expect.

Choosing the right Funds for you

Not every Fund is right for every investor. When you're choosing a Fund to
invest in, you should consider things like your investment goals, how much
risk you can accept and how long you're planning to hold your investment.

The Domestic Stock Funds all focus on long-term growth. They may be suitable
for you if:

o you have longer-term investment goals

o they're part of a balanced portfolio

o you want to try to protect your portfolio against a loss of buying power
that inflation can cause over time

2
<PAGE>

They may not be suitable for you if:

o you're not prepared to accept or are unable to bear the risks associated
with equity securities, including foreign securities

o you have short-term investment goals

o you're looking for a regular stream of income

The Government & Corporate Fund focuses on the potential to earn income. They
may be suitable for you if:

o you're looking for income

o you have longer-term investment goals

The Government & Corporate Bond Fund may not be suitable for you if:

o you're not prepared to accept or are unable to bear the risks associated
with fixed income securities

You'll find a discussion of each Fund's principal investments, strategies and
risks in the Fund descriptions that start on page 5.

For more information

If you have any questions about the Funds, please call us at 1.800.321.7854 or
contact your investment professional.

3
<PAGE>

What's inside
--------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Banc of America Advisors, Inc.

[GRAPHIC OMITTED]

You'll find more about
BAAI and the sub-advisers
starting on page 22.

<TABLE>
[GRAPHIC OMITTED]

<S> <C>

About the Funds

Nations Asset Allocation Fund 5
Sub-advisers: Banc of America Capital Management, Inc. and
Chicago Equity Partners LLC
-----------------------------------------------------------
Nations Marsico Growth & Income Fund 9
Sub-adviser: Marsico Capital Management, LLC
-----------------------------------------------------------
Nations Marsico Focused Equities Fund 13
Sub-adviser: Marsico Capital Management, LLC
-----------------------------------------------------------
Nations Government Securities Fund 17
Sub-adviser: Banc of America Capital Management, Inc.
-----------------------------------------------------------
Other important information 21
-----------------------------------------------------------
How the Funds are managed 22

</TABLE>

<TABLE>
[GRAPHIC OMITTED]

<S> <C>

About your investment

Information for investors
Choosing a share class 26
Buying, selling and exchanging shares 37
How selling and servicing agents are paid 45
Distributions and taxes 47
---------------------------------------------
Terms used in this prospectus 49
---------------------------------------------
Where to find more information back cover
</TABLE>

4
<PAGE>

[GRAPHIC OMITTED]

About the sub-advisers

This Fund is managed by two sub-advisers: BACAP and Chicago Equity
Partners LLC (Chicago Equity). Chicago Equity's Equity Management
Team makes the day-to-day investment decisions for the equity
portion of the Fund. BACAP's Fixed Income Management Team makes the
day-to-day investment decisions for the fixed income and money
market portions of the Fund.

[GRAPHIC OMITTED]

You'll find more about
BACAP and Chicago
Equity, starting on
page 23.

[GRAPHIC OMITTED]

What is an asset
allocation fund?

This asset allocation fund invests in a mix of equity and fixed
income securities, and cash equivalents.

Each of these "asset classes" has different risk/return
characteristics. The portfolio management team changes the mix
based on its assessment of the expected risks and returns of each
class.

Asset allocation funds like this one can provide a diversified
asset mix for you in a single investment.

Nations Asset Allocation Fund

[GRAPHIC OMITTED]

Investment objective

The Fund seeks to obtain long-term growth from capital appreciation,
and dividend and interest income.

[GRAPHIC OMITTED]

Principal investment strategies

The Fund invests in a mix of equity and fixed income securities, as
well as cash equivalents, including U.S. government obligations,
commercial paper and other short-term, interest-bearing instruments.

For the equity portion of the Fund, the team uses quantitative analysis to
analyze fundamental information about securities and identify value. Starting
with a universe of approximately 2000 common stocks, the team uses a
multi-factor computer model to rank securities, based on the following
criteria, among others:

o changes in actual and expected earnings
o unexpected changes in earnings
o price-to-earnings ratio
o dividend discount model
o price-to-cash flow

5
<PAGE>

[GRAPHIC OMITTED]

You'll find more about
other risks of investing in
this Fund starting on
page 21 and in the SAI.

[GRAPHIC OMITTED]

Risks and other things to consider

Nations Asset Allocation Fund has the following risks:

o Stock market risk - The value of the stocks the Fund holds can be
affected by changes in U.S. or foreign economies and financial
markets, and the companies that issue the stocks, among other
things. Stock prices can rise or fall over short as well as long
periods. In general, stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. As of the
date of this prospectus, the stock markets, as measured by the S&P
500 and other commonly used indices, were trading at historically
high levels. There can be no guarantee that these levels will
continue.

o Interest rate risk - The prices of the Fund's fixed income securities
will tend to fall when interest rates rise. In general, fixed income
securities with longer terms tend to fall more in value when
interest rates rise than fixed income securities with shorter terms.

o Mortgage-related risk - The value of the Fund's mortgage-backed
securities can fall if the owners of the underlying mortgages pay
off their mortgages sooner than expected, which could happen when
interest rates fall, or later than expected, which could happen when
interest rates rise. If the underlying mortgages are paid off sooner
than expected, the Fund may have to reinvest this money in
mortgage-backed or other securities that have lower yields.

o Asset-backed securities risk - Payment of interest and repayment of
principal may be impacted by the cash flows generated by the assets
backing these securities. The value of the Fund's asset-backed
securities may also be affected by changes in interest rates, the
availability of information concerning the interests in and
structure of the pools of purchase contracts, financing leases or
sales agreements that are represented by these securities, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities that provide any
supporting letters of credit, surety bonds, or other credit
enhancements.

o Changing to a feeder fund - Unlike traditional mutual funds, which
invest in individual securities, a "feeder fund" invests all of its
assets in another fund, called a "master portfolio." Other feeder
funds generally also invest in a master portfolio. The master
portfolio invests in individual securities and has the same
investment objective, investment strategies and principal risks as
the feeder funds. This structure can help reduce a feeder fund's
expenses because its assets are combined with those of other feeder
funds. If a master portfolio doesn't attract other feeder funds,
however, a feeder fund's expenses could be higher than those of a
traditional mutual fund.

This Fund may become a feeder fund if the Board of Trustees decides
this would be in the best interests of shareholders. We don't require
shareholder approval to make the change, but we'll notify you if it
happens.

6
<PAGE>

[GRAPHIC OMITTED]

A look at the Fund's performance

Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC OMITTED]

There are two kinds of fees -- shareholder fees you pay directly and
annual fund operating expenses that are deducted from a fund's assets.

[GRAPHIC OMITTED]

What it costs to invest in the Fund

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

Annual Fund operating expenses(4)
(Expenses that are deducted from the Fund's assets)

Management fees 0.65% 0.65% 0.65%
Distribution (12b-1) and shareholder
servicing fees 0.25% 1.00% 1.00%
Other expenses 0.37% 0.37% 0.37%
----- ------- -------
Total annual Fund operating expenses 1.27% 2.02% 2.02%
===== ======= =======
</TABLE>

(1) A 1.00% maximum deferred sales charge applies to investors who buy $1
million or more of Investor A Shares and sell them within eighteen
months of buying them. Different charges may apply to purchases made
prior to August 1, 1999. Please see page 29 for details.

(2) This charge decreases over time. Please see page 29 for details.
Different charges apply to Investor B Shares bought before January 1,
1996 and after July 31, 1997. Please see page 29 for details.

(3) This charge applies to investors who buy Investor C Shares and sell
them within one year of buying them. Please see page 32 for details.

(4) The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

7
<PAGE>

[GRAPHIC OMITTED]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example

This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Investor A, Investor B or Investor C Shares of
the Fund for the time periods indicated and then sell all of your
shares at the end of those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

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

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor A Shares $697 $955
Investor B Shares $705 $934
Investor C Shares $305 $634
</TABLE>

If you bought Investor B or Investor C Shares, you would pay the
following expenses if you didn't sell your shares:

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor B Shares $205 $634
Investor C Shares $205 $634
</TABLE>

8
<PAGE>

[GRAPHIC OMITTED]

About the sub-adviser

[GRAPHIC OMITTED]

You'll find more about
Marsico Capital and
Mr. Marsico on page 23.

[GRAPHIC OMITTED]

Why invest in a growth and income fund?

Nations Marsico Growth & Income Fund

[GRAPHIC OMITTED]

Investment objective

The Fund seeks long-term growth of capital with a limited emphasis on
income.

[GRAPHIC OMITTED]

Principal investment strategies

The Fund invests all of its assets in Nations Marsico Growth & Income
Master Portfolio (the Master Portfolio). The Master Portfolio has the
same investment objective as the Fund.

Marsico Capital looks for companies with earnings growth potential that may
not be recognized by other investors, focusing on companies that have some of
the following characteristics:

o products, markets or technologies in flux that can result in extraordinary
growth

o strong brand franchises that can take advantage of a changing global
environment

o global reach that allows the company to generate sales and earnings both in
the United States and abroad. This can give the company added growth
potential and also means the company may be less affected by changes in
local markets

o movement with, not against, the major social, economic and cultural shifts
taking place in the world

9
<PAGE>

[GRAPHIC OMITTED]

You'll find more about
other risks of investing
in this Fund starting on
page 21 and in the SAI.

[GRAPHIC OMITTED]

Risks and other things to consider

Nations Marsico Growth & Income Fund has the following risks:

o Investment strategy risk - Marsico Capital uses an investment strategy
that tries to identify equities with growth or income potential.
There is a risk that the value of these investments will not rise as
high as Marsico Capital expects, or will fall.

o Stock market risk - The value of the stocks the Master Portfolio holds
can be affected by changes in U.S. or foreign economies and
financial markets, and the companies that issue the stocks, among
other things. Stock prices can rise or fall over short as well as
long periods. In general, stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. As of the
date of this prospectus, the stock markets, as measured by the S&P
500 and other commonly used indices, were trading at historically
high levels. There can be no guarantee that these levels will
continue.

o Technology and technology-related risk - The Master Portfolio may invest
in technology and technology-related companies, which can be
significantly affected by obsolescence of existing technology, short
product cycles, falling prices and profits, and competition from new
market entrants.

o Interest rate risk - The prices of the Master Portfolio's fixed income
securities will tend to fall when interest rates rise and to rise
when interest rates fall. In general, fixed income securities with
longer terms tend to fall more in value when interest rates rise
than fixed income securities with shorter terms.

o Credit risk - The Master Portfolio could lose money if the issuer of a
fixed income security is unable to pay interest or repay principal
when it's due. Credit risk usually applies to most fixed income
securities, but is generally not a factor for U.S. government
obligations.

o Foreign investment risk - Because the Master Portfolio may invest up to
25% of its assets in foreign securities, it can be affected by the
risks of foreign investing. Foreign investments may be riskier than
U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited
financial information. Withholding taxes also may apply to some
foreign investments.

10
<PAGE>

[GRAPHIC OMITTED]

A look at the Fund's performance

Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC OMITTED]

There are two kinds of fees -- shareholder fees you pay directly, and
annual fund operating expenses that are deducted from a fund's assets.

[GRAPHIC OMITTED]

What it costs to invest in the Fund

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

Annual Fund operating expenses(4)
(Expenses that are deducted from the
Fund's assets)(5)

Management fees 0.75% 0.75 % 0.75 %
Distribution (12b-1) and shareholder
servicing fees 0.25% 1.00 % 1.00 %
Other expenses 0.48% 0.48 % 0.48 %
----- -------- --------
Total annual Fund operating expenses 1.48% 2.23 % 2.23 %
===== ======== ========
</TABLE>

(3) This charge applies to investors who buy Investor C Shares and sell
them within one year of buying them. Please see page 32 for details.

(4) The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(5) These fees and expenses and the example below include the Fund's
portion of the fees and expenses deducted from the assets of the
Master Portfolio.

11
<PAGE>

[GRAPHIC OMITTED]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example

This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Investor A, Investor B or Investor C Shares of
the Fund for the time periods indicated and then sell all of your
shares at the end of those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

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

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor A Shares $717 $1,017
Investor B Shares $726 $ 997
Investor C Shares $326 $ 697
</TABLE>

If you bought Investor B or Investor C Shares, you would pay the
following expenses if you didn't sell your shares:

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor B Shares $226 $697
Investor C Shares $226 $697
</TABLE>

12
<PAGE>

[GRAPHIC OMITTED]

About the sub-adviser

[GRAPHIC OMITTED]

You'll find more about
Marsico Capital and
Mr. Marsico on page 23.

[GRAPHIC OMITTED]

What is a focused fund?

Nations Marsico Focused Equities Fund

[GRAPHIC OMITTED]

Investment objective

The Fund seeks long-term growth of capital.

[GRAPHIC OMITTED]

Principal investment strategies

The Fund invests all of its assets in Nations Marsico Focused Equities
Master Portfolio (the Master Portfolio). The Master Portfolio has the
same investment objective as the Fund.

Marsico Capital looks for companies with earnings growth potential that may
not be recognized by other investors, focusing on companies that have some of
the following characteristics:

o products, markets or technologies in flux that can result in extraordinary
growth
o strong brand franchises that can take advantage of a changing global
environment
o global reach that allows the company to generate sales and earnings both in
the United States and abroad. This can give the company added growth
potential and also means the company may be less affected by changes in
local markets
o movement with, not against, the major social, economic and cultural shifts
taking place in the world

13
<PAGE>

[GRAPHIC OMITTED]

You'll find more about
other risks of investing
in this Fund starting on
page 21 and in the SAI.

[GRAPHIC OMITTED]

Risks and other things to consider

Nations Marsico Focused Equities Fund has the following risks:

o Investment strategy risk - There is a risk that the value of the Master
Portfolio's investments will not rise as high as Marsico Capital
expects, or will fall.

o Holding fewer investments - The Master Portfolio is considered to be
non-diversified because it may hold fewer investments than other
kinds of equity funds. This increases the risk that its value could
go down significantly if even only one of its investments performs
poorly. The value of the Master Portfolio will tend to have greater
price swings than the value of more diversified equity funds. The
Master Portfolio may become a diversified fund by limiting the
investments in which more than 5% of its total assets are invested.

o Stock market risk - The value of the stocks the Master Portfolio holds
can be affected by changes in U.S. or foreign economies and
financial markets, and the companies that issue the stocks, among
other things. Stock prices can rise or fall over short as well as
long periods. In general, stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. As of the
date of this prospectus, the stock markets, as measured by the S&P
500 and other commonly used indices, were trading at historically
high levels. There can be no guarantee that these levels will
continue.

o Technology and technology-related risk - The Master Portfolio may invest
in technology and technology-related companies, which can be
significantly affected by obsolescence of existing technology, short
product cycles, falling prices and profits, and competition from new
market entrants.

o Foreign investment risk - Because the Master Portfolio may invest up to
25% of its assets in foreign securities, it can be affected by the
risks of foreign investing. Foreign investments may be riskier than
U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited
financial information. Withholding taxes also may apply to some
foreign investments.

14
<PAGE>

[GRAPHIC OMITTED]

A look at the Fund's performance

Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC OMITTED]

There are two kinds of fees -- shareholder fees you pay directly,
and annual fund operating expenses that are deducted from a fund's
assets.

[GRAPHIC OMITTED]

What it costs to invest in the Fund

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

Annual Fund operating expenses(4)
(Expenses that are deducted from the
Fund's assets)(5)

Management fees 0.75% 0.75% 0.75%
Distribution (12b-1) and shareholder
servicing fees 0.25% 1.00% 1.00%
Other expenses 0.41% 0.41% 0.41%
----- ------ ------
Total annual Fund operating expenses 1.41% 2.16% 2.16%
===== ====== ======
</TABLE>

(3) This charge applies to investors who buy Investor C Shares and sell
them within one year of buying them. Please see page 32 for details.

(4) The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(5) These fees and expenses and the example below include the Fund's
portion of the fees and expenses deducted from the assets of the
Master Portfolio.

15
<PAGE>

[GRAPHIC OMITTED]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example

This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Investor A, Investor B or Investor C Shares of
the Fund for the time periods indicated and then sell all of your
shares at the end of those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

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

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor A Shares $710 $996
Investor B Shares $719 $976
Investor C Shares $319 $676
</TABLE>

If you bought Investor B or Investor C Shares, you would pay the
following expenses if you didn't sell your shares:

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
Investor B Shares $219 $676
Investor C Shares $219 $676
</TABLE>

16
<PAGE>

[GRAPHIC OMITTED]

About the sub-adviser

BACAP is this Fund's sub-adviser. BACAP's Fixed Income Management
Team makes the day-to-day investment decisions for the Fund.

[GRAPHIC OMITTED]

You'll find more about
BACAP on page 23.

[GRAPHIC OMITTED]

Mortgage-backed securities

Nations Government Securities Fund

[GRAPHIC OMITTED]

Investment objective

The Fund seeks high current income consistent with moderate fluctuation
of principal.

[GRAPHIC OMITTED]

Principal investment strategies

The Fund normally invests at least 65% of its assets in U.S. government
obligations and repurchase agreements secured by these securities.

It may also invest in the following securities rated investment grade at the
time of investment:

o mortgage-related securities issued by governments, their agencies or
instrumentalities, or corporations.

o asset-backed securities or municipal securities.

o corporate debt securities, including bonds, notes and debentures.

Normally, the Fund's average dollar-weighted maturity will be between five and
30 years.

When selecting individual investments, the team:

o looks at a fixed income security's potential to generate both income and
price appreciation

o allocates assets primarily among U.S. government obligations, including
securities issued by government agencies, mortgage-backed securities and
U.S. Treasury securities, based on how they have performed in the past,
and on how they are expected to perform under current market conditions.
The team may change the allocations when market conditions change

o selects securities using structure analysis, which evaluates the
characteristics of a security, including its call features, coupons and
expected timing of cash flows

17
<PAGE>

[GRAPHIC OMITTED]

You'll find more about
other risks of investing in
this Fund starting on
page 21 and in the SAI.

