ANALYTIC OPTIONED EQUITY FUND INC, 485APOS, 1997-08-21

ANALYTIC OPTIONED EQUITY FUND INC
485APOS, 1997-08-21

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As filed with the Securities & Exchange Commission August 21, 1997
----------------

Securities Act File No. 2-60792
--------------------
Investment Company Act File No. 811-2807
--------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

Registration Statement Under the Securities Act of 1933 X
-------
Pre-Effective Amendment No.
---------- -------

Post-Effective Amendment No. 27 X
---------- -------

Registration Statement Under the Investment Company Act of 1940 X
-------

Amendment No. 24 X
---------- -------

THE ANALYTIC OPTIONED EQUITY FUND, INC.
(Exact Name of Registrant as Specified in Charter)

700 South Flower Street, Suite 2400, Los Angeles, CA 90017
(Address of principal executive offices)

Registrant's Telephone Number: (213) 688-3015

NAME AND ADDRESS OF AGENT FOR SERVICE

COPIES TO:
HARINDRA DE SILVA MICHAEL GLAZER
Analytic Optioned Equity Fund, Inc. Paul, Hastings, Janofsky & Walker LLP
700 South Flower Street, Suite 2400 555 South Flower Street
Los Angeles, CA 90017 Los Angeles, CA 90071

It is proposed that this filing will become effective:
_______ immediately upon filing pursuant to paragraph (b)
_______ on _________________ pursuant to paragraph (b)
___X___ 60 days after filing pursuant to paragraph (a)(1)
_______ on ________________ pursuant to Rule 485 paragraph (a)(1)
_______ 75 days after filing pursuant to paragraph (a)(2)
_______ on ________________ pursuant to paragraph (a)(2) of Rule 485
This post-effective amendment designates a new effective date for a
_______ previously filed post-effective amendment.

The Registrant has registered an indefinite number of shares of its common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's Rule 24f-2 Notice for its most recent
fiscal year was filed on February 27, 1997.
<PAGE>

CROSS REFERENCE SHEET

FORM N-1A

PART A: INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S> <C> <C>
N-1A Item No. Item Location in Registration Statement
1. Cover Page Cover Page - Prospectus
2. Synopsis Fund Expense Table; How Performance is
Calculated
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Fund; Investment Objective and Policies;
Dividends, Distributions and Taxes
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Securities Capital Stock
7. Purchase of Securities Being Offered How to Purchase Shares; Shareholder Accounts;
Net Asset Value
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings Not Applicable
</TABLE>

PART B: INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
<S> <C> <C>
N-1A Item No. Item Location in Registration Statement
10. Cover Page Cover Page - Statement of Additional
Information
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Objective and Policies; Investment
Restrictions and Other Investment Policies;
Hedging Transactions in Options, Futures and
Related Options
14. Management of Registrant Management of the Fund
15. Control Persons and Principal Holders of Management of the Fund; Principal Shareholders
Securities
16. Investment Advisory and Other Services Custodian; Independent Accountants; Legal Counsel
17. Broker Allocation Brokerage
18. Capital Stock and Other Securities Not Applicable
19. Purchase, Redemption, and Pricing of Securities Pricing and Redemption of Fund Shares
Being Offered
20. Tax Status Tax Status; Tax Information and Option
Accounting Principles
21. Underwriters Not Applicable
22. Calculation of Performance Data Calculation of Performance Data and Other
Performance Comparisons and Statistics
23. Financial Statements Financial Statements
</TABLE>

1
<PAGE>

PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.

PART A

PROSPECTUS

October ___, 1997

THE DEFENSIVE EQUITY PORTFOLIO
of Analytic Optioned Equity Fund, Inc.

A No-Load, Open-End Fund
With No Sales Charge or Redemption Fee.

Table of Contents

Benefits to Investors................................................. 6
Fund Expense Table.................................................... 7
Financial Highlights.................................................. 8
How Performance is Calculated......................................... 9
The Fund.............................................................. 9
Investment Objectives and Policies ................................... 9
Covered Option Writing................................................ 11
Risks of Option Writing............................................... 12
Hedging Transactions.................................................. 13
Risk Factors in Hedging Transactions.................................. 14
Other Investment Techniques........................................... 15
Portfolio Turnover.................................................... 16
Further Information................................................... 16
Management of the Fund................................................ 16
How to Purchase Shares................................................ 19
How to Redeem Shares.................................................. 21
How to Exchange Shares................................................ 22
Shareholder Accounts.................................................. 24
Tax Sheltered Retirement Plans ....................................... 25
Withdrawal Plan....................................................... 25

2
<PAGE>

Dividends, Distributions and Taxes.................................... 25
Distributions.................................................... 25
Taxation of Shareholders......................................... 25
Tax Considerations in Portfolio Transactions .................... 26
Capital Stock......................................................... 26
General Information................................................... 27
Glossary of Investment Terms and Stock and Debt Option Terms ......... 28

3
<PAGE>

PROSPECTUS

The Defensive Equity Portfolio of Analytic Optioned Equity Fund, Inc.
(800) 374-2633

The Defensive Equity Portfolio of Analytic Optioned Equity Fund, Inc.
(the "Fund") is a NO-LOAD, open-end, diversified investment management company,
or "mutual fund". As a no-load mutual fund, shares may be purchased directly
from and are redeemed by the Fund at net asset value without any sale or
redemption charges. The Fund's investment adviser is Analytic [Bullet] TSA
Global Asset Management, Inc.

The Fund's investment objective is to obtain a greater long-term total
return and smaller fluctuations in quarterly total return from a diversified,
hedged common stock portfolio than would be realized from the same portfolio
unhedged. (See "Glossary" for definitions of "quarterly total return,"
"long-term total return" and "fluctuations in total return".)

The Fund will attempt to achieve this objective by investing primarily
in dividend paying common stocks on which options are traded on national
securities exchanges and in securities convertible into common stocks, by
selling covered call options and secured put options and by entering into
closing purchase transactions with respect to certain of such options. The Fund
may also hedge its securities by purchasing put and call options on its
portfolio securities, purchasing put and selling call options on the same
securities, and engaging in transactions in stock index and interest rate
futures, stock index options, and options on stock index and interest rate
futures.

Special Characteristics. The Fund may hedge against changes in stock
prices by engaging in transactions involving stock index futures and their
related options, and may hedge against changes in interest rates by engaging in
transactions involving interest rate futures and their related options. (See
"Investment Objectives and Policies Hedging Transactions"). The Fund may also
make short sales of securities "against the box" to receive interest from the
proceeds of such sale and/or to defer realizing of a gain or loss thereon; and
enter into "repurchase agreements" subject to certain limitations (see "Other
Investment Techniques").

There is no minimum on initial or subsequent purchases of Fund shares
by tax deferred retirement plans (including IRA, SEP-IRA and profit sharing and
money purchase plans) or Uniform Gifts to Minors Act accounts. For other
investors the minimum is $5,000 for an initial purchase and there is no minimum
for subsequent purchases.

4
<PAGE>

This prospectus contains concise information regarding the Fund which a
prospective investor should know before investing. Additional information
concerning the Fund and its investment adviser has been filed with the
Securities and Exchange Commission (the "Statement of Additional Information").
The Statement of Additional Information is incorporated by reference into this
Prospectus and is available without charge to investors by telephoning the Fund
at the telephone number shown above.

------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------------------------------------
Investors should read and retain this Prospectus
for further reference.

The date of this Prospectus and the related
Statement of Additional Information is October ___, 1997

5
<PAGE>

THE FUND OFFERS INVESTORS THESE BENEFITS

Professional Management.

Founded in 1970, Analytic [Bullet] TSA Global Asset Management, Inc. (the
"Adviser") provides continuous professional management to the Fund's
portfolio. By pooling their assets, shareholders can participate in
investments that might not otherwise be available to the individual
shareholder.

No-Load.

There is never any sales charge, redemption fee, or 12b-1 promotional fees
when you buy or redeem shares in the Fund. All of your money goes to work
immediately to achieve your investment objectives.

Liquidity.

Although the Fund is designed for long-term investment, you may redeem all
or part of your Fund shares at net asset value, on any business day,
without charge. Your investment is liquid.

Convenience.

Shareholders are relieved of the administrative burden associated with the
direct ownership of individual securities because the Fund handles all
record keeping, collecting dividends and interest, and safekeeping of
securities.

Quarterly Reports.

The Fund lets you know where you stand in easy-to-read, comprehensive
quarterly reports.

Systematic Withdrawal Plans.

Without cost, a shareholder may elect to receive systematic withdrawal
checks on a monthly or quarterly basis.

Exchange Privileges

Should your investment goals change, shares may be exchanged for shares of
any portfolio of the Analytic Series Fund, a registered investment company
for which the Adviser serves as investment adviser.

Retirement Plans.

Shares of the Fund can be purchased in connection with the following
tax-deferred prototype retirement plans:

IRAs (including transfers and "rollovers" from existing retirement plans
for individuals and their spouses); SEP-IRA and profit sharing and
money-purchase plans for corporations, partnerships and self-employed
individuals to benefit themselves and their employees.

6
<PAGE>

FUND EXPENSE TABLE

The following tables illustrate the expenses and fees that a shareholder of the
Fund will incur. However, transaction fees may be charged if a broker-dealer or
other financial intermediary deals with the Fund on your behalf (See "How to
Purchase Shares"). The expenses set forth in the tables are based on the Fund's
1996 fiscal year.

Shareholder Transaction Expenses

Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None

Annual Fund Operating Expenses

(as a percentage of average net assets)

Investment Advisory Fees 0.75%
12b-1 Fees None
Other Expenses (1) 0.59%

Total Fund Operating Expenses (1) 1.34%

(1) The Adviser has entered into agreements whereby a portion of the commissions
earned by a broker-dealer on portfolio transactions placed with such
broker-dealer is reimbursed to the Fund by payment of all or a portion of the
Fund's expenses, including its custodian fees. With the expense reduction from
such arrangements, other expenses would have been 0.48% and total operating
expenses would have been 1.23% of the total average net assets.

EXAMPLE

1 year 3 years 5 years 10 years
------ ------- ------- --------

You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the
end of each time period:
$14 $42 $73 $161

The purpose of the above information is to help an investor in the Fund to
understand the various costs and expenses he will bear directly or indirectly.
The example is not a representation of past or future expenses and actual
expenses may be greater or less than those shown.

7
<PAGE>

FINANCIAL HIGHLIGHTS

The financial statements in the table below for each of the ten years
in the period ended December 31, 1996 has been audited by Deloitte & Touche LLP,
independent auditors. Such financial statements and the report of Deloitte &
Touche LLP thereon are incorporated by reference in the Statement of Additional
Information.

Copies of the Fund's 1996 Annual Report to Shareholders may be
obtained, at no charge, by telephoning the Fund at the telephone number
appearing on the cover page of this Prospectus.

<TABLE>
<CAPTION>
Year Ended December 31
==============================================================================
1996 1995 1994 1993 1992
----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.26 $11.12 $11.96 $11.97 $12.29
----------- ----------- ------------ ---------- ---------
Income from investment operations
Net investment income 0.20 0.24 0.31 0.33 0.27
Net realized or unrealized gains
(losses) on investments and options 1.87 2.14 (0.02) 0.48 0.48
----------- ----------- ------------ ---------- ---------
Total from investment operations 2.07 2.38 0.29 0.81 0.75
----------- ----------- ------------ ---------- ---------

Less distributions
From net investment income 0.20 0.24 0.31 0.33 0.29
From net realized gains 0.75 0.00 0.82 0.49 0.78
----------- ----------- ------------ ---------- ---------
Total distributions 0.95 0.24 1.13 0.82 1.07

----------- ----------- ------------ ---------- ---------
Net asset value, end of period $14.38 $13.26 $11.12 $11.96 $11.97
=========== =========== ============ ========== =========

Total return 15.66 % 21.52 % 2.47 % 6.73 % 6.17 %
----------- ----------- ------------ ---------- ---------

Ratios/supplemental data
Net assets, end of period (000) $52,484 $42,648 $48,254 $76,948 $91,561
Ratio of expenses to average net assets 1.34 % (1) 1.38 % (1) 1.10 % 1.07 % 1.02 %
Ratio of net investment income to
average net assets 1.43 % 1.87 % 3.45 % 2.51 % 2.33 %
Portfolio turnover rate 43.17 % 32.37 % 48.71 % 36.19 % 81.73 %
Average commission rate (2) $0.0446 $0.0442 --- --- ---
</TABLE>

(2) The formula for calculating the average commission rate is total
commissions paid divided by total shares purchased and sold. This rate
includes commissions paid on option contracts where each contract is 100
shares.

8
<PAGE>

<TABLE>
<CAPTION>
Year Ended December 31
=================================================================
1991 1990 1989 1988 1987
------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.92 $13.00 $12.06 $11.38 $13.70
------------- ------------ ----------- ------------ -----------

Income from investment operations
Net investment income 0.40 0.46 0.50 0.39 0.38
Net realized or unrealized gains
(losses) on investments and options 1.17 (0.27) 1.61 1.35 0.24
------------- ------------ ----------- ------------ -----------
Total from investment operations 1.57 0.19 2.11 1.74 0.62
------------- ------------ ----------- ------------ -----------

Less distributions
From nvest investment income 0.40 0.48 0.51 0.40 0.46
From net realized gains 0.80 0.79 0.66 0.66 2.48
------------- ------------ ----------- ------------ -----------
Total distributions 1.20 1.27 1.17 1.06 2.94
------------- ------------ ----------- ------------ -----------
Net asset value, end of period $12.29 $11.92 $13.00 $12.06 $11.38
============= ============ =========== ============ ===========

Total return 13.29 % 1.54 % 17.74 % 15.60 % 4.28 %
------------- ------------ ----------- ------------ -----------

Ratios/supplemental data
Nert assets, end of period (000) $100,548 $106,220 $106,474 $102,239 $74,840
Ratio of expenses to average net assets 1.10 1.11 1.09 1.13 1.17 %
Ratio of net investment income to
average net assets 3.05 3.68 3.74 3.44 2.68 %
Portfolio turnover rate 75.83 72.20 61.20 66.11 83.53 %
Average commission rate (2) --- --- --- --- ---
</TABLE>

(1) Gross of expenses paid indirectly through broker arrangements. With the
expense reduction from brokerage arrangements, the ratio of expenses to
average net assets would have been 1.23% and 1.22% for the years ended
December 31, 1996 and 1995, respectively.
(2) The formula for calculating the average commission rate is total
commissions paid divided by total shares purchased and sold. This rate
includes commissions paid on option contracts where each contract is 100
shares.

9
<PAGE>

HOW PERFORMANCE IS CALCULATED

From time to time the Fund may report its "total return" in
prospectuses, the Fund's annual reports, shareholder communications, and
advertising.

Total return for a performance period is calculated by assuming a
hypothetical initial investment ("p") in the Fund at the beginning of the
period. Then, assuming reinvestment of all distributions into new Fund shares, a
redeemable value at the end of the performance period ("ERV") is calculated
based on actual Fund performance. The percentage change between the ending value
and initial investment is the "cumulated total return". The "average annual
total compound return" (growth rate) expresses the total return as an annual
rate, which, if compounded annually over the period ("n" is the number of
years), would increase or decrease the initial investment to the ending value.
(Formula for calculating average annual total compound return: (ERV/p)1/n -1)).
See the "Glossary" for further discussion and examples of total return and
fluctuations in total return.

THE FUND

The Fund is a California corporation incorporated in 1977 and
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended, as an open end, diversified, management
investment company. The Fund offers for sale its common stock, no par value, on
a no-load basis, which means that such shares may be purchased directly from and
redeemed by the Fund at net asset value without any sales or redemption charge
(See "Purchase of Fund Shares" for minimum investment limitations).

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to obtain a greater long-term total
return and smaller fluctuations in quarterly total return from a diversified,
hedged common stock portfolio than would be realized from the same portfolio
unhedged. This investment objective may not be changed without shareholder
approval in accordance with applicable requirements of the Investment Company
Act of 1940.

The Fund seeks to achieve its investment objective by investing
primarily in dividend paying common stocks on which options are traded on
national securities exchanges and in securities convertible into common stocks,
by selling covered call options and secured put options and by entering into
closing purchase transactions with respect to certain of such options. The Fund
may also hedge its portfolio securities by purchasing put and call options on
its portfolio securities, purchasing put and selling call options on the same
securities, and engaging in transactions in stock index and interest rate
futures, stock index options, and options on stock index and interest rate
futures. The Fund's strategy is to create a well diversified and significantly
hedged portfolio using combined stock and option and fixed income and option
positions. Typically, the Fund remains diversified across all industries
represented in the Standard & Poor's 500 Index with similar industry weightings.

Total return will be obtained from the following sources:

(1) premiums from expired options.
(2) net profits, if any, from closing purchase or closing sale
transactions.
(3) dividends received on the securities in the Fund's portfolio.
(4) net realized capital gains, if any.
(5) net changes in unrealized capital appreciation, if any.
(6) interest income from money market instruments, U.S. Government
Securities, convertible securities, and short sales.

In seeking a greater long-term total return, the Fund will equally
emphasize current return and long-term capital gains. (See "Dividends,
Distributions and Taxes--Tax Considerations in Portfolio Transactions"). Since
opportunities to realize net gains from covered option writing programs and
yields on stocks, money market instruments, U.S. Government securities,
convertible debt securities, and short sales vary from time to time because of
general economic and market conditions and many other factors, it is anticipated
that the Fund's total return will fluctuate and therefore there can be no
assurance that the Fund will be able to achieve its investment objective.

10
<PAGE>

Except as described below, at least 80% of the Fund's total assets
(taken at current value), excluding cash, cash equivalents and U.S. Government
securities, will be invested in dividend paying common stocks which have been
approved by one or more exchanges as underlying securities for listed call or
put options, or securities which are convertible into such common stocks without
the payment of further consideration. The Fund may invest its cash reserves in
securities of the U.S. Government and its agencies or the following cash
equivalents: deposits in domestic banks, bankers' acceptances, certificates of
deposit, commercial paper, or securities of registered investment companies.
Commercial paper investments will be limited to investment grade issues, rated
A-1 or A-2 by Standard & Poor's Corporation, or Prime 1 or Prime 2 by Moody's
Investors Service, Inc. Investments in registered investment companies are
limited by certain additional restrictions (see "Investments in Securities of
Other Investment Companies".) The Fund may also enter into short-term repurchase
agreements with respect to the foregoing securities, the sellers of which,
usually banks, agree to repurchase the securities subject to the agreement at
the Fund's cost plus interest within a specified time, usually, one day.

In periods of unusual market conditions and for defensive purposes the
Fund may retain all or part of its assets in cash or cash reserves of the type
described above.

Covered Option Writing. Covered call options and secured put options will be
written on the Fund's portfolio in order (i) to achieve, through the receipt of
premiums, a higher long-term total return then would be received from the same
portfolio unhedged and (ii) to reduce the fluctuation in this total return. The
writing of such options tends to reduce fluctuations in total return because, in
any short period of time, the gains or losses on the sale of options will tend
to offset the losses or gains, respectively, on the underlying securities.
Covered option writing involves risks -- see "Risks of Option Writing" below.

Covered Call Options. A call option gives the purchaser of the option
the right to buy, and the writer has the obligation to sell, the underlying
securities at the exercise price during the option period. The Fund, as the
writer of the option, receives the premium from the purchaser of the call
option. The writer, during the time he is obligated under the option, may be
assigned an exercise notice by the broker-dealer through whom the call was sold,
requiring him to deliver the underlying security against payment of the exercise
price. The obligation is terminated only upon expiration of the option or at
such earlier time as the writer effects a closing purchase transaction. Once a
writer has been assigned an exercise notice, he will thereafter be unable to
effect a closing purchase transaction in that option. So long as the Fund is
obligated as the writer of a call option, it will (i) own the underlying
securities subject to the option, or (ii) have the right to acquire the
underlying securities through immediate conversion or exchange of convertible
preferred stocks or convertible debt securities owned by the Fund, or (iii) hold
on a security-for-security basis a call on the same security as the call written
where the exercise price of the call held is equal to or less than the exercise
price of the call written (or, if greater than the exercise price of the call
written the difference will be maintained in U.S. Government securities in a
segregated account with the Custodian or broker).

To secure this obligation to deliver the underlying security, a covered
call option writer is required to deposit in escrow the underlying security or
other assets in accordance with the rules of the Clearing Corporation and the
exchange on which the covered call option is traded. To fulfill this obligation,
at the time an option is written, the Fund, in compliance with its custodian
agreement, directs the custodian of its investment securities, or a securities
depository acting for the custodian, to act as the Fund's escrow agent by
issuing an escrow receipt to the Clearing Corporation respecting the option's
underlying securities. The Clearing Corporation will release the securities from
this escrow either upon the exercise of the option, its expiration without being
exercised or when the Fund enters into a closing purchase transaction. Until
such release the Fund cannot sell the underlying securities.

So long as his obligation as a writer continues, the covered call
option writer gives up the opportunity to profit from a price increase in the
underlying security above the sum of the exercise price plus the premium
received in exchange for increasing his return if the underlying security does
not advance to or beyond the sum of the exercise price plus the premium. Thus,
in some periods the Fund will receive less total return and in other periods
greater total return from its call options than it would have received from its
underlying securities unoptioned. The Fund expects to increase its long-term
total return by writing options which, in its opinion, have sufficiently
attractive premiums to produce greater total return over the long-term.

Secured Put Options. The purchaser of a secured put option has the
right to sell, and the writer has the obligation to buy, the underlying security
at the exercise price during the option period. As a secured put writer, the
Fund will invest an amount equal to not less than the exercise price of the put
option in money market instruments, or it will hold on a security-for-security
basis a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written
(or, if less than the exercise price of the put written, the difference will be

11
<PAGE>

maintained in U.S. Government securities in a segregated account with the
Custodian or broker). These assets are then escrowed in a manner similar to that
applicable to securities underlying covered call options. Thereafter, should the
option be exercised, the Fund will have a money market investment available
equal to the exercise price of the option to honor its obligation as a writer.
The obligation of a secured put option writer is terminated either upon the
exercise of the option, its expiration without being exercised, or by effecting
a closing purchase transaction.