[GRAPHIC OMITTED]

Risks and other things to consider

Nations Government Securities Fund has the following risks:

o Investment strategy risk - There is a risk that the value of the
investments that the team chooses will not rise as high as the team
expects, or will fall.

o Interest rate risk - The prices of fixed income securities will tend to
fall when interest rates rise. In general, fixed income securities
with longer terms tend to fall more in value when interest rates
rise than fixed income securities with shorter terms.

o Changing distribution levels - The level of monthly income distributions
paid by the Fund depends on the amount of income paid by the
securities the Fund holds. It is not guaranteed and will change.
Changes in the value of the securities, however, generally should
not affect the amount of income they pay.

o Mortgage-related risk - The value of the Fund's mortgage-backed
securities can fall if the owners of the underlying mortgages pay
off their mortgages sooner than expected, which could happen when
interest rates fall, or later than expected, which could happen when
interest rates rise. If the underlying mortgages are paid off sooner
than expected, the Fund may have to reinvest this money in
mortgage-backed or other securities that have lower yields.

o Asset-backed securities risk - Payment of interest and repayment of
principal may be impacted by the cash flows generated by the assets
backing these securities. The value of the Fund's asset-backed
securities may also be affected by changes in interest rates, the
availability of information concerning the interests in and
structure of the pools of purchase contracts, financing leases or
sales agreements that are represented by these securities, the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities that provide any
supporting letters of credit, surety bonds, or other credit
enhancements.

o Changing to a feeder fund - Unlike traditional mutual funds, which
invest in individual securities, a "feeder fund" invests all of its
assets in another fund, called a "master portfolio." Other feeder
funds generally also invest in a master portfolio. The master
portfolio invests in individual securities and has the same
investment objective, investment strategies and principal risks as
the feeder funds. This structure can help reduce a feeder fund's
expenses because its assets are combined with those of other feeder
funds. If a master portfolio doesn't attract other feeder funds,
however, a feeder fund's expenses could be higher than those of a
traditional mutual fund.

This Fund may become a feeder fund if the Board of Trustees decides
this would be in the best interests of shareholders. We don't require
shareholder approval to make the change, but we'll notify you if it
happens.

18
<PAGE>

[GRAPHIC OMITTED]

A look at the Fund's performance

Because the Fund has not been in operation for a full calendar year, no
performance information is included in the prospectus.

[GRAPHIC OMITTED]

There are two kinds of fees -- shareholder fees you pay directly
and annual fund operating expenses that are deducted from a fund's
assets.

Total net expenses are actual expenses paid by the Fund after
waivers and/or reimbursements.

[GRAPHIC OMITTED]

What it costs to invest in the Fund

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

Annual Fund operating expenses(4)
(Expenses that are deducted from the
Fund's assets)

Management fees 0.50% 0.50% 0.50%
Distribution (12b-1) and shareholder
servicing fees 0.25% 1.00% 1.00%
Other expenses 0.39% 0.39% 0.39%
------ ------- -----
Total annual Fund operating expenses 1.14% 1.89% 1.89%
Fee waivers and/or reimbursements (0.10)% (0.10)% (0.10)%
------ ------- -------
Total net expenses(5) 1.04% 1.79% 1.79%
====== ======= ========
</TABLE>

(3) This charge applies to investors who buy Investor C Shares and sell
them within one year of buying them. Please see page 32 for details.

(4) The figures contained in the above table are based on amounts incurred
during the Fund's most recent fiscal year and have been adjusted, as
necessary, to reflect current service provider fees.

(5) The Fund's investment adviser and/or some of its other service
providers have agreed to waive fees and/or reimburse expenses until
July 31, 2001. The figures shown here are after waivers and/or
reimbursements. There is no guarantee that these waivers and/or
reimbursements will continue after this date.

19
<PAGE>

[GRAPHIC OMITTED]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Fund's
actual expenses and performance.

Example

This example is intended to help you compare the cost of investing in
this Fund with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Investor A, Investor B or Investor C Shares of
the Fund for the time periods indicated and then sell all of your
shares at the end of those periods

o you reinvest all dividends and distributions in the Fund

o your investment has a 5% return each year

o the Fund's operating expenses remain the same as shown in the table
above

o the waivers and/or reimbursements shown above expire July 31, 2001 and
are not reflected in the 3 year example

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

<TABLE>
<S> <C> <C>
1 year 3 years
Investor A Shares $576 $811
Investor B Shares $682 $884
Investor C Shares $282 $584
</TABLE>

If you bought Investor B or Investor C Shares, you would pay the
following expenses if you didn't sell your shares:

<TABLE>
<S> <C> <C>
1 year 3 years
Investor B Shares $182 $584
Investor C Shares $182 $584
</TABLE>

20
<PAGE>

[GRAPHIC OMITTED]

Other important information

o Changing investment objectives and policies - The investment objective
and certain investment policies of any Fund can be changed without
shareholder approval. Other investment policies may be changed only
with shareholder approval.

o Holding other kinds of investments - The Funds may hold investments that
aren't part of their principal investment strategies. Please refer
to the SAI for more information. The portfolio managers or
management team can also choose not to invest in specific securities
described in this prospectus and in the SAI.

o Foreign investment risk - Funds that invest in foreign securities may be
affected by changes in currency exchange rates and the costs of
converting currencies; foreign government controls on foreign
investment, repatriation of capital, and currency and exchange;
foreign taxes; inadequate supervision and regulation of some foreign
markets; difficulty selling some investments which may increase
volatility; different settlement practices or delayed settlements in
some markets; difficulty getting complete or accurate information
about foreign companies; less strict accounting, auditing and
financial reporting standards than those in the U.S.; political,
economic or social instability; and difficulty enforcing legal
rights outside the U.S.

o Investing defensively - A Fund may temporarily hold investments that are
not part of its investment objective or its principal investment
strategies to try to protect it during a market or economic downturn
or because of political or other conditions. A Fund may not achieve
its investment objective while it is investing defensively.

o Securities lending program - A Fund may lend portfolio securities to
approved broker-dealers or other financial institutions on a fully
collateralized basis in order to earn additional income for the
Fund. There may be delays in receiving additional collateral after
the loan is made or in recovering the securities loaned.

o Portfolio turnover - A Fund that replaces -- or turns over -- more than
100% of its investments in a year is considered to trade frequently.
Frequent trading can result in larger distributions of short-term
capital gains to shareholders. These gains are taxable at higher
rates than long-term capital gains. Frequent trading can also mean
higher brokerage and other transaction costs, which could reduce the
Fund's returns. The Funds generally buy securities for capital
appreciation, investment income, or both, and don't engage in
short-term trading. The annual portfolio turnover rates for Nations
Asset Allocation Fund, Nations Marsico Growth & Income Fund, Nations
Marsico Focused Equities Fund and Nations Government Securities Fund
are expected to be no more than 157%, 150%, 177% and 600%, respectively.

21
<PAGE>

[GRAPHIC OMITTED]

How the Funds are managed

[GRAPHIC OMITTED]

Banc of America Advisors, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

Investment adviser

BAAI is the investment adviser to over 60 mutual fund portfolios in the
Nations Funds Family, including the Funds described in this prospectus.

BAAI is a registered investment adviser. It's a wholly-owned subsidiary of
Bank of America, which is owned by Bank of America Corporation.

Nations Funds pays BAAI an annual fee for its investment advisory services.
The fee is calculated as a percentage of the average daily net assets of each
Fund and is paid monthly. BAAI uses part of this money to pay investment
sub-advisers for the services they provide to each Fund.

The following chart shows the maximum advisory fees BAAI can receive, along
with the actual advisory fees it received during the Funds' last fiscal year,
after waivers and/or reimbursements:

Annual investment advisory fee, as a % of average daily net assets

(1) These fees are the current contract levels, which in some cases have been
reduced from the contract levels that were in effect during the last fiscal
year.

(2) These Funds don't have their own investment adviser because they invest in
Nations Marsico Growth & Income Master Portfolio and Nations Marsico Focused
Equities Master Portfolio, respectively. BAAI is the investment adviser to
each Master Portfolio.

22
<PAGE>

Investment sub-advisers

Nations Funds and BAAI engage one or more investment sub-advisers for each
Fund to make day-to-day investment decisions for the Fund. BAAI retains
ultimate responsibility (subject to Board oversight) for overseeing the
sub-advisers and evaluates the Funds' needs and available sub-advisers' skills
and abilities on an ongoing basis. Based on its evaluations, BAAI may at times
recommend to a Fund's Board that the Fund:

o change, add or terminate one or more sub-advisers;

o continue to retain a sub-adviser even though the sub-adviser's ownership or
corporate structure has changed; or

o materially change a sub-advisory agreement with a sub-adviser.

[GRAPHIC OMITTED]

Banc of America Capital Management, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

Banc of America Capital Management, Inc.

BACAP is a registered investment adviser and a wholly-owned subsidiary of Bank
of America. Its management expertise covers all major domestic asset classes,
including equity and fixed income securities, and money market instruments.

<TABLE>
<CAPTION>
Fund BACAP Team
<S> <C>
Nations Asset Allocation Fund Fixed Income Management Team
for the fixed income and money market
portions of the fund

Nations Government Securities Fund Fixed Income Management Team
</TABLE>

[GRAPHIC OMITTED]

Marsico Capital
Management, LLC

1200 17th Street
Suite 1300
Denver, Colorado 80202

Marsico Capital Management, LLC

Marsico Capital is a full service investment advisory firm founded by Thomas
F. Marsico in September 1997. It is a registered investment adviser and
currently has over $16 billion in assets under management.

Marsico Management Holdings, LLC, a wholly-owned subsidiary of Bank of America
Corporation, indirectly owns the equity of Marsico Capital.

23
<PAGE>

Marsico Capital is the investment sub-adviser to:

o Nations Marsico Growth & Income Master Portfolio

o Nations Marsico Focused Equities Master Portfolio

Average annual total returns as of August 7, 1997

<TABLE>
<CAPTION>
Janus Twenty
Fund (%) S&P 500 (%)
<S> <C> <C>
one year 48.21 46.41
three years 32.07 30.63
five years 20.02 20.98
during the period of Mr. Marsico's management
(January 31, 1988 to August 7, 1997) 23.38 18.20
</TABLE>

This information is designed to show the historical track record of Mr.
Marsico. It does not indicate how the Fund has performed or will perform in
the future.

Performance will vary based on many factors, including market conditions, the
composition of the Fund's holdings and the Fund's expenses.

24
<PAGE>

The table below shows the returns for the Janus Growth and Income Fund
compared with the S&P 500 for the period ending August 7, 1997. The returns
reflect deductions of fees and expenses, and assume all dividends and
distributions have been reinvested.

Average annual total returns as of August 7, 1997

<TABLE>
<CAPTION>
Janus Growth
and Income
Fund (%) S&P 500 (%)
<S> <C> <C>
one year 47.77 46.41
three years 31.13 30.63
five years 21.16 20.98
during the period of Mr. Marsico's management
(May 31, 1991 to August 7, 1997) 21.19 18.59
</TABLE>

This information is designed to show the historical track record of Mr.
Marsico. It does not indicate how the Fund has performed or will perform in
the future.

Performance will vary based on many factors, including market conditions, the
composition of the Fund's holdings and the Fund's expenses.

[GRAPHIC OMITTED]

Chicago Equity Partners LLC

180 North LaSalle
Suite 3800
Chicago, Illinois 60601

Chicago Equity Partners LLC

Chicago Equity is a registered investment adviser and is owned by the firm's
senior management. Chicago Equity is the investment sub-adviser to Nations
Blue Chip Master Portfolio and is one of two sub-advisers to Nations Asset
Allocation Fund.

Chicago Equity's Equity Management Team is responsible for making the
day-to-day investment decisions for the equity portion of Nations Asset
Allocation Fund.

[GRAPHIC OMITTED]

Stephens Inc.

111 Center Street
Little Rock, Arkansas 72201

Other service providers

The Funds are distributed and co-administered by Stephens Inc., a registered
broker/dealer. Stephens may pay commissions, distribution (12b-1) and
shareholder servicing fees, and/or other compensation to companies for selling
shares and providing services to investors.

<TABLE>
<S> <C>
Domestic Stock Funds 0.23%
Government and Corporate Bond Fund 0.22%
</TABLE>

[GRAPHIC OMITTED]

PFPC Inc.

400 Bellevue Parkway
Wilmington, Delaware 19809

25
<PAGE>

About your investment
--------------------------------------------------------------------------------

[GRAPHIC OMITTED]

We've used the term, investment professional, to refer to the
person who has assisted you with buying Nations Funds. Selling
agent or servicing agent (sometimes referred to as a selling
agent) means the company that employs your investment
professional. Selling and servicing agents include banks,
brokerage firms, mutual fund dealers and other financial
institutions, including affiliates of Bank of America.

[GRAPHIC OMITTED]

For more information about how to choose a share class, contact
your investment professional or call us at 1.800.321.7854.

[GRAPHIC OMITTED]

Before you invest, please note that, over time,distribution
(12b-1) and shareholder servicing fees will increase the cost of
your investment, and may cost you more than any sales charges you
may pay. For more information, see How selling and servicing
agents are paid.

[GRAPHIC OMITTED]

Choosing a share class

Before you can invest in the Funds, you'll need to choose a share class. There
are three classes of shares for each Fund offered by this prospectus.

Each class has its own sales charges and fees. The table below compares the
charges and fees and other features of the share classes.

<TABLE>
<CAPTION>
Nations
Government Stock Funds
Investor A Shares Securities Fund All Domestic
<S> <C> <C>
Maximum amount you no limit no limit
can buy
Maximum front-end 4.75% 5.75%
sales charge
Maximum deferred none none
sales charge(1)
Maximum annual 0.25% 0.25%
distribution distribution distribution
and shareholder (12b-1)/ (12b-1)/
servicing fees service fee service fee
Conversion feature none none
</TABLE>

(1) A 1.00% maximum deferred sales charge applies to investors who buy $1
million or more of Investor A Shares and sell them within eighteen months of
buying them. Different charges may apply to purchases made prior to August
1, 1999. Please see page 29 for details.

<TABLE>
<CAPTION>
Nations
Government Stock Funds
Investor B Shares Securities Fund All Domestic
<S> <C> <C>
Maximum amount you can $250,000 $250,000
buy
Maximum front-end sales none none
charge
Maximum deferred sales 5.00%(1) 5.00%(1)
charge
Redemption fee none none
Maximum annual 0.75% 0.75%
distribution and distribution distribution
shareholder servicing fees (12b-1) fee and (12b-1) fee and
0.25% service fee 0.25% service fee
Conversion feature yes yes
</TABLE>

(1) This charge decreases over time. Please see page 34 for details. Different
charges apply to Investor B Shares bought before January 1, 1996 and after
July 31, 1997. Please see page 29 for details.

26
<PAGE>

<TABLE>
<CAPTION>
Nations
Government Stock Funds
Investor C Shares Securities Fund All Domestic
<S> <C> <C>
Maximum amount you can no limit no limit
buy
Maximum front-end sales none none
charge
Maximum deferred sales 1.00% 1.00%
charge(1)
Redemption fee none none
Maximum annual 0.75% 0.75%
distribution and distribution distribution
shareholder servicing fees (12b-1) fee and (12b-1) fee and
0.25% service fee 0.25% service fee
Conversion feature none none
</TABLE>

(1) This charge applies to investors who buy Investor C Shares and sell them
within one year of buying them. Please see page 32 for details.

The share class you choose will depend on how much you're investing, how long
you're planning to stay invested, and how you prefer to pay the sales charge.

The total cost of your investment over the time you expect to hold your shares
will be affected by the distribution (12b-1) and shareholder servicing fees,
as well as by the amount of any front-end sales charge or contingent deferred
sales charge (CDSC) that applies, and when you're required to pay the charge.
You should think about these things carefully before you invest.

Investor A Shares have a front-end sales charge, which is deducted when you
buy your shares. This means that a smaller amount is invested in the Funds,
unless you qualify for a waiver or reduction of the sales charge. However,
Investor A Shares have lower ongoing distribution (12b-1) and/or shareholder
servicing fees than Investor B and Investor C Shares. This means that Investor
A Shares can be expected to pay relatively higher dividends per share.

Investor B Shares have limits on how much you can invest. When you buy
Investor B or Investor C Shares, the full amount is invested in the Funds.
However, you may pay a CDSC when you sell your shares. Over time, Investor B
and Investor C Shares can incur distribution (12b-1) and shareholder servicing
fees that are equal to or more than the front-end sales charge, and the
distribution (12b-1) and shareholder servicing fees you would pay for Investor
A Shares. Although the full amount of your purchase is invested in the Funds,
any positive investment return on this money may be partially or fully offset
by the expected higher annual expenses of Investor B and Investor C Shares.
You should also consider the conversion feature for Investor B Shares, which
is described in About Investor B Shares.

27
<PAGE>

[GRAPHIC OMITTED]

The offering price per share is the net asset value per share plus
any sales charge that applies.

The net asset value per share is the price of a share calculated
by a Fund every business day.

[GRAPHIC OMITTED]

About Investor A Shares

There is no limit to the amount you can invest in Investor A Shares. You
generally will pay a front-end sales charge when you buy your shares, or in some
cases, a CDSC when you sell your shares.

Front-end sales charge

You'll pay a front-end sales charge when you buy Investor A Shares, unless:

o you qualify for a waiver of the sales charge. You can find out if you
qualify for a waiver in the section, When you might not have to pay
a sales charge

o you're reinvesting distributions

The sales charge you'll pay depends on the Fund you're buying, and the amount
you're investing -- generally, the larger the investment, the smaller the
percentage sales charge.

<TABLE>
<CAPTION>
Nations Government Securities Fund
<S> <C> <C> <C>
Amount retained
Sales charge Sales charge by selling agents
as a % of the as a % of the as a % of the
offering price net asset value offering price
Amount you bought per share per share per share
$0-$49,999 4.75% 4.99% 4.25%
$50,000-$99,999 4.50% 4.71% 4.00%
$100,000-$249,999 3.50% 3.63% 3.00%
$250,000-$499,999 2.50% 2.56% 2.25%
$500,000-$999,999 2.00% 2.04% 1.75%
$1,000,000 or mor 0.00% 0.00% 1.00%(1)
</TABLE>

(1) 1.00% on the first $3,000,000, 0.50% on the next $47,000,000, 0.25%
on amounts over $50,000,000. Stephens pays the amount retained by
selling agents on investments of $1,000,000 or more, but may be
reimbursed when a CDSC is deducted if the shares are sold within
eighteen months from the time they were bought. Please see How selling
and servicing agents are paid for more information.

28
<PAGE>

<TABLE>
<CAPTION>
All Domestic Stock Funds
<S> <C> <C> <C>
Amount retained
Sales charge Sales charge by selling agents
as a % of the as a % of the as a % of the
offering price net asset value offering price
Amount you bought per share per share per share
$0-$49,999 5.75% 6.10% 5.00%
$50,000-$99,999 4.50% 4.71% 3.75%
$100,000-$249,999 3.50% 3.63% 2.75%
$250,000-$499,999 2.50% 2.56% 2.00%
$500,000-$999,999 2.00% 2.04% 1.75%
$1,000,000 or more 0.00% 0.00% 1.00% (1)
</TABLE>

(1)1.00% on the first $3,000,000, 0.50% on the next $47,000,000, 0.25% on
amounts over $50,000,000. Stephens pays the amount retained by selling
agents on investments of $1,000,000 or more, but may be reimbursed when a
CDSC is deducted if the shares are sold within eighteen months from the time
they were bought. Please see How selling and servicing agents are paid for
more information.

Contingent deferred sales charge

If you own or buy $1,000,000 or more of Investor A Shares, there are
two situations when you'll pay a CDSC:

o If you bought your shares before August 1, 1999, and you sell them:

o during the first year you own them, you'll pay a CDSC of 1.00%

o during the second year you own them, you'll pay a CDSC of 0.50%

o If you buy your shares on or after August 1, 1999 and sell them within
18 months of buying them, you'll pay a CDSC of 1.00%.

The CDSC is calculated from the day your purchase is accepted (the trade date).
We deduct the CDSC from the market value or purchase price of the shares,
whichever is lower.

You won't pay a CDSC on any increase in net asset value since you bought your
shares, or on any shares you receive from reinvested distributions. We'll sell
any shares that aren't subject to the CDSC first. We'll then sell shares that
result in the lowest CDSC.

[GRAPHIC OMITTED]

About Investor B Shares

You can buy up to $250,000 of Investor B Shares at a time. You don't pay a
sales charge when you buy Investor B Shares, but you may have to pay a CDSC when
you sell them.

Contingent deferred sales charge

You'll pay a CDSC when you sell your Investor B Shares, unless:

o you bought the shares on or after January 1, 1996 and before August 1,
1997

o you received the shares from reinvested distributions

o you qualify for a waiver of the CDSC. You can find out how to qualify
for a waiver on page 35

29
<PAGE>

The CDSC you pay depends on the Fund you bought, when you bought your shares,
how much you bought in some cases, and how long you held them.

Nations Government Securities Fund

If you sell your shares
during the following year: You'll pay a CDSC of:
--------------------------------- -----------------------------------------------------------------------
Shares
you
bought Shares
Shares on or after you
you bought Shares you bought between 1/1/1996 bought
after 8/1/1997 and 11/15/1998 and before before
11/15/1998 in the following amounts: 8/1/1997 1/1/1996
------------ ----------------------------------- ------------ --------
$250,000- $500,000-
$0-$249,999 $499,999 $999,999
<S> <C> <C> <C> <C> <C> <C>
the first year you own them 5.0% 4.0% 3.0% 2.0% none 5.0%
the second year you own them 4.0% 3.0% 2.0% 1.0% none 4.0%
the third year you own them 3.0% 3.0% 1.0% none none 3.0%
the fourth year you own them 3.0% 2.0% none none none 2.0%
the fifth year you own them 2.0% 1.0% none none none 2.0%
the sixth year you own them 1.0% none none none none 1.0%
after six years of owning them none none none none none none
</TABLE>

All Domestic Stock Funds

<TABLE>
<CAPTION>
If you sell your shares
during the following year: You'll pay a CDSC of:
--------------------------------- -----------------------------------------------------------------------
Shares
you
bought Shares
Shares on or after you
you bought Shares you bought between 1/1/1996 bought
after 8/1/1997 and 11/15/1998 and before before
11/15/1998 in the following amounts: 8/1/1997 1/1/1996
------------ ----------------------------------- ------------ --------
$250,000- $500,000-
$0-$249,999 $499,999 $999,999
<S> <C> <C> <C> <C> <C> <C>
the first year you own them 5.0% 5.0% 3.0% 2.0% none 5.0%
the second year you own them 4.0% 4.0% 2.0% 1.0% none 4.0%
the third year you own them 3.0% 3.0% 1.0% none none 3.0%
the fourth year you own them 3.0% 3.0% none none none 2.0%
the fifth year you own them 2.0% 2.0% none none none 2.0%
the sixth year you own them 1.0% 1.0% none none none 1.0%
after six years of owning them none none none none none none
</TABLE>

The CDSC is calculated from the trade date of your purchase. We deduct the CDSC
from the market value or purchase price of the shares, whichever is lower. We'll
sell any shares that aren't subject to the CDSC first. We'll then sell shares
that result in the lowest CDSC.

Your selling agent receives compensation when you buy Investor B Shares. Please
see How selling and servicing agents are paid for more information.

30
<PAGE>

About the conversion feature

Investor B Shares generally convert automatically to Investor A Shares
according to the following schedule:

<TABLE>
<CAPTION>
Nations Government Securities Fund
Will convert to Investor A Shares
Investor B Shares you bought after you've owned them for
<S> <C>
after November 15, 1998 eight years

between August 1, 1997
and November 15, 1998

$0-$249,999 nine years
$250,000-$499,999 six years
$500,000-$999,999 five years
before August 1, 1997 eight years
</TABLE>

All Domestic Stock Funds
Will convert to Investor A Shares
Investor B Shares you bought after you've owned them for
<S> <C>
after November 15, 1998 eight years

between August 1, 1997
and November 15, 1998

$0-$249,000 nine years
$250,000-$499,999 six years
$500,000-$999,999 five years
before August 1, 1997 nine years
</TABLE>

The conversion feature allows you to benefit from the lower operating costs of
Investor A Shares, which can help increase total returns.

Here's how the conversion works:

o Shares are converted at the end of the month in which they become
eligible for conversion. Any shares you received from reinvested
distributions on these shares will convert to Investor A Shares at
the same time.

o You'll receive the same dollar value of Investor A Shares as the
Investor B Shares that were converted. No sales charge or other
charges apply.

o Investor B Shares that you received from an exchange of Investor B
Shares of another Nations Fund will convert based on the day you
bought the original shares. Your conversion date may be later if you
exchanged to or from a Nations Fund Money Market Fund.

o Conversions are free from federal tax.

31
<PAGE>

[GRAPHIC OMITTED]

About Investor C Shares

There is no limit to the amount you can invest in Investor C Shares. You don't
pay a sales charge when you buy Investor C Shares, but you may pay a CDSC when
you sell them.

Contingent deferred sales charge

You'll pay a CDSC of 1.00% when you sell Investor C Shares within one year of
buying them, unless:

o you received the shares from reinvested distributions

o you qualify for a waiver of the CDSC. You can find out how to qualify
for a waiver on page 35

Your selling agent receives compensation when you buy Investor C Shares. Please
see How selling and servicing agents are paid for more information.

[GRAPHIC OMITTED]

Please contact your investment professional for more information
about reductions and waivers of sales charges.

You should tell your investment professional that you may qualify
for a reduction or a waiver before buying shares.

We can change or cancel these terms at any time. Any change or
cancellation applies only to future purchases.

When you might not have to pay a sales charge

Front-end sales charges
(Investor A Shares)

There are three ways you can lower the front-end sales charge you pay on
Investor A Shares:

o Combine purchases you've already made
Rights of accumulation allow you to combine the value of Investor A,
Investor B and Investor C Shares you already own with Investor A
Shares you're buying to calculate the sales charge. The sales charge
is based on the total value of the shares you already own, or the
original purchase cost, whichever is higher, plus the value of the
shares you're buying. Index Funds and Money Market Funds, except
Investor B and Investor C Shares of Nations Reserves Money Market
Funds, don't qualify for rights of accumulation.

o Combine purchases you plan to make
By signing a letter of intent, you can combine the value of shares
you already own with the value of shares you plan to buy over a
13-month period to calculate the sales charge.

o You can choose to start the 13-month period up to 90 days before you
sign the letter of intent.

o Each purchase you make will receive the sales charge that applies to
the total amount you plan to buy.

32
<PAGE>

o If you don't buy as much as you planned within the period, you must
pay the difference between the charges you've paid and the charges
that actually apply to the shares you've bought.

o Your first purchase must be at least 5% of the minimum amount for the
sales charge level that applies to the total amount you plan to
buy.

o If the purchase you've made later qualifies for a reduced sales charge
through the 90-day backdating provisions, we'll make an adjustment
for the lower charge when the letter of intent expires. Any
adjustment will be used to buy additional shares at the reduced
sales charge.

o Combine purchases with family members
You can receive a quantity discount by combining purchases of
Investor A Shares that you, your spouse and children under age 21
make on the same day. Some distributions or payments from the
dissolution of certain qualified plans also qualify for the quantity
discount. Index Funds and Money Market Funds, except Investor B and
Investor C Shares of Nations Reserves Money Market Funds, don't
qualify.

The following investors can buy Investor A Shares without paying a front-end
sales charge:

o full-time employees and retired employees of Bank of America Corporation
(and its predecessors), its affiliates and subsidiaries and the
immediate families of these people

o banks, trust companies and thrift institutions acting as fiducuaries

o individuals receiving a distribution from a Bank of America trust or
other fiduciary account may use the proceeds of that distribution to
buy Investor A Shares without paying a front-end sales charge, as
long as the proceeds are invested in the Funds within 90 days of the
date of distribution

o Nations Funds' Trustees, Directors and employees of its investment
sub-advisers

o registered broker/dealers that have entered into a Nations Funds dealer
agreement with Stephens may buy Investor A Shares without paying a
front-end sales charge for their investment account only

o registered personnel and employees of these broker/dealers and their
family members may buy Investor A Shares without paying a front-end
sales charge according to the internal policies and procedures of
the employing broker/dealer as long as these purchases are made for
their own investment purposes

o employees or partners of any service provider to the Funds

o former shareholders of Class B Shares of the Special Equity Portfolio of
the Capitol Mutual Funds who held these shares as of January 31,
1994 or received Investor A Shares of Nations Aggressive Growth Fund
may buy Investor A Shares of Nations Aggressive Growth Fund without
paying a front-end sales charge

33
<PAGE>

o investors who buy through accounts established with certain fee-based
investment advisers or financial planners, including Nations Funds
wrap fee accounts and other managed agency/asset allocation accounts

o shareholders of certain Funds that reorganized into the Nations Funds
who were entitled to buy shares at net asset value

The following plans can buy Investor A Shares without paying a front-end sales
charge:

o pension, profit-sharing or other employee benefit plans established
under Section 401 or Section 457 of the Internal Revenue Code of
1986, as amended (the tax code)

o employee benefit plans created according to Section 403(b) of the tax
code and sponsored by a non-profit organization qualified under
Section 501(c)(3) of the tax code. To qualify for the waiver, the
plan must:

o have at least $500,000 invested in Investor A Shares of Nations Funds
(except Money Market Funds), or

o sign a letter of intent to buy at least $500,000 of Investor A Shares
of Nations Funds (except Money Market Funds), or

o be an employer-sponsored plan with at least 100 eligible participants,
or

o be a participant in an alliance program that has signed an agreement
with the Fund or a selling agent

You can also buy Investor A Shares without paying a sales charge if you buy the
shares within 120 days of selling the same Fund. This is called the
reinstatement privilege. You can invest up to the amount of the sale proceeds.
We'll credit your account with any CDSC paid when you sold the shares. The
reinstatement privilege does not apply to any shares you bought through a
previous reinstatement. PFPC, Stephens or their agents must receive your written
request within 120 days after you sell your shares.

In addition, you can buy Investor A Shares without paying a sales charge if you
buy the shares with proceeds from the redemption of shares of a nonaffiliated
mutual fund as long as the redemption of the nonaffiliated fund shares occurred
within 45 days prior to the purchase of the Investor A Shares. We must receive a
copy of the confirmation of the redemption transaction in order for you to avoid
paying the sales charge.

34
<PAGE>

Contingent deferred sales charges
(Investor A, Investor B and Investor C Shares)

You won't pay a CDSC on the following transactions:

o shares sold following the death or disability (as defined in the tax
code) of a shareholder, including a registered joint owner

o the following retirement plan distributions.

o lump-sum or other distributions from a qualified corporate or
self-employed retirement plan following the retirement (or
following attainment of age 59 1/2 in the case of a "key employee"
of a "top heavy" plan)

o distributions from an IRA or Custodial Account under Section 403(b)(7)
of the tax code, following attainment of age 59 1/2

o a tax-free return of an excess contribution to an IRA

o distributions from a qualified retirement plan that aren't subject to
the 10% additional federal withdrawal tax under Section 72(t)(2)
of the tax code

o payments made to pay medical expenses which exceed 7.5% of income, and
distributions made to pay for insurance by an individual who has
separated from employment and who has received unemployment
compensation under a federal or state program for at least 12 weeks

o shares sold under our right to liquidate a shareholder's account,
including instances where the aggregate net asset value of Investor
A, Investor B or Investor C Shares held in the account is less than
the minimum account size

o if you exchange Investor B or Investor C Shares of a Nations Fund that
were bought through a Bank of America employee benefit plan for
Investor A Shares of a Nations Fund

o withdrawals made under the Automatic Withdrawal Plan described in
Buying, selling and exchanging shares, if the total withdrawals of
Investor A, Investor B or Investor C Shares made in a year are less
than 12% of the total value of those shares in your account. A CDSC
may only apply to Investor A Shares if you bought more than
$1,000,000

We'll also waive the CDSC on the sale of Investor A or Investor C Shares bought
before September 30, 1994 by current or retired employees of Bank of America
Corporation (and its predecessors) and its affiliates, or by current or former
trustees or directors of the Nations Funds or other management companies managed
by Bank of America.

<PAGE>

You won't pay a CDSC on the sale of Investor B or Investor C Shares if you
reinvest any of the proceeds in the same Fund within 120 days of the sale. This
is called the reinstatement privilege. You can invest up to the amount of the
sale proceeds. We'll credit your account with any CDSC paid when you sold the
shares. The reinstatement privilege does not apply to any shares you bought
through a previous reinstatement. PFPC, Stephens or their agents must receive
your written request within 120 days after you sell your shares.

36
<PAGE>

[GRAPHIC OMITTED]

Buying, selling and exchanging shares

[GRAPHIC OMITTED]

When you sell shares of a mutual fund, the fund is effectively
"buying" them back from you. This is called a redemption.

You can invest in the Funds through your selling agent or directly from
Nations Funds.

We encourage you to consult with an investment professional who can open an
account for you with a selling agent and help you with your investment
decisions. Once you have an account, you can buy, sell and exchange shares by
contacting your investment professional or selling agent. They will look after
any paperwork that's needed to complete a transaction and send your order to us.

You should also ask your selling agent about its limits, fees and policies for
buying, selling and exchanging shares, which may be different from those
described here, and about its related programs or services.

The table on the next page summarizes some key information about buying,
selling and exchanging shares. You'll find sales charges and other fees that
apply to these transactions in Choosing a share class.

The Funds also offer other classes of shares, with different features and
expense levels, which you may be eligible to buy. Please contact your investment
professional, or call us at 1.800.321.7854 if you have questions or you need
help placing an order.

37
<PAGE>

<TABLE>
<CAPTION>
Ways to
buy, sell or How much you can buy,
exchange sell or exchange Other things to know
------------ ---------------------------- ----------------------------------------------------
<S> <C> <C> <C>
Buying shares In a lump sump minimum initial investment: There is no limit to the amount you can invest in
o $1,000 for regular accounts Investor A and C Shares. You can invest up to
o $500 for traditional and Roth IRA $250,000 in Investor B Shares at a time.
accounts
o $250 for certain fee-based accounts
o no minimum for certain retirement
plan accounts like 401(k) plans and
SEP accounts, but other restrictions
apply
minimum additional investment:
o $100 for all accounts
Using our minimum initial investment: You can buy shares monthly, twice a month or
Systematic o $100 quarterly, using automatic transfers from your
Investment Plan minimum additional investment: bank account.
o $50
------------------------------------------------------------------------------------------------------------------------------------
Selling shares In a lump sump o you can sell up to $50,000 of your We'll deduct any CDSC from the amount you're
shares by telephone, otherwise there selling and send you or your selling agent the
are no limits to the amount you can balance, usually within three business days of
sell receiving your order.
o other restrictions may apply to If you paid for your shares with a check that
withdrawals from retirement plan wasn't certified, we'll hold the sale proceeds
accounts when you sell those shares for at least 15 days
after the trade date of the purchase, or until the
check has cleared.
Using our o minimum $25 per withdrawal Your account balance must be at least $10,000
Automatic to set up the plan. You can make withdrawals
Withdrawal Plan monthly, twice a month or quarterly. We'll send
your money by check or deposit it directly to your
bank account. No CDSC is deducted if you
withdraw 12% or less of the value of your shares
in a class.
------------------------------------------------------------------------------------------------------------------------------------
Exchanging shares In a lump sum o minimum $1,000 per exchange You can exchange your Investor A Shares for
Investor A shares of any other Nations Fund,
except Index Funds. You won't pay a front-end
sales charge, CDSC or redemption fee on the
shares you're exchanging.
You can exchange your Investor B Shares for:
o Investor B Shares of any other Nations Fund,
except Nations Funds Money Market Funds
o Investor B Shares of Nations Reserves Money
Market Funds
You can exchange your Investor C Shares for:
o Investor C Shares of any other Nations Fund,
except Nations Funds Money Market Funds
o Investor C Shares of Nations Reserves Money
Market Funds
If you received Investor C Shares of a Fund from
an exchange of Investor A Shares of a Managed
Index Fund, you can also exchange these shares
for Investor A Shares of an Index Fund.
You won't pay a CDSC on the shares you're
exchanging.
Using our o minimum $25 per exchange This feature is not available for Investor B
Automatic Shares.
Exchange You must already have an investment in the
Feature Funds into which you want to exchange. You can
make exchanges monthly or quarterly.
</TABLE>

38
<PAGE>

[GRAPHIC OMITTED]

How shares are priced

All transactions are based on the price of a Fund's shares -- or its net asset
value per share. We calculate net asset value per share for each class of each
Fund at the end of each business day. First, we calculate the net asset value
for each class of a Fund by determining the value of the Fund's assets in the
class and then subtracting its liabilities. Next, we divide this amount by the
number of shares that investors are holding in the class.