The risk characteristics and potential rewards of writing a secured put
option are essentially similar to those of covered call option writing. The
writer's gain on a put option is limited to interest earned on its money market
investment plus the premium received, while the risk is not less than the
exercise price of the option less the current market price of the underlying
stock when the put is exercised, offset by the premium received and interest
earned. The Fund will only write secured put options in circumstances where it
has made an investment decision that it desires to acquire the security
underlying the option at the exercise price specified in the option.

The Fund may engage in spreads in which it is both the purchaser and
the covered writer of the same type of option (puts or calls) on the same
underlying security with the options having different exercise prices and/or
expiration dates.

The Fund will write options from time to time on such portion of its
portfolio as management determines is appropriate in seeking to attain the
Fund's objective. The Fund will write options when management believes that a
liquid secondary market will exist on a national securities exchange for options
of the same series so that the Fund can effect a closing purchase transaction if
it desires to close out its position. Consistent with the investment policies of
the Fund, a closing purchase transaction will ordinarily be effected to realize
a profit on an outstanding option, to prevent an underlying security from being
called, or to permit the sale of the underlying security. Effecting a closing
purchase transaction will permit the Fund to write another option on the
underlying security with either a different exercise price or expiration date or
both.

The premium the Fund receives for writing an option will reflect, among
other things, the current market price of the underlying security, the
relationship of the exercise price to such market price, the historical price
volatility of the underlying security, the option period, supply and demand and
interest rates. The exercise price of an option may be below, equal to or above
the current market value of the underlying security at the time the option is
written. Options written by the Fund will normally have expiration dates between
one and nine months from the date written. From time to time, for tax and other
reasons, the Fund may purchase an underlying security for delivery in accordance
with an exercise notice assigned to it, rather than delivering such security
from its portfolio. Since the time required to obtain physical delivery of
underlying common stocks upon conversion or exchange of convertible or
exchangeable securities with respect to which the Fund has written options may
exceed the time within which it must make delivery in accordance with an
exercise notice of a call option assigned to it, the Fund may purchase or borrow
the underlying common stocks to make delivery. By so doing, the Fund will not
bear any market risk, since it will have the absolute right to receive from the
issuer of the underlying common stock an equal number of shares to replace the
borrowed stock, but the Fund may incur additional transaction costs or interest
expense in connection with any such purchase or borrowing.

Risks of Option Writing. In return for the premium received, a covered call
writer during the term of the option is subject to the risk of losing the
potential for capital appreciation above the exercise price of the underlying
security. Likewise, a secured put writer retains the risk of loss should the
value of the underlying security decline below the exercise price, less the
premium received and interest earned. In both cases the writer has no control
over the time when he has to fulfill his obligation as a writer of the option.
Once an option writer has received an exercise notice he cannot effect a closing
purchase transaction.

If a call expires unexercised, the covered writer realizes a gain in
the amount of the premium received, although there may have been a decline
(unrealized loss) in the market value of the underlying security during the
option period which may exceed such gain. If the covered writer has to sell the
underlying security because of the exercise of a call option, the writer will
realize a gain or loss from the sale of the underlying security with the
proceeds being increased by the amount of the premium. If a put expires
unexercised, the secured put writer realizes income from the amount of the
premium plus the interest income on the money market investment. If the secured
put writer has to buy the underlying security because of the exercise of the put
option, the secured put writer incurs a loss to the extent that the current
market value of the underlying security is less than the exercise price of the
put option. However, this may be offset in whole or in part by the premium
received and any interest income earned on the money market investment.

12
<PAGE>

Hedging Transactions. To hedge its portfolio, the Fund may enter into securities
transactions intended to reduce investment risk by taking an investment position
which will move in the opposite direction from the position being hedged. To the
extent the hedge works as intended, a loss or gain on one position will tend to
be offset by a gain or loss on the other. Any losses incurred in and the costs
of hedging transactions will reduce the Fund's return. Hedging transactions
involve risks - see "Risk Factors in Hedging Transactions" below. The Fund's
hedging strategies are fundamental policies which cannot be changed without the
approval of the holders of a majority of the Fund's outstanding voting
securities. (See "Investment Restrictions and Other Investment Policies" in the
Statement of Additional Information.) See the Appendix for a more complete
description of the instruments discussed below and see the Statement of
Additional Information for more discussion of the various options, futures
contracts and portfolio hedging strategies that may be used by the Fund.

The extent to which the Fund may engage in the hedging techniques and
strategies described below, including spread transactions, covered call options
and "forward conversion" transactions, may be limited by the Internal Revenue
Code's requirements for qualification as a regulated investment company. See
"Option Accounting Principles" and "Tax Status" in the Statement of Additional
Information.

Purchasing Put and Call Options on Portfolio Securities. The Fund may
purchase put options in connection with its hedging activities and will
generally do so at or about the same time it purchases the underlying security.
By buying a put, the Fund has a right to sell the security at the exercise
price, thus limiting its risk of loss through a decline in the market value of
the security until the put expires. The amount of any appreciation in the value
of the underlying security will be partially offset by the amount of the premium
paid for the put option and any related transaction costs. Prior to its
expiration, a put option may be sold in a closing sale transaction and profit or
loss from the sale will depend on whether the amount received is more or less
than the premium paid for the put option plus the related transaction costs.

The Fund may purchase call options on securities which it intends to
purchase in order to limit the risk of a substantial increase in the market
price of such security. The Fund may also purchase call options on securities
held in its portfolio and on which it has written call options. Prior to its
expiration, a call option may be sold in a closing sale transaction. Profit or
loss from such a sale will depend on whether the amount received is more or less
than the premium paid for the call option plus the related transaction costs.

Put and Call Options on the Same Securities. The Fund may buy puts and
sell calls on the same portfolio security in "forward conversion" transactions.
In a forward conversion, the Fund will purchase a security and write call
options and purchase put options on the security. By purchasing puts, the Fund
protects the underlying security from depreciation in value. The Fund will not
exercise a put it has purchased while a call option on the same security is
outstanding. By selling calls on the same security, the Fund receives premiums
which may offset part or all of the cost of purchasing the puts while foregoing
the opportunity for appreciation in the value of the underlying security. The
use of options in connection with forward conversions is intended to hedge
against fluctuations in the market value of the underlying security. Although it
is generally intended in forward conversion transactions that the exercise price
of put and call options would be identical, situations might occur in which some
option positions are acquired with different exercise prices. Therefore, the
Fund's return may depend in part on movements in the price of the underlying
security because of the different exercise prices of the call and put options.
Such price movements may also affect the total return if the conversion is
terminated prior to the expiration date of the options. In such event, the
Fund's return may be greater or less than it would otherwise have been if it had
hedged the security only by purchasing put options.

Other Hedging Tools. The Fund may engage in the following hedging transactions
which are described more fully in the Appendix: Stock index futures and related
options, stock index options, and financial futures and related options.

Stock Index Futures. The Fund may sell stock index futures contracts in
anticipation of or during a market decline to attempt to offset the decrease in
market value of its equity securities that might otherwise result. When the Fund
is not fully invested in stocks and anticipates a significant market advance, it
may purchase stock index futures in order to gain rapid market exposure that may
in part or entirely offset increases in the cost of common stocks that it
intends to purchase. As such purchases are made, an equivalent amount of stock
index futures contracts will be terminated by offsetting sales. In most of these
transactions, the Fund will purchase such securities upon termination of the
long futures position whether the long position results from the purchase of a
stock index futures contract or the purchase of a call option on a stock index
futures contract, but under unusual market conditions, a long futures position
may be terminated without the corresponding purchase of equity securities.

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<PAGE>

Financial Futures. The Fund may purchase and sell financial futures on
U.S. Government securities, including GNMA certificates (see the Appendix), in
order to hedge its U.S. Government securities and those portfolios securities
which may be sensitive to changes in interest rates. Such hedging is similar to
the Fund's hedging its equity securities through the use of stock index futures.

Stock Index Options. The Fund may purchase and sell exchange listed
call and put options on stock indexes to hedge against risks of market-wide
price movements. The need to hedge against such risks will depend on the extent
of diversification of the Fund's common stock and the sensitivity of its stock
investments to factors influencing the stock market as a whole. Purchasing a put
or selling a call option on a stock index is analogous to the sale of a stock
index futures contract. Purchasing a call or selling a put option on a stock
index is analogous to the purchase of a stock index futures contract.

Options on Stock Index Futures. The Fund may purchase and sell exchange
listed call and put options on stock index futures to hedge against risks of
market-wide price movements. The need to hedge against such risks will depend on
the extent of diversification of the Fund's common stock and the sensitivity of
its stock investments to factors influencing the stock market as a whole.
Purchasing a put or selling a call option on a stock index futures contract is
analogous to the sale of a stock index futures contract. Purchasing a call or
selling a put option on a stock index futures contract is analogous to the
purchase of a stock index futures contract.

Options on Financial Futures. The Fund may purchase and sell exchange
listed call and put options on financial futures to hedge against risks of
interest rate movements. The need to hedge against such risks will depend on the
extent of diversification of the Fund's common stock and the sensitivity of its
stock investments to interest rates. Purchasing a put or selling a call option
on a financial future is analogous to the sale of a stock index futures
contract. Purchasing a call or selling a put option on a financial future is
analogous to the purchase of a stock index future.

Limitations on Purchase and Sale of Futures Contracts and Options on
Futures Contracts. The Fund will not engage in transactions in futures contracts
or related options for speculation but only as a hedge against changes resulting
from market conditions in the values of its securities or securities which it
intends to purchase. The Fund will not enter into any stock index or financial
futures contract or related option if, immediately thereafter, more than
one-third of the Fund's net assets would be represented by futures contracts or
related options. In addition, the Fund may not purchase or sell futures
contracts or purchase or sell related options if, immediately thereafter, the
sum of the amount of margin deposits on its existing futures and related options
positions and premiums paid for related options would exceed 5% of the market
value of the Fund's total assets. In instances involving the purchase of futures
contracts or related call options, money market instruments equal to the market
value of the futures contract or related option will be deposited in a
segregated account with the Custodian or broker to collateralize such long
positions and thereby insure that the use of such futures contracts or related
options is unleveraged.

The Fund's sale of futures contracts and purchase of put options on
futures contracts will be solely to protect its investments against declines in
value. The Fund expects that in the normal course it will purchase securities
upon termination of long futures contracts and long call options on futures
contracts most of the time, but under unusual market conditions it may terminate
any of such positions without a corresponding purchase of securities.

Risk Factors in Hedging Transactions. The Fund's ability to hedge effectively
all or a portion of its securities through transactions in options on stock
indexes, stock index futures, financial futures and related options depends on
the degree to which price movements in the underlying index or underlying debt
securities correlate with price movements in the relevant portion of the Fund's
securities. Inasmuch as such securities will not duplicate the components of any
index or such underlying debt securities, the correlation will not be perfect.
Consequently, the Fund bears the risk that the prices of the securities being
hedged will not move in the same amount as the hedging instrument. It is also
possible that there may be a negative correlation between the index or other
securities underlying the hedging instrument and the hedged securities which
would result in a loss on both such securities and the hedging instrument.

In addition, there is the risk that the anticipated spread between the
prices may be distorted due to differences in the nature of the markets, such as
speculators in the futures market. However, the risk of imperfect correlation
generally tends to diminish as the maturity date of the futures contract
approaches.

Positions in stock index options, stock index futures and financial
futures and related options may be closed out only on an Exchange which provides
a secondary market. There can be no assurance that a liquid secondary market
will exist for any particular stock index option or futures contract or related
option at any specific time. Thus, it may not be

14
<PAGE>

possible to close such an option or futures position. The inability to close
options on futures positions also could have an adverse impact on the Fund's
ability to effectively hedge its securities. The Fund will enter into an option
or futures position only if there appears to be a liquid secondary market for
such options or futures and does not intend to take delivery of the instruments
underlying financial futures contracts it holds.

The Commodities Futures Trading Commission and the various exchanges
have established limits referred to as "speculative position limits" on the
maximum net long or net short position which any person may hold or control in a
particular futures contract. Trading limits are imposed on the maximum number of
contracts which any person may trade on a particular trading day. An Exchange
may order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. Management does not believe
that these trading and positions limits will have adverse impact on the Fund's
strategies for hedging its securities.

Other Investment Techniques. The Fund may also engage in the following
transactions: lending of securities; short sales against the box; synthetic put
options; investment in securities of other investment companies; and repurchase
agreements.

Lending of Securities. The Fund may lend those securities not subject
to written options or held in a segregated account with its Custodian to
broker-dealers pursuant to agreements requiring that the loans be continuously
secured by cash, or securities of the U.S. Government or its agencies, or any
combination of cash and such securities, as collateral equal to at least the
market value at all times of the securities lent. (See "Investment Restrictions
and Other Investment Policies" in the Statement of Additional Information.) Such
loans will not be made if as a result the aggregate of all outstanding
securities loans will exceed 30% of the value of the Fund's total assets taken
at current value. The Fund will continue to receive interest on the securities
lent and simultaneously earn interest on the investment of the cash collateral
in U.S. Government securities. However, the Fund will normally pay lending fees
to such broker-dealers from the interest earned on invested collateral. Such
loans will comply with applicable regulatory requirements. There may be risks of
delay in receiving additional collateral, or risks of delay in recovery should
the borrower of the securities fail financially. However, loans will be made
only to borrowers deemed by management to be of good standing, and when in the
judgment of management the consideration which can be earned currently from such
securities loans justifies the attendant risk.

Short Sales Against the Box and Synthetic Put Options. The Fund may
make short sales of common stocks, provided that at all times that a short
position is open the Fund owns at least an equal amount of preferred stocks or
debt securities convertible or exchangeable into an equal number of shares of
the common stocks sold short (known as short sales "against the box") without
payment of further consideration (except upon exercise of covered call options
on such securities with a strike price no higher than the price at which the
securities were sold short or, if higher, if the difference between the strike
price and the price at which the securities were sold short is maintained in
U.S. Government securities in a segregated account with the Fund's custodian or
a broker). A short sale of securities which is hedged by a corresponding long
position in a call option on the same security is known as a "synthetic put"
position because it has the same investment characteristics as owning a
protective put option on the same underlying security.

Management intends to make short sales "against the box" for the
purpose of receiving a portion of the interest earned by the executing broker
from the proceeds of such sale and/or to defer realization of gain or loss for
Federal income tax purposes. The proceeds of such a sale are held by the broker
until the settlement date when the Fund delivers the convertible security to
close out its short position. Although prior to such delivery the Fund will have
to pay an amount equal to any dividends paid on the common stocks sold short,
the Fund will receive the dividends from the preferred stocks or interest from
the securities convertible into the stocks sold short, plus a portion of the
interest earned from the proceeds of the short sale. The Fund will not make
short sales of any optioned securities. The Fund will segregate in a special
account with its Custodian or broker convertible preferred stocks or convertible
debt securities in connection with such short sales "against the box". The
extent to which the Fund may make such short sales may be limited by the Code's
requirements for qualification as a regulated investment company and the Fund's
intention to qualify as such. (See "Option Accounting Principles" and "Tax
Status" in the Statement of Additional Information.)

Synthetic put positions are sometimes advantageous for the Fund to
enter instead of purchasing an actual put option. For example, the Fund may
engage in spreads in which it is both the purchaser and the covered writer of
the same type of option (puts or calls) on the same underlying security with the
options having different exercise prices and/or expiration dates. When the Fund
enters into such a spread involving two put options, it is sometimes
advantageous to enter a synthetic put position instead of purchasing the put
option which is the long side of the spread. This can occur because there is
smaller

15
<PAGE>

investor interest in the put options as compared to the corresponding calls and
consequently the put options are offered for sale at a higher price than the
price that could be obtained by entering the synthetic put position.

Investments in Securities of Other Investment Companies. Investments in
the securities of other investment companies are intended to (i) provide an
investment vehicle for the Fund's cash reserves that the Fund does not want to
commit to riskier investments, (ii) facilitate investment strategies in which
high-grade collateral is required, or (iii) facilitate investment strategies by
acquiring investments in portfolios of securities more diversified or with
specialized characteristics that could not be efficiently acquired directly.
Accordingly, the Fund may invest up to 35% of its total assets in such
securities. However, the Fund is restricted to purchasing securities only to the
extent that is permitted under the Investment Company Act of 1940. The 1940 Act
generally permits the Fund to purchase or otherwise acquire securities issued by
another investment company so long as, immediately after such acquisition, the
Fund and all affiliated persons of the Fund do not own in the aggregate more
than 3% of the total outstanding voting stock of the acquired investment
company. The 1940 Act also permits the purchase of securities of other
investment companies in connection with a merger, reorganization, consolidation
or similar transaction.

Such transactions may in some cases raise the Fund's transaction costs
relative to a direct investment in the same securities, but in some cases the
Fund may benefit from being able to acquire a diversified investment in one
purchase that could not be made economically in a direct fashion. As other
investment companies pay management fees to their investment advisers,
shareholders will bear a proportionate share of such fees as well as the
management fees paid by the Fund. In addition, the 1940 Act provides that no
investment company in which the Fund invests is obligated to redeem shares of
such company owned by the Fund in an amount exceeding 1% of the company's
outstanding shares during any period of less than thirty days.

Repurchase Agreements. The Fund may purchase U.S. Government securities
and concurrently enter into so-called "repurchase agreements" with the seller,
which will agree to repurchase such securities at the Fund's cost plus interest
within a specified time (normally one day). While repurchase agreements involve
certain risks not associated with direct investments in U.S. Government
securities, the Fund will follow procedures designed to minimize such risks.
These procedures include effecting repurchase transactions only with large,
well-capitalized banks and certain reputable broker-dealers. In addition, the
Fund's repurchase agreements will provide that the value of the collateral
underlying the repurchase agreement will always be at least equal to the
repurchase price, including any accrued interest earned on the repurchase
agreement. In the event of a default or bankruptcy by a seller, the Fund will
seek to liquidate such collateral. However, to liquidate such collateral could
involve certain costs or delays and, to the extent that proceeds from any sale
upon a default of the obligation to repurchase were less than the repurchase
price, the Fund could suffer a loss. No more than 10% of the total market value
of Fund assets at the time of purchase will be invested in repurchase agreements
which have a maturity longer than 7 days.

Portfolio Turnover. The Fund will not attempt to achieve, nor will it be limited
to, a predetermined rate of portfolio turnover. Turnover rate is the lesser of
purchases or sales of portfolio securities for a year (excluding all securities
and options with maturities of one year or less) divided by the monthly average
of the market value of such securities. The anticipated turnover rate is not
expected to be higher than 100%; however, a higher turnover rate may occur if
the Fund writes a substantial number of options which are exercised. For the
years ended December 31, 1996 and 1995, the Fund's portfolio turnover rates were
43.17% and 32.37%, respectively. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs. The
Fund will pay brokerage commissions on its securities transactions and in
connection with the purchase and sale of options as well as for selling a
security on exercise of a call option and buying a security on exercise of a put
option.

Further Information. The Fund's investment objective and policies are subject to
certain restrictions, including limitations on borrowing, short sales of
securities and investments in real estate companies or securities secured by
real estate, which restrictions may not be changed without approval of the
holders of a majority of the Fund's outstanding shares. In addition, certain
factors may restrict the ability of the Fund to write options. These
restrictions and factors are described in the Statement of Additional
Information.

MANAGEMENT OF THE FUND

The officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Directors.

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<PAGE>

Investment Adviser. Analytic [Bullet] TSA Global Asset Management, Inc.
(the "Adviser"), 700 South Flower Street, Suite 2400, Los Angeles, California
90017, is the investment adviser of the Fund. The Adviser is a wholly owned
subsidiary of United Asset Management Corporation, a holding company described
under "Management of the Fund" in the Statement of Additional Information.

The Adviser was founded in 1970 as Analytic Investment Management, Inc.
one of the first independent investment counsel firms specializing in the
creation and continuous management of optioned equity and optioned debt
portfolios for fiduciaries and other long term investors. It is one of the
oldest and largest independent investment management firms in this specialized
area. In January 1996, the Adviser acquired and merged with TSA Capital
Management which emphasizes U.S. and global tactical asset allocation, currency
management, quantitative equity and fixed income management, as well as option
yield curve strategies. The Adviser serves, among others, pension and
profit-sharing plans, endowments, foundations, corporate investment portfolios,
mutual savings banks, and insurance companies, for which it manages in excess of
$1,000,000,000. It is also the investment adviser of The Analytic Series Fund, a
registered investment company which commenced operations in late 1992.

17
<PAGE>

Pursuant to an Investment Management Agreement with the Fund, the
Adviser, subject to the control and direction of the Fund's Officers and Board
of Directors, manages the portfolio of the Fund in accordance with its stated
investment objective and policies and makes investment decisions for the Fund.
Dennis M. Bein, Harindra de Silva and Charles L. Dobson are the portfolio
managers for the Fund. Mr. Bein has been a member of the portfolio manager and
research team for the Adviser since August 1995. He concurrently serves as a
senior associate for Analysis Group, Inc. Dr. de Silva is the President of the
Fund and serves as a managing director of the Adviser, which he joined in May
1995. He concurrently serves as a principal of Analysis Group, which he joined
in March 1986. Mr. Dobson is Executive Vice President and Secretary of the Fund
and The Analytic Series Fund and has been a portfolio manager of the Adviser
since 1978. They are subject to the supervision of the Adviser's investment
management committee.

Management Fees. As compensation for furnishing investment advisory,
management, and other services, and costs and expenses assumed, pursuant to the
Investment Management Agreement the Fund pays the Adviser an annual fee equal to
0.75% of the first $100,000,000 of average daily net assets, 0.65% of the next
$100,000,000 of average daily net assets, and 0.55% of average daily net assets
in excess of $200,000,000.