Valuing securities in a Fund

The value of a Fund's assets is based on the total market value of all of the
securities it holds. The prices reported on stock exchanges and securities
markets around the world are usually used to value securities in a Fund. If
prices aren't readily available, or the value of a security has been
materially affected by events occurring after a foreign exchange closes, we'll
base the price of a security on its fair value. When a Fund uses fair value to
price securities it may value those securities higher or lower than another
fund that uses market quotations to price the same securities. We use the
amortized cost method, which approximates market value, to value short-term
investments maturing in 60 days or less. International markets may be open on
days when U.S. markets are closed. The value of foreign securities owned by a
Fund could change on days when Fund shares may not be bought or sold.

How orders are processed

Orders to buy, sell or exchange shares are processed on business days. Orders
received by Stephens, PFPC or their agents before the end of a business day
(usually 4:00 p.m. Eastern time, unless the NYSE closes early) will receive
that day's net asset value per share. Orders received after the end of a
business day will receive the next business day's net asset value per share.
The business day that applies to your order is also called the trade date. We
may refuse any order to buy or exchange shares. If this happens, we'll return
any money we've received to your selling agent.

Telephone orders

You can place orders to buy, sell or exchange by telephone if you complete the
telephone authorization section of our account application and send it to us.

Here's how telephone orders work:

o If you sign up for telephone orders after you open your account, you
must have your signature guaranteed.

o Telephone orders may not be as secure as written orders. You may be
responsible for any loss resulting from a telephone order.

o We'll take reasonable steps to confirm that telephone instructions are
genuine. For example, we require proof of your identification before
we will act on instructions received by telephone and may record
telephone conversations. If we and our service providers don't take
these steps, we may be liable for any losses from unauthorized or
fraudulent instructions.

o Telephone orders may be difficult to complete during periods of
significant economic or market change.

39
<PAGE>

[GRAPHIC OMITTED]

The offering price per share is the net asset value per share plus
any sales charge that applies.

The net asset value per share is the price of a share calculated
by a Fund every business day.

[GRAPHIC OMITTED]

Buying shares

Here are some general rules for buying shares:

o You buy Investor A Shares at the offering price per share. You buy
Investor B and Investor C Shares at net asset value per share.

o If we don't receive your money within three business days of
receiving your order, we'll refuse the order.

o Selling agents are responsible for sending orders to us and
ensuring we receive your money on time.

o Shares purchased are recorded on the books of the Fund. We don't
issue certificates.

Minimum initial investment

The minimum initial amount you can buy is usually $1,000.

If you're buying shares through one of the following accounts or plans,
the minimum initial amount you can buy is:

o $500 for traditional and Roth individual retirement accounts (IRAs)

o $250 for accounts set up with some fee-based investment advisers or
financial planners, including wrap fee accounts and other managed accounts

o $100 using our Systematic Investment Plan

o There is no minimum for 401(k) plans, simplified employee pension plans
(SEPs), salary reduction-simplified employee pension plans (SAR-SEPs),
Savings Incentives Match Plans for Employees (SIMPLE IRAs), salary
reduction-IRAs (SAR-IRAs) or other similar kinds of accounts. However, if the
value of your account falls below $1,000 for 401(k) plans or $500 for the
other plans within one year after you open your account, we may sell your
shares. We'll give you 60 days notice in writing if we're going to do this

Minimum additional investment

You can make additional purchases of $100, or $50 if you use our
Systematic Investment Plan.

40
<PAGE>

Systematic Investment Plan

You can make regular purchases of $50 or more using automatic transfers from
your bank account to the Funds you choose. You can contact your investment
professional or us to set up the plan.

Here's how the plan works:

o You can buy shares twice a month, monthly or quarterly.

o You can choose to have us transfer your money on or about the 15th or
the last day of the month.

o Some exceptions may apply to employees of Bank of America and its
affiliates, and to plans set up before August 1, 1997. For details,
please contact your investment professional.

[GRAPHIC OMITTED]

For more information
about telephone orders,
see page 39.

[GRAPHIC OMITTED]

Selling shares

Here are some general rules for selling shares:

o We'll deduct any CDSC from the amount you're selling and send you
the balance.

o If you're selling your shares through a selling agent, we'll
normally send the sale proceeds by federal funds wire within
three business days after Stephens, PFPC or their agents receive
your order. Your selling agent is responsible for depositing the
sale proceeds to your account on time.

o If you're selling your shares directly through us, we'll normally
send the sale proceeds by mail or wire them to your bank account
within three business days after the Fund receives your order.

o You can sell up to $50,000 of shares by telephone if you qualify
for telephone orders.

o If you paid for your shares with a check that wasn't certified,
we'll hold the sale proceeds when you sell those shares for at
least 15 days after the trade date of the purchase, or until the
check has cleared, whichever is later.

o If you hold any shares in certificate form, you must sign the
certificates (or send a signed stock power with them) and send
them to PFPC. Your signature must be guaranteed unless you've
made other arrangements with us. We may ask for any other
information we need to prove that the order is properly
authorized.

o Under certain circumstances allowed under the Investment Company
Act of 1940 (1940 Act), we can pay you in securities or other
property when you sell your shares.

o We can delay payment of the sale proceeds for up to seven days.

o Other restrictions may apply to retirement plan accounts. For more
information these restrictions, please contact your retirement
plan administrator.
41
<PAGE>

We may sell your shares:

o if the value of your account falls below $500. We'll give you 60
days notice in writing if we're going to do this

o if your selling agent tells us to sell your shares under
arrangements made between the selling agent and its customers

o under certain other circumstances allowed under the 1940 Act

Automatic Withdrawal Plan

The Automatic Withdrawal Plan lets you withdraw $25 or more every month, every
quarter or every year. You can contact your investment professional or us to
set up the plan.

Here's how the plan works:

o Your account balance must be at least $10,000 to set up the plan.

o If you set up the plan after you've opened your account, your signature
must be guaranteed.

o You can choose to have us transfer your money on or about the 15th or
the 25th of the month.

o You won't pay a CDSC on Investor A, Investor B or Investor C Shares if
you withdraw 12% or less of the value of those shares in a year.
Otherwise, we'll deduct any CDSC from the withdrawals.

o We'll send you a check or deposit the money directly to your bank
account.

o You can cancel the plan by giving your selling agent or us 30 days
notice in writing.

It's important to remember that if you withdraw more than your investment in
the Fund is earning, you'll eventually use up your original investment.

42
<PAGE>

[GRAPHIC OMITTED]

You should make sure you understand the investment objective and
principal investment strategies of the Fund you're exchanging
into. Please read its prospectus carefully.

[GRAPHIC OMITTED]

Exchanging shares

You can sell shares of a Fund to buy shares of another Nations Fund. This is
called an exchange. You might want to do this if your investment goals or
tolerance for risk changes.

Here's how exchanges work:

o You must exchange at least $1,000, or $25 if you use our Automatic
Exchange Feature.

o The rules for buying shares of a Fund, including any minimum
investment requirements, apply to exchanges into that Fund.

o You may only make an exchange into a Fund that is legally sold in
your state of residence.

o You generally may only make an exchange into a Fund that is
accepting investments.

o We may limit the number of exchanges you can make within a
specified period of time.

o We may change or cancel your right to make an exchange by giving
the amount of notice required by regulatory authorities
(generally 60 days for a material change or cancellation).

o You cannot exchange any shares you own in certificate form until
PFPC has received the certificate and deposited the shares to
your account.

Exchanging Investor A Shares

o If you received Investor A Shares of a Managed Index Fund through a
conversion of Investor C Shares originally bought through a
401(k) plan, you can exchange your shares for:

o Investor C Shares of any other Nations Fund, except Nations Funds
Money Market Funds

o Investor C Shares of Nations Reserves Money Market Funds

o You can exchange Investor A Shares of the other Funds for Investor
A Shares of any other Nations Fund, except Index Funds.

Here are some rules for exchanging Investor A Shares:

o You won't pay a front-end sales charge on the shares of the Fund
you're exchanging.

o You won't pay a CDSC, if applicable, on the shares you're
exchanging. Any CDSC will be deducted when you sell the shares
you received from the exchange. The CDSC at that time will be
based on the period from when you bought the original shares
until you sold the shares you received from the exchange.

o You won't pay a redemption fee on the shares you're exchanging. Any
redemption fee will be deducted when you sell the shares you
received from the exchange. Any redemption fee will be paid to
the original Fund.

43
<PAGE>

A CDSC may apply to the shares you receive from the exchange, and to any
Investor B Shares you receive from an exchange of these shares. The CDSC will be
based on the period from when you bought your original Investor B Shares until
you sell the shares you received from the exchange.

Exchanging Investor B Shares

You can exchange Investor B Shares of a Fund for:

o Investor B Shares of any other Nations Fund, except Nations Funds
Money Market Funds

o Investor B Shares of Nations Reserves Money Market Funds

You won't pay a CDSC on the shares you're exchanging. Any CDSC will be deducted
when you sell the shares you received from the exchange. The CDSC will be based
on the period from when you bought the original shares until you sold the shares
you received from the exchange.

Exchanging Investor C Shares

You can exchange Investor C Shares of a Fund for:

o Investor C Shares of any other Nations Fund, except Nations Funds
Money Market Funds

o Investor C Shares of Nations Reserves Money Market Funds

If you received Investor C Shares of a Fund from an exchange of Investor A
Shares of a Managed Index Fund, you can also exchange these shares for Investor
A Shares of an Index Fund.

You won't pay a CDSC on the shares you're exchanging. Any CDSC will be
deducted when you sell the shares you received from the exchange. The CDSC
will be based on the period from when you bought the original shares until you
sold the shares you received from the exchange.

Automatic Exchange Feature

The Automatic Exchange Feature lets you exchange $25 or more of Investor A or
Investor C Shares every month or every quarter. You can contact your
investment professional or us to set up the plan.

Here's how automatic exchanges work:

o Send your request to PFPC in writing or call 1.800.321.7854.

o If you set up your plan to exchange more than $50,000 you must have
your signature guaranteed.

o You must already have an investment in the Funds you want to
exchange.

o You can choose to have us transfer your money on or about the 1st
or the 15th day of the month.

o The rules for making exchanges apply to automatic exchanges.

44
<PAGE>

[GRAPHIC OMITTED]

How selling and servicing agents are paid

Selling and servicing agents usually receive compensation based on your
investment in the Funds. The kind and amount of the compensation depends on the
share class in which you invest. Selling agents typically pay a portion of the
compensation they receive to their investment professionals.

Commissions

Your selling agent may receive an up-front commission (reallowance) when you
buy shares of a Fund. The amount of this commission depends on which share class
you choose:

o up to 5.00% of the offering price per share of Investor A Shares of the
Domestic Stock Funds. The commission is paid from the sales charge we
deduct when you buy your shares

o up to 4.25% of the offering price per share of Investor A Shares of the
Government & Corporate Bond Fund. The commission is paid from the sales
charge we deduct when you buy your shares

o up to 4.00% of the net asset value per share of Investor B Shares. The
commission is not deducted from your purchase -- we pay your selling
agent directly

o up to 1.00% of the net asset value per share of Investor C Shares. The
commission is not deducted from your purchase -- we pay your selling
agent directly

If you buy Investor B or Investor C Shares you will be subject to higher
distribution (12b-1) and shareholder servicing fees and may be subject to a CDSC
when you sell your shares.

[GRAPHIC OMITTED]

The financial institution or intermediary that buys shares for you
is also sometimes referred to as a selling agent.

The distribution fee is often referred to as a "12b-1" fee because
it's paid through a plan approved under Rule 12b-1 under the 1940
Act.

Your selling agent may charge other fees for services provided to
your account.

Distribution (12b-1) and shareholder servicing fees

Stephens and selling and servicing agents may be compensated for selling shares
and providing services to investors under distribution and shareholder servicing
plans.

The amount of the fee depends on the class of shares you own:

<TABLE>
<CAPTION>
Maximum annual distribution (12b-1)
and shareholder servicing fees
(as an annual % of average daily net assets)
<S> <C>
Investor A Shares 0.25% combined distribution (12b-1) and shareholder servicing fee
Investor B Shares 0.75% distribution (12b-1) fee, 0.25% shareholder servicing fee
Investor C Shares 0.75% distribution (12b-1) fee, 0.25% shareholder servicing fee
</TABLE>

Fees are calculated daily and deducted monthly. Because these fees are paid out
of the Funds' assets on an ongoing basis, they will increase the cost of your
investment over time, and may cost you more than any sales charges you may pay.

45
<PAGE>

The Funds pay these fees to Stephens and to eligible selling and servicing
agents for as long as the plans continue. We may reduce or discontinue payments
at any time.

Other compensation

Selling and servicing agents may also receive:

o a bonus, incentive or other compensation relating to the sale, promotion
and marketing of the Funds

o additional amounts on all sales of shares:

o up to 1.00% of the offering price per share of Investor A Shares

o up to 1.00% of the net asset value per share of Investor B Shares

o up to 1.00% of the net asset value per share of Investor C Shares

o non-cash compensation like trips to sales seminars, tickets to sporting
events, theater or other entertainment, opportunities to participate in
golf or other outings and gift certificates for meals or merchandise

This compensation, which is not paid by the Funds, is discretionary and may be
available only to selected selling and servicing agents. For example, Stephens
sometimes sponsors promotions involving Banc of America Investment Services,
Inc., an affiliate of BAAI, and certain other selling or servicing agents.
Selected selling and servicing agents also may receive compensation for opening
a minimum number of accounts.

BAAI and Stephens may pay amounts from their own assets to selling or servicing
agents of the Funds for services they provide.

46
<PAGE>

[GRAPHIC OMITTED]

Distributions and taxes

[GRAPHIC OMITTED]

The power of compounding

Reinvesting your distributions buys you more shares of a
Fund -- which lets you take advantage of the potential for
compound growth.

About distributions

A mutual fund can make money two ways:

o It can earn income. Examples are interest paid on bonds and dividends paid
on common stocks.

A mutual fund is not subject to income tax as long as it distributes its net
investment income and realized capital gain to its shareholders. The Funds
intend to pay out a sufficient amount of their income and capital gain to their
shareholders so the Funds won't have to pay any income tax. When a Fund makes
this kind of a payment, it's split equally among all shares, and is called a
distribution.

All of the Funds distribute any net realized capital gain, at least once a
year. The frequency of distributions of net investment income varies by Fund:

The distribution you receive is based on the number of shares you hold on the
record date, which is usually the day the distribution is declared (daily
dividend Funds) or the day before the distribution is declared (all other
Funds). Shares are eligible to receive distributions from the settlement date
(daily dividend Funds) or the trade date (all other Funds) of the purchase up to
and including the day before the shares are sold.

Different share classes of a Fund usually pay different distribution amounts,
because each class has different expenses. Each time a distribution is made, the
net asset value per share of the share class is reduced by the amount of the
distribution.

We'll automatically reinvest distributions in additional shares of the same
Fund unless you tell us you want to receive your distributions in cash. You can
do this by writing to us at the address on the back cover, or by calling us at
1.800.321.7854.

We generally pay cash distributions within five business days after the end of
the month, quarter or year in which the distribution was made. If you sell all
of your shares, we'll normally pay any distribution that applies to those shares
in cash within five business days after the sale was made.

47
<PAGE>

If you buy shares of a Fund shortly before it makes a distribution, you will,
in effect, receive part of your purchase back in the distribution, which is
subject to tax. Similarly, if you buy shares of a Fund that holds securities
with unrealized capital gain, you will, in effect, receive part of your purchase
back if and when the Fund sells those securities and realizes and distributes
the gain. This distribution is also subject to tax. Some Funds have built up, or
have the potential to build up, high levels of unrealized capital gain.

[GRAPHIC OMITTED]

For more information about
taxes, please see the SAI.

How taxes affect your investment

Distributions that come from net investment income, net foreign currency gain
and any excess of net short-term capital gain over net long-term capital loss,
generally are taxable to you as ordinary income. A portion of such distributions
to corporate shareholders may qualify for the dividends received deduction.

Distributions that come from net capital gain (generally the excess of net
long-term capital gain over net short-term capital loss) generally are taxable
to you as net capital gain.

In general, all distributions are taxable to you when paid, whether they are
paid in cash or automatically reinvested in additional shares of the Fund.
However, any distributions declared in October, November or December of one year
and distributed in January of the following year will be taxable as if they had
been paid to you on December 31 of the first year.

Withholding tax

We're required by federal law to withhold tax of 31% on any distributions and
redemption proceeds paid to you (including amounts to be paid for in securities
or other property and exchanges) if:

o you haven't given us a correct Taxpayer Identification Number (TIN) and
haven't certified that the TIN is correct and withholding doesn't apply

o the Internal Revenue Service (IRS) has notified us that the TIN listed on
your account is incorrect according to its records

o the IRS informs us that you are otherwise subject to backup withholding

The IRS may also impose penalties against you if you don't give us a correct
TIN.

Amounts we withhold are applied to your federal income tax liability. You may
receive a refund from the IRS if the withholding tax results in an overpayment
of taxes.

We're also normally required by federal law to withhold tax (at a rate of 30%,
or a lower rate if a treaty applies) on distributions paid to foreign
shareholders.

Taxation of redemptions and exchanges

Your redemptions (including redemptions paid for in securities or other
property) and exchanges of Fund shares will usually result in a taxable capital
gain or loss, depending on the amount you receive for your shares (or are deemed
to receive in the case of exchanges) and the amount you paid (or are deemed to
have paid) for them.

48
<PAGE>

[GRAPHIC OMITTED]

This glossary includes explanations of the important terms that
may be used in this prospectus. Some of the terms explained may
apply to Nations Funds not included in this prospectus.

[GRAPHIC OMITTED]

Terms used in this prospectus

Asset-backed security - a debt security that gives you an interest in a pool of
assets that is collateralized or "backed" by one or more kinds of assets,
including real property, receivables or mortgages, generally issued by banks,
credit card companies or other lenders. Some securities may be issued or
guaranteed by the U.S. government or its agencies, authorities or
instrumentalities. Asset-backed securities typically make periodic payments,
which may be interest or a combination of interest and a portion of the
principal of the underlying assets.

Bank obligation - a money market instrument issued by a bank, including
certificates of deposit, time deposits and bankers' acceptances.

Cash equivalents - short-term, interest-bearing instruments, including
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities, bank obligations, asset-backed securities, foreign government
securities and commercial paper issued by U.S. and foreign issuers which, at the
time of investment, is rated at least Prime-2 by Moody's Investor Services, Inc.
(Moody's), A-2 by S&P, or F-1 by Fitch IBCA (Fitch).

Collateralized mortgage obligation (CMO) - a debt security that is backed by
real estate mortgages. CMO payment obligations are covered by interest and/or
principal payments from a pool of mortgages. In addition, the underlying assets
of a CMO are typically separated into classes, called tranches, based on
maturity. Each tranche pays a different rate of interest. CMOs are not generally
issued by the U.S. government, its agencies or instrumentalities.

Commercial paper - a money market instrument issued by a large company.

Convertible debt - a debt security that can be exchanged for common stock (or
another type of security) on a specified basis and date.

Convertible security - a security that can be exchanged for common stock (or
another type of security) at a specified rate. Convertible securities include
convertible debt, rights and warrants.

49
<PAGE>

Corporate obligation - a money market instrument issued by a corporation or
commercial bank.

Crossing networks - an electronic system where anonymous parties can match buy
and sell transactions. These transactions don't affect the market, and
transaction costs are extremely low.

Debt security - when you invest in a debt security, you are typically lending
your money to a governmental body or company (the issuer) to help fund their
operations or major projects. The issuer pays interest at a specified rate on a
specified date or dates, and repays the principal when the security matures.
Short-term debt securities include money market instruments such as treasury
bills. Long-term debt securities include fixed income securities such as
government and corporate bonds, and mortgage-backed and asset-backed securities.

Depositary receipts - evidence of the deposit of a security with a custodian
bank. American Depositary Receipts (ADRs), for example, are certificates traded
in U.S. markets representing an interest of a foreign company. They were created
to make it possible for foreign issuers to meet U.S. security registration
requirements. Other examples include ADSs, GDRs and EDRs.

Dividend yield - rate of return of dividends paid on a common or preferred
stock. It equals the amount of the annual dividend on a stock expressed as a
percentage of the stock's current market value.

Dollar roll transaction - the sale by a Fund of mortgage-backed or other
asset-backed securities, together with a commitment to buy similar, but not
identical, securities at a future date.

Equity security - an investment that gives you an equity ownership right in a
company. Equity securities (or "equities") include common and preferred stock,
rights and warrants.

First Boston Convertible Index - a widely-used unmanaged index that measures
the performance of convertible securities. The index is not available for
investment.

First-tier security - under Rule 2a-7 under the 1940 Act, a debt security that
is an eligible investment for money market funds and has the highest short-term
rating from a nationally recognized statistical rating organization (NRSRO), or
if unrated, is determined by the fund's portfolio management team to be of

50
<PAGE>

comparable quality, or is a money market fund issued by a registered investment
company, or is a government security.

Fixed income security - an intermediate to long-term debt security that matures
in more than one year.

Foreign security - a debt or equity security issued by a foreign company or
government.

Forward foreign currency contracts - a forward foreign currency contract
includes an obligation to purchase or sell a foreign currency at a specified
future date.

Futures contract - a contract to buy or sell an asset or an index of securities
at a specified price on a specified future date. The price is set through a
futures exchange.

Guaranteed investment contract - an investment instrument issued by a rated
insurance company in return for a payment by an investor.

High quality - includes municipal securities that are rated in the top two
highest short-term debt categories according to NRSROs such as S&P and Moody's.
The portfolio management team may consider an unrated municipal security if it
is determined to be of comparable quality, based upon guidelines approved by the
Fund's Board of Trustees. Please see the SAI for more information about credit
ratings.

High-yield debt security - debt securities that, at the time of investment by
the sub-adviser, are rated "BB" or below by S&P or "Ba" or below by Moody's, or
that are unrated and determined to be of comparable quality.

Interest rate swap - an agreement between two parties to exchange periodic
interest payments based on some predetermined dollar principal.

Investment grade - a debt security that has been given a medium to high credit
rating (Baa or higher by Moody's, BBB or higher by S&P or a comparable rating by
other NRSROs) based on the issuer's ability to pay interest and repay principal
on time. The portfolio management team may consider an unrated debt security to
be investment grade if the team believes it is of comparable quality. Please see
the SAI for more information about credit ratings.

Lehman 3-Year Municipal Bond Index - a broad-based, unmanaged index of
investment grade bonds with maturities of two to four years. All dividends are
reinvested.

51
<PAGE>

Lehman 7-Year Municipal Bond Index - a broad-based, unmanaged index of
investment grade bonds with maturities of seven to eight years. All dividends
are reinvested.

Lehman Government Bond Index - an index of government bonds with an average
maturity of approximately nine years. All dividends are reinvested.

Lehman Government/Corporate Bond Index - an index of U.S. government, U.S.
Treasury and agency securities, and corporate and Yankee bonds. All dividends
are reinvested.

Lehman Intermediate Government Bond Index - an index of U.S. government agency
and U.S. Treasury securities. All dividends are reinvested.

Lehman Intermediate Treasury Index - an index of U.S. Treasury securities with
maturities of three to 10 years. All dividends are reinvested.

Lehman Municipal Bond Index - a broad-based, unmanaged index of 8,000
investment grade bonds with long-term maturities. All dividends are reinvested.

Liquidity - a measurement of how easily a security can be bought or sold at a
price that is close to its market value.

Merrill Lynch 1-3 Year Treasury Index - an index of U.S. Treasury bonds with
maturities of 1 to 3 years. All dividends are reinvested.

52
<PAGE>

Municipal security (obligation) - a debt security issued by state or local
governments or governmental authorities to pay for public projects and services.
"General obligations" are typically backed by the issuer's full taxing and
revenue-raising powers. "Revenue securities" depend on the income earned by a
specific project or authority, like road or bridge tolls, user fees for water or
revenues from a utility. Interest income from these securities is exempt from
federal income taxes and is generally exempt from state taxes if you live in the
state that issued the security. If you live in the municipality that issued the
security, interest income may also be exempt from local taxes.

Options - An option is the right to buy or sell a security based on an agreed
upon price at a specified time. For example, an option may give the holder of a
stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options may also be based
on the movement of an index such as the S&P 500.

Over-the-counter market - a market where dealers trade securities through a
telephone or computer network rather than through a public stock exchange.

Participation - a pass-through certificate representing a share in a pool of
debt obligations or other instruments.

Pass-through certificate - securitized mortgages or other debt securities with
interest and principal paid by a servicing intermediary shortly after interest
payments are received from borrowers.

Price-to-earnings ratio (P/E ratio) - the current price of a share divided by
its actual or estimated earnings per share. The P/E ratio is one measure of the
value of a company.

Private activity bond - a municipal security that is used to finance private
projects or other projects that aren't qualified for tax purposes. Private
activity bonds are generally taxable, unless their use is specifically exempted,
or may be treated as tax preference items.

53
<PAGE>

Quantitative analysis - an analysis of financial information about a company or
security to identify securities that have the potential for growth or are
otherwise suitable for a fund to buy.

Repurchase agreement - a short-term (often overnight) investment arrangement.
The investor agrees to buy certain securities from the borrower and the borrower
promises to buy them back at a specified date and price. The difference between
the purchase price paid by the investor and the repurchase price paid by the
borrower represents the investor's return. Repurchase agreements are popular
because they provide very low-risk return and can virtually eliminate credit
difficulties.

Right - a temporary privilege allowing investors who already own a common stock
to buy additional shares directly from the company at a specified price or
formula.

S&P 500(1) - Standard & Poor's 500 Composite Stock Price Index, an unmanaged
index of 500 widely held common stocks. It is not available for investment.

S&P IFC Investables Index - an unmanaged index that tracks more than 1,400
stocks in 25 emerging markets in Asia, Latin America, Eastern Europe, Africa
and the Middle East. The index is weighted by market capitalization.

54
<PAGE>

S&P SmallCap 600(1) - Standard & Poor's SmallCap 600 Index, an unmanaged index
of 600 common stocks, weighted by market capitalization. It is not available
for investment.

Salomon Brothers Mortgage Index - an index of 30-year and 15-year GNMA, FNMA
and FHLMC securities, and FNMA and FHLMC balloon mortgages.

Second-tier security - under Rule 2a-7 under the 1940 Act, a debt security that
is an eligible investment for money market funds, but is not a first-tier
security.

Senior security - a debt security that allows holders to receive their share of
a company's remaining assets in a bankruptcy before other bondholders,
creditors, and common and preferred shareholders.

Special purpose issuer - an entity organized solely to issue asset-backed
securities on a pool of assets it owns.

Trade date - the effective date of a purchase, sale or exchange transaction, or
other instructions sent to us. The trade date is determined by the day and time
we receive the order or instructions in a form that's acceptable to us.

U.S. government obligations - a wide range of debt securities issued or
guaranteed by the U.S. government or its agencies, authorities or
instrumentalities.

U.S. Treasury obligation - a debt security issued by the U.S. Treasury.

Warrant - a certificate that gives you the right to buy common shares at a
specified price within a specified period of time.

Zero-coupon bond - a bond that makes no periodic interest payments. Zero coupon
bonds are sold at a deep discount to their face value and mature at face value.
The difference between the face value at maturity and the purchase price
represents the return.

(1) S&P has not reviewed any stock included in the S&P SuperComposite 1500, S&P
500, S&P SmallCap 600, or S&P MidCap 400 Index for its investment merit. S&P
determines and calculates its indices independently of the Funds and is not a
sponsor or affiliate of the Funds. S&P gives no information and makes no
statements about the suitability of investing in the Funds or the ability of its
indices to track stock market performance. S&P makes no guarantees about the
indices, any data included in them and the suitability of the indices or its
data for any purpose. "Standard and Poor's," "S&P 500" and "S&P 600" are
trademarks of The McGraw-Hill Companies, Inc.
55
<PAGE>

[GRAPHIC OMITTED]

Where to find more information

You'll find more information about the Domestic Stock and Government &
Corporate Bond Funds in the following documents:

Annual and semi-annual reports

[GRAPHIC OMITTED]

Statement of Additional Information

The SAI contains additional information about the Funds and their policies. The
SAI is legally part of this prospectus (it's incorporated by reference). A copy
has been filed with the SEC.

You can obtain a free copy of these documents, request other information about
the Funds and make shareholder inquiries by contacting Nations Funds:

By telephone: 1.800.321.7854

By mail:
Nations Funds
c/o Stephens Inc.
One Bank of America Plaza
33rd Floor
Charlotte, NC 28255

On the Internet: www.nations-funds.com

Information about the Funds can be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at 1-202-942-8090. The reports
and other information about the Funds are available on the EDGAR Database on the
SEC's Internet site at http://www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the following
E-mail address: [email protected], or by writing the SEC's Public Reference
Section, Washington, D.C. 20549-0102.

SEC file numbers: [Nations Funds Logo]
Nations Funds Trust, 811-09645

COMBOPROIX-12/00
<PAGE>
[GRAPHIC]

LifeGoal Portfolios
Prospectus -- Primary A Shares
December 27, 2000

LifeGoal Growth Portfolio

LifeGoal Balanced Growth Portfolio

LifeGoal Income and Growth Portfolio

------------------------------
Not FDIC Insured
------------------------------
May Lose Value
------------------------------
No Bank Guarantee
------------------------------

[Nations Funds Logo]
<PAGE>

An overview of the Portfolios
--------------------------------------------------------------------------------

[GRAPHIC]

Terms used in this prospectus

[GRAPHIC]

You'll find Terms used in this prospectus on page 34.

Your investment in a Portfolio is not a bank deposit and is not
insured or guaranteed by Bank of America, N. A. (Bank of America),
the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Your investment may lose money.

Affiliates of Bank of America are paid for the services they
provide to the Portfolios and the underlying Funds.

This booklet, which is called a prospectus, tells you about Nations Funds
LifeGoal Portfolios. Please read it carefully because it contains information
that's designed to help you make informed investment decisions. Although this
prospectus describes LifeGoal Growth Portfolio, LifeGoal Balanced Growth
Portfolio and LifeGoal Income and Growth Portfolio, as of the date of this
prospectus, the shares of these Portfolios are not offered for sale to the
public. It is anticipated that the shares of the Portfolios will be offered for
sale beginning on or about June 8, 2001.

Unlike traditional mutual funds, which invest in individual securities, the
Portfolios invest in a mix of Nations Funds Domestic Stock, International
Stock, Government & Corporate Bond and Money Market Funds using an asset
allocation approach. This kind of mutual fund is sometimes called a "fund of
funds."

About asset allocation
Asset allocation is the process of creating a diversified portfolio by
investing in different asset classes -- for example, equity securities, fixed
income securities and money market instruments -- in varying proportions.

The mix of asset classes and how much is invested in each may be the most
important factor in how a Portfolio performs and the amount of risk involved.
Each asset class, and market segments within a class, like large, mid- and
small capitalization stocks, has different return and risk characteristics, and
reacts in different ways to changes in the economy. An investment approach that
combines asset classes and market segments may help to reduce overall Portfolio
volatility.

About the Portfolios
Each Portfolio has its own asset allocation strategy, which gives it
distinctive risk/return characteristics. The performance of each Portfolio
depends on many factors, including its allocation strategy and the performance
of the Nations Funds it invests in. In general, the more a LifeGoal Portfolio
allocates to Domestic Stock and International Stock Funds, the greater the
potential return and the greater the risk of a decline in share price. The more
a LifeGoal Portfolio allocates to Government & Corporate Bond Funds, the
greater the potential for price stability and the lower the potential return.
There's always a risk, however, that you'll lose money or you may not earn as
much as you expect.

LifeGoal Growth Portfolio focuses on long-term growth by normally allocating
all of its assets to a mix of Funds that invest primarily in equity securities.
Equities have the potential to provide higher returns than many other kinds of
investments, but they also tend to have the highest risk.

2
<PAGE>
LifeGoal Balanced Growth Portfolio focuses on long-term growth by normally
allocating its assets to a balanced mix of Funds that invest in equity and
fixed income securities. Fixed income securities have the potential to increase
in value, because, when interest rates fall, the value of these securities
tends to rise. When interest rates rise, however, the value of these securities
tends to fall. Other things can also affect the value of fixed income
securities.

LifeGoal Income and Growth Portfolio focuses on current income and modest
growth. It normally allocates most of its assets to Funds that invest in fixed
income securities, but may also allocate some assets to Funds that invest in
equity securities. Over time, the return on this Portfolio may be lower than
the return on the other Portfolios.

Is LifeGoal right for you?
When you're choosing a Portfolio to invest in, you should consider things like
your investment goals, how much risk you can accept and how long you're
planning to hold your investment.

The LifeGoal Portfolios may be suitable for you if:

o you have longer-term investment goals

o they're part of a balanced portfolio

They may not be suitable for you if:

o you're not prepared to accept or are unable to bear the risks associated
with equity and fixed income securities

o you have short-term investment goals

o you're looking for a regular stream of income

You'll find a discussion of each Portfolio's principal investments, strategies
and risks in the Portfolio descriptions that start on page 5.

For more information
If you have any questions about the Portfolios, please call us at
1.800.765.2668 or contact your investment professional.

You'll find more information about the Portfolios in the Statement of
Additional Information (SAI). The SAI includes more detailed information about
each Portfolio's investments, policies, performance and management, among other
things. Please turn to the back cover to find out how you can get a copy.

3
<PAGE>

What's inside
--------------------------------------------------------------------------------

[GRAPHIC]
Banc of America Advisors, Inc.

Banc of America Advisors, Inc. (BAAI) is the investment adviser to
each of the Portfolios. BAAI is responsible for the overall
management and supervision of the investment management of each
Portfolio. BAAI and Nations Funds have engaged a sub-adviser --
Banc of America Capital Management, Inc. (BACAP) -- which is
responsible for the day-to-day investment decisions for each of the
Portfolios.

[GRAPHIC]
You'll find more about BAAI and BACAP starting on page 23.

[GRAPHIC]

About the Portfolios

LifeGoal Growth Portfolio 5
Sub-adviser: BACAP
------------------------------------------------------
LifeGoal Balanced Growth Portfolio 9
Sub-adviser: BACAP
------------------------------------------------------
LifeGoal Income and Growth Portfolio 13
Sub-adviser: BACAP
------------------------------------------------------
About the Nations Funds 17
------------------------------------------------------
Other important information 21
------------------------------------------------------
How the Portfolios are managed 23

[GRAPHIC]

About your investment

Information for investors
Buying, selling and exchanging shares 29
Distributions and taxes 32
------------------------------------------------------
Terms used in this prospectus 34
------------------------------------------------------
Where to find more information back cover

4
<PAGE>
[GRAPHIC]

About the sub-adviser

BACAP is this Portfolio's sub-adviser. BACAP's Investment
Strategies Team makes the day-to-day investment decisions for the
Portfolio.