Distributor. UAM Fund Distributors, Inc,. a wholly-owned subsidiary of
United Asset Management Corporation, is the distributor of the Fund's shares.
Its principal office is located at 211 Congress Street, Boston, Massachusetts
02110. Under a Distribution Agreement with the Fund (the "Distribution
Agreement"), the Distributor, as agent of the Fund, has agreed to use its best
efforts as sole distributor of Fund shares. The Distributor does not receive any
fee or other compensation under the Distribution Agreement. The Distribution
Agreement provides that the Fund will bear costs of registration of its shares
with the SEC and various states as well as the printing of its prospectuses, its
Statement of Additional Information and its reports to shareholders.

Administrative Services. UAM Fund Services, Inc., a wholly-owned
subsidiary of United Asset Management Corporation, performs and oversees all
administrative, fund accounting, dividend disbursing and transfer agent services
to the Fund pursuant to a Fund Administration Agreement with the Fund (the
"Administration Agreement"). For its services UAM Fund Services receives a fee
based on net assets. UAM Fund Services' principal office is located at 211
Congress Street, Boston, Massachusetts 02110. UAM Fund Services has
subcontracted some of these services to Chase Global Funds Services Company, an
affiliate of The Chase Manhattan Bank. Chase Global Funds Services Company is
located at 73 Tremont Street, Boston, Massachusetts 02108.

Chase Global Funds Services Company is the Fund's sub-dividend
disbursing agent, sub-transfer agent and sub-shareholder servicing agent. The
shareholder servicing phone number is (800)374-2633. All other administrative
and accounting functions are performed by UAM Fund Services.

Expenses. In addition to the management and service fees, the Fund pays
all other costs and expenses of its operations including, among other things,
legal and audit fees, unaffiliated Directors' fees and expenses, registration
fees, custodian fees, and expenses of printing and mailing of proxies,
prospectuses, statements of additional information and reports to shareholders.
During 1996, the Fund's ratio of operating expenses (net of expenses paid
indirectly through broker-dealers) to average net assets was 1.23%.

Brokerage. Under the terms of the Investment Advisory Agreement, the
Adviser is authorized to employ broker-dealers to execute orders for the
purchase and sale of portfolio securities, including options and futures, who in
its best judgment can provide "best execution" (prompt and reliable execution at
reasonably competitive price). In determining the abilities of the broker-dealer
to provide best execution of a particular portfolio transaction, the Adviser
considers all relevant factors including the execution capabilities required by
the transaction or transactions; the ability and willingness of the
broker-dealer to facilitate each transaction by participation therein for its
own account; the importance to the Fund of speed, efficiency, or
confidentiality; the broker-dealer's apparent familiarity with sources from or
to whom particular securities might be purchased or sold; the quality and
continuity of service rendered by the broker-dealer with regard to the Fund's
other transactions; and any other factors relevant to the selection of a
broker-dealer for particular and related portfolio transactions of the Fund.
Subject to the foregoing obligation to seek best execution, the Adviser may
consider as factors in

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<PAGE>

the allocation of portfolio transactions to a broker-dealer the broker-dealer's
sale of Fund shares, agreement to pay operating expenses of the Fund, or the
provision of research services to the Adviser.

Money market securities are traded primarily in the over-the-counter
market. Where possible, the Fund will deal directly with the dealers who make a
market in the securities involved except in those circumstances where better
prices and execution are available elsewhere. Such dealers usually are acting as
principal for their own account. On occasion, securities may be purchased
directly from the issuer. Money market securities are generally traded on a net
basis and do not normally involve either brokerage commission or transfer taxes.
The cost of executing portfolio transactions will primarily consist of dealer
spreads and underwriting commissions.

The Fund has entered into agreements whereby a portion of the
commissions earned by a broker-dealer on portfolio transactions placed with such
broker-dealer is reimbursed to the Fund by payment of Fund expenses. Such
payments aggregated $53,203 for the Fund's 1996 fiscal year.

Net Asset Value. The net asset value of the Fund is computed once daily
at 4:30 P.M. Eastern Time after the close of trading of the New York Stock
Exchange and the various option exchanges, or such other time as is determined
by or under the direction of the Board of Directors, on each day in which there
is a sufficient degree of trading in the Fund's portfolio securities that the
current net asset value of the Fund might be materially affected by changes in
the value of portfolio securities. The net asset value per share is calculated
by taking the total value of the Fund's assets, deducting total liabilities and
dividing the results by the number of shares outstanding. Securities traded on
the New York Stock Exchange are valued at their price at the close of regular
trading on the New York Stock Exchange. Options traded on one or more exchanges
are valued at their closing prices on whatever exchange the last sale occurred.
All other portfolio securities which are traded on a national securities
exchange are valued at their last sale. In all cases, when there is no last sale
on that day or if the last sale is unrepresentative, the value is taken to be
the mean between the last current bid and asked prices. All other securities not
so traded are valued at the mean between the last current bid and asked prices
if market quotations are available. Other securities and assets are valued at
fair value in accordance with methods determined in good faith by or under the
direction of the Fund's Board of Directors.

Money market securities are valued at the most recent bid price or
yield equivalent as obtained from dealers that make markets in such securities.
Securities with a remaining maturity of 60 days or less are valued on an
amortized basis. This involves valuing a portfolio security at its cost
initially and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the security.

HOW TO PURCHASE SHARES

Shares of the Fund are purchased directly from the Fund with no sales
charge or commission at net asset value next computed after an order and payment
are received by the Fund. Any order received after 4:00 P.M. Eastern Time will
be processed at the next day's closing net asset value. There is no minimum on
initial or subsequent purchases of Fund shares by tax deferred retirement plans
(including IRA, SEP-IRA and profit sharing and money purchase plans) or Uniform
Gifts to Minors Act accounts. For other investors the minimum is $5,000 for an
initial purchase and there is no minimum for subsequent purchases.

Shares of the Fund may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Fund shares and may charge transaction or other account fees.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding additional or different purchase or
redemption conditions. Shareholders who are customers of Service Agents should
consult their Service Agent for information regarding these fees and conditions.
Amounts paid to Service Agents may include transaction fees and/or service fees
paid by the Fund from the Fund assets attributable to the Service Agent, which
would not be imposed if shares of the Fund were purchased directly from the Fund
or its distributor. Service Agents may provide shareholder services to their
customers that are not available to a shareholder dealing directly with the
Fund.

Service Agents may enter confirmed purchase orders on behalf of their
customers. If shares of the Fund are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York

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<PAGE>

Stock Exchange, and transmit it to the Fund's Sub-Transfer Agent, Chase Global
Funds Services Company, prior to the close of their business day to receive that
day's share price. Proper payment for the order must be received by the
Sub-Transfer Agent no later than the time when the Fund is priced on the
following business day. Service Agents are responsible to their customers and
the Fund for timely transmission of all subscription and redemption requests,
investment information, documentation and money.

The Fund reserves the right to reject any purchase order or to suspend
or modify the continuous offering of its shares.

Purchase by Mail. Initial purchases of Fund shares may be made by
mailing a completed and signed application, together with a check payable to the
Fund, to:

The Analytic Optioned Equity Fund, Inc. Street Address (overnight mail)
P.O. Box 2798 73 Tremont Street
Boston, MA 02208 Boston, MA 02108

(800)374-2633

Subsequent purchases of Fund shares may be made by mailing to the above
address the account stub which accompanies any Fund confirmation statement along
with a check payable to the Fund or by mailing to the above address a check
payable to the Fund. If you chose to mail a check without the account stub,
please make sure that your check includes your account number, account name and
the Fund's name.

Purchase by Wire. Initial and subsequent purchases may be made by
wiring Federal Funds addressed:

The Chase Manhattan Bank
ABA #021000021
UAM Funds
The Analytic Optioned Equity Fund, Inc. - (Defensive Equity Portfolio)
Credit DDA 9102772952
Account Registration: (your name)
Account #: (your account number)

Before wiring funds you must telephone the Fund's sub-transfer agent at
(800) 374-2633 with the bank name, date and amount being wired to insure proper
investment. FOR INITIAL PURCHASES ONLY: No purchases will be processed until a
completed and signed application is received.

Purchase by Exchange. You may open an account or purchase additional
shares by making an exchange from an existing account in The Analytic Series
Fund. You may not open an account by exchange unless you have completed an
account application. For further information concerning exchanges, see
"Exchanging Shares" discussed below.

All shares (including reinvested dividends and capital gain
distributions) are issued or redeemed in full and fractional shares rounded to
the third decimal place, at net asset value, with no fees or charges. No share
certificates will be issued except for investors whose regulators require them
to hold certificates. Instead, an account will be established for each
shareholder and all shares purchased will be held in book entry form by the
Fund. Any transaction respecting an account, including reinvestment of dividends
and distributions, will be confirmed in writing to the shareholder showing the
details of the transaction. (See "Shareholder Accounts.")

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<PAGE>

HOW TO REDEEM SHARES

Telephone Redemption Privilege: Provided the shareholder has previously
established the telephone redemption privilege (by completing the telephone
redemption portion of his application to purchase shares or by subsequent
written instructions with signature(s) guaranteed) a shareholder may redeem all
or part of his shares by calling the Fund's sub-transfer agent at (800)
374-2633. No request for redemption will be accepted by telephone or wire except
where redemption proceeds are to be remitted to a predesignated bank account.
The redemption proceeds will be wired to the bank designated in the
instructions. Any changes to the telephone redemption instructions must be in
writing with signature(s) guaranteed. Telephone redemption privileges are not
permitted for Analytic prototype retirement plans.

The Fund's sub-transfer agent will employ procedures designed to provide
reasonable assurance that instructions communicated by telephone are genuine
and, if it does not do so, it may be liable for any losses due to unauthorized
or fraudulent instructions. The procedures employed by the sub-transfer agent
include requiring the following information at the time of the telephone call:

1. Account number;
2. Registration of account; and
3. Social Security Number or Tax I.D.

NOTE: Neither the Fund nor the sub-transfer agent is responsible for
unauthorized telephone redemptions by a person reasonably believed to be a
shareholder unless the sub-transfer agent has received written notice canceling
the telephone redemption authorization. The Fund may change or discontinue the
telephone redemption privilege without notice. For your protection, the Fund and
its agents reserve the right to record all calls.

The Fund reserves the right to refuse a telephone redemption if it
believes it is advisable to do so. Telephone redemptions may be difficult to
implement during periods of drastic economic or market changes, which may result
in an unusually high volume of telephone calls. If a shareholder is unable to
reach the Fund's sub-transfer agent by telephone, shares may be redeemed in
writing as described below.

Redemptions by Written Instructions: A shareholder may also redeem all
or part of his shares by written request to the Fund's sub-transfer agent at the
address set forth above under "Purchase by Mail." The written request must be
endorsed by the registered owner(s) exactly as the account is registered,
including any special capacity of the registered owner(s). Where the owner or
owners have not arranged with the Fund for redemption proceeds to be remitted to
a predesignated bank account, the Fund requires that the signature(s) be
guaranteed. Fiduciaries, corporations and other entities may also be required to
furnish supporting documents.

Redeeming by Exchange: Shares may be redeemed by making an exchange
into any portfolio of The Analytic Series Fund. For more information, see "How
to Exchange Shares" discussed below.

Signature Guarantees. To protect the shareholder's account and the Fund
from fraud, signature guarantees are required for certain redemptions. The
purpose of signature guarantees is to verify the identity of the party who has
authorized the redemption. A guarantor must be a commercial bank or trust
company which is a member of the Federal Deposit Insurance Corporation, a member
firm of a national securities exchange or another eligible guarantor
institution. Notaries public are not acceptable guarantors. Signature guarantees
are required for:

1. any redemption request for an account where the owner(s) have not
arranged with the Fund for redemption proceeds to be remitted to a
predesignated bank account;

2. transfers or exchanges between accounts which are not identically
registered;

3. the addition of or change in the wiring instructions for the financial
institution designated to receive redemption proceeds directly into a
shareholder's account; and

4. procedures involving disputed or deceased shareholder accounts.

General. Shares are redeemed without charge at the net asset value next
computed after instructions and required documents are received in proper form.
Any instructions received after 4:00 P.M. Eastern Time will be processed at

21
<PAGE>

the next day's closing net asset value. Payment will be made as promptly as
possible but in no event later than 3 business days from the day the redemption
request is received. Any letter of instruction must be signed exactly as the
account is registered, including any special capacity of the registered owner.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund may be
required to withhold at a rate of 31% from dividends and capital gain
distributions to shareholders and upon payment of redemptions to shareholders,
if they have not complied with the provisions of the Act relating to the
furnishing of taxpayer identification numbers and reporting of dividends.

A request for a distribution from an IRA, SEP-IRA or other tax deferred
retirement account for which the Fund acts as sponsor may be delayed until the
Fund has ascertained the withholding requirements applicable to the
distribution. Investors may send withholding instructions to the Fund on
Internal Revenue Service ("IRS") Form W-4P along with the distribution request.
The form is available from the IRS or by calling the Fund. If an investor does
not want tax withholding from distributions, the investor may state in the
distribution request (instead of using Form W-4P) that no withholding is desired
and that the investor understands that there may be a liability for income tax
on the distribution, including penalties for failure to pay estimated taxes.

In the event that the Fund is requested to redeem shares for which it
has not received good payment (e.g., cash or cashier's check on a U.S. bank), it
may delay the mailing of a redemption check until such time as it has determined
that good payment has been collected for the purchase of such shares. In
addition, the Fund reserves the right to defer honoring redemption requests
where the shares to be redeemed have been purchased by check within 15 days
prior to the date the redemption request is received unless the Fund has been
advised that the check used for investment has been cleared for payment by the
shareholder's bank. With the exception of retirement plan accounts, the Fund may
close out any investor's account whenever, due to redemptions, the value of the
account falls below the minimum account balance of $1,000 and the investor fails
to purchase sufficient shares to bring the value of the account up to $1,000 or
more within 90 days after written notice to do so is sent by the Fund. Thus, for
example, an investor who opens an account with an initial investment of $5,000,
does not add to it, and then redeems a portion of it, may be asked to increase
his balance to $1,000 or have it involuntarily redeemed.

HOW TO EXCHANGE SHARES

Should your investment goals change, you may exchange your shares for
shares of any portfolio in The Analytic Series Fund. Exchanges are processed at
the net asset value per share next computed after receipt of instructions in
proper form.

Exchanging Shares by Telephone: Provided that Telephone Exchange
Privileges have been established (by completing the "Telephone Exchange
Privileges" portion of the Account Registration or by subsequent written
instructions with signature(s) guaranteed), a shareholder may exchange all or
part of his shares by calling the Fund's sub-transfer agent at (800) 374-2633.

1. Account number;
2. Registration of account; and
3. Social Security Number or Tax I.D.

NOTE: Neither the Fund nor the sub-transfer agent is responsible for
unauthorized telephone exchanges by a person reasonably believed to be a
shareholder unless the sub-transfer agent has received written notice canceling
the telephone exchange authorization. The Fund may change or discontinue the
telephone exchange privilege without notice. For your protection, the Fund and
its agents reserve the right to record all calls.

The Fund reserves the right to refuse a telephone exchange if it
believes it is advisable to do so. Telephone exchanges may be difficult to
implement during periods of drastic economic or market changes, which may result
in an

22
<PAGE>

unusually high volume of telephone calls. If a shareholder is unable to
reach the Fund's sub-transfer agent by telephone, shares may be exchanged in
writing as described below.

A shareholder may exchange all or part of his shares by written request
to the Fund's sub-transfer agent at the address set forth above under "Purchase
by Mail." The written request must be endorsed by the owner(s) exactly as the
account is registered, including any special capacity of the registered
owner(s). The Fund requires that the signature(s) be guaranteed.

23
<PAGE>

IMPORTANT EXCHANGE INFORMATION. Before you make an exchange you should
consider the following:

1. Please read the prospectus of The Analytic Series Fund before making an
exchange.
2. An exchange is treated as a redemption and a purchase and any gain or
loss on the transaction is taxable.
3. Recently purchased shares may not be exchanged until payment for the
purchase has been collected. The Fund reserves the right to defer
honoring exchange requests where shares to be exchanged have been
purchased by check within 15 days prior to the date of the exchange
request, unless the Fund has been advised that such check has been
cleared for payment by the shareholder's bank.
4. Exchanges are accepted only if the registrations of the accounts are
identical.
5. The redemption and purchase price of shares redeemed by exchange is the
net asset value per share of the respective funds next computed after
the Fund receives instructions in proper form.
6. No exchange can be made unless the shares to be purchased have been
registered in the state of the purchaser.

EXCHANGE PRIVILEGE LIMITATIONS. The Fund's exchange privilege is not
intended to afford shareholders a way to speculate on short-term market
movements. Accordingly, in order to prevent excessive use of the Exchange
Privilege that may potentially disrupt the management of the Fund and increase
transaction costs, the Fund may establish a policy of limiting excessive
exchange activity.

SHAREHOLDER ACCOUNTS

When an investor makes his initial purchase of shares an account will
be opened for him on the books of the Fund, and he will receive a confirmation
of the opening of his account. Thereafter, whenever a transaction takes place in
the account, such as a purchase, redemption, transfer, change of address,
reinvestment of income or capital gain distributions, or withdrawal of share
certificates, a confirmation will be sent to the shareholder giving complete
details of that transaction. In addition, shareholders will receive quarterly
statements giving complete details of all transactions during the quarter.

A shareholder may make additional investments in his account by sending
a check, money order or wire funds made payable to the Fund. Income
distributions (including dividends and distributions of net short-term capital
gains) and net long-term capital gains distributions, if any, will be reinvested
in full and fractional shares rounded to the third decimal place, at the net
asset value per share determined on the payment date. Shareholders wishing to
receive fixed payments on a monthly or quarterly basis in amounts of $100 or
more may do so by writing to the Fund (at the address set forth above under
"Purchase by Mail") or noting the appropriate box on the application form. (See
"Withdrawal Plan".)

24
<PAGE>

TAX SHELTERED RETIREMENT PLANS

Shares of the Fund may be purchased in connection with certain
prototype tax sheltered retirement plans, (IRA, SEP-IRA and profit sharing and
money-purchase plans) for corporations, partnerships and self-employed
individuals to benefit themselves and their employees. Investors with existing
plans who wish to invest their plan assets in the Fund without adopting a
prototype may do so by completing the Application to Purchase Shares which
accompanies this Prospectus.

The Adviser, at no cost to the Fund or any of the Fund's shareholders,
pays all fees for prototype retirement plans offered by the Fund (including IRA
accounts) for the life of the plan's account with the Fund. These fees can be
substantial and include all trustee and custodian, set-up, activity, and annual
maintenance fees. Complete information and simplified forms to establish new
accounts, or to transfer assets from existing accounts, are available on
request.

WITHDRAWAL PLAN

Any shareholder may establish a withdrawal plan under which he receives
a monthly or quarterly check in a predetermined amount of not less than $100.
All income dividends and any realized gain distributions attributable to the
account will be reinvested at net asset value on the payment dates, as with
other shareholder accounts, and shares of the Fund as specified on the
Application will be redeemed from the account in order to make the required
withdrawal payments. The shareholder may vary the amount or frequency of
withdrawal payments, temporarily discontinue them or terminate them by notifying
the Fund in writing at the address set forth above under "Purchase by Mail."
There is no charge for this service; however, the Fund reserves the right to
amend or discontinue such plans on thirty days' notice.

Withdrawal payments should not be considered dividends, yield, or
income on an investment, since portions of each payment may consist of a return
of capital. Depending upon the size and frequency of payments and fluctuations
in value of the Fund's shares redeemed, redemptions for the purpose of making
withdrawal plan disbursements may reduce or even exhaust a shareholder account.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Tax Status of the Fund. The Fund intends to qualify as a "regulated
investment company" under the Internal Revenue Code. As a regulated investment
company, it will not be liable for federal income taxes on amounts paid by it as
dividends and distributions. The Fund did so qualify during its last fiscal
year, and intends to qualify in current and future years. However, the Code
contains a number of complex tests relating to qualification which the Fund
might not meet in any particular year. For example, if the Fund derives 30% or
more of its gross income from the sale or other disposition of securities held
for less than 3 months, it may fail to qualify (see, also, "Tax Information and
Option Accounting Principles" in the Statement of Additional Information). If it
did not so qualify, it would be treated for tax purposes as an ordinary
corporation and receive no tax deduction for payments made to shareholders.

Distributions. The Fund intends to distribute its investment company taxable
income, exclusive of capital gains, on a quarterly basis. Any net short-term
capital gains will be distributed at least annually and may be distributed more
frequently at the discretion of the Fund's Board of Directors. Distributions of
net capital gains (net long-term capital gains less net short-term capital
losses) if any, will be made annually. Income distributions (including dividends
and distributions of net short-term capital gains) and net long-term capital
gains distributions, if any, will be reinvested in full and fractional shares
rounded to the third decimal place, at the net asset value per share determined
on the payment date.

Taxation of shareholders. The following is only a brief discussion of Federal
income taxation in effect on the date of this prospectus, and does not discuss
the status of dividends and distributions from the Fund under state and local
tax laws. All applicable tax laws and regulations are subject to change by
legislative and administrative action. Each shareholder of the Fund is advised
to consult his own tax adviser with respect to applicable Federal, state and
local tax laws.

The maximum marginal tax rate for individuals is currently 28% on net
capital gains distributions and 39.60% on ordinary income distributions. The
reduction of certain deductions and phase-out of exemptions may increase the
individuals marginal tax rate to more than 39.60%. For corporations, net capital
gains distributions are subject to maximum marginal tax rate of 35% and ordinary
income distributions are subject to the maximum marginal rate is 39%.

25
<PAGE>

Distributions paid from the Fund's dividend and interest income and
from any net realized short-term capital gains are taxable to shareholders as
ordinary income under Federal income tax law, whether received in cash or in
additional shares. Net capital gains distributions are taxable to shareholders
as long-term capital gains, whether received in cash or additional shares,
regardless of how long such shareholders have held their shares. However, any
loss (to the extent of the distribution of net capital gain received by a
shareholder) will be treated as long-term capital loss upon the redemption of
shares of the Fund held for twelve months or less.

The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss. A capital gain or loss may be realized from any ordinary
redemption of shares or exchange of shares.

All or a part of the Fund's dividends will be eligible for the 70%
deduction for dividends received by corporations. Special provisions are
contained in the Internal Revenue Code as to the eligibility, for the deduction,
of payments made by mutual funds to corporate shareholders. Net capital gains
distributions are not eligible for the deduction. The Fund will report to its
shareholders income dividends and capital gains distributed during the calendar
year and will designate that portion which qualifies for the 70% corporate
dividends received deduction. This determination will be based on the ratio
between aggregate dividends received by the Fund on domestic corporate stock
held for at least 46 days (91 days for certain preferred stock) and the Fund's
gross income. Gross income will include dividends, interest and the excess of
net short-term capital gains (which includes premium from expired options and
gains from closing purchase transactions) over net long-term capital losses.
Each year the Fund will mail you information on the tax status of dividends and
distributions.

Pursuant to the Interest and Dividend Tax Compliance Act of 1983,
shareholders may be subject to backup withholding of federal income tax at a 31%
rate on dividends and other payments made to shareholders if they have not
provided the Fund with their correct social security number or other taxpayer
identification number, or have not made the certifications required by the
Internal Revenue Service.

The foregoing is only a brief discussion of Federal income taxation in
effect on the date of this Prospectus, and does not discuss the status of
dividends and distributions from the Fund under state and local tax laws. All
applicable tax laws and regulations are subject to change by legislative and
administrative action. Each shareholder of the Fund is advised to consult his
own tax adviser with respect to applicable Federal, state and local tax laws.

Any net capital gain distribution paid by the Fund has the effect of
reducing the net asset value per share on the reinvestment date by the amount of
the distribution. Therefore, a capital gain distribution paid shortly after a
purchase of shares by an investor would represent, in substance, a partial
return of capital to the shareholder (to the extent it is paid on the shares so
purchased), even though it would be subject to income taxes as discussed above.
Accordingly, prior to purchasing shares of the Fund, an investor should
carefully consider the impact of dividends or capital gains distributions which
are expected to be or have been announced.

Tax Considerations in Portfolio Transactions. As a covered call and secured put
option writer, the Fund has great flexibility in determining the taxable nature
of its investment results, and it is this flexibility which the Fund will
utilize to attempt to achieve an equal emphasis on current income and long-term
capital gains earned on the Fund's investment portfolio. There can be no
assurance, however, that such equal emphasis can be achieved over any particular
period of time. Moreover, optioning securities in the Fund's investment
portfolio may have the effect of reducing capital appreciation earned on such
securities below that which could have been earned had no options been written
on such securities.

Further, since shareholders of the Fund who are taxable may receive
distributions which are taxed to them as ordinary income in years when the total
return of the Fund is less than its dividend and interest return, during such
years the Fund will attempt, consistent with its investment objective, to
minimize its shareholders' ordinary taxable income by offsetting, to the extent
possible, any net short-term capital gains that may have been realized from
expired options and profitable closing purchase transactions by selling
underlying stocks with unrealized capital losses. Otherwise, in such years the
Fund's shareholders might have both a negative total return and current taxable
income, thus being subject to the payment of income taxes in a year in which
their real wealth may have declined. Of course, there can be no assurance that
the Fund will have sufficient unrealized losses on its underlying common stocks
to be able to offset these net short-term capital gains.

CAPITAL STOCK

The Fund has an authorized capital of 100,000,000 shares of common
stock with no par value. All shares are of the same class with equal rights and
privileges. Except with respect to the election of directors where cumulative
voting may

26
<PAGE>

apply, each share is entitled to one vote and to participate equally in
dividends and distributions declared by the Fund. Cumulative voting means that
each shareholder is entitled to as many votes as shall equal the number of his
shares of common stock multiplied by the number of directors to be elected, and
such shareholder may cast all such votes for a single director or divide them
among two or more directors as he sees fit. The shares are fully paid and
nonassessable and have no pre-emptive, conversion or exchange rights. The shares
are transferable without restriction. The Fund does not normally hold annual
meetings of shareholders except when required by the Investment Company Act of
1940.

GENERAL INFORMATION

Shareholder inquiries should be made by telephone at (800) 374-2633 or
in writing to the following address:

Analytic Funds Street Address (overnight mail)
P.O. Box 2798 73 Tremont Street
Boston, MA 02208 Boston, MA 02108
(800)374-2633

Each shareholder will receive annual and semi-annual financial
statements, including a list of portfolio securities and outstanding call and
put options. The annual financial statements of the Fund will be audited by
certified public accountants.

27
<PAGE>
GLOSSARY OF INVESTMENT TERMS AND STOCK AND DEBT OPTION TERMS

Investment Terms

Quarterly Total Returns. The percentage change over a quarter in the
value of a shareholder's investment, assuming immediate reinvestment of all
distributions in additional Fund shares and no adjustment for the shareholder's
income tax consequences. This change derives from: dividends, interest, realized
capital gains or losses, changes in unrealized capital appreciation or
depreciation, premiums received from expired options and gains or losses on
closing purchase transactions, all less expenses. For example, assume a
shareholder's investment in the Fund has a value of $100 at the start of a
three-month period. If the value of his investment, after immediate reinvestment
of all income and capital gains distributions, is $101 at the end of such
period, the total return for the period would be +1%. If the value at the end of
such period is $99 (again after reinvestment of all income and capital gains
distributions), the total return for the period would be -1%.

Long Term Total Returns. The percentage change in the value of a
shareholder's initial investment after a full market cycle (usually 3 or more
years), expressed as a constant annual compound rate of total return, assuming
the reinvestment of all subsequent income and capital gain distributions in
additional Fund shares. For example, suppose a shareholder's initial investment
is $100 (one share whose net asset value is $100) and that all subsequent income
and capital gain distributions are reinvested in additional Fund shares on the
distribution date. If after three years the initial one share has become 1.2
shares and the net asset value per share is $104.98, then the initial $100
investment is worth $125.98 (1.2 x $104.98) and has grown at 8% per annum
compounded. Compounded means that at the end of each compounding interval, in
this example one year, the total return is computed and reinvested in additional
fund shares at the end of each compounding interval. Thus, at the end of the
first year the initial $100 investment is worth $108, and at the end of the
second year it is worth $116.64, and at the end of the third year it is worth
$125.98. Similarly, if after three years the net asset value per share is $64.89
then the initial $100 investment is worth $77.87 (1.2 x $64.89) and has had a
negative return of 8% per annum compounded. Also if after three years the net
asset value per share is $83.33 then the initial $100 investment is worth $100
(1.2 x $83.33) and has had a net return of zero per cent per annum. As these
examples show, the basic components on total return, income and the change in
value of the portfolio securities will vary and there can be no assurance that
the Fund's total return will be positive or that it will accrue at a constant
rate.

Fluctuations in Total Return. Fluctuations in the Fund's total return
will be measured by the standard deviation of the Fund's quarterly total
returns. The standard deviation of returns measures the extent to which the
individual returns deviate from their arithmetic average. The standard deviation
is used extensively as a measure of dispersion (risk) and provides a good
historical measure of the variability of returns from an investment portfolio.
For example, the following table shows the 108 quarterly total returns (assuming
reinvestment of all dividends at the end of each calendar quarter with no
transaction costs) for a Standard & Poor's 500 Stock Index over the twenty-seven
year period ended December 31, 1996. The arithmetic average of these quarterly
returns is 3.22% and their standard deviation is 8.11%. In 32 of these 108
quarters the total return was negative.

28
<PAGE>

PERCENT QUARTERLY TOTAL RETURN, S & P 500 STOCK INDEX, 1970-1996

<TABLE>
<CAPTION>
Year Qtr % Return Year Qtr % Return Year Qtr % Return
---- --- -------- ---- --- -------- ---- --- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1970 1 -1.77 1971 1 9.69 1972 1 5.75
2 -18.03 2 0.16 2 .67
3 16.92 3 -0.58 3 3.92
4 10.41 4 4.64 4 7.56
1973 1 -4.89 1974 1 -2.82 1975 1 22.95
2 -5.77 2 -7.56 2 15.36
3 4.81 3 -25.16 3 -10.95
4 -9.18 4 9.37 4 8.65
1976 1 14.98 1977 1 -7.45 1978 1 -4.94
2 2.47 2 3.31 2 8.51
3 1.91 3 -2.83 3 8.67
4 3.22 4 -0.11 4 -4.93
1979 1 7.10 1980 1 -4.12 1981 1 1.38
2 2.73 2 13.49 2 -2.30
3 7.65 3 11.22 3 -10.23
4 0.14 4 9.49 4 6.93
1982 1 -7.31 1983 1 10.12 1984 1 -2.40
2 -0.56 2 11.10 2 -2.57
3 11.52 3 -0.13 3 9.70
4 18.25 4 0.40 4 1.89
1985 1 9.19 1986 1 14.11 1987 1 21.36
2 7.34 2 5.89 2 5.02
3 -4.10 3 -6.97 3 6.60
4 17.21 4 5.58 4 -22.53
1988 1 5.70 1989 1 8.83 1990 1 -3.00
2 6.67 2 7.09 2 6.28
3 0.33 3 10.71 3 -13.75
4 3.08 4 2.07 4 8.96
1991 1 14.53 1992 1 -2.53 1993 1 4.37
2 -0.22 2 1.90 2 .49
3 5.35 3 3.16 3 2.58
4 8.38 4 5.04 4 2.32
1994 1 -3.79 1995 1 9.74 1996 1 5.37
2 0.42 2 9.55 2 4.49
3 4.89 3 3.59 3 3.09
4 -0.02 4 10.49 4 8.35
</TABLE>

The arithmetic average of these quarterly returns is 3.22% and their standard
deviation is 8.11%. In 32 of the 108 quarters, the total return was negative.
Source: Standard & Poor's.

29
<PAGE>

Stock and Debt Option Terms

Option. An option is either a call or put option issued by the Options
Clearing Corporation (the "Clearing Corporation") on a stock or debt security
and traded on one or more Exchanges, as defined below, or subject to regulatory
approval is traded over-the-counter. Currently options are traded on common
stocks, stock indexes, stock index futures; on U.S. Treasury bonds, notes, and
bills; and on GNMA securities. Such options give a holder the right to sell (in
the case of a put option) or to buy (in the case of a call option) the number of
shares or other units of the underlying security covered by the option at a
fixed or determinable exercise price. The rights represented by an option may be
exercised by the proper filing of an exercise notice prior to the fixed
expiration time of the option.

Class of Options. Options covering the same underlying security.

Clearing Corporation. The Option Clearing Corporation.

Closing Purchase Transaction. A transaction in which an investor who is
obligated as a writer (seller) of an option terminates his obligation as a
writer by purchasing on an exchange, in a closing purchase transaction, an
option of the same series as the option previously written. Such a transaction
has the effect of canceling the option writer's position as a writer and does
not result in the ownership of a new option.

Closing Sale Transaction. A transaction in which an investor who is the
holder of an outstanding option liquidates his position as a holder by selling
an option of the same series as the option previously purchased. Such sale does
not result in the investor assuming the obligations of a writer.

Covered Call Option Writer. A writer of a call option who, so long as
he remains obligated as a writer, owns the underlying security or a security
which is immediately convertible into the underlying security or who holds on a
security-for-security basis on all on the same security as the call written
where the exercise price of the call held is equal to or less than the exercise
price of the call written or, if greater than the exercise price of the call
written, the difference is maintained by the writer in U.S. Government
securities in a segregated account with the writer's broker or custodian.

Covered Put Option Writer. A writer of a put option who, so long as he
remains obligated as a writer, has deposited U.S. Government securities with a
value equal to or greater than the exercise price with a securities depository
and has pledged them to the Options Clearing Corporation for the account of the
broker-dealer carrying the writer's position or who holds on a
security-for-security basis a put on the same security as the put written where
the exercise price of the put held is equal to or greater than the exercise
price of the put written or if less than the exercise price of the put written,
the difference is maintained by the writer in U.S. Government securities in a
segregated account with the writer's broker or custodian.

Exchange. A national securities exchange on which options are traded:
currently the Chicago Board Options Exchange ("CBOE"), American Stock Exchange
("AMEX"), Pacific Stock Exchange ("PSE"), Philadelphia Stock Exchange ("PHLX")
and New York Stock Exchange ("NYSE").

Exercise Price. The price per unit at which the holder of a call option
may purchase (and the holder of a put option may sell) the underlying security
upon exercise of the option, sometimes referred to as the striking price.

Expiration Date. The latest date when an option may be exercised.

NASDAQ Options. Standardized options on unlisted securities which are
displayed on the National Association of Securities Dealers Automated Quotations
System.

Option Period. The time during which an option may be exercised,
generally from the date the option is written through its expiration date.

Premium. The price of an option agreed upon between the buyer and
writer (seller) for their agents in a transaction on an Exchange.

30
<PAGE>

Put Option. Any option issued by the Clearing Corporation and traded on
one or more of the Exchanges referred to above which gives the holder the right
to sell to the Clearing Corporation the underlying security at the stated
exercise price by filing an exercise notice prior to the expiration date.

Secured Put Option Writer. A writer of a put option who has an
underlying money market investment in an amount not less than the exercise price
of the option, so long as he remains obligated as writer of the put option.

Series of Options. Options covering the same underlying security and
having the same exercise prices and expiration dates.

Standard & Poor's 500 Stock Index. An unmanaged index composed of 400
industrial stocks, 40 financial stocks, 40 utilities stocks, and 20
transportation stocks. Comparisons of performance assume reinvestment of
dividends.

Underlying Securities. The securities subject to purchase upon the
exercise of a call option or subject to sale upon the exercise of a put option.

31
<PAGE>

APPENDIX

Description of U.S. Government Securities.

U.S. Government securities include (1) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance: U.S.
Treasury bills (maturity of one year or less), U.S. Treasury notes (maturities
of one to ten years) and U.S. Treasury bonds (generally maturities of greater
than ten years); and (2) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities which are supported by any of the following: (a)
the full faith and credit of the U.S. Treasury (such as Government National
Mortgage Association (GNMA) Certificates), (b) the right of the issuer to borrow
an amount limited to a specific line of credit from the U.S. Treasury, (c)
discretionary authority of the U.S. Government to purchase certain obligations
of the U.S. Government agency or instrumentality, or (d) the credit of the
instrumentality. Agencies and instrumentalities include: Federal Land Banks,
Farmers Home Administration, Central Bank for Cooperatives, Federal Intermediate
Credit Banks, Federal Home Loan Banks, and Federal National Mortgage
Association.

GNMA Certificates are mortgage-backed securities representing part
ownership of a pool of mortgage loans. These loans - issued by lenders such as
mortgage bankers, commercial banks and savings and loan associations - are
either insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled and,
after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal on
each mortgage is guaranteed by the full faith and credit of the U.S. Government.

GNMA Certificates differ from bonds in that principal is paid back
monthly by the borrower over the term of the loan rather than returned in a lump
sum at maturity. GNMA Certificates are called "pass-through" securities because
both interest and principal payments (including prepayments) are passed through
to the holder of the Certificate.

Description of Various Options, Futures Contracts, and Related Options.

Options on Stock Indexes. Options on stock indexes are similar to
options on stock except that the delivery requirements are different. Instead of
giving the right to take or make delivery of stock at a specified price, an
option on a stock index gives the holder the right to receive a cash "exercise
settlement amount" equal to (i) the amount by which the fixed exercise price of
the options exceeds (in the case of a put) or is less than (in the case of a
call) the closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier". Receipt of this cash amount will
depend upon the closing level of the stock index upon which the option is based
being greater than, in the case of a call, or less than, in the case of a put,
the exercise price of the option. The amount of cash received will be equal to
such difference between the closing price of the index and the exercise price of
the option expressed in dollars times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. Gain or loss to the Fund on transactions in stock index options
will depend on price movements in the stock market generally (or in a particular
industry or segment of the market) rather than price movements of individual
securities.

As with stock options, the Fund may offset its position in stock index
options prior to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.

A stock index fluctuates with changes in the market value of the stocks
included in the index. Some stock index options are based on a broad market
index such as the S & P 500, the S & P 100, or the N.Y.S.E. Composite Index.
Indexes are also based on an industry or market segment such as the AMEX Oil and
Gas Index or the Computer and Business Equipment Index. Options on stock indexes
are currently traded on the following exchanges among others: The Chicago Board
Options Exchange, New York Stock Exchange and American Stock Exchange.

Stock Index Futures. A stock index futures contract is a bilateral
agreement pursuant to which the Fund will agree to receive or deliver at
settlement an amount of cash equal to a dollar amount multiplied by the
difference between the value of a stock index at the close of the last trading
day of the contract and the price at which the futures contract is originally
struck. Stock index futures have similar characteristics to other futures
contracts such as the financial futures discussed below, except that settlement
is through delivery of cash rather than the underlying instruments. The Fund
will be required to deposit with its Custodian or broker an amount of cash, cash
equivalents, money market instruments or U.S. Treasury bills equal to
approximately 5% of the contract amount as initial margin. Daily variation
margin payments to and from the Fund

A-1
<PAGE>
must be made during the life of the futures contract in order to reflect
increases or decreases in the contract's value. At any time prior to expiration
of the stock index futures contract, the Fund may elect to close the position by
taking an opposite position. A final determination of variation margin is then
made, and additional cash is required to be paid or released by the Fund, which
will realize a gain or loss. In addition, the Fund will pay a commission on each
contract, including offsetting transactions. Stock index futures are currently
traded on the following exchanges among others: Chicago Mercantile Exchange, New
York Financial Exchange and Kansas City Board of Trade.

Options on Stock Index Futures. Put and call options are traded on
stock index futures and they have characteristics and terminology similar to
other exchange traded options discussed above. See "Stock Index Futures" above
for a description of the instruments underlying these options.

Financial Futures Contracts. A financial futures contract sale creates
an obligation by the Fund, as seller, to deliver the specific type of financial
instrument called for in the contract at a specified future time for a specified
price. A financial futures contract purchase creates an obligation by the Fund,
as purchaser, to take delivery of the specific type of financial instrument at a
specified future time at a specified price. The specific securities delivered or
taken, respectively, on the settlement date, are not determined until at or near
that date. The determination is in accordance with the rules of the exchange on
which the futures contract sale or purchase was made. The Fund does not intend
to take delivery of the instruments underlying futures contracts it holds.

Although financial futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed out
before the settlement date without the making or taking of delivery of
securities. Closing out a futures contract sale is effected by the Fund entering
into a futures contract purchase for the same aggregate amount of the specific
type of financial instrument and same delivery date. If the price in the sale
exceeds the price in the offsetting purchase, the Fund is paid the difference
and thus realizes a gain. If the offsetting purchase price exceeds the sale
price, the Fund pays the difference and realizes a loss. Similarly, the closing
out of a futures contract purchase is effected by the Fund entering into a
futures contract sale. If the offsetting sale price exceeds the purchase price,
the Fund realizes a gain, and if the purchase price exceeds the offsetting sale
price, the Fund realizes a loss.

The purchase or sale of a futures contract differs from the purchase or
sale of the security, in that no price or premium is paid or received. Instead,
cash, cash equivalents, money market instruments, or U.S. Treasury bills equal
to approximately 1 1/2% of the contract amount must be deposited by the Fund
with its Custodian or broker. This amount is known as initial margin. Subsequent
payments to and from the broker, called variation margin, are made on a daily
basis as the price of the underlying security fluctuates making the long and
short positions in the futures contract more or less valuable, a process known
as "mark-to-market". At any time prior to expiration of the futures contract,
the Fund may elect to close the position by taking an opposite position which
will operate to terminate the position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid to or released by the broker, and the Fund realizes a loss or gain. In
addition, the Fund will pay a commission on each contract, including offsetting
transactions.

Currently, financial futures contracts can be purchased or sold on U.S.
Treasury bills, U.S. Treasury bonds, U.S. Treasury notes with maturities between
2 and 10 years, on GNMA Certificates, and on three-month domestic bank
certificates of deposit. While Treasury bonds, Treasury bills and Treasury notes
are backed by the full faith and credit of the U.S. Government and GNMA
Certificates are guaranteed by a U.S. Government agency, the futures contracts
in U.S. Government securities are not obligations of the U.S. Treasury.

Financial futures contracts are traded in an auction environment on the
floors of several exchanges principally, the Chicago Board of Trade, the Chicago
Mercantile Exchange and the New York Futures Exchange. The Fund will deal only
in standardized contracts on recognized exchanges. Each exchange guarantees
performance under contract provisions through a clearing corporation, a
nonprofit organization managed by the exchange membership which is also
responsible for handling daily accounting of deposits or withdrawals of margin.

Options on Financial Futures. Put and call options are traded on
financial futures contracts, and they have characteristics and terminology
similar to other exchange traded options. See "Financial Futures Contracts"
above for a description of the instruments underlying these options.

A-2
<PAGE>

Investment Adviser
Analytic [Bullet] TSA Global Asset Management, Inc.
700 South Flower Street, Suite 2400
Los Angeles, CA 90017

Transfer Agent and Dividend Disbursing Agent

UAM Fund Services, Inc.
73 Tremont Street
Boston, MA 02108

Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110

Custodian
The Chase Manhattan Bank
1211 Avenue of the Americas
New York, NY 10036

Counsel
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071

Independent Auditors
Deloitte & Touche LLP
1000 Wilshire Boulevard
Los Angeles, CA 90017

- ------------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Fund or the Adviser. This Prospectus does not
constitute any offer to sell or a solicitation of any offer to buy any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction.
<PAGE>

PART B

THE DEFENSIVE EQUITY PORTFOLIO
of Analytic Optioned Equity Fund
(800)374-2633

October ___, 1997

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a Prospectus but should
be read in conjunction with the Prospectus for Analytic Optioned Equity Fund,
Inc. (the "Fund") dated October ____, 1997. A copy of the Prospectus may be
obtained by telephoning the Fund at the telephone number shown above.