[GRAPHIC]

You'll find more about BACAP on page 24.

[GRAPHIC]

About the underlying Nations Funds

You'll find more information about the Funds in which the Portfolio
invests, including their objectives and strategies, in About the
Nations Funds and in the SAI.

LifeGoal Growth Portfolio

[GRAPHIC]

Investment objective

The Portfolio seeks capital appreciation through exposure to a variety
of equity market segments.

[GRAPHIC]

Investment strategies

The Portfolio normally invests most of its assets in Primary A Shares of
Nations Funds Domestic Stock and International Stock Funds.

The team uses asset allocation as its principal investment approach. It:

o allocates assets among Fund categories, within the target allocations set
for the Portfolio. It bases its allocations on the Portfolio's investment
objective, historical returns for each asset class and on its outlook for
the economy

o chooses individual Funds within each category and the amount it will
allocate to each, looking at each Fund's historical returns, as well as
the expected performance of the mix of Funds

o reviews the allocations to Fund categories and individual Funds at least
monthly, and may change these allocations when it believes it's
appropriate to do so

The actual amount in each Fund or category of Funds may vary from the
allocations set by the team, depending on how the Funds perform, and for other
reasons. The team may use various strategies to try to manage how much the
actual amount varies, and for how long. For example:

o if there are more assets in a Fund category than in the target allocation,
the team may allocate money coming into the Portfolio to the other Fund
categories

o if there are fewer assets in a Fund category than in the target
allocation, it may allocate money coming into the Portfolio to that Fund
category

The Portfolio normally sells a proportionate amount of the shares it owns in
each Nations Fund to meet its redemption requests.

5
<PAGE>
LifeGoal Growth Portfolio Target allocation for each
can invest in: Fund category:

Large-capitalization domestic stock funds 30-70%
Nations Value Fund
Nations Blue Chip Fund
Nations Strategic Growth Fund
Nations Marsico Focused Equities Fund
Mid-capitalization domestic stock fund 10-30%
Nations MidCap Growth Fund
Small-capitalization domestic stock fund 10-30%
Nations Small Company Fund
International stock funds 10-30%
Nations International Value Fund
Nations International Equity Fund
Emerging markets stock fund 0-5%
Nations Emerging Markets Fund

The team can substitute or add other Funds to this list at any time,
including Funds introduced after the date of this prospectus.

[GRAPHIC]

You'll find detailed information about each Fund's investment
strategies and risks in its prospectus, and in its SAI. Please call
us at 1.800.765.2668 for a copy.

[GRAPHIC]

You'll find more about other risks of investing in this Portfolio
starting on page 21 and in the SAI.

[GRAPHIC]

Risks and other things to consider

LifeGoal Growth Portfolio has the following risks:

o Investment strategy risk - The team uses an asset allocation strategy
to try to achieve the highest total return. There is a risk that the
mix of investments will not produce the returns they expect, or that
the Portfolio will fall in value. There is also the risk that the
Funds the Portfolio invests in will not produce the returns the team
expects, or will fall in value.
o Stock market risk - The Portfolio allocates assets to Funds that
invest in stocks. The value of the stocks a Fund holds can be
affected by changes in U.S. or foreign economies and financial
markets, and the companies that issue the stocks, among other things.
Stock prices can rise or fall over short as well as long periods. In
general, stock markets tend to move in cycles, with periods of rising
prices and periods of falling prices. As of the date of this
prospectus, the stock markets, as measured by the S&P 500 and other
commonly used indices, were trading at historically high levels.
There can be no guarantee that these levels will continue.
o Small company risk - The Portfolio allocates assets to Funds that may
invest in smaller companies. Stocks of smaller companies tend to have
greater price swings than stocks of larger companies because they
trade less frequently and in lower volumes. These securities may have
a higher potential for gains, but also carry more risk.
o Foreign investment risk - The Portfolio allocates assets to Funds
that invest in foreign securities. Foreign investments may be riskier
than U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited financial
information. Withholding taxes also may apply to some foreign
investments.

6
<PAGE>
o Emerging markets risk - The Portfolio allocates assets to Funds that
invest in securities of companies in emerging markets. Securities
issued by companies in developing or emerging market countries, like
those in Eastern Europe, the Middle East, Asia or Africa, may be more
sensitive to the risks of foreign investing. In particular, these
countries may experience instability resulting from rapid social,
political and economic development. Many of these countries are
dependent on international trade, which makes them sensitive to world
commodity prices and economic downturns in other countries. Some
emerging countries have a higher risk of currency devaluation, and
some countries may experience long periods of high inflation or rapid
changes in inflation rates.
o Technology and technology-related risk - The Portfolio allocates
assets to Funds that may invest in technology and technology-related
companies, which can be significantly affected by obsolescence of
existing technology, short product cycles, falling prices and
profits, and competition from new market entrants.
o Rebalancing policy - The actual amount in each Fund or category of
Funds may vary from the allocations set by the team. This could
continue for some time.

[GRAPHIC]

A look at the Portfolio's performance

Because the Portfolio has not been in operation for a full calendar
year, no performance information is included in the prospectus.

7
<PAGE>
[GRAPHIC]

There are two kinds of fees --
shareholder fees you pay directly and annual fund operating
expenses that are deducted from a portfolio's assets and from the
assets of the Nations Funds the Portfolio invests in.

[GRAPHIC]

What it costs to invest in the Portfolio

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

Shareholder fees
(Fees paid directly from your investment) Primary A Shares

Maximum sales charge (load) none
Maximum deferred sales charge (load) none
Annual Portfolio operating expenses
(Expenses that are deducted from the
Portfolio's assets)
Management fees 0.25%
----
Total annual Portfolio operating expenses 0.25%
====

Indirect Expenses
The Portfolio's annual operating expenses include a portion of the
annual Fund operating expenses of the Nations Funds in which the
Portfolio invests. This portion is estimated to be between 0.99% and
1.18% (expressed as a weighted average, including any fee waiver and/or
reimbursement commitments that will expire July 31, 2001), and is based
on:
o the amount the Portfolio expects to invest in each Fund, based on
the target allocation
o each Fund's annualized expense ratio for the period ended March
31, 2000, adjusted as necessary to reflect current service
provider fees

[GRAPHIC]
This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Portfolio's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing
in this Portfolio with the cost of investing in other mutual funds.

This example assumes:
o you invest $10,000 in Primary A Shares of the Portfolio for the
time periods indicated and then sell all of your shares at the end
of those periods
o you reinvest all dividends and distributions in the Portfolio
o your investment has a 5% return each year o the Portfolio's operating
expenses remain the same as shown in the table above
o the Portfolio's indirect expenses remain at the average of the
range as shown above for the 1 year example, excluding any fee
waivers and/or reimbursements for the 3 year example

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

1 year 3 years

Primary A Shares $135 $428

8
<PAGE>
[GRAPHIC]

About the sub-adviser

BACAP is this Portfolio's sub-adviser. BACAP's Investment
Strategies Team makes the day-to-day investment decisions for the
Portfolio.

[GRAPHIC]

You'll find more about BACAP on page 24.

[GRAPHIC]

About the underlying Nations Funds

You'll find more information about the Funds in which the Portfolio
invests, including their objectives and strategies, in About the
Nations Funds and in the SAI.

LifeGoal Balanced Growth Portfolio

[GRAPHIC]

Investment objective

The Portfolio seeks total return through a balanced portfolio of equity
and fixed income securities.

[GRAPHIC]

Investment strategies

The Portfolio normally invests all of its assets in Primary A Shares of
a balanced mix of Nations Funds Domestic Stock and International Stock
and Government & Corporate Bond Funds.

The team uses asset allocation as its principal investment approach. It:

o chooses individual Funds within each category and the amount it will
allocate to each, looking at each Fund's historical returns, as well as
the expected performance of the mix of Funds

o reviews the allocations to Fund categories and individual Funds at least
monthly, and may change these allocations when it believes it's
appropriate to do so

o if there are more assets in a Fund category than in the target allocation,
the team may allocate money coming into the Portfolio to the other Fund
categories

o if there are fewer assets in a Fund category than in the target
allocation, it may allocate money coming into the Portfolio to that Fund
category

The Portfolio normally sells a proportionate amount of the shares it owns in
each Nations Fund to meet its redemption requests.

9
<PAGE>
[GRAPHIC]

You'll find more about other risks of investing in this Portfolio
starting on page 21 and in the SAI.

[GRAPHIC]

You'll find detailed information about each Fund's investment
strategies and risks in its prospectus, and in its SAI. Please call
us at 1.800.765.2668 for a copy.

LifeGoal Balanced Growth Target allocation for each
Portfolio can invest in: Fund category:

Large-capitalization domestic stock funds 15-40%
Nations Value Fund
Nations Blue Chip Fund
Nations Strategic Growth Fund
Nations Marsico Focused Equities Fund
Mid-capitalization domestic stock fund 5-15%
Nations MidCap Growth Fund
Small-capitalization domestic stock fund 5-15%
Nations Small Company Fund
International stock funds 5-15%
Nations International Value Fund
Nations International Equity Fund
Government & corporate bond funds 35-60%
Nations Bond Fund
Nations Strategic Income Fund
High yield bond fund 0-10%
Nations High Yield Bond Fund

The team can substitute or add other Funds to this list at any time,
including Funds introduced after the date of this prospectus.

[GRAPHIC]

Risks and other things to consider

LifeGoal Balanced Growth Portfolio has the following risks:

o Small company risk - The Portfolio allocates assets to Funds that may
invest in smaller companies. Stocks of smaller companies tend to have
greater price swings than stocks of larger companies because they
trade less frequently and in lower volumes. These securities may have
a higher potential for gains, but also carry more risk.

10
<PAGE>
o Foreign investment risk - The Portfolio allocates assets to Funds
that invest in foreign securities. Foreign investments may be riskier
than U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited financial
information. Withholding taxes may also apply to some foreign
investments. Funds that invest in securities of companies in emerging
markets have high growth potential, but can be more volatile than
securities in more developed markets.

o Interest rate risk - The Portfolio allocates assets to Funds that may
invest in fixed income securities. The prices of fixed income
securities will tend to fall when interest rates rise. In general,
fixed income securities with longer terms tend to fall more in value
when interest rates rise than fixed income securities with shorter
terms.

o Credit risk - A Fund that invests in fixed income securities could
lose money if the issuer of a fixed income security is unable to pay
interest or repay principal when it's due. Credit risk usually
applies to most fixed income securities, but generally is not a
factor for U.S. government obligations. The Portfolio allocates
assets to Funds that typically invest in securities that are not
investment grade and are generally considered speculative because
they present a greater risk of loss, including default, than higher
quality debt securities. These securities typically pay a premium --
a high interest rate or yield -- because of the increased risk of
loss. These securities also can be subject to greater price
volatility.

o Technology and technology-related risk - The Portfolio allocates
assets to Funds that may invest in technology and technology-related
companies, which can be significantly affected by obsolescence of
existing technology, short product cycles, falling prices and
profits, and competition from new market entrants.

o Rebalancing policy - The actual amount in each Fund or category of
Funds may vary from the allocations set by the team. This could
continue for some time.

[GRAPHIC]

A look at the Portfolio's performance

Because the Portfolio has not been in operation for a full calendar
year, no performance information is included in the prospectus.

11
<PAGE>
[GRAPHIC]
There are two kinds of fees -- shareholder fees you pay directly
and annual fund operating expenses that are deducted from a
portfolio's assets and from the assets of the Nations Funds the
Portfolio invests in.

[GRAPHIC]
What it costs to invest in the Portfolio

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

Shareholder fees
(Fees paid directly from your investment) Primary A Shares

Maximum sales charge (load) imposed on purchases none
Maximum deferred sales charge (load) none
Annual Portfolio operating expenses
(Expenses that are deducted from the Portfolio's assets)
Management fees 0.25%
----
Total annual Portfolio operating expenses 0.25%
====

o the amount the Portfolio expects to invest in each Fund, based on the
target allocation

o each Fund's annualized expense ratio for the period ended March 31,
2000, adjusted as necessary to reflect current service provider fees

[GRAPHIC]

This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Portfolio's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Portfolio with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Portfolio for the
time periods indicated and then sell all of your shares at the end
of those periods

o you reinvest all dividends and distributions in the Portfolio

o your investment has a 5% return each year

o the Portfolio's operating expenses remain the same as shown in the
table above

o the Portfolio's indirect expenses remain at the average of the
range as shown above for the 1 year example, excluding any fee
waivers and/or reimbursements for the 3 year example

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

1 year 3 years

Primary A Shares $120 $379

12
<PAGE>
[GRAPHIC]

About the sub-adviser

BACAP is this Portfolio's sub-adviser. BACAP Investment Strategies
Team makes the day-to-day investment decisions for the Portfolio.

[GRAPHIC]

You'll find more about BACAP on page 24.

[GRAPHIC]

About the underlying Nations Funds

You'll find more information about the Funds in which the Portfolio
invests, including their objectives and strategies, in About the
Nations Funds and in the SAI.

LifeGoal Income and Growth Portfolio

[GRAPHIC]

Investment objective

The Portfolio seeks current income and modest growth to protect against
inflation and to preserve purchasing power.

[GRAPHIC]

Investment strategies

The Portfolio normally invests most of its assets in Primary A Shares of
Nations Funds Government & Corporate Bond Funds, but may also invest in
Nations Funds Domestic Stock and International Stock Funds, and Nations
Funds Money Market Funds.

The team uses asset allocation as its principal investment approach. It:

o chooses individual Funds within each category and the amount they will
allocate to each, looking at each Fund's historical returns, as well as
the expected performance of the mix of Funds

o reviews the allocations to Fund categories and individual Funds at least
monthly, and may change these allocations when it believes it's
appropriate to do so

o if there are more assets in a Fund category than in the target allocation,
the team may allocate money coming into the Portfolio to the other Fund
categories

o if there are fewer assets in a Fund category than in the target
allocation, it may allocate money coming into the Portfolio to that Fund
category

The Portfolio normally sells a proportionate amount of the shares it owns in
each Nations Fund to meet its redemption requests.

13
<PAGE>
LifeGoal Income and Growth Portfolio Target allocation for each
can invest in: Fund category:

Large-capitalization domestic stock funds 10-30%
Nations Value Fund
Nations Blue Chip Fund
Nations Strategic Growth Fund
Nations Marsico Focused Equities Fund
Small-capitalization domestic stock fund 0-10%
Nations Small Company Fund
International stock funds 0-10%
Nations International Value Fund
Nations International Equity Fund
Government & corporate bond funds 50-90%
Nations Short-Term Income Fund
Nations Bond Fund
Nations Strategic Income Fund
High yield bond fund 0-10%
Nations High Yield Bond Fund
Money market fund 0-20%
Nations Prime Fund

LifeGoal Income and Growth's target allocation for total investments in
domestic stock and international stock funds is 30%. The team can
substitute or add other Funds to this list at any time, including Funds
introduced after the date of this prospectus.

[GRAPHIC]

You'll find more about other risks of investing in this Portfolio
starting on page 21 and in the SAI.

[GRAPHIC]

You'll find detailed information about each Fund's investment
strategies and risks in its prospectus, and in its SAI. Please call
us at 1.800.765.2668 for a copy.

[GRAPHIC]

Risks and other things to consider

LifeGoal Income and Growth Portfolio has the following risks:

o Investment strategy risk - The team use an asset allocation strategy
to try to achieve the highest total return. There is a risk that the
mix of investments will not produce the returns they expect, or that
the Portfolio will fall in value. There is also the risk that the
Funds the Portfolio invests in will not produce the returns the team
expects, or will fall in value.
o Stock market risk - The Portfolio allocates assets to Funds that
invest in stocks. The value of the stocks a Fund holds can be
affected by changes in U.S. or foreign economies and financial
markets, and the companies that issue the stocks, among other things.
Stock prices can rise or fall over short as well as long periods. In
general, stock markets tend to move in cycles, with periods of rising
prices and periods of falling prices. As of the date of this
prospectus, the stock markets, as measured by the S&P 500 and other
commonly used indices, were trading at historically high levels.
There can be no guarantee that these levels will continue.
o Small company risk - The Portfolio allocates assets to Funds that may
invest in smaller companies. Stocks of smaller companies tend to have
greater price swings than stocks of larger companies because they
trade less frequently and in lower volumes. These securities may have
a higher potential for gains, but also carry more risk.

14
<PAGE>
o Foreign investment risk - The Portfolio allocates assets to Funds
that invest in foreign securities. Foreign investments may be riskier
than U.S. investments because of political and economic conditions,
changes in currency exchange rates, foreign controls on investment,
difficulties selling some securities and lack of or limited financial
information. Withholding taxes also may apply to some foreign
investments. Funds that invest in securities of companies in emerging
markets have high growth potential, but can be more volatile than
securities in more developed markets.

o Rebalancing policy - The actual amount in each Fund or category of
Funds may vary from the allocations set by the team. This could
continue for some time.

[GRAPHIC]

A look at the Portfolio's performance

Because the Portfolio has not been in operation for a full calendar
year, no performance information is included in the prospectus.

15
<PAGE>
[GRAPHIC]

There are two kinds of fees -- shareholder fees you pay directly
and annual fund operating expenses that are deducted from a
portfolio's assets and from the assets of the Nations Funds the
Portfolio invests in.

[GRAPHIC]

What it costs to invest in the Portfolio

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

Shareholder fees
(Fees paid directly from your investment) Primary A Shares

o the amount the Portfolio expects to invest in each Fund, based on the
target allocation
o each Fund's annualized expense ratio for the period ended March 31,
2000, adjusted as necessary to reflect current service provider fees

[GRAPHIC]
This is an example only. Your actual costs could be higher or
lower, depending on the amount you invest, and on the Portfolio's
actual expenses and performance.

Example
This example is intended to help you compare the cost of investing in
this Portfolio with the cost of investing in other mutual funds.