TABLE OF CONTENTS
Page
Investment Objective and Policies B-2
Covered Option Writing B-2
Factors Which May Adversely Affect Transactions
in Options B-2
Position Limitations B-3
Investment Restrictions and Other Investment Policies B-3
Hedging Transactions in Options, Futures and Related Options B-5
Stock Index Options B-5
Stock Index Futures B-6
Options on Stock Index Futures B-6
Financial Futures and Related Options B-6
Management of the Fund B-6
Investment Advisory and Other Services B-8
Brokerage B-10
Tax Information and Option Accounting Principles B-11
Calculation of Performance Data and Other Performance
Comparisons and Statistics B-13
Principal Shareholders B-16
Pricing and Redemption of Fund Shares B-16
Custodian B-17
Transfer, Dividend Disbursing and Shareholder Servicing Agent B-17
Independent Auditors B-17
Legal Counsel B-17
Financial Statements B-17

B-1
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

The Prospectus discusses the Fund's investment objective and the
policies it employs to achieve this objective. The following information
supplements the discussion in the Prospectus.

Covered Option Writing. In return for the premium received, a covered
call option writer during the term of the option is subject to the risk of
losing the potential for capital appreciation above the exercise price.
Likewise, a secured put option writer retains the risk of loss should the value
of the underlying security decline below the exercise price. In both cases the
writer has no control over the time when he has to fulfill his obligation as a
writer of the option. Once an option writer has received an exercise notice he
cannot effect a closing purchase transaction.

If a call option expires unexercised, the covered option writer
realizes a gain in the amount of the premium received although there may have
been a decline (unrealized loss) in the market value of the underlying security
during the option period which may exceed such gain. If the covered option
writer has to sell the underlying security because of the exercise of a call
option, the writer will realize a gain or loss from the sale of the underlying
security with the proceeds being increased by the amount of the premium. If a
put option expires unexercised, the secured put option writer realizes income
from the amount of the premium plus the interest income of the money market
investment. If the secured put writer has to buy the underlying security because
of the exercise of the put option, the secured put writer incurs an unrealized
loss to the extent that the current market value of the underlying security is
less than the exercise price of the put option. However, this may be offset in
whole or in part by the premium received and any interest income earned on the
money market investment.

A call option gives the purchaser of the option the right to buy, and
the writer the obligation to sell, the underlying security at the exercise price
during the option period. A put option gives the purchaser the right to sell,
and the writer the obligation to buy, the underlying security at the exercise
price during the option period. So long as the obligation of the writer
continues, he may be assigned an exercise notice by the broker-dealer through
whom such option was sold, requiring him to deliver, in the case of a call, or
take delivery of, in the case of a put, the underlying security against payment
of the exercise price. This obligation terminates upon expiration of the option,
or such earlier time at which the writer effects a closing purchase transaction
by purchasing an option of the same series as he previously sold. Once a writer
has been assigned an exercise notice in respect of an option, he is thereafter
not allowed to effect a closing purchase transaction. To secure his obligation
to deliver the underlying security in the case of a call option, or to pay for
the underlying security in the case of a put option, a covered writer is
required to deposit in escrow the underlying security or other assets in
accordance with the rules of the Options Clearing Corporation (the "Clearing
Corporation") and of the Exchanges.

The principal reason for writing options on a securities portfolio is
to attempt to realize, through the receipt of premiums, a greater long term
total return and smaller fluctuations in quarterly return than would be realized
on the securities alone. The covered call option writer has, in return for the
premium, given up the opportunity for profit from a price increase in the
underlying security above the exercise price so long as his obligation as a
writer continues, but has retained the risk of loss should the price of the
security decline. Conversely, the put option writer has, in the form of the
premium, gained a profit as long as the price of the underlying security remains
above the exercise price, but has assumed an obligation to purchase the
underlying security from the buyer of the put option at the exercise price, even
though the security may fall below the exercise price, at any time during the
option period. The option writer has no control over when he may be required to
sell his securities in the case of a call option, or to purchase securities in
the case of a put option, since he may be assigned an exercise notice at any
time prior to the termination of his obligation as a writer. If an option
expires unexercised, the writer realizes a gain in the amount of the premium.
Such a gain, of course, may, in the case of a covered call option, be offset by
a decline in the market value of the underlying security during the option
period. If a call option is exercised, the writer realizes a gain or loss from
the sale of the underlying security. If a put option is exercised, the writer
must fulfill his obligation to purchase the underlying security at the exercise
price, which will usually exceed the then market value of the underlying
security. Options written by the Fund will normally have expiration dates not
more than nine months from the date written. The exercise price of the options
may be below, equal to, or above the current market prices of the underlying
securities at the times the options are written.

Factors Which May Adversely Affect Transactions in Options. An option
position may be closed out only on an Exchange which provides a secondary market
for an option of the same series. Although the Fund will generally purchase or
write only those options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an Exchange will
exist for any particular option, or at any particular time, and for some options
no secondary market on an Exchange may exist. In such event, it might not be
possible to effect closing transactions in particular options. If as a covered
call option writer the Fund is unable to effect a closing purchase transaction
in a secondary

B-2
<PAGE>

market, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise. Likewise, a
secured put writer could not sell the money market instrument and use the
proceeds for other investments, such as an investment in common stocks, while he
was obligated as a put writer.

Reasons for the absence of a liquid secondary market on an Exchange
include the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an Exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an Exchange; (v) the facilities of an Exchange or
the Clearing Corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more Exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market thereon would cease to exist, although outstanding options on
that Exchange which have been issued by the Clearing Corporation as a result of
trades on that Exchange would continue to be exercisable in accordance with
their terms.

There can be no assurance that higher than anticipated trading activity
or order flow or other unforeseen events might not, at times, render certain of
the facilities of the Clearing Corporation and the Exchanges inadequate. Such
events have in the past resulted, and may again result, in the institution by an
Exchange of special procedures, such as trading rotations, restrictions on
certain types of orders, or trading halts or suspensions, with respect to one or
more options, or may otherwise interfere with the timely execution of customers'
orders.

In the event that NASDAQ options are traded, it is anticipated that
many of the factors which may adversely affect transactions in Exchange listed
options may also adversely affect NASDAQ options.

The size of the premiums which the Fund may receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option writing activities.

Position Limitations. Each of the Exchanges has established limitations
governing the maximum number of calls and puts in each class (whether or not
covered) which may be written by a single investor, or group of investors acting
in concert, (regardless of whether the options are written on the same or
different Exchanges or are held or written in one or more accounts or through
one or more brokers). It is possible that the Fund and clients advised by the
Adviser may constitute such a group. An Exchange may order the liquidation of
positions found to be in violation of these limits, and it may impose certain
other sanctions. At the date of this Prospectus, the only such limits which may
affect the operations of the Fund are those which limit the writing of call
options on the same underlying security by an investor or such group to 4,500
options (450,000 shares), 7,500 options (750,000 shares), 10,500 options
(1,050,000 shares) 20,000 options (2,000,000 shares) or 25,000 options
(2,500,000 shares) in each class regardless of expiration date. Whether the
applicable limit is 4,500, 7500, 10,500, 20,000 or 25,000 options is determined
by the most recent six-month trading volume of the underlying security. Every
six months each Exchange reviews the status of underlying securities to
determine which limit should apply. These position limits may limit the number
of options which the Fund can write on a particular security.

INVESTMENT RESTRICTIONS AND OTHER INVESTMENT POLICIES

The following restrictions are fundamental policies for the protection
of the Fund's shareholders and cannot be changed without the approval of the
holders representing a majority of the Fund's outstanding voting securities,
which for purposes of such approval shall be the lesser of (i) 67% or more of
the shares present at a meeting of shareholders if the holders of more than 50%
of the outstanding voting securities of the Fund are present or represented by
proxy or (ii) more than 50% of the outstanding voting securities of the Fund.
The Fund may not:

(1) Purchase securities of any issuer (other than U.S. Government
obligations) if, as a result, more than 5% of the value of the Fund's assets
would be invested in securities of that issuer, nor may it concentrate its
investments in any single industry except that it may invest up to 25% of its
net asset value in a single industry.

(2) Purchase more than 10% of the voting securities or more than 10% of
any class of securities of any issuer. (For this purpose, all outstanding debt
securities of an issuer are considered as one class, and all preferred stocks of
an issuer are considered as one class.)

B-3
<PAGE>

(3) Purchase securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities). (The deposit or payment by the Fund of initial or variation
margin in connection with futures contracts or related options is not considered
the purchase of a security on margin.)

(4) Write, purchase or sell puts, calls or combinations thereof, except
that the Fund may write covered call options with respect to all of its
portfolio securities, write covered put options, and enter into closing purchase
transactions with respect to such options, engage in put and call option
transactions, and engage in interest rate and stock index futures contracts and
related options transactions, as described under "Investment Objective and
Policies".

(5) Make short sales of securities or maintain a short position, unless
at all times when a short position is open the Fund owns an equal amount of such
securities or owns securities convertible into or exchangeable for securities,
without payment of additional consideration (except upon exercise of covered
call options on such securities with a strike price no higher than the price at
which the securities were sold short or, if higher, if the difference between
the strike price and the price at which the securities were sold short is
maintained in U.S. Government securities in a segregated account with the Fund's
custodian or a broker), which are at least equal in amount to and of the same
issue as the securities sold short and such securities are not subject to
outstanding call options, and unless not more than 10% of the Fund's net assets
(taken at current value) are held as collateral for such sales at any one time.

(6) Invest in real estate although the Fund may invest in marketable
securities which are secured by real estate and securities of companies which
invest in or deal in real estate. The Fund will not invest more than 10% of the
value of its total assets in securities which are not readily marketable,
including real estate interests.

(7) Invest more than 5% of the value of its total assets in securities
of issuers which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual proprietorship if the company whose
securities are to be purchased by the Fund has come into existence as a result
of a distribution, merger, consolidation, reorganization or the purchase of all
or substantially all of the assets of such predecessor.

(8) Purchase or retain the securities of any issuer if, to the
knowledge of the Fund, any of the officers or directors of the Fund or its
investment adviser owns individually more than one-half of one percent of the
securities of such issuer and together own more than 5% of the securities of
such issuer.

(9) Make loans, except through the making of time or demand deposits
with banks, and subject to paragraphs 6 and 16, the purchase of bonds,
debentures, commercial paper and other short term obligations, and except
through repurchase agreements (provided however, that the Fund will not invest
more than 10% of its total net assets in repurchase agreements of more than
seven days duration).

(10) Borrow money in excess of 10% of the Fund's total assets at
current value and then only as a temporary measure for extraordinary or
emergency purposes and not for leverage.

(11) Pledge more than 10% of the Fund's total assets at current value.
Neither the deposit or escrow of underlying securities, convertible preferred
stocks or convertible debt securities, or U.S. Government securities, in
connection with the writing of call options, nor the deposit of U.S. Government
securities in escrow in connection with the writing of put options, nor the
segregation in a segregated account with the Custodian of securities in
connection with short sales "against the box," nor the deposit of cash, cash
equivalents, or money market instruments in a segregated account with the
Custodian and/or a broker in connection with futures contracts or related
options, is deemed to be a pledge.

(12) Underwrite securities of others except to the extent the Fund may
be deemed to be an underwriter, under the federal securities laws, in connection
with the disposition of portfolio securities.

(13) Purchase securities of other investment companies, except as
permitted under the Investment Company Act of 1940.

(14) Invest for the purpose of exercising control or management of
another company.

B-4
<PAGE>
(15) Invest in interests in oil, gas or other mineral exploration or
development programs, although the Fund may invest in the common stock of
companies which invest in or sponsor such programs.

(16) Invest in securities restricted as to disposition under the
Federal securities laws.

(17) Participate on a joint or a joint and several basis in any trading
account in securities.

(18) Buy or sell commodities or commodity contracts except that the
Fund may engage in interest rate futures contracts, stock index futures
contracts and related options, as described under "Hedging Transactions in
Options, Futures and Related Options".

If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in percentage beyond the specified limit resulting
from a change in values of net assets will not be considered a violation of
these restrictions.

In addition to the policies described above, the Fund has adopted the
following investment policies which are not deemed to be fundamental, which may
be changed without shareholder approval, and are not otherwise described in the
Fund's Prospectus:

It is contrary to the Fund's present policies to:

o Sell or buy options which are not listed for trading on a national
securities exchange if, as a result, more than 5% of the Fund's net
assets would be at risk in connection with all such unlisted options;
o Sell any covered put stock option if, as a result, the Fund would then
have more than 50% of its total assets at current value subject to
being invested upon the exercise of put options;
o Make short sales "against the box", except for the purpose of deferring
realization of gain or loss for Federal income tax purposes and/or to
receive interest on the proceeds of such sales when made in connection
with convertible securities. Such sales will not be made of securities
subject to outstanding options;
o Lend its unencumbered portfolio securities against collateral if the
Fund's aggregate lending will exceed 30% of its total net assets;
o Borrow securities, except as a temporary measure, to enable the Fund to
meet, in a timely manner, obligations to deliver such securities upon
the exercise of a call option written by it in connection with a
convertible security. If, due to market fluctuations or other reasons,
the value of the Fund's assets fall below 300% of its borrowings, the
Fund will reduce its borrowings to the required level within three days
thereafter (not including Sundays and holidays) which reduction may
result in the Fund's being required to sell securities at a time when
it may otherwise be disadvantageous to do so.

HEDGING TRANSACTIONS IN OPTIONS, FUTURES AND RELATED OPTIONS

The Fund does not intend to enter into transactions in stock index
options, stock index futures and related options or financial futures and
related options except in connection with hedging its portfolio. The Fund will
invest in stock index options, futures and options on futures only if, in the
judgment of management, there is a sufficient degree of correlation between
movements in the value of such instrument and movements in the value of the
relevant portion of the Fund's investments for such hedge to be effective. There
can be no assurance that such judgment will be accurate or that hedging
transactions will be successful. As noted in the Prospectus, the Fund may
purchase options to hedge its portfolio securities or securities which it
intends to purchase, but as set forth above its option writing strategies are
intended to obtain a greater long term total return with smaller fluctuations in
quarterly total return than would be realized on the securities alone.

Stock Index Options. The Fund may purchase exchange listed call and put
options on stock indexes for the purpose of hedging its portfolio. As stated in
the Prospectus, the effectiveness of this hedging technique will depend upon the
extent to which price movements in the portion of the Fund's portfolio being
hedged correlate with price movements of the stock index selected. Because the
value of an index option depends upon movements in the level of the index rather
than the price of a particular stock, whether the Fund will realize a gain or
loss from purchases of options on an index depends upon movements in the level
of stock prices in the stock market generally or in an industry or market
segment rather than movements in the price of a particular stock.

B-5
<PAGE>

Stock Index Futures. The Fund may sell stock index futures contracts in
anticipation of or during a market decline in an endeavor to offset the decrease
in market value of portfolio securities that would otherwise result from a
market decline. When the Fund is not fully invested in the securities market and
anticipates a significant market advance, it may purchase stock index futures in
order to gain rapid market exposure that may in part or entirely offset
increases in the cost of the securities that it intends to purchase. No purchase
of stock index futures will be made, however, unless the Fund intends to
purchase securities in approximately the amount of the market value of the
stocks represented by the index futures purchased and it has identified the cash
or cash equivalents needed to make such a purchase. An amount of cash and cash
equivalents equal to the market value of the futures contracts will be deposited
in a segregated account with the Fund's Custodian to collateralize its position
in stock index futures.

Options on Stock Index Futures. The Fund may sell options on stock
index futures only to terminate an existing position. Put options on stock index
futures sometimes may be purchased in lieu of the sale of a stock index future
for the purpose of hedging a portion of the securities portfolio of the Fund.
The purchase of a call option on a stock index futures contract is intended to
serve as a temporary substitute for the purchase of individual securities which
may subsequently be purchased in an orderly fashion. However, if such options
are exercised and futures contracts are purchased to hedge against a possible
increase in the price of a security before the Fund is able to purchase such
security in an orderly fashion and the security declines instead, the Fund may
then decide not to purchase the security because of concerns of possible further
declines or for other reasons. Thus, the Fund will realize a loss on the futures
contract that is not offset by a reduction in the price of securities purchased.
When it purchases a call on stock index futures, the Fund will set aside the
amount of additional cash or cash equivalents necessary to meet its obligations
on the underlying index futures contract.

Financial Futures and Related Options. The Fund may purchase and sell
financial futures on U.S. Treasury bills, U.S. Treasury bonds, U.S. Treasury
notes, and GNMA mortgage-backed certificates, or sell call options or purchase
put options on such futures, in order to hedge U.S. Government and other
portfolio securities and convertible preferred stocks, whose prices are or may
be sensitive to changing interest rates. Certain convertible preferred stocks
tend to trade more like fixed-income securities than other equity securities.
However, the values of convertible preferred stocks are also affected by changes
in the prices of the securities into which they are convertible; thus, at times,
there may not be a close correlation between such convertible preferred stocks
and financial futures or related options. The effectiveness of these hedging
strategies will depend upon the correlation between interest rates and changes
in the value of the Fund's securities. In addition, due to temporary price
distortions in the market, even a correct forecast of general interest trends by
management may still not result in an effective use of these instruments as a
hedge.

MANAGEMENT OF THE FUND

The officers of the Fund manage its day to day operations and are
responsible to the Fund's Board of Directors. The following is a list of
directors and officers of the Fund and their principal occupations during the
past five years. The mailing address of the directors and officers of the Fund
is 700 South Flower Street, Suite 2400, Los Angeles, CA 90017. (* indicates a
director who is an interested person of the Fund, as defined under the
Investment Company Act of 1940.)

MICHAEL F. KOEHN*. Chairman of the Board of Directors.
Member of the Board of Directors, President and Chief Executive Officer of the
Adviser and Trustee of The Analytic Series Fund. He concurrently serves as
President of Analysis Group, Inc., a consulting firm providing economic and
financial consulting services. He earned a Ph.D. in Finance at the Wharton
School, University of Pennsylvania.

MICHAEL D. BUTLER. Director.
Trustee of The Analytic Series Fund. Professor emeritus of Social Sciences,
former Dean of Undergraduate Studies at the University of California at Irvine
and former member of the Society of Fellows, Harvard University.

ROBERTSON WHITTEMORE. Director.
Trustee of The Analytic Series Fund and Partner, Encore of La Jolla, retail
clothing store. Former real estate broker, attorney, President of La Jolla Town
Council; trustee of Combined Arts and Education Council of San Diego, and
Executive Director of the San Diego Community Foundation. He earned his B.A.
from Yale University, and his J.D. and M.B.A. from University of California at
Berkeley.

HARINDRA de SILVA. President.

B-6
<PAGE>
Managing Director and Treasurer of the Adviser and President of The Analytic
Series Fund. He concurrently serves as Principal of Analysis Group, Inc. He
holds a B.S. from the University of Manchester at Manchester England, a M.B.A.
from Simon School at Rochester New York and a Ph.D. in Finance from the
University of California at Irvine.

B-7
<PAGE>

CHARLES L. DOBSON. Executive Vice President and Secretary.
Director, Secretary and Portfolio Manager of the Adviser and Executive Vice
President and Secretary of The Analytic Series Fund. He holds a B.A. in
Economics and M.S. in Administration from the University of California, Irvine.

GREGORY M. MC MURRAN. Treasurer.
Chief Investment Officer of the Adviser and Treasurer of The Analytic Series
Fund. He holds a B.A. in Economics from the University of California, Irvine and
a M.A. Economics from California State University at Fullerton.

MARIE NASTASI ARLT. Senior Vice President.
Chief Operating Officer and Secretary of the Adviser and Senior Vice President
of The Analytic Series Fund and Vice President of Analytic [Bullet] TSA
Investors, Inc. She holds a B.A. from California State University, Fullerton.
Formerly she served as Managing Director and Executive Vice President of TSA
Capital Management.

ANGELO A. CALVELLO. Senior Vice President.
Director of Business Development of the Adviser and Senior Vice President of The
Analytic Series Fund. He earned a B.A., M.A. and Ph.D in Philosophy from DePaul
University at Chicago, Illinois. Formerly, he served as Executive Vice President
at Credit Agricole Futures and Vice President of The Chicago Mercantile
Exchange.

Officers and directors of the Fund who are affiliates of the Adviser receive no
fee or salary from the Fund. Each director who is not an affiliate of the
Adviser receives an annual fee of $2,000 plus $1,000 per meeting attended and
reimbursement for expenses. For the fiscal year ended December 31, 1996, total
compensation received by the directors who are not affiliates of the Adviser is
as follows:

<TABLE>
<CAPTION>
Aggregate Total Compensation From
Compensation from Pension/Retirement Estimated Annual Analytic Optioned
Analytic Optioned Benefits Accrued as Benefits from Equity Fund and The
Name Equity Fund Part of Fund Expenses Retirement Analytic Series Fund
--------------- ------------------- --------------------- ------------- -----------------
<S> <C> <C> <C> <C>
Michael D. Butler $5,000 None None $10,000
Robertson Whittemore $5,060 None None $10,120
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

The Investment Adviser: Analytic [Bullet] TSA Global Asset Management,
Inc. (the "Adviser") is the investment adviser of the Fund pursuant to an
Investment Management Agreement between the Fund and the Adviser, dated August
12, 1993 (the "Management Agreement"). The Management Agreement was last
approved by the Board of Directors, including the unanimous vote of the Fund's
Directors who are not parties to the agreement or "interested persons" of the
Fund, on April 2, 1997, at a meeting called for the purpose of voting on such
approval.

The Adviser is a wholly owned subsidiary of United Asset Management
Corporation ("UAMC"). UAMC was organized in 1980 by its President and principal
stockholder, Norton H. Reamer, for the purpose of acquiring firms engaged in the
institutional investment management business.

The officers and directors of the Adviser are:

Roger G. Clarke Chairman of the Board
Michael F. Koehn Member of the Board, President and Chief Executive Officer
Gregory M. McMurran Chief Investment Officer
Robert Bannon Managing Director

Harindra de Silva Managing Director and Treasurer
Marie Nastasi Arlt Chief Operating Officer and Secretary

B-8
<PAGE>

The Investment Management Agreement: Pursuant to an Investment
Management Agreement with the Fund, the Adviser, subject to the control and
direction of the Fund's Officers and Board of Directors, manages the Fund in
accordance with its stated investment objective and policies, and makes
investment decisions for the Fund. At its expense, the Adviser provides the
office space and all necessary office facilities, equipment, and personnel for
providing these services to the Fund.

As compensation for furnishing investment advisory, management and
other services, and expenses assumed, pursuant to the Investment Management
Agreement, the fund pays the Adviser an annual fee equal to 0.75% of the first
$100,000,000 of the Fund's average daily net assets, 0.65% of the next
$100,000,000 of average daily net assets, and 0.55% of average net assets in
excess of $200,000,000. For the fiscal years ended December 31, 1994, 1995 and
1996, the Fund paid advisory fees of $497,600, $346,095, and $363,576,
respectively, pursuant to the current Investment Management Agreement and the
former Investment Advisory Agreement.

The Adviser has agreed that if in any fiscal year the expenses borne by
the Fund exceed the applicable expense limitations imposed by the securities
regulations of any state in which shares of such Fund are registered or
qualified for sale to the public, it will reimburse the Fund for any excess to
the extent required by such regulations. Unless otherwise required by law such
reimbursement would be accrued and paid on the same basis that the advisory fees
are accrued and paid by the Fund. To the Fund's knowledge, the only state
expense limitation in effect on the date of this Statement of Additional
information is that of California, which requires the Adviser to reimburse the
Fund for advisory fees to the extent that certain expenses exceed 2-1/2% of
average annual net assets up to $30,000,000, 2% of the next $70 million of
average net assets, and 1-1/2% of average net assets in excess of $100,000,000.

Under the Management Agreement, any liability of the Adviser to the
Fund and its shareholders is limited to situations involving its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties and
obligations under the Management Agreement.

The Management Agreement continues from year to year so long as it is
approved annually by a majority of the Board of Directors or of the outstanding
voting securities of the Fund, and by a majority of the Directors who are not
"interested persons" of any party to the Agreement (as defined in the Investment
Company Act of 1940).

The Management Agreement may not be assigned by the Adviser and will
terminate automatically upon assignment. It may be terminated without penalty
upon 60-days' written notice by either party or by a vote of a majority of the
Fund's outstanding voting securities (as defined in the 1940 Act). The
Management Agreement may be amended by a vote of a majority of the Directors of
the Fund, including a majority of the disinterested directors, cast in person at
a meeting called for that purpose, subject to approval by the vote of a majority
of the Fund's outstanding voting securities. "A majority of the Fund's
outstanding voting securities" as used herein, is defined in the first paragraph
of "Investment Restrictions and Other Investment Policies."

Personnel of the Adviser may invest in securities for their own
accounts pursuant to a Code of Ethics that sets forth all employees' fiduciary
responsibilities regarding the Fund, established procedures for personal
investing, and restricts certain transactions. For example, the Code restricts
the timing of personal investing in relation to trades by the Fund, prohibits
participating by employees in initial public offerings, and requires approval of
private placement purchases and service on boards of directors of publicly held
companies.

B-9
<PAGE>

Administrative Services. UAM Fund Services, Inc., a wholly-owned
subsidiary of United Asset Management Corporation ("UAMC"), has agreed to
perform and oversee all administrative, fund accounting, dividend disbursing and
transfer agent services to the Fund pursuant to a Fund Administration Agreement
with the Fund (the "Administration Agreement") dated on or about May 15, 1997.
UAM Fund Services has subcontracted some of these services to Chase Global Funds
Services Company, an affiliate of The Chase Manhattan Bank.

The Fund pays UAM Fund Services a two part monthly fee: a Fund specific
fee at the annual rate of 0.06% of net assets which is retained by UAM Fund
Services, and a sub-administration fee which UAM Fund Services in turn pays to
Chase Global Funds Services. Chase Global Funds Services' monthly fee for its
services is calculated on an annualized basis as follows:

0.19 of 1% of the first $200 million of total net assets of the Fund
0.11 of 1% on the next $800 million of total net assets
0.07 of 1% on total net assets over $1 billion up to $3 billion
0.05 of 1% on total net assets over $3 billion

The Fund is subject to a graduated minimum fee schedule which starts at
$2,000 per month and increases to $70,000 annually after eighteen months. If a
separate class of shares is added, its minimum annual fee increases by $20,000.

The fees paid to Chase Global Funds Services are the responsibility of
UAM Fund Services, and not the Fund.

Under the Fund Administration Agreement, any liability of UAM Fund
Services to the Fund and its shareholders is limited to situations involving its
own willful misfeasance, bad faith, gross negligence or reckless disregard of
duties. In addition, the Fund has agreed to indemnify UAM Fund Services against
certain matters, including all expenses arising out of actions of UAM Fund
Services pursuant to the Administration Agreement (other than those involving
UAM Fund Services' willful misfeasance, bad faith, gross negligence or reckless
disregard of duties).

UAM Fund Services may assign its obligations under the Fund
Administration Agreement to subcontractors approved by the Board of Directors,
but no such assignment will relieve UAM Fund Services of its obligations to the
Fund. The Agreement may be terminated without penalty upon 60-days' written
notice by either party.

Distributor. UAM Fund Distributors, Inc. a wholly-owned subsidiary of
UAMC, distributes shares of the Fund. Under the Distribution Agreement (the
"Distribution Agreement"), the Distributor, as agent of the Fund, agrees to use
its best efforts as sole distributor of Fund shares. The Distributor does not
receive any fee or other compensation under the Agreement. The Agreement
continues in effect as long as it is approved at least annually by the Fund's
Board of Directors. Those approving the Agreement must include a majority of
Directors who are not interested persons of any party to the Agreement.

The term and termination provisions of the Distribution Agreement are
similar to those of the Fund's Investment Management Agreement. In addition, it
contains provisions limiting the liability of, and providing indemnification to,
the Distributor, that are similar to those of the Fund Administration Agreement,
except that nothing in the Agreement protects the Distributor from any
liabilities which it may have under the Securities Act of 1933 or the Investment
Company Act of 1940.

BROKERAGE

Under the terms of the Advisory Agreement, the Adviser is authorized to
employ brokers and dealers to execute orders for the purchase and sale of the
Fund's portfolio securities, including the writing of option contracts, who, in
its best judgment , can provide "best execution" (prompt and reliable execution
at a reasonable competitive price). During the fiscal the years ended December
31, 1994, 1995, and 1996, aggregate commissions paid by the Fund amounted to
$251,936,

B-10
<PAGE>

$159,118 and $149,614, respectively. During the fiscal year ended December 31,
1996, none of the Fund's commissions were allocated to brokers who also provided
research services to the Adviser.

In determining the abilities of the broker-dealer to provide best
execution of a particular portfolio transaction, the Adviser considers all
relevant factors including the execution capabilities required by the
transaction or transactions; the ability and willingness of the broker-dealer to
facilitate each transaction by participation therein for its own account; the
importance to the Fund of speed, efficiency, or confidentiality; the
broker-dealer's apparent familiarity with sources from or to whom particular
securities might be purchased or sold; and the quality and continuity of service
rendered by the broker-dealer with regard to the Fund's other transactions; and
any other factors relevant to the selection of a broker-dealer for particular
and related portfolio transactions of the Fund. Subject to the foregoing
obligation to seek best execution, the Adviser may consider as factors in the
allocation of portfolio transactions to a broker-dealer the broker-dealer's sale
of Fund shares, agreement to pay operating expenses of the Fund, or the
provision of research services to the Adviser. Research services furnished by
brokers through which the Fund affects portfolio transactions may be used by the
adviser in servicing all of its accounts. Similarly, research services furnished
by brokers through which the adviser's other accounts affect portfolio
transactions may be used in servicing the Fund.

If the Fund effects a closing purchase transaction with respect to an
option written by it, normally such transaction will be executed by the same
broker-dealer who executed the sale of the option, except where the Fund
utilizes a clearing agent with respect to certain put and call options.
Likewise, if an option written by the Fund is exercised, normally the sale or
purchase of the underlying securities will be executed by the same broker-dealer
or clearing agent who executed the sale of the option. During the year ended
December 31, 1996, such clearing agents received commissions of $9,579.

The Fund may purchase or sell listed securities in the over-the-counter
market ("the third market"). Where transactions are executed in the third
market, the Fund generally will deal with the primary market makers; however, if
it is to the advantage of the Fund, the services of other brokers may be
utilized.

The Adviser currently manages separate accounts and other mutual funds
aggregating in excess of $1,000,000,000 which employ investment strategies
similar to those used by the Fund. At times, investment decisions may be made to
purchase or sell the same investment security for the Fund and one or more of
the other clients advised by the Adviser. When two or more of such clients are
simultaneously engaged in the purchase or sale of the same security or option,
the transactions will be allocated as to amount and price in a manner considered
equitable to each and so that each receives, to the extent practicable, the
average price or premium for such transaction. There may be circumstances in
which such simultaneous transactions would be disadvantageous to the Fund with
respect to price and availability of securities. In other cases, however, it is
believed that transactions would be advantageous to the Fund.

TAX INFORMATION AND OPTION ACCOUNTING PRINCIPLES

As of the date of this Prospectus, the Fund is qualified as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended, and the Fund intends to continue to qualify under said Subchapter M. As
a result of such qualification the Fund will not be subject to Federal income
taxes to the extent that it distributes not less than 98% of its investment
company taxable income and its capital gains net income. Investment company
taxable income includes net income from dividends, interest and net short-term
capital gain. Premiums from expired options written by the Fund and net gains,
if any, from closing purchase transactions are treated as short-term capital
gains for Federal income tax purposes. In order to qualify under Subchapter M,
the Fund, among other things must derive less than 30% of its gross income from
the sale or other disposition of securities held less than three months; as a
result the Fund may be restricted in the writing of options which expire in less
than three months or in effecting closing purchase transactions in options
written less than three months before such transaction.

When the Fund writes an option, an amount equal to the premium received
is recorded by the Fund as an asset and an equivalent liability. The liability
is thereafter valued to reflect the current value of the option which is either
the last sale price, or, in the absence of a sale, the mean between the last
current bid and asking price. If the option is not exercised and expires, or if
the Fund effects a closing purchase transaction, the Fund will realize a gain
(or a loss in the case of a closing purchase transaction where the cost exceeds
the original premium received) and the liability related to the option will be
extinguished. Any such gain or loss is a short-term capital gain or loss for
Federal income tax purposes, except that a short-

B-11
<PAGE>

term loss realized when the Fund closes certain in-the-money covered call
options involving portfolio equity securities will be converted to a long-term
capital loss if the hypothetical sale of the underlying security on the date of
such transaction would have given rise to a long-term capital gain. If a call
option which the Fund has written on any equity security is exercised, the Fund
realizes a capital gain or loss (long-term or short-term, depending on the
holding period of the underlying security) from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. If a put option which the Fund has written on an equity security is
exercised, the amount of the premium originally received will reduce the cost of
the security which the Fund purchases upon exercise of the option.

In the case of put and call options on nonequity securities, the
principle of marking-to-market carries over to the Federal income tax treatment
of such options in that an option is treated as having been closed on the last
day of the Fund's taxable year, giving rise to a capital gain or loss. Nonequity
options include broad-based stock index options, debt options, commodity options
and currency options. Sixty percent of any net gain or loss recognized on such
deemed closings, as well as 60% of the gain or loss with respect to such options
on any actual closing transactions or exercises will be treated as long-term
capital gain or loss, and the remainder will be treated as short-term capital
gain or loss. Also, 60% of the gain on the expiration of any such option on its
stipulated expiration date will be treated as long-term capital gain, and the
balance as short-term capital gain. However, if a put or call option the Fund
has written or holds relating to a nonequity security is part of a "mixed
straddle," as defined by the Internal Revenue Code (the "Code") (see discussion
of straddles below), the Fund may be able to make an election under which these
provisions will be inapplicable in whole or in part to such option, and the
rules applicable to options on equity securities described above will apply. In
any event, the provisions of Code Section 1092 described below in Special Tax
Rules Applicable to Straddles will be applicable to such straddles.

The Purchase Of Calls And Puts On Debt And Equity Securities - In
General - the premium paid by the Fund for the purchase of a call or put option
is included in the asset section of the Fund's "Statement of Assets and
Liabilities" as an investment and subsequently adjusted to the current market
value of the option. For example, if the current market value of the option
exceeds the premium paid, the excess would be unrealized appreciation. The
current market value of a purchased option is the last sale price on the
principal Exchange on which such option is traded or, in the absence of a sale,
the mean between the last bid and offering prices.

If the option on an equity security which the Fund has purchased
expires on the stipulated expiration date, the Fund realizes a short-term or
long-term loss for tax purposes in the amount of the cost of the option. If the
Fund enters into a closing sale transaction with respect to such an option, it
realizes a capital gain or loss, depending on whether the sales proceeds from
the closing sale transaction are greater or less than the cost of the option.
The gain or loss will be short-term or long-term, depending on the Fund's
holding period in the option. If the Fund exercises a put option on an equity
security, it will realize a gain or loss (long-term or short-term, depending on
the period for which the Fund has held the underlying security prior to the time
it purchased the put) from the sale of the underlying security and the proceeds
from such sale will be decreased by the premium originally paid. However, since
the purchase of a put option is treated as a short sale for Federal income tax
purposes, the holding period of a hedged underlying security held for not more
than one year will be terminated by such a purchase and will start again only
when the Fund enters into a closing sale transaction with respect to such option
or it expires. If the Fund exercises a call option on an equity security, the
premium paid for the option will be added to the cost of the security purchased.

Special Tax Rules Applicable to "Straddles" - Section 1092 of the Code
may affect the taxation of options on debt or equity securities. Section 1092
defines a "straddle" as offsetting positions with respect to personal property.
A position in personal property is generally defined as any interest, including
an option, in personal property. A position in personal property includes a debt
security and certain options written thereon and also includes a stock position
and "deep-in-the-money" options (as defined in the Code) written thereon.

Section 1092 generally provides that in the case of a straddle, any
loss from the disposition of a position in the straddle can only be deducted to
the extent that the loss exceeds the unrealized gains on all offsetting straddle
positions. For example, if the Fund owns a stock and has purchased a put option
with respect to such stock, any loss realized from a closing sale transaction
with respect to the option can only be recognized to the extent that such loss
exceeds any unrealized gain on the underlying stock. Section 1092 also provides
that "wash sale" rules are applicable to transactions where a position is sold
at a loss and a new offsetting position is acquired within a prescribed period
and that "short sale" rules are applicable to offsetting positions. These rules
are applicable to the Fund's debt option positions, "deep-in-the-money" stock
option positions, options on convertible securities and certain of the Fund's
hedging transactions in options, stock index options, stock index and financial
futures contracts and related options described under "Hedging Transactions in
Options, Futures

B-12
<PAGE>

and Related Options". In addition, Section 1092 will suspend or terminate the
Fund holding period in certain stocks with respect to which the Fund writes or
acquires options, including non-"deep-in-the-money" options which are "qualified
covered call options" and stock index options and subject stocks to restrictions
comparable to the "wash sale rules" of Code Section 1091.

Moreover, a Portfolio will not be able to deduct currently part of the
interest and other expenses which are attributable to positions that are
governed by the straddle rules of Section 1092 of the Code. Losses which the
Fund realizes on certain transactions involving certain in-the-money covered
call options may be converted from short-term to long-term capital loss.
Management will manage the Fund to take into account Section 1092 and such
Regulations.

Futures Contracts - Accounting for futures contracts will be in
accordance with generally accepted accounting principles. The amount of any
realized gain or loss on closing out of futures contracts will result in a
realized capital gain or loss for tax purposes. Futures contracts held by the
Fund at the end of each fiscal year will be required to be "marked-to-market"
for Federal income tax purposes. Sixty percent of any net gain or loss
recognized on such deemed sales or on any actual sales will be treated as
long-term capital gain or loss, and the remainder will be treated as short-term
capital gain or loss. However, if a futures contract is part of "mixed
straddle," as defined by the Code, the Fund may be able to make an election
under which these provisions will be inapplicable in whole or in part to such
futures contracts,. In any event, the provisions of Section 1092 described above
will be applicable to such straddles.

Options on Certain Stock Indexes and on Futures Contracts - accounting
for options on futures contracts and on certain stock indexes will be in
accordance with generally accepted accounting principles. The amount of any
realized gain or loss on closing out such a position will result in a realized
capital gain or loss for tax purposes. Such options held by the Fund at the end
of each fiscal year will be required to be "marked-to-market" for Federal income
tax purposes. Sixty percent of any net gain or loss recognized on such deemed
sales or on any actual sales will be treated as long-term capital gain or loss,
and the remainder will be treated as short-term capital gain or loss. However,
if the option is part of a "mixed straddle," as defined by the Code, the Trust
may be able to make an election under which these provisions will be
inapplicable in whole or in part to such option. In any event, the provisions of
Section 1092 described above will be applicable to such straddles. The above
rules apply to options on stock indexes if there is in effect a designation by
the Commodities Futures Trading Commission (the "CFTC") of a contract market
based on such stock index or the Treasury Department determines that such
options meet the requirements of law for such a designation. Options on
"broad-based" stock indexes have generally been so designated. Options on stock
indexes for which the CFTC has not designated a contract market and which the
Treasury Department has not determined meet the requirements of law for such
designation, generally including options on "narrow-based" stock indexes, will
receive Federal income tax treatment similar to that of stock options.

CALCULATION OF PERFORMANCE DATA AND OTHER
PERFORMANCE COMPARISONS AND STATISTICS

From time to time the Fund may report its "total return" in
prospectuses, the Fund's annual reports, shareholder communications, and
advertising.

Total return for a performance period is calculated by assuming a
hypothetical initial investment ("p") in the Fund at the beginning of the
period. Then, assuming reinvestment of all distributions into new Fund shares, a
redeemable value at the end of the performance period ("ERV") is calculated
based on actual Fund performance. The percentage change between the ending value
and initial investment is the "cumulative total return". The "average annual
total compound return" (growth rate) expresses the total return as an annual
rate, which, if compounded annually over the period ("n" is the number of
years), would increase or decrease the initial investment to the ending value.
(Formula for calculating average annual total compound return: (ERV/p)^1/n -1)).
See the "Glossary" in the Prospectus for further discussion and examples of
total return and fluctuations in total return.

B-13
<PAGE>
For example, the Fund's total return for various periods has been as follows:

<TABLE>
<CAPTION>
1 year 5 years 10 years
1/1/96 - 12/31/96 1/1/92 - 12/31/96 1/1/87 - 12/31/96
----------------- ----------------- -----------------
<S> <C> <C> <C>
Cumulative Total Return 15.69% 63.27% 166.56%
Average Annual Compound Total Return 15.69% 10.30% 10.30%
</TABLE>

Volatility. Occasionally statistics may be used to specify the Fund's
volatility or risk. Measures of volatility or risk are generally used to compare
the Fund's net asset value or performance relative to a market index. One
measure of volatility is beta. Beta is the volatility of the Fund relative to
the total market as represented by the Standard & Poor's 500 Stock Index. A beta
of more than 1.00 indicates volatility greater than the market, and a beta of
less than 1.00 indicates volatility less than the market. Sometimes beta may be
calculated relative to a different market index. Another measure of volatility
or risk is standard deviation. Standard deviation is used to measure variability
of net asset value or total return around an average, over a specified period of
time. The premise is that greater volatility connotes greater risk undertaken in
achieving performance.

Other Performance Quotations. One measure of performance that adjusts
for risk is alpha. Alpha is a measure of the difference between the Fund's
performance and a market index portfolio with the same beta.

For example, suppose the Fund's beta is approximately 0.5 over a
historical period. Then, a similar risk market index portfolio can be
constructed with a beta of 0.5 by creating an index with a weight of 50% in the
S & P 500 Index and 50% in U.S. Treasury Bills. The Fund's return is then
compared to the return of the market index.

Sales literature referring to the use of the Fund as a potential
investment for Individual Retirement Accounts (IRAs), Business Retirement Plans,
and other tax-advantaged retirement plans may quote a total return based upon
compounding of dividends on which is it presumed no federal income tax applies.

Regardless of the method used, past performance is not necessarily
indicative of future results, but is an indication of the return to shareholders
only for the limited historical period used.

Comparisons. To help investors better evaluate how an investment in the
Fund might satisfy their investment objective, advertisements and other
materials regarding the Fund may discuss various measures of the Fund's
performance as reported by various financial publications. Materials may also
compare performance (as calculated above) to performance as reported by other
investments, indices, and averages. The following publications, indices, and
averages, among others, may be used:

a) The Dow Jones Composite Average or its component averages - an
unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks (Dow Jones Utilities
Average), and 20 transportation company stocks. Comparisons of performance
assume reinvestment of dividends.

b) Standard & Poor's 500 Stock Index or its component indices - an
unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40
utilities stocks, and 20 transportation stocks. Comparisons of performance
assume reinvestment of dividends.

c) The New York Stock Exchange composite or component indices -
unmanaged indices of all industrial, utilities, transportation, and finance
stocks listed on the New York Stock Exchange.

d) Wilshire 5000 Equity Index - represents the return on the market
value of all common equity securities for which daily pricing is available.
Comparisons of performance assume reinvestment of dividends.

e) Mixtures of indexes and U.S. Treasury Bills which approximate the
historical risk level of the Fund. In particular: mixtures of the S & P 500
Stock Index and U.S. Treasury Bills such as the 50%/50% mixture discussed under
"Other Performance Quotations."