This example assumes:

o you invest $10,000 in Primary A Shares of the Portfolio for the time
periods indicated and then sell all of your shares at the end of
those periods

o you reinvest all dividends and distributions in the Portfolio

o your investment has a 5% return each year

o the Portfolio's operating expenses remain the same as shown in the
table above

o the Portfolio's indirect expenses remain at the average of the range
as shown above for the 1 year example, excluding any fee waivers
and/or reimbursements for the 3 year example

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

1 year 3 years

Primary A Shares $99 $326

16
<PAGE>
About the Nations Funds

The table starting on the next page is a brief overview of the objectives and
principal investments of the Nations Funds in which the LifeGoal Portfolios
invest in. Each Portfolio invests in a different mix of Nations Funds. You'll
find the mix of Nations Funds and target allocations for each Portfolio
starting on page 5.

The team can substitute or add other Funds to this table at any time, including
Funds introduced after the date of this prospectus.

For more information
You'll find more detailed information about each Fund's investment strategies
and risks in its prospectus and in its SAI. Please call us at 1.800.765.2668
for copies.

17
<PAGE>
<TABLE>
<CAPTION>
The Fund's investment objective What the Fund invests in
------------------------------------------- --------------------------------------------------
<S> <C> <C>
Domestic Stock Funds

Nations Value Fund Growth of capital by investing in companies o at least 65% of its assets in common stocks of
that are believed to be undervalued. U.S. companies. The Fund generally invests in
companies in a broad range of industries with
market capitalizations of at least $1
billion and daily trading volumes of at least
$3 million.

Nations Blue Chip Fund Long-term capital appreciation through Nations Blue Chip Master Portfolio. The Master
investments in blue chip stocks. Portfolio invests:
o at least 65% of its assets in blue chip stocks
o primarily in blue chip stocks that are
included in the S&P 500 Index

Nations Strategic Growth Fund Long-term, after-tax returns by investing in a o at least 65% of its assets in common stocks of
diversified portfolio of common stocks. companies selected from most major industry
sectors

Nations Marsico Focused Long-term growth of capital. Nations Marsico Focused Equities Master Portfolio.
Equities Fund The Master Portfolio invests in:
o at least 65% of its assets in common stocks of
large companies. The Master Portfolio, which
is non-diversified, generally holds a core
position of 20 to 30 common stocks
o up to 25% of its assets in foreign securities

Nations MidCap Growth Fund Capital appreciation by investing in emerging o at least 65% of its assets in companies chosen
growth companies that are believed to have from a universe of emerging growth companies.
superior long-term earnings growth prospects. The Fund generally holds securities of between
75 and 130 issuers, which include common
stocks, preferred stocks and convertible
securities like warrants, rights and
convertible debt

Nations Small Company Fund Long-term capital growth by investing o at least 65% of its assets in companies with a
primarily in equity securities. market capitalization of $1 billion or less.
The Fund usually holds 75 to 130 securities,
which include common stocks, preferred stocks
and convertible securities like warrants,
rights and convertible debt

International Stock Funds

Nations International Value Long-term capital appreciation by investing Nations International Value Master Portfolio.
Fund primarily in equity securities of foreign The Master Portfolio invests:
issuers, including emerging markets countries. o at least 65% of its assets in foreign
companies anywhere in the world that have a
market capitalization of more than $1 billion
at the time of investment. The Fund typically
invests in at least three countries other than
the United States at any one time
o primarily in common stocks, preferred stocks,
convertible securities, either directly or
indirectly through closed-end investment
companies and depositary receipts

Nations International Equity Long-term capital growth by investing Nations International Equity Master Portfolio.
Fund primarily in equity securities of non-United The Master Portfolio invests:
States companies in Europe, Australia, the Far o at least 65% of its assets in established
East and other regions, including developing companies located in at least three countries
countries. other than the United States. The investment
managers select countries, including emerging
market or developing countries, that they
believe have the potential for growth
o primarily in equity securities, which may
include equity interests in foreign investment
funds or trusts, convertible securities, real
estate investment trust securities and
depositary receipts
</TABLE>

18
<PAGE>
<TABLE>
<CAPTION>
The Fund's investment objective What the Fund invests in
------------------------------------------- --------------------------------------------------
<S> <C> <C>
Nations Marsico International Long-term growth of capital. Nations Marsico International Opportunities Master
Opportunities Fund Portfolio. The Master Portfolio invests:
o at least 65% of its assets in common stocks of
foreign companies. The Fund typically invests in
issuers from at least three different countries not
including the United States and generally holds a
core position of 35 to 50 common stocks
o in common stocks of companies operating in
emerging markets

Nations Emerging Markets Long-term capital growth by investing o at least 65% of its assets in companies in
Fund primarily in equity securities of companies in emerging markets or developing countries. The Fund
emerging market countries, such as those in typically invests in securities of companies in at
Latin America, Eastern Europe, the Pacific least three emerging markets countries at any one
Basin, the Far East and India. time
o may invest in foreign currency exchange contracts
to convert foreign currencies to and from the U.S.
dollar, and to hedge against changes in foreign
currency exchange rates

Government & Corporate Bond Funds

Nations Short-Term Income High current income consistent with minimal o at least 65% of its total assets in investment
Fund fluctuations of principal. grade fixed income securities. The team may choose
unrated securities if it believes they are of
comparable quality to investment grade securities at
the time of investment
o corporate debt securities, including bonds, notes
and debentures, mortgage-related securities issued
by governments, asset-backed securities or U.S.
government obligations

Nations Bond Fund Total return by investing in investment grade o at least 65% of its assets in investment grade
fixed income securities. fixed income securities. The portfolio management
team may choose unrated securities if it believes
they are of comparable quality to investment grade
securities at the time of investment
o corporate debt securities, including bonds, notes
and debentures, U.S. government obligations, foreign
debt securities denominated in U.S. dollars,
mortgage-related securities, asset-backed securities
or municipal securities

Nations Strategic Income Fund Total return with an emphasis on current o at least 65% of its assets in investment grade
income by investing in a diversified portfolio debt securities, including corporate debt
of fixed income securities. securities, U.S. government obligations, foreign
debt securities denominated in U.S. dollars or
foreign currencies, and mortgage-related securities
issued by governments and non-government issuers
o up to 35% of its assets in lower-quality fixed
income securities ("junk bonds" or "high yield
bonds") rated "B" or better by Moody's or S&P. The
portfolio management team may choose unrated
securities if it believes they are of comparable
quality at the time of investment
</TABLE>

19
<PAGE>
<TABLE>
<CAPTION>
The Fund's investment objective What the Fund invests in
------------------------------------------- --------------------------------------------------
<S> <C> <C>
Nations High Yield Bond Fund Maximum income by investing in a diversified Nations High Yield Bond Master Portfolio. The Master
portfolio of high yield debt securities. Portfolio invests:
o at least 65% of its assets in domestic and foreign
corporate high yield debt securities which are not
rated investment grade but generally will be rated
"B"or better by Moody's Investor Services, Inc. or
Standard & Poor's Corporation
o primarily in U.S. government obligations,
zero-coupon bonds, as well as domestic corporate
high yield debt securities and U.S.
dollar-denominated foreign corporate high yield debt
securities, both of which include private placements
o up to 25% of its assets in equity securities which
may include convertible securities

Money Market Fund

Nations Prime Fund Maximization of current income to the extent o money market instruments, including commercial
consistent with the preservation of capital paper, bank obligations, short-term debt securities,
and the maintenance of liquidity. guaranteed investment contracts, short-term taxable
municipal securities, repurchase agreements secured
by first-tier securities or U.S. government
obligations
</TABLE>

20
<PAGE>
[GRAPHIC]

You'll find specific information about each Portfolio's principal
investments, strategies and risks in the descriptions starting on
page 5.

[GRAPHIC]

Other important information

The following are some other risks and information you should consider before
you invest:

o Changing investment objectives and policies - The investment
objective and certain investment policies of any Portfolio or Fund
can be changed without shareholder approval. Other investment
policies may be changed only with shareholder approval.

o Changing to a feeder fund - Unlike traditional mutual funds, which
invest in individual securities, a "feeder fund" invests all of its
assets in another fund, called a "master portfolio." Other feeder
funds generally also invest in a master portfolio. The master
portfolio invests in individual securities and has the same
investment objective, investment strategies and principal risks as
the feeder funds. This structure can help reduce a feeder fund's
expenses because its assets are combined with those of other feeder
funds. If a master portfolio doesn't attract other feeder funds,
however, a feeder fund's expenses could be higher than those of a
traditional mutual fund.

Each Portfolio may become a feeder fund if the Board of Trustees
decides this would be in the best interests of shareholders. We don't
require shareholder approval to make the change, but we'll notify you
if it happens.

o Holding other kinds of investments - The Portfolios or any Fund may
hold investments that aren't part of their principal investment
strategies. Please refer to the SAI for more information. The
portfolio managers or management team can also choose not to invest
in specific securities described in this prospectus and in the SAI.

o Foreign investment risk - Funds that invest in foreign securities may
be affected by changes in currency exchange rates and the costs of
converting currencies; foreign government controls on foreign
investment, repatriation of capital, and currency and exchange;
foreign taxes; inadequate supervision and regulation of some foreign
markets; difficulties selling some investments, which may increase
volatility; different settlement practices or delayed settlements in
some markets; difficulty getting complete or accurate information
about foreign companies; less strict accounting, auditing and
financial reporting standards than those in the U.S.; political,
economic or social instability; and difficulty enforcing legal rights
outside the U.S.

o Investing defensively - A Portfolio may temporarily hold up to 100%
of its assets in Nations Prime Fund, a money market fund, to try to
protect it during a market or economic downturn or because of
political or other conditions. A Portfolio may not achieve its
investment objective while it is investing defensively.

21
<PAGE>
o Securities lending program - A Fund may lend portfolio securities to
approved broker-dealers or other financial institutions on a fully
collateralized basis in order to earn additional income. There may be
delays in receiving additional collateral after the loan is made or
in recovering the securities loaned.

o Portfolio turnover - A Portfolio or Fund that replaces -- or turns
over -- more than 100% of its investments in a year is considered to
trade frequently. Frequent trading can result in larger distributions
of short-term capital gains to shareholders. These gains are taxable
at higher rates than long-term capital gains. Frequent trading can
also mean higher brokerage and other transaction costs, which could
reduce the Portfolio's returns. The Portfolios generally buy
securities for capital appreciation, investment income, or both, and
don't engage in short-term trading. The annual portfolio turnover
rates for LifeGoal Growth Portfolio, LifeGoal Balanced Growth
Portfolio and LifeGoal Income and Growth Portfolio are expected to be
no more than 161%, 124% and 107%, respectively.

22
<PAGE>
[GRAPHIC]
Banc of America Advisors, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

[GRAPHIC]

How the Portfolios are managed

Investment adviser
BAAI is the investment adviser to over 60 mutual fund portfolios in the Nations
Funds Family, including the Portfolios described in this prospectus.

BAAI is a registered investment adviser. It's a wholly-owned subsidiary of Bank
of America, which is owned by Bank of America Corporation.

Nations Funds pays BAAI an annual fee for its investment advisory services. The
fee is calculated as a percentage of the average daily net assets of each
Portfolio and is paid monthly. BAAI uses part of this money to pay the
investment sub-adviser for the services it provides to each Portfolio. BAAI has
also agreed to pay all other Portfolio expenses, except taxes, brokerage fees
and commissions, extraordinary expenses, and any distribution (12b-1),
shareholder servicing or shareholder administration fees.

The following chart shows the maximum advisory fees BAAI can receive, along
with the actual advisory fees it received during the Portfolios' last fiscal
year:

Annual investment advisory fee, as a % of average daily net assets

Maximum Actual fee
advisory paid last
fee fiscal year

Nations LifeGoal Growth Portfolio 0.25% 0.25%
Nations LifeGoal Balanced Growth Portfolio 0.25% 0.25%
Nations LifeGoal Income and Growth Portfolio 0.25% 0.25%

23
<PAGE>
Investment sub-advisers
Nations Funds and BAAI engage one or more investment sub-advisers for each
Portfolio to make day-to-day investment decisions for the Portfolio. BAAI
retains ultimate responsibility (subject to Board oversight) for overseeing the
sub-advisers and evaluates the Portfolios' needs and available sub-advisers'
skills and abilities on an ongoing basis. Based on its evaluations, BAAI may at
times recommended to a Portfolio's Board that the Portfolio:

o change, add or terminate one or more sub-advisers;

o continue to retain a sub-adviser even though the sub-adviser's ownership or
corporate structure has changed; or

o materially change a sub-advisory agreement with a sub-adviser.

Applicable law requires a Portfolio to obtain shareholder approval in order to
act on most of these types of recommendations, even if the Portfolio's Board
has approved the proposed action and believes that the action is in
shareholders' best interests. BAAI and the Portfolios have applied for relief
from the SEC to permit the Portfolios to act on many of BAAI's recommendations
with approval only by the Portfolios' Board and not by Portfolios shareholders.
BAAI or a Portfolio would inform the Portfolio's shareholders of any actions
taken in reliance on this relief. Until BAAI and the Portfolios obtain the
relief, each Portfolio will continue to submit these matters to shareholders
for their approval to the extent required by applicable law.

[GRAPHIC]

Banc of America
Capital Management, Inc.

One Bank of America Plaza
Charlotte, North Carolina 28255

Currently managing more than $125 billion, BACAP has over 200 institutional
clients and is sub-adviser to more than 65 mutual funds in the Nations Funds
Family. BACAP generally takes a team approach to investment management. Each
team or individual portfolio manager has access to the latest technology and
analytical resources.

BACAP is the investment sub-adviser to all of the LifeGoal Portfolios. BACAP's
Investment Strategies Team is responsible for making the day-to-day investment
decisions for each Portfolio.

BACAP is also the investment sub-adviser to the Nations Funds that appear in
the table below. The table tells you which internal BACAP asset management team
is responsible for making the day-to-day investment decisions for each Fund.

Fund BACAP Team

Nations Value Fund Value Strategies Team
Nations Small Company Fund SmallCap Strategies Team
Nations Short-Term Income Fund Fixed Income Management Team
Nations Bond Fund Fixed Income Management Team
Nations Strategic Income Fund Fixed Income Management Team
Nations Prime Fund Taxable Money Market Management Team
Nations Strategic Growth Fund Growth Strategies Team
Nations MidCap Growth Fund Growth Strategies Team

24
<PAGE>
Nations Funds and BAAI have engaged investment sub-advisers to provide
day-to-day portfolio management for the underlying Nations Funds in which the
Portfolios invest. These sub-advisers function under the supervision of BAAI
and the Boards of Nations Funds.

[GRAPHIC]

Marsico Capital
Management, LLC

1200 17th Street
Suite 1300
Denver, Colorado 80202

Marsico Capital Management, LLC
Marsico Capital is a full service investment advisory firm founded by Thomas F.
Marsico in September 1997. It is a registered investment adviser, specializing
in large capitalization stocks, and currently has over $16 billion in assets
under management.

Marsico Management Holdings, LLC, a wholly-owned subsidiary of Bank of America
Corporation, indirectly owns the equity of Marsico Capital.

Marsico Capital is the investment sub-adviser to Nations Marsico Focused
Equities Master Portfolio and Nations Marsico International Opportunities
Master Portfolio.

Thomas F. Marsico, Chairman and Chief Executive Officer of Marsico Capital, is
the portfolio manager responsible for making the day-to-day investment
decisions for Nations Marsico Focused Equities Master Portfolio. Mr. Marsico
was an executive vice president and portfolio manager at Janus Capital
Corporation from 1988 until he formed Marsico Capital in September 1997. He has
more than 20 years of experience as a securities analyst and portfolio manager.

James G. Gendelman is the portfolio manager of Nations Marsico International
Opportunities Master Portfolio. Prior to joining Marsico Capital in May, 2000,
Mr. Gendelman spent thirteen years as a Vice President of International Sales
for Goldman, Sachs & Co. He holds a Bachelors degree in Accounting from
Michigan State University and an MBA in Finance from the University of
Chicago. Mr. Gendelman was an accountant for Ernst & Young from 1983 to 1985.

[GRAPHIC]
Brandes Investment
Partners, L.P.

12750 High Bluff Drive
San Diego, California 92130

Brandes Investment Partners, L.P.
Founded in 1974, Brandes is an investment advisory firm with 53 investment
professionals who manage more than $40 billion in assets. Brandes uses a
value-oriented approach to managing international investments, seeking to build
wealth by buying high quality, undervalued stocks.

Brandes is the investment sub-adviser to Nations International Value Master
Portfolio. Brandes' Large Cap Investment Committee is responsible for making
the day-to-day investment decisions for the Master Portfolio.

[GRAPHIC]

Chicago Equity Partners LLC

180 North LaSalle
Suite 3800
Chicago, Illinois 60601

Chicago Equity's Equity Management Team is responsible for making the
day-to-day investment decisions for Nations Blue Chip Master Portfolio.

25
<PAGE>
[GRAPHIC]

Gartmore Global Partners

Gartmore House
8 Fenchurch Place
London EC3M 4PH, England

Gartmore Global Partners
Gartmore is a global asset manager dedicated to serving the needs of U.S. based
investors. Gartmore was formed in 1995 as a registered investment adviser and
manages more than $1 billion in assets.

Gartmore is a general partnership which is an indirect wholly-owned subsidiary
of Nationwide Mutual Insurance Company.

Gartmore generally follows a growth philosophy, which is reflected in its
active management of market allocation and stock selection.

Gartmore is co-investment sub-adviser to:

o Nations International Equity Master Portfolio

Gartmore is investment sub-adviser to:

o Nations Emerging Markets Fund

Gartmore's portion of Nations International Equity Master Portfolio is
co-managed by five portfolio managers:

Christopher Palmer has been responsible since May 1999 for investments in
developing countries, and has been the principal portfolio manager of Nations
International Equity Fund since that time. He joined Gartmore in 1995 and is a
senior investment manager on the Gartmore Emerging Markets Team. Before he
joined Gartmore, Mr. Palmer worked for Unifund, S.A., a private investment
bank, in its Mexico City and Hong Kong offices, and managed global derivatives,
credit and counterparty credit risk as vice president in the Institutional
Credit Department of Bear Stearns & Co. He graduated from Colgate University in
1986 with a BA Honors degree in History and completed an MBA in Finance at New
York University in 1988. Mr. Palmer was awarded the CFA designation by the
Association of Investment Management and Research in 1993.