B-14
<PAGE>

f) Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income
Fund Performance Analysis - measure total return and average current yield for
the mutual fund industry, and rank individual mutual fund performance over
specified time periods, assuming reinvestment of all distributions, exclusive of
any applicable sales charges.

g) CDA Mutual Fund Report, published by CDA Investment Technologies,
Inc. - analyzes price, current yield, risk, total return, and average rate of
return (average annual compounded growth rate) over specified time periods for
the mutual fund industry.

h) Financial publications: The Wall Street Journal and Business Week,
Changing Times, Financial World, Forbes, Fortune, and Money magazines - provide
performance statistics over specified time periods.

i) Consumer Price Index (or Cost of Living Index), published by the
U.S. Bureau of Labor Statistics - a statistical measure of change, over time, in
the price of goods and services, in major expenditure groups.

j) Stocks, Bonds Bills, and Inflation, published by Ibbotson Associates
- - historical measure of yield, price, and total return for common and small
company stock, long-term government bonds, Treasury bills, and inflation.

k) Savings and Loan Historical Interest Rates - as published in the
U.S. Savings & Loan League Fact Book.

l) Historical data supplied by the research departments of First Boston
Corporation, The J.P. Morgan companies, Salomon Brothers, Merrill Lynch, Lehman
Brothers, Smith Barney Shearson and Bloomberg L.P.

m) Standard & Poor's 100 Stock Index - an unmanaged index based on the
prices of 100 blue-chip stocks, including 92 industrials, one utility, two
transportation companies, and five financial institutions. The S & P 100 Stock
Index is a smaller more flexible index for options trading.

In assessing such comparisons of performance an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the Fund, that the averages are generally
unmanaged. In addition there can be no assurance that the Fund will continue
this performance as compared to such other averages.

B-15
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table shows as of July 31, 1997, the beneficial ownership
of shares of the Fund's common stock by all officers and directors of the Fund
as a group and the record ownership of shares by each person known to the Fund
to be a record owner of more than 5% of its issued and outstanding common stock
(3,232,017 shares). Except for the shares held by officers and directors, the
Fund has no information regarding beneficial ownership of such shares.

Name and Address Number of Shares Percentage of Class
- ---------------- ---------------- -------------------
<S> <C> <C>

Public School Retirement System of St. Louis 407,517 12.60%
One Mercantile Center, Room 2607
St. Louis, MO 63101

LaSalle National Bank 254,806 7.88%
Metz Banking Pension Trust
c/o Mutual Funds, 18th Floor
135 LaSalle Street
Chicago, IL 60603

Charles Schwab & Co., Inc. 240,375 7.43%
101 Montgomery Street
San Francisco, CA 94104

All Officers and Directors of the Fund as a group 40,120 1.24%

</TABLE>

PRICING AND REDEMPTION OF FUND SHARES

The Fund's net asset value per share is calculated by taking the total
value of the Fund's assets, deducting total liabilities and dividing the result
by the number of shares outstanding. Portfolio securities which are traded on a
national securities exchange are valued at the last sale price or if there is no
recent sale, at the mean between the last current bid and asked prices. All
other securities not so traded are valued at the mean between the last current
bid and asked prices if market quotations are available. Other securities and
assets are valued at fair value in accordance with methods determined in good
faith by the Fund's Board of Directors.

The Fund may suspend the right of redemption or delay payment more than
three (3) business days: (a) during any period when the New York Stock Exchange
is closed (other than customary weekend and holiday closings); (b) when trading
on the New York Stock Exchange is restricted; (c) when an emergency exists as
determined by the Securities and Exchange Commission so that disposal of the
Fund's investments or determination of its net asset value is not reasonably
practicable; or (d) for such other periods as the Securities and Exchange
Commission by order may permit for protection of the Fund's shareholders. The
amount received by a shareholder upon redemption may be more or less than he
paid for his shares depending on the market value of the Fund's portfolio
securities at the time.

Shares of the Fund may be transferred upon delivery to the Fund of (1)
a letter of instructions, signed by each registered owner exactly as the shares
are registered, which clearly identifies the exact names in which the account is
presently registered, the account number, the number of shares to be
transferred, and the names, addresses and social security or tax identification
number of the account to which the shares are to be transferred, (2) stock
certificates, if any, which are the subject of the transfer, and (3) an
instrument of assignment ("stock power"), which should specify the total number
of

B-16
<PAGE>

shares to be transferred and on which the signature(s) of the registered
owner(s) have been guaranteed by a commercial bank or trust company which is a
member of the Federal Deposit Insurance Corporation, or by a member firm of a
national securities exchange. Additional documents are required for transfers by
corporations, executors, administrators, trustees and guardians; if a
shareholder is in doubt as to what documents are required, he should contact the
Fund. The Fund is not bound to record any transfer of the stock transfer books
until the Fund has received all required documents.

CUSTODIAN

The Fund's custodian is The Chase Manhattan Bank, 1211 Avenue of the
Americas, New York, New York 10036. Pursuant to the terms of the Custodian
Agreement the Fund will forward to the Custodian the proceeds of each purchase
of Fund shares. The Custodian will hold such proceeds and make disbursements
therefrom in accordance with the terms of the Custodian Agreement. It will
retain possession of the securities purchased with such proceeds and maintain
appropriate records with respect to receipt and disbursements of money, receipt
and release of securities, and all other transactions of the Custodian with
respect to the securities and other assets of the Fund.

TRANSFER, DIVIDEND DISBURSING AND SHAREHOLDER SERVICING AGENT

UAM Fund Services, Inc. is responsible for performing and overseeing
all administrative, fund accounting, dividend disbursing and transfer agent
services for the Fund. UAM Fund Services has also contracted certain of these
services to Chase Global Funds Services Company. Chase Global Funds Services
will act as the Fund's sub-dividend disbursing agent, sub-transfer agent and
sub-shareholder servicing agent. (see "Investment Advisory and Other Services").

INDEPENDENT AUDITORS

Deloitte & Touche LLP, 1000 Wilshire Boulevard, Los Angeles, CA
90017-2472 serves as independent auditors to the Fund. The services provided by
the firm include the audit of the financial statements of the Fund included in
the Statement of Additional Information and services related to other filings
made with the Securities and Exchange Commission.

LEGAL COUNSEL

The Fund's legal counsel is Paul, Hastings, Janofsky & Walker LLP, 555
South Flower Street, Los Angeles, California 90071.

FINANCIAL STATEMENTS

The financial statements in the Fund's 1996 Annual Report to Shareholders are
incorporated in this Statement of Additional Information by reference. Such
financial statements have been audited by the Fund's independent auditors,
Deloitte & Touche LLP, whose report thereon also appears in such Annual Report
and is incorporated herein by reference. Such financial statements have been
incorporated hereby in reliance upon such reports given upon their authority as
experts in accounting and auditing. Copies of the Fund's 1996 Annual Report to
Shareholders may be obtained at no charge by telephoning the Fund at the number
on the front page of this Statement of Additional Information.

B-17
<PAGE>
PART C

OTHER INFORMATION

Item 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:

(1) The following information is included in Part A -
Prospectus:

Financial Highlights

(2) The following information is included in Part B -
Statement of Additional Information:

Registrant's Statement of Assets and Liabilities including
Schedules of Portfolio Investments, Statement of Changes
in Net Assets, Statement of Operations, related notes, and
Independent Auditors' Report, are included as part of
Registrant's Annual Report to Shareholders for the period
ended December 31, 1996, and are incorporated by reference
in Part B.

(b) Exhibits

1 Articles of Incorporation, as amended -- filed as
Exhibit 1 to Registrant's Form N-1A Registration
Statement on April 26, 1990 and incorporated herein by
reference.

2 Bylaws, as amended -- filed as Exhibit 2 to
Registrant's Form N-1A Registration Statement on April
26, 1990 and incorporated herein by reference.

3 None.

4 Specimen of share certificate of Registrant -- filed as
Exhibit 4 to Registrant's Form N-1A Registration
Statement on April 26, 1990 and incorporated herein by
reference.

5 Investment Advisory Agreement dated August 12, 1993
between Registrant and Analytic Investment Management,
Inc. -- filed as Exhibit 5 to Post Effective Amendment
No. 21 to Registrant's Form N-1A Registration Statement
on June 10, 1993 and incorporated herein by reference.

6 Distribution Agreement between Registrant and UAM Fund
Distributors, Inc. dated May 1, 1997.

7 None.

8 Form of Custodian Agreement between Registrant and The
Chase Manhattan Bank.
9.1 Fund Administration Agreement between Registrant and
UAM Fund Services, Inc. dated May 16, 1997.

9.2 Mutual Funds Service Agreement between UAM Fund
Services, Inc. and Chase Global Funds Services
Company dated May 16, 1997.

10 Opinion and Consent of Counsel - included as part of
Registrant's Form 24f-2 Notice filed February 27, 1997
and incorporated herein by reference.

11 Consent of Deloitte & Touche LLP.

12 None.

C-1

<PAGE>

13 None.

14 Analytic Individual Retirement Account and Disclosure
Statement -- filed as Exhibit 14 to Post Effective
Amendment No. 17 to the Registrant's Form N-1A
Registration Statement on April 26, 1990 and
incorporated herein by reference..

15 None.

16 Schedule of Computation of Performance Quotations in
Registration Statement -- filed as Exhibit 16 to Post
Effective Amendment No. 22 to the Registrant's Form
N-1A Registration Statement on April 29, 1994 and
incorporated herein by reference.
17 Financial Data Schedule.

18 None

C-2

<PAGE>

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

By reason of its common Board of Trustees and investment adviser, The
Analytic Series Fund, a Delaware business trust which is registered as a
diversified, open-end management investment company under the 1940 Act, may be
deemed to be under common control with the Registrant.

Item 26: NUMBER OF HOLDERS OF SECURITIES

Title of Class Number of Record Holders as of
-------------- July 31, 1997
-------------

Common Stock, No Par Value 1,449

Item 27: INDEMNIFICATION

Article V of Registrant's Articles of Incorporation and Article VI of
Registrant's Bylaws provide for indemnification of Registrant's officers and
directors.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

During the two years ended December 31, 1996, Analytic [Bullet] TSA
Global Asset Management, Inc. has engaged only in the business of acting as
investment adviser to fiduciaries and other long-term investors. It also acts as
adviser to The Analytic Series Fund, an open-end, diversified registered
investment company. During such period, the other substantial business,
professions, vocations or employments of the directors and officers of Analytic
[Bullet] TSA Global Asset Management, Inc. have been as follows:

C-3

<PAGE>

Name Office Other Employment
<S> <C> <C>
Roger G. Clarke Chairman of the Board of President of Analytic [Bullet] TSA Investors (wholly owned
Directors subsidiary of Adviser) and Director of Investment Securities of
the Church of Jesus Christ of Latter Day Saints, since January
1996. Formerly, Managing Director, President, Chief Executive
Officer and Chief Investment Officer of TSA Capital Management.

Michael F. Koehn Member of the Board of Director of Analytic Optioned Equity Fund; Trustee of The
Directors, President and Chief Analytic Series Fund, Co-founder and President of Analysis
Executive Officer Group, Inc.

Gregory M. McMurran Chief Investment Officer Treasurer of Analytic Optioned Equity Fund and The Analytic
Series Fund.

Harindra de Silva Managing Director President of Analytic Optioned Equity Fund and The
and Treasurer Analytic Series Fund. Concurrently, President of AG
Risk Management and Principal of Analysis Group

Robert J. Bannon Managing Director Portfolio Manager of Analytic [Bullet] TSA Investors (wholly
owned subsidiary of Adviser) since March, 1996. Formerly, Senior
Vice President and Senior Investment Strategist of TSA Capital
Management.

Marie Nastasi Arlt Chief Operating Officer Senior Vice President of Analytic Optioned Equity Fund and The
and Secretary Analytic Series Fund. Secretary, Treasurer, Principal and Vice
President of Analytic[Bullet] TSA Investors (wholly owned
subsidiary Adviser). Executive Vice President, Managing
Director, Principal, Treasurer and Secretary of TSA Capital
Management.

</TABLE>

C-4

<PAGE>

The business address of such persons is 700 South Flower Street, Suite 2400, Los
Angeles, CA 90017.

C-5

<PAGE>

Item 29. PRINCIPAL UNDERWRITERS

(a) UAM Fund Distributors, Inc. (the "Distributor"), the firm
which acts as sole distributor of the Registrant's shares,
also acts as distributor for UAM Funds Trust, UAM Funds, Inc.
and The Analytic Series Fund.

(b) The information required with respect to each Director and
officer of the Distributor is incorporated by reference to
Schedule A of Form BD filed by the Distributor pursuant to the
Securities and Exchange Act of 1934 (SEC File No. 8-41126).

Item 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder will be maintained at the offices of the Registrant and its
investment adviser(700 South Flower Street, Suite 2400, Los Angeles, CA 90017),
the Registrant's sub-transfer agent, sub-dividend disbursing agent and
sub-shareholder servicing agent (Chase Global Funds Services Company, 73 Tremont
Street, Boston, MA 02108) and the Registrant's custodian bank (The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, NY 11245).

Item 31. Not applicable.

Item 32. UNDERTAKINGS

The Fund hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

C-6

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, and State of California,
on the 20th day of August, 1997.

ANALYTIC OPTIONED EQUITY FUND, INC.

(Registrant)

By /s/ Michael F. Koehn
-------------------------------
Michael F. Koehn, Chairman

Pursuant to the requirements of the Securities Act of 1933, this
amended Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.

NAME TITLE DATE

/s/ Harindra de Silva
- -------------------------------------------
Harindra de Silva President August 20, 1997

/s/ Gregory M. McMurran
- -------------------------------------------
Gregory M. McMurran Treasurer (Chief
Financial Officer) August 20, 1997

/s/ Michael F. Koehn
- -------------------------------------------
Michael F. Koehn Chairman of the
Board of Directors August 20, 1997

/s/ Michael D. Butler
- -------------------------------------------
Michael D. Butler* Director August 20, 1997

/s/ Robertson Whittemore
- -------------------------------------------
Robertson Whittemore* Director August 20, 1997

*By /s/ Marie Nostasi Arlt
--------------------------------------
Marie Nostasi Arlt
Attorney-in-fact

C-7

<PAGE>

EXHIBIT INDEX

Exhibit No. Exhibit Description Page

6 Distribution Agreement C-9
8 Form of Custodian Agreement C-13
9.1 Fund Administration Agreement C-35
9.2 Mutual Funds Service Agreement C-54
11 Consent of Deloitte & Touche LLP C-80
17 Financial Data Schedule C-81

C-8

DISTRIBUTION AGREEMENT

BETWEEN

UAM FUND DISTRIBUTORS, INC.

AND

ANALYTIC OPTIONED EQUITY FUND, INC.

THIS AGREEMENT entered into the 1st day of May, 1997, by and between
ANALYTIC OPTIONED EQUITY FUND, INC., a California corporation (the "Fund"), and
UAM FUND DISTRIBUTORS, INC., a Massachusetts corporation (the "Distributor").

WITNESSETH:

In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and agree
with each other as follows:

1. The Fund hereby appoints the Distributor as agent of the Fund to
effect the sale and public distribution of shares of the capital stock of the
Fund.

2. The Fund shall not compensate the Distributor for services it
renders on behalf of the Fund.

3. The Distributor shall be the agent for the Fund for the sale of
its shares either through dealers or otherwise and the Fund agrees that it will
not sell any shares to any person except to fill orders for the shares received
through the Distributor; provided, however, that the foregoing shall not apply:
(a) to shares issued or sold in connection with the merger or consolidation of
any other investment company with the Fund or the acquisition by purchase or
otherwise of all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the Fund; (b)
to shares which may be offered by the Fund to its stockholders for reinvestment
of cash distributed from capital gains or net investment income of the Fund; (c)
to shares which may be issued to shareholders of a series of the Fund who
exercise any exchange privilege set forth in a Prospectus of the Fund; (d) to
shares issued to existing stockholders as the result of a stock split; (e) to
shares which the Fund otherwise may issue directly to registered stockholders
pursuant to authority of its Board of Directors; or (f) shares sold in any
jurisdiction in which the Distributor is not registered as a broker-dealer.

4. The Fund hereby authorizes the Distributor to sell its shares in
accordance with the following schedule of prices:

The applicable price will be the respective public offering price
applicable to each portfolio of the Fund next effective after receipt and
acceptance by the Fund of a proper offer to purchase, determined in
accordance with the Articles of Incorporation, By-Laws, Registration
Statement and Prospectus for the portfolios of the Fund.

5. Orders for the purchase of shares placed by the Distributor shall
be subject to the provisions of paragraphs (f) and (g) of Section 26 of the
Rules of Fair Practice of the NASD, the provisions of which are hereby
incorporated by reference.

C-9
<PAGE>

6. The Fund agrees to prepare and file registration statements with
the Securities and Exchange Commission and the Securities Departments of various
states and other jurisdictions in which the shares may be offered, at its own
expense, and do such other things and to take such other actions as may be
mutually agreed upon by and between the parties as shall be reasonably necessary
in order to effect the registration and the sale of the Fund's shares . The
Distributor shall cooperate with the Fund in the preparation and filing of
applications for registration and qualification of the shares under applicable
law.

7. With respect to the apportionment of costs between the Fund and
the Distributor of activities with which both are concerned, the following will
apply:

(a) At its own expense, the Fund shall pay all costs incurred
in the preparation and mailing of the Fund' s current Prospectuses, Statements
of Additional Information and reports to stockholders .

(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective investors.

(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to prospective investors.

(d) The Distributor will pay the costs of any additional
copies of Fund financial and other reports and other Fund literature supplied to
the Distributor by the Fund for sales promotion purposes.

8. Normally, the Fund shall not exercise any direction or control
over the time and place of solicitation, the persons to be solicited, or the
manner of solicitation; but the Distributor agrees that solicitations shall be
in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the Registration
Statement, the Prospectuses, the Articles of Incorporation, and By-Laws of the
Fund, and shall not violate any provision of the laws of the United States or
any other jurisdiction to which solicitations are subject, or violate any rule
or regulation promulgated by any lawfully constituted authority to which the
Fund or Distributor may be subject.

9. (a) The Fund appoints and designates the Distributor as agent of
the Fund and the Distributor accepts such appointment as such agent, to
repurchase shares of the Fund in accordance with the provisions of the Articles
of Incorporation and By-Laws of the Fund.

(b) In connection with such redemptions or repurchases the
Fund authorizes and designates the Distributor to take any action, to make any
adjustments in net asset value, and to make any arrangements for the payment of
the redemption or repurchase price authorized or permitted to be taken or made
in accordance with the Investment Company Act of 1940 and as set forth in the
By-Laws and then current Prospectuses of the Fund.

(c) The authority of the Distributor under this paragraph 9
may, with the consent of the Fund, be redelegated in whole or in part to another
person or firm.

C-10
<PAGE>
(d) The authority granted in this paragraph 9 may be suspended
by the Fund at any time or from time to time pursuant to the provisions of its
Articles of Incorporation until further notice to the Distributor. The President
or any Vice President of the Fund shall have the power granted by said
provisions. After any such suspension the authority granted to the Distributor
by this paragraph 9 shall be reinstated only by a written instrument executed by
the Fund's President or any Vice President.

10. The Distributor shall keep and maintain adequate records in
respect of its activities which further the sale of shares.

11. The Distributor agrees that it will not place orders for more
shares than are required to fill the requests received by it as agent of the
Fund and that it will expeditiously transmit all such orders to the Fund.

12. (a) This Agreement shall become effective as of the date hereof
and shall continue in effect for a period of more than one year from its
effective date only as long as such continuance is approved, at least annually,
by a vote of the Board of Directors of the Fund, and of the Directors who are
not "interested persons" of the Fund, cast in person at a meeting called for the
purpose of voting on such Agreement.

(b) This Agreement may be terminated at any time, without the
payment of any penalty, by vote of a majority of the members of the Board of
Directors of the Fund who are not interested persons of the Fund or by vote of a
majority of the outstanding voting securities of the Fund on not more than sixty
days' written notice to the Distributor. This Agreement shall automatically
terminate in the event of its assignment by the Distributor unless the United
States Securities and Exchange Commission has issued an order exempting the Fund
and the Distributor from the provisions of the Investment Company Act of 1940,
as amended, which would otherwise have effected the termination of this
Agreement.

13. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved in the manner described in
paragraph 12(a) above for approval of this Agreement.

14. The Fund and the Distributor hereby each agree that all
literature and publicity issued by either of them referring directly or
indirectly to the Fund or to the Distributor shall be submitted to and receive
the approval of the Fund and the Distributor before the same may be used by
either party.

15. The Distributor agrees to use its best efforts in effecting the
sale and public distribution of the shares of the Fund and to perform its duties
in redeeming the shares of the Fund, but nothing contained in this Agreement
shall make the Distributor or any of its officers and directors or shareholders
liable for any loss sustained by the Fund or the Fund's officers, directors or
shareholders, or by any other person on account of any act done or omitted to be
done by the Distributor under this Agreement; provided, that nothing herein
contained shall protect the Distributor against any liability to the Fund or to
any of its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties as Distributor or by reason of its reckless disregard of its
obligations or duties as Distributor under this Agreement. Nothing in this
Agreement shall protect the Distributor from any liabilities which it may have
under the Securities Act of 1933 or the Investment Company Act of 1940.

C-11
<PAGE>

16. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall have the
respective meanings specified in the Investment Company Act of 1940 as now in
effect.

17. This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, except to the extent such laws are preempted
by the Investment Company Act of 1940.

18. Any notice required to be given hereunder shall be sent via
first class mail to the address of the party as set forth above.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers on the day and year above written.

Attest: ANALYTIC OPTIONED EQUITY FUND INC.

/s/ Deborah Sheflin /s/ Harindra de Silva
- --------------------- -----------------------------
Name:
Title:

Attest: UAM FUND DISTRIBUTORS, INC.