Seok Teoh has been responsible since June 1998 for investments in Asia. Ms.
Teoh has been with Gartmore since 1990 as the London based manager of its Far
East Team. Previously, she managed four equity funds for Rothschild Asset
Management in Tokyo and Singapore, and was also responsible for Singaporean and
Malaysian equity sales at Overseas Union Bank Securities in Singapore. Ms. Teoh
is native to Singapore and is fluent in Mandarin and Cantonese. She received an
Economics degree from the University of Durham.

Nick Reid has been responsible (or has shared responsibility) for investments
in Japan since August 1999. He has been investment manager for the Gartmore
Japanese Equities Team since he joined Gartmore in 1994 and has specific
responsibility for managing retail funds. Before he joined Gartmore, Mr. Reid
was a United Kingdom Smaller Companies Analyst with Panmure Gordon and a fund
manager covering Japanese and other Asian markets with Refuge Assurance. He
graduated from Cambridge University in 1989 with an honors degree in History.
Mr. Reid is also an associate member of the Institute of Investment Management
and Research.

26
<PAGE>
Stephen Jones has been responsible for investments in Europe since 1998. He is
also head of Gartmore European Equities. Mr. Jones joined Gartmore in 1994 and
was appointed head of the European equity team in 1995. He began his career at
The Prudential in 1984, and became a European equities investment manager in
1987, focusing on France, Belgium and Switzerland. He graduated from Manchester
University in 1984 with an honors degree in Economics.

Stephen Watson has been responsible since June 1998 for allocating assets among
the various regions, and for determining investments in regions not covered by
the other portfolio managers. He was the sole portfolio manager of Nations
International Equity Fund from February 1995 to June 1998. Mr. Watson joined
Gartmore in 1993 as a global fund manager, and is the chief investment officer
of Gartmore Global Partners and a member of Gartmore's global policy group.
Before joining Gartmore, he was a director and global fund manager with James
Capel Fund Managers, London, as well as client service manager for
international clients. He was in Capel-Cure Myers' portfolio management
division from 1980 to 1987, and began his career in 1976 with Samuel Motagu. He
is a member of the Securities Institute.

Nations Emerging Markets Fund is managed by Christopher Palmer, a senior
investment manager on the Gartmore Emerging Markets Team. He has managed the
Fund since August 1999. He also co-manages Nations International Equity Master
Portfolio.

[GRAPHIC]

INVESCO Global Asset
Management (N.A.), Inc.

1360 Peachtree Street, N.E.
Atlanta, Georgia 30309

INVESCO Global Asset Management (N.A.), Inc.
INVESCO Global is a division of AMVESCAP PLC, a publicly traded UK financial
holding company located in London.

INVESCO Global is one of the three investment sub-advisers to Nations
International Equity Master Portfolio. INVESCO's International Equity Portfolio
Management Team is responsible for making the day-to-day investment decisions
for its portion of the Master Portfolio.

[GRAPHIC]

Putnam Investment
Management, Inc.

One Post Office Square
Boston, Massachusetts 02109

Putnam Investment Management, Inc.
Putnam is a wholly-owned subsidiary of Putnam Investments, Inc., which, except
for shares held by employees, is owned by Marsh & McLennan Companies.

Putnam is one of three investment sub-advisers to Nations International Equity
Master Portfolio. Putnam's Core International Equity Group is responsible for
making the day-to-day investment decisions for its portion of the Master
Portfolio.

[GRAPHIC]

MacKay Shields LLC

9 West 57th Street
New York, New York 10019

MacKay Shields LLC
Founded in 1938, MacKay Shields is an independently-managed, wholly-owned
subsidiary of New York Life Insurance Company. The firm's 63 investment
professionals manage more than $30 billion in assets, including over $6 billion
in high yield assets.

MacKay Shields' High Yield Portfolio Management Team is responsible for making
the day-to-day decisions for Nations High Yield Bond Master Portfolio.

27
<PAGE>

[GRAPHIC]

Stephens Inc.

111 Center Street
Little Rock, Arkansas 72201

BAAI is also co-administrator of the Portfolios, and assists in overseeing the
administrative operations of the Funds.

BAAI and Stephens may pay amounts from their own assets to selling or servicing
agents of the Funds for services they provide.

[GRAPHIC]

PFPC Inc.

400 Bellevue Parkway
Wilmington, Delaware 19809

PFPC Inc. (PFPC) is the transfer agent for the Portfolios' shares. Its
responsibilities include processing purchases, sales and exchanges, calculating
and paying distributions, keeping shareholder records, preparing account
statements and providing customer service.

28
<PAGE>

About your investment
--------------------------------------------------------------------------------

[GRAPHIC]

When you sell shares of a mutual fund, the fund is effectively
"buying" them back from you. This is called a redemption.

[GRAPHIC]

A business day is any day that the New York Stock Exchange (NYSE)
is open. A business day ends at the close of regular trading on the
NYSE, usually at 4:00 p.m. Eastern time. If the NYSE closes early,
the business day ends as of the time the NYSE closes.

[GRAPHIC]

Buying, selling and exchanging shares

This prospectus offers Primary A Shares of the Portfolios. Here are some
general rules about this class of shares:

o Primary A Shares are available to certain financial institutions and
intermediaries for their own accounts, and for certain client accounts for
which they act as a fiduciary, agent or custodian. These include:

o Bank of America and certain of its affiliates

o certain other financial institutions and intermediaries, including
financial planners and investment advisers

o institutional investors

o charitable foundations

o endowments

o other Funds in the Nations Funds Family

o The minimum initial investment is $250,000. Financial institutions or
intermediaries can total the investments they make on behalf of their clients
to meet the minimum initial investment amount. Client accounts for which the
financial institution or intermediary no longer acts as fiduciary, agent or
custodian may no longer be eligible to purchase or hold Primary A Shares.

o There is no minimum amount for additional investments.

o There are no sales charges for buying, selling or exchanging these shares.

You'll find more information about buying, selling and exchanging Primary A
Shares on the pages that follow. You should also ask your financial institution
or intermediary about its limits, fees and policies for buying, selling and
exchanging shares, which may be different from those described here, and about
its related programs and services.

The Portfolios also offer other classes of shares, with different features and
expense levels, which you may be eligible to buy. Please contact your
investment professional, or call us at 1.800.765.2668 if you have any
questions, or you need help placing an order.

How shares are priced
All transactions are based on the price of a Portfolio's shares -- or its net
asset value per share. We calculate net asset value per share for each class of
each Portfolio at the end of each business day. The net asset value per share
of a Portfolio is based on the net asset value per share of the Nations Funds
the Portfolio invests in.

We calculate the net asset value for each class of a Fund by determining the
value of the Fund's assets in the class and then subtracting its liabilities.
Next, we divide this amount by the number of shares that investors are holding
in the class.

29
<PAGE>
Valuing securities in an underlying Fund
The value of a Fund's assets is based on the total market value of all of the
securities it holds. The prices reported on stock exchanges and securities
markets around the world are usually used to value securities in a Fund. If
prices aren't readily available, or the value of a security has been materially
affected by events occurring after a foreign exchange closes, we'll base the
price of a security on its fair value. When a Fund uses fair value to price
securities it may value those securities higher or lower than another fund that
uses market quotations to price the same securities. We use the amortized cost
method, which approximates market value, to value short-term investments
maturing in 60 days or less. International markets may be open on days when
U.S. markets are closed. The value of foreign securities owned by a Fund could
change on days when Fund shares may not be bought or sold.

[GRAPHIC]

Buying shares

Here are some general rules for buying shares:

o Investors buy Primary A Shares at net asset value per share.

o If we don't receive payment within three business days of receiving
an order, we'll refuse the order. We'll return any payment received
for orders that we refuse.

o Financial institutions and intermediaries are responsible for
sending us orders for their clients and for ensuring that we receive
payment on time.

o Shares purchased are recorded on the books of the Portfolio. We
don't issue certificates.

[GRAPHIC]

Selling shares

Here are some general rules for selling shares:

o We normally send the sale proceeds by federal funds wire within
three business days after Stephens, PFPC or their agents receive the
order.

o If you paid for your shares with a check that wasn't certified,
we'll hold the sale proceeds when you sell those shares for at least
15 days after the trade date of the purchase, or until the check has
cleared, whichever is later.

30
<PAGE>
o Financial institutions and intermediaries are responsible for
sending us orders for their clients and for depositing the sale
proceeds to their accounts on time.

o Under certain circumstances allowed under the Investment Company Act
of 1940 (1940 Act), we can pay you in securities or other property
when you sell shares.

o We can delay payment of the sale proceeds for up to seven days.

o Other restrictions may apply to retirement plan accounts. For more
information about these restrictions, please contact your retirement
plan administrator.

We may sell shares:

o if the value of an investor's account falls below $500. We'll
provide 60 days notice in writing if we're going to do this

o if a financial institution or intermediary tells us to sell the
shares for a client under arrangements it has made with its clients

o under certain other circumstances allowed under the 1940 Act

[GRAPHIC]

You should make sure you understand the investment objective and
principal investment strategies of the Portfolio or Fund you're
exchanging into. Please read its prospectus carefully.

[GRAPHIC]

Exchanging shares

Investors can sell shares of a Portfolio to buy shares of another
Portfolio or Nations Fund. This is called an exchange, and may be
appropriate if investment goals or tolerance for risk change.

Here's how exchanges work:

o Investors can exchange Primary A Shares of a Portfolio for Primary A
Shares of any other Portfolio or Nations Fund. In some cases, the
only Money Market Fund option is Trust Class Shares of Nations
Reserves Money Market Funds.

o The rules for buying shares of a Portfolio or Fund, including any
minimum investment requirements, apply to exchanges into that
Portfolio or Fund.

o Exchanges can only be made into a Portfolio or Fund that is legally
sold in the investor's state of residence.

o Exchanges can generally only be made into a Portfolio or Fund that
is accepting investments.

o We may limit the number of exchanges that can be made within a
specified period of time.

o We may change or cancel the right to make an exchange by giving the
amount of notice required by regulatory authorities (generally 60
days for a material change or cancellation).

31
<PAGE>
[GRAPHIC]

Distributions and taxes

[GRAPHIC]

The power of compounding

Reinvesting your distributions buys you more shares of a Portfolio
-- which lets you take advantage of the potential for compound
growth.

Putting the money you earn back into your investment means it, in
turn, may earn even more money. Over time, the power of compounding
has the potential to significantly increase the value of your
investment. There is no assurance, however, that you'll earn more
money if you reinvest your distributions.

About distributions

A mutual fund can make money two ways:

o It can earn income. Examples are interest paid on bonds and dividends paid
on common stocks.

A mutual fund is not subject to income tax as long as it distributes its net
investment income and realized capital gain to its shareholders. The Portfolios
intend to pay out a sufficient amount of their income and capital gain to their
shareholders so the Portfolios won't have to pay any income tax. When a
Portfolio makes this kind of a payment, it's split equally among all shares,
and is called a distribution.

All of the Portfolios distribute net investment income quarterly, and any net
realized capital gain at least once a year.

Different share classes of a Portfolio usually pay different distribution
amounts, because each class has different expenses. Each time a distribution is
made, the net asset value per share of the share class is reduced by the amount
of the distribution.

We'll automatically reinvest distributions in additional shares of the same
Portfolio unless you tell us you want to receive your distributions in cash.
You can do this by writing to us at the address on the back cover or by calling
us at 1.800.765.2668.

If you buy shares of a Portfolio shortly before it makes a distribution, you
will, in effect, receive part of your purchase back in the distribution, which
is subject to tax. Similarly, if you buy shares of a Portfolio that holds
securities with unrealized capital gain, you will, in effect, receive part of
your purchase back if and when the Portfolio sells those securities and
distributes the gain. This distribution is also subject to tax. Some Portfolios
have built up, or have the potential to build up, high levels of unrealized
capital gain.

32
<PAGE>
[GRAPHIC]

[GRAPHIC]

For more information about taxes, please see the SAI.

How taxes affect your investment
Distributions that come from net investment income and any net short-term
capital gain over net long-term capital loss generally are taxable to you as
ordinary income. A portion of such distributions to corporate shareholders may
qualify for the dividends received deduction.

Distributions that come from net capital gain (generally the excess of net
long-term capital gain over net short-term capital loss) generally are taxable
to you as net capital gain.

In general, all distributions are taxable to you when paid, whether they are
paid in cash or automatically reinvested in additional shares of the Portfolio.
However, any distributions declared in October, November or December of one
year and distributed in January of the following year will be taxable as if
they had been paid to you on December 31 of the first year.

o you haven't given us a correct Taxpayer Identification Number (TIN) and
haven't certified that the TIN is correct and withholding doesn't apply

o the Internal Revenue Service (IRS) has notified us that the TIN listed on
your account is incorrect according to its records

o the IRS informs us that you are otherwise subject to backup withholding

The IRS may also impose penalties against you if you don't give us a correct
TIN.

Amounts we withhold are applied to your federal income tax liability. You may
receive a refund from the IRS if the withholding tax results in an overpayment
of taxes.

We're also normally required by federal law to withhold tax (at a rate of 30%,
or a lower rate if a treaty applies) on distributions paid to foreign
shareholders.

Taxation of redemptions and exchanges
Your redemptions (including redemptions paid in securities or other property)
and exchanges of Portfolio shares will usually result in a taxable capital gain
or loss to you, depending on the amount you receive for your shares (or are
deemed to receive in the case of exchanges) and the amount you paid (or are
deemed to have paid) for them.

33
<PAGE>
[GRAPHIC]

This glossary includes explanations of the important terms that may
be used in this prospectus. Some of the terms explained may apply
to Nations Funds not included in this prospectus.

[GRAPHIC]

Terms used in this prospectus

Asset-backed security - a debt security that gives you an interest in a pool of
assets that is collateralized or "backed" by one or more kinds of assets,
including real property, receivables or mortgages, generally issued by banks,
credit card companies or other lenders. Some securities may be issued or
guaranteed by the U.S. government or its agencies, authorities or
instrumentalities. Asset-backed securities typically make periodic payments,
which may be interest or a combination of interest and a portion of the
principal of the underlying assets.

Bank obligation - a money market instrument issued by a bank, including
certificates of deposit, time deposits and bankers' acceptances.

Cash equivalents - short-term, interest-bearing instruments, including
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities, bank obligations, asset-backed securities, foreign
government securities and commercial paper issued by U.S. and foreign issuers
which, at the time of investment, is rated at least Prime-2 by Moody's Investor
Services, Inc. (Moody's), A-2 by S&P, or F-1 by Fitch IBCA (Fitch).

Commercial paper - a money market instrument issued by a large company.

Convertible debt - a debt security that can be exchanged for common stock (or
another type of security) on a specified basis and date.

Convertible security - a security that can be exchanged for common stock (or
another type of security) at a specified rate. Convertible securities include
convertible debt, rights and warrants.

Corporate obligation - a money market instrument issued by a corporation or
commercial bank.

34
<PAGE>
Debt security - when you invest in a debt security, you are typically lending
your money to a governmental body or company (the issuer) to help fund their
operations or major projects. The issuer pays interest at a specified rate on a
specified date or dates, and repays the principal when the security matures.
Short-term debt securities include money market instruments such as treasury
bills. Long-term debt securities include fixed income securities such as
government and corporate bonds, and mortgage-backed and asset-backed
securities.

Depositary receipts - evidence of the deposit of a security with a custodian
bank. American Depositary Receipts (ADRs), for example, are certificates traded
in U.S. markets representing an interest of a foreign company. They were
created to make it possible for foreign issuers to meet U.S. security
registration requirements. Other examples include ADSs, GDRs and EDRs.

Dividend yield - rate of return of dividends paid on a common or preferred
stock. It equals the amount of the annual dividend on a stock expressed as a
percentage of the stock's current market value.

Duration - a measure used to estimate a security's or portfolio's sensitivity
to changes in interest rates. For example, if interest rates rise by one
percentage point, the share price of a fund with a duration of five years would
decline by about 5%. If interest rates fall by one percentage point, the fund's
share price would rise by about 5%.

Equity security - an investment that gives you an equity ownership right in a
company. Equity securities (or "equities") include common and preferred stock,
rights and warrants.

First-tier security - under Rule 2a-7 under the 1940 Act, a debt security that
is an eligible investment for money market funds and has the highest short-term
rating from a nationally recognized statistical rating organization (NRSRO) or
if unrated, is determined by the fund's portfolio management team to be of
comparable quality, or is a money market fund issued by a registered investment
company, or is a government security.

Fixed income security - an intermediate to long-term debt security that matures
in more than one year.

Foreign security - a debt or equity security issued by a foreign company or
government.

Futures - a contract to buy or sell an asset or an index of securities at a
specified price on a specified future date. The price is set through a futures
exchange.

35
<PAGE>
Investment grade - a debt security that has been given a medium to high credit
rating (Baa or higher by Moody's, BBB or higher by S&P or a comparable rating
by other NRSROs) based on the issuer's ability to pay interest and repay
principal on time. The portfolio management team may consider an unrated debt
security to be investment grade if the team believes it is of comparable
quality. Please see the SAI for more information about credit ratings.

Liquidity - a measurement of how easily a security can be bought or sold at a
price that is close to its market value.

Municipal security (obligation) - a debt security issued by state or local
governments or governmental authorities to pay for public projects and
services. "General obligations" are typically backed by the issuer's full
taxing and revenue-raising powers. "Revenue securities" depend on the income
earned by a specific project or authority, like road or bridge tolls, user fees
for water or revenues from a utility. Interest income from these securities is
exempt from federal income taxes and is generally exempt from state taxes if
you live in the state that issued the security. If you live in the municipality
that issued the security, interest income may also be exempt from local taxes.

36
<PAGE>
Quantitative analysis - an analysis of financial information about a company or
security to identify securities that have the potential for growth or are
otherwise suitable for a fund to buy.