/s/ Michael DeFao /s/ Gary French
- --------------------- -----------------------------
Gary French, President

C-12

EXHIBIT 8

FORM OF
GLOBAL CUSTODY AGREEMENT

This AGREEMENT is effective September __, 1997, and is between THE CHASE
MANHATTAN BANK (the "Bank") and THE ANALYTIC OPTIONED EQUITY FUND, INC. (the
"Customer").

1. Customer Accounts.

The Bank agrees to establish and maintain the following accounts
("Accounts"):

(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and

(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal by
draft or check.

The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the same
class in place of those deposited in the Custody Account.

Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.

2. Maintenance of Securities and Cash at Bank and Subcustodian Locations.

Unless Instructions specifically require another location acceptable to
the Bank:

(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and

(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.

Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
If available and not contrary to instructions, cash will be held in an interest
bearing account. To the extent Instructions are issued and the Bank can comply
with such Instructions, the Bank is authorized to maintain cash balances on
deposit for the Customer with itself or one of its affiliates at such

C-13
<PAGE>

reasonable rates of interest as may from time to time be paid on such accounts,
or in non-interest bearing accounts as the Customer may direct, if acceptable to
the Bank.

If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.

3. Subcustodians and Securities Depositories.

The Bank may act under this Agreement through the subcustodians listed in
Schedule A of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets in
the Accounts in accounts which the Bank has established with one or more of its
branches or Subcustodians. The Bank and Subcustodians are authorized to hold any
of the Securities in their account with any securities depository in which they
participate.

The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule A. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.

4. Use of Subcustodian.

(a) The Bank will identify the Assets on its books as belonging to the
Customer.

(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such Subcustodian's books
as special custody accounts for the exclusive benefit of customers of the Bank.

(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.

(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.

5. Deposit Account Transactions.

(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.

(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by the Bank on similar
loans.

C-14
<PAGE>

(c) If the Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If the Customer does not promptly return
any amount upon such notification, the Bank shall be entitled, upon oral or
written notification to the Customer, to reverse such credit by debiting the
Deposit Account for the amount previously credited. The Bank or its Subcustodian
shall have no duty or obligation to institute legal proceedings, file a claim or
a proof of claim in any insolvency proceeding or take any other action with
respect to the collection of such amount, but may act for the Customer upon
Instructions after consultation with the Customer.

6. Custody Account Transactions.

(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account may be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.

(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.

(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction.

(ii) If any Securities delivered pursuant to this Section 6 are returned
by the recipient thereof, the Bank may reverse the credits and debits of
the particular transaction at any time.

7. Actions of the Bank.

The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:

(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.

(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.

(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.

C-15
<PAGE>

(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.

The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within sixty (60) days of receipt, the Customer shall be deemed to
have approved such statement. In such event, or where the Customer has otherwise
approved any such statement, the Bank shall, to the extent permitted by law, be
released, relieved and discharged with respect to all matters set forth in such
statement or reasonably implied therefrom as though it had been settled by the
decree of a court of competent jurisdiction in an action where the Customer and
all persons having or claiming an interest in the Customer or the Customer's
Accounts were parties.

All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement.

8. Corporate Actions; Proxies; Tax Reclaims.

(a) Corporate Actions. Whenever the Bank receives information concerning
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.

When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person, but if Instructions are not received in time
for the Bank to take timely action, or actual notice of such Corporate Action
was received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the Deposit Account with
the proceeds or take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.

(b) Proxy Voting. The Bank shall provide proxy voting services, if elected
by the Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank).

(i) Subject to the provisions hereof, the Bank will apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which
apply in each applicable market in respect of income payments on
Securities for the benefit of the Customer which the Bank believes may be
available to such Customer.

(ii) The provision of tax reclaim services by the Bank is conditional upon
the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from

C-16
<PAGE>

the Bank). The Customer acknowledges that, if the Bank does not receive
such declarations, documentation and information, additional United
Kingdom taxation will be deducted from all income received in respect of
Securities issued outside the United Kingdom and that U.S. non-resident
alien tax or U.S. backup withholding tax will be deducted from U.S. source
income. The Customer shall provide to the Bank such documentation and
information as it may require in connection with taxation, and warrants
that, when given, this information shall be true and correct in every
respect, not misleading in any way, and contain all material information.
The Customer undertakes to notify the Bank immediately if any such
information requires updating or amendment.

(iii) The Bank shall not be liable to the Customer or any third party for
any tax, fines or penalties payable by the Bank or the Customer, and shall
be indemnified accordingly, whether these result from the inaccurate
completion of documents by the Customer or any third party, or as a result
of the provision to the Bank or any third party of inaccurate or
misleading information or the withholding of material information by the
Customer or any other third party, or as a result of any delay of any
revenue authority or any other matter beyond the control of the Bank.

(iv) The Customer confirms that the Bank is authorized to deduct from any
cash received or credited to the Deposit Account any taxes or levies
required by any revenue or governmental authority for whatever reason in
respect of the Securities or Cash Accounts.

(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to
the Customer from time to time and the Bank may, by notification in
writing, at its absolute discretion, supplement or amend the markets in
which the tax reclaim services are offered. Other than as expressly
provided in this sub-clause, the Bank shall have no responsibility with
regard to the Customer's tax position or status in any jurisdiction.

(vi) The Customer confirms that the Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the
Customer.

(vii) Tax reclaim services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would
have been if it performed such services itself.

9. Nominees.

Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.

C-17
<PAGE>

10. Authorized Persons.

As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.

11. Instructions.

The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.

Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.

12. Standard of Care; Liabilities.

(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in Instructions which
are consistent with the provisions of this Agreement as follows:

(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care with respect to the
safekeeping of such Assets to the same extent that the Bank would be
liable to the Customer if the Bank were holding such Assets in New York.
In the event of any loss to the Customer by reason of the failure of the
Bank or its Subcustodian to utilize reasonable care, the Bank shall be
liable to the Customer only to the extent of the Customer's direct
damages, to be determined based on the market value of the property which
is the subject of the loss at the date of discovery of such loss and
without reference to any special conditions or circumstances.

(ii) The Bank will not be responsible for any act, omission, default or
the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.

(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant to
Instructions or otherwise within the scope of this Agreement if such act
or omission was in good faith, without negligence. In performing its

C-18
<PAGE>

obligations under this Agreement, the Bank may rely on the genuineness of
any document which it believes in good faith to have been validly
executed.

(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses with respect to
income from or Assets in the Accounts.

(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.

(vi) The Bank need not maintain any insurance solely for the benefit of
the Customer.

(vii) Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the
value of Assets.

(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God.

(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:

(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;

(ii) supervise or make recommendations with respect to investments or the
retention of Securities;

(iii) advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) of this Agreement;

(iv) evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant to this Agreement;

(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.

(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.

C-19
<PAGE>

13. Fees and Expenses.

The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, as set forth in the attached Fee
Schedule together with the Bank's reasonable out-of-pocket or incidental
expenses, including, but not limited to, legal fees. The Bank shall have a lien
on and is authorized to charge any Accounts of the Customer for any amount owing
to the Bank under any provision of this Agreement.

14. Miscellaneous.

(a) Foreign Exchange Transactions. To facilitate the administration of the
Customer's trading and investment activity, the Bank is authorized to enter into
spot or forward foreign exchange contracts with the Customer or an Authorized
Person for the Customer and may also provide foreign exchange through its
subsidiaries, affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but the Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates or
Subcustodians enter into a foreign exchange contract related to Accounts, the
terms and conditions of the then current foreign exchange contract of the Bank,
its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent,
this Agreement shall apply to such transaction.

(b) Certification of Residency, etc. The Customer certifies that it is a
resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications.

(c) Access to Records. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.

(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.

(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):

|_| Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");

|X| Mutual Fund assets subject to certain Securities and Exchange
Commission ("SEC") rules and regulations;

|_| Neither of the above.

This Agreement consists exclusively of this document together with
Schedule A and the following Rider(s) [Check applicable rider(s)]:

C-20
<PAGE>
|X| ERISA

|X| MUTUAL FUND

|X| PROXY VOTING

|X| SPECIAL TERMS AND CONDITIONS

There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.

(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or unenforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.

(g) Waiver. Except as otherwise provided in this Agreement, no failure or
delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.

(h) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:

Bank: The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division

or telex: _________________________

Customer: The Analytic Optioned Equity Fund, Inc.
700 South Flower Street
Suite 2400
Los Angeles, CA 90017

or telex: _________________________

(i) Termination. This Agreement may be terminated by the Customer or the
Bank by giving sixty (60) days written notice to the other, provided that such
notice to the Bank shall specify the names of the persons to whom the Bank shall
deliver the Assets in the Accounts. If notice of termination is given by the
Bank, the Customer shall, within sixty (60) days (or such other amount of days
as is contemplated by the Extension Notice) following receipt of the notice,
deliver to the Bank Instructions specifying the names of the persons to whom the
Bank shall deliver the Assets. In either case the Bank will deliver the Assets
to the persons so specified, after

C-21
<PAGE>

deducting any amounts which the Bank determines in good faith to be owed to it
under Section 13. If within sixty (60) days following receipt of a notice of
termination by the Bank, the Bank does not receive Instructions from the
Customer specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or trust
company doing business in the State of New York to be held and disposed of
pursuant to the provisions of this Agreement, or to Authorized Persons, or may
continue to hold the Assets until Instructions are provided to the Bank.

THE ANALYTIC OPTIONED EQUITY FUND, INC.

By: _____________________________
Title: _____________________________
Date: _____________________________

THE CHASE MANHATTAN BANK, N.A.

By: _____________________________
Title: _____________________________
Date: _____________________________

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<PAGE>

SCHEDULE A

FEE SCHEDULE TO GLOBAL CUSTODY
AGREEMENT BETWEEN THE ANALYTIC OPTIONED EQUITY FUND, INC.
AND THE CHASE MANHATTAN BANK

C-23
<PAGE>

STATE OF)

: ss.

COUNTY OF)

On this day of, 199, before me personally came, to me known, who being by
me duly sworn, did depose and say that he/she resides in at, that he/she is a
of, the entity described in and which executed the foregoing instrument; that he
knows the seal of said entity, that the seal affixed to said instrument is such
seal, that it was so affixed by order of said entity, and that he/she signed
his/her name thereto by like order.

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

Sworn to before me this

day of, 199 .

Notary

My Commission Expires

C-24
<PAGE>

STATE OF)

: ss.

COUNTY OF)

On this day of, 199 , before me personally came, to me known, who being by
me duly sworn, did depose and say that he/she resides in at, that he/she is, the
corporation described in and which executed the foregoing instrument; the he/she
knows the seal of said corporation, that the seal affixed to said instrument is
such corporate seal, that it was so affixed by order of the Board of Directors
of said corporation, and that he signed his name thereto by like order.

Sworn to before me this

day of, 199 .

Notary

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<PAGE>

ERISA Rider to Global Custody Agreement
Between The Chase Manhattan Bankand
THE ANALYTIC OPTIONED EQUITY FUND, INC.
effective August __, 1997

Customer represents that the Assets being placed in the Bank's custody are
subject to ERISA. It is understood that in connection therewith the Bank is a
service provider and not a fiduciary of the plan and trust to which the assets
are related. The Bank shall not be considered a party to the underlying plan and
trust and the Customer hereby assumes all responsibility to assure that
Instructions issued under this Agreement are in compliance with such plan and
trust and ERISA.

This Agreement will be interpreted as being in compliance with the
Department of Labor Regulations Section 2550.404b-1 concerning the maintenance
of indicia of ownership of plan assets outside of the jurisdiction of the
district courts of the United States.

The following modifications are made to the Agreement:

Section 3. Subcustodians and Securities Depositories.

Add the following language to the end of Section 3:

As used in this Agreement, the term Subcustodian and the term securities
depositories include a branch of the Bank, a branch of a qualified U.S.
bank, an eligible foreign custodian, or an eligible foreign securities
depository, where such terms shall mean:

(a) "qualified U.S. bank" shall mean a U.S. bank as described in
paragraph (a)(2)(ii)(A)(1) of the Department of Labor Regulations
Section 2550.404b-1;

(b) "eligible foreign custodian" shall mean a banking institution
incorporated or organized under the laws of a country other than the
United States which is supervised or regulated by that country's
government or an agency thereof or other regulatory authority in the
foreign jurisdiction having authority over banks; and

(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the
laws of a country other than the United States, which is supervised
or regulated by that country's government or an agency thereof or
other regulatory authority in the foreign jurisdiction having
authority over such depositories or clearing agencies and which is
described in paragraph (c)(2) of the Department of Labor Regulations
Section 2550.404b-1.

Section 4. Use of Subcustodian.

Subsection (d) of this section is modified by deleting the last sentence.

Section 5. Deposit Account Payments.

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<PAGE>

Subsection (b) is amended to read as follows:

(b) In the event that any payment made under this Section 5 exceeds the
funds available in the Deposit Account, such discretionary advance shall
be deemed a service provided by the Bank under this Agreement for which it
is entitled to recover its costs as may be determined by the Bank in good
faith.

Section 10. Authorized Persons.

Add the following paragraph at the end of Section 10:

Customer represents that: a) Instructions will only be issued by or for a
fiduciary pursuant to Department of Labor Regulation Section 404b-1
(a)(2)(i) and b) if Instructions are to be issued by an investment
manager, such entity will meet the requirements of Section 3(38) of ERISA
and will have been designated by the Customer to manage assets held in the
Customer Accounts ("Investment Manager"). An Investment Manager may
designate certain of its employees to act as Authorized Persons under this
Agreement.

Section 14(a). Foreign Exchange Transactions.

Add the following paragraph at the end of Subsection 14(a):

Instructions to execute foreign exchange transactions with the Bank, its
subsidiaries, affiliates or Subcustodians will include (1) the time period
in which the transaction must be completed; (2) the location i.e., Chase
New York, Chase London, etc. or the Subcustodian with whom the contract is
to be executed and (3) such additional information and guidelines as may
be deemed necessary; and, if the Instruction is a standing Instruction, a
provision allowing such Instruction to be overridden by specific contrary
Instructions.

C-27
<PAGE>

Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
THE ANALYTIC OPTIONED EQUITY FUND, INC.
effective August ___, 1997

Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.

Except to the extent that the Bank has specifically agreed to comply with
a condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.

The following modifications are made to the Agreement:

Section 3. Subcustodians and Securities Depositories.

Add the following language to the end of Section 3:

The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible
foreign custodian or an eligible foreign securities depository, which are
further defined as follows:

(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Investment Company Act of 1940;

(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in
excess of $200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and
that has shareholders' equity in excess of $100 million in U.S. currency
(or a foreign currency equivalent thereof) (iii) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States or a majority owned direct or indirect subsidiary
of a qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States which
has such other qualifications as shall be specified in Instructions and
approved by the Bank; or (iv) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the SEC;
and

(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i) the central
system for handling securities or equivalent book-entries in that country,
or (ii) a transnational system for the central handling of securities or
equivalent book-entries.

The Customer represents that its Board of Directors has approved each of
the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each

C-28
<PAGE>

Subcustodian, which are attached as Exhibits I through _____ of Schedule A, and
further represents that its Board has determined that the use of each
Subcustodian and the terms of each subcustody agreement are consistent with the
best interests of the Fund(s) and its (their) shareholders. The Bank will supply
the Customer with any amendment to Schedule A for approval. The Customer has
supplied or will supply the Bank with certified copies of its Board of Directors
resolution(s) with respect to the foregoing prior to placing Assets with any
Subcustodian so approved.

Section 11. Instructions.

Add the following language to the end of Section 11:

Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is
to be made and Customer shall be solely responsible to assure that
Instructions are in accord with any limitations or restrictions applicable
to the Customer by law or as may be set forth in its prospectus.

(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;

(b) When Securities are called, redeemed or retired, or otherwise become
payable;

(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;

(d) Upon conversion of Securities pursuant to their terms into other
securities;

(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;

(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;

(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;

(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;

(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the
Bank, its Subcustodian or the Customer's transfer agent, such shares to be
purchased or redeemed;

(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;

(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;

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<PAGE>

(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the
option, or at expiration, the Bank will receive from brokers the
Securities previously deposited. The Bank will act strictly in accordance
with Instructions in the delivery of Securities to be held in escrow and
will have no responsibility or liability for any such Securities which are
not returned promptly when due other than to make proper request for such
return;

(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;

(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification
that the purpose is a proper purpose under the instruments governing the
Customer; and

(o) Upon the termination of this Agreement as set forth in Section 14(i).

Section 12. Standard of Care; Liabilities.

Add the following subsection (c) to Section 12:

(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for
such Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank and its
securities depositories in New York.

Section 14. Access to Records.

Add the following language to the end of Section 14(c):

Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer with
such similar reports as it may reasonably request with respect to each
Subcustodian and securities depository holding the Customer's assets.

C-30
<PAGE>

GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
THE ANALYTIC OPTIONED EQUITY FUND, INC. (the "Customer")
dated August ___, 1997

1. Global Proxy Services (the "Services") shall be provided for the countries
listed in the procedures and guidelines ("Procedures") furnished to
Customer, as the same may be amended by the Bank from time to time on
prior notice to Customer. The Procedures are incorporated by reference
herein and form a part of this Rider.

2. The Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by the
Bank to Customer of the dates of pending shareholder meetings, resolutions
to be voted upon and the return dates as may be received by the Bank or
provided to the Bank by its Subcustodians or third parties, and (b) voting
by the Bank of proxies based on Customer Directions. Original proxy
materials or copies thereof shall not be provided. Notifications shall
generally be in English and, where necessary, shall be summarized and
translated from such non-English materials as have been made available to
the Bank or its Subcustodian. In this respect the Bank's only obligation
is to provide information from sources it believes to be reliable and/or
to provide materials summarized and/or translated in good faith. the Bank
reserves the right to provide Notifications, or parts thereof, in the
language received. Upon reasonable advance request by Customer, backup
information relative to Notifications, such as annual reports, explanatory
material concerning resolutions, management recommendations or other
material relevant to the exercise of proxy voting rights shall be provided
as available, but without translation.

3. While the Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, the Bank shall not be liable for
any losses or other consequences that may result from reliance by Customer
upon Notifications where the Bank prepared the same in good faith.

4 Notwithstanding the fact that the Bank may act in a fiduciary capacity
with respect to Customer under other agreements or otherwise under the
Agreement, in performing Services the Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Services.

5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are:
(i) on loan; (ii) at registrar for registration or reregistration; (iii)
the subject of a conversion or other corporate action; (iv) not held in a
name subject to the control of the Bank or its Subcustodian or are
otherwise held in a manner which precludes voting; (v) not capable of
being voted on account of local market regulations or practices or
restrictions by the issuer; or (vi) held in a margin or collateral
account.

6 Customer acknowledges that in certain countries the Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions received
from all customers).

7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered by this Agreement,
and shall in no event sell, license, give or otherwise make the
information provided hereunder available, to any third party, and shall
not directly or indirectly compete with the Bank or diminish the market
for the Services by provision of such information, in whole or in part,
for compensation or otherwise, to any third party.

8. The names of Authorized Persons for Services shall be furnished to the
Bank in accordance with ss.10 of the Agreement. Fees for the Services
shall be agreed as set forth in ss.13 of the Agreement.

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<PAGE>

SPECIAL TERMS AND CONDITIONS RIDER

GLOBAL CUSTODY AGREEMENT

WITH THE ANALYTIC OPTIONED EQUITY FUND, INC.

DATE August __, 1997

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<PAGE>

DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER

Domestic Corporate Actions and Proxies

With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the provisions of Section
8 of the Agreement and the Global Proxy Service rider:

The Bank will send to the Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of the
Bank's nominee or the nominee of a central depository) and communications
with respect to Securities in the Custody Account as call for voting or
relate to legal proceedings within a reasonable time after sufficient
copies are received by the Bank for forwarding to its customers. In
addition, the Bank will follow coupon payments, redemptions, exchanges or
similar matters with respect to Securities in the Custody Account and
advise the Customer or the Authorized Person for such Account of rights
issued, tender offers or any other discretionary rights with respect to
such Securities, in each case, of which the Bank has received notice from
the issuer of the Securities, or as to which notice is published in
publications routinely utilized by the Bank for this purpose.

Fees

The fees referenced in Section 13 of this Agreement cover only domestic and
euro-dollar holdings. There will be no Schedule A to this Agreement, as there
are no foreign assets in the Accounts.

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<PAGE>

DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER

Domestic Corporate Actions and Proxies

With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:

C-34

EXHIBIT 9.1

FUND ADMINISTRATION AGREEMENT
ANALYTIC OPTIONED EQUITY FUND, INC.

AGREEMENT made as of May 16th, 1997 by and between Analytic Optioned
Equity Fund, Inc., a corporation organized under the laws of the State of
California (the "Fund"), and UAM Fund Services, Inc., a Delaware corporation
(the "Administrator").

WITNESSETH:

WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended (the
1940 Act"); and

WHEREAS, the Fund wishes to retain the Administrator to provide certain
transfer agent, fund accounting and administration services with respect to the
Fund, and the Administrator is willing to furnish or provide for the furnishing
of such services;

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:

1. Appointment. The Fund hereby appoints the Administrator to provide
transfer agent, fund accounting and fund administration services to the Fund,
subject to the supervision of the Board of Directors of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 4 of this Agreement. The
Fund presently issues shares of beneficial interest in one or more series each
representing separate interests in a portfolio of investments and cash.
Hereinafter, each such series shall be referred to as a "Portfolio." The term
"Portfolio" as hereinafter used shall be deemed to include not only separate
series of the Fund, but also separate classes of series of the Fund. The Fund
shall notify the Administrator in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that said provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to such new Portfolio in writing by the
Fund and the Administrator at the time of the addition of such new Portfolio.

2. Delivery of Documents. The Fund will upon request furnish the
Administrator with copies, properly certified or authenticated, of each
of the following in their most current form:

(a) Resolutions of the Fund's Board authorizing the appointment of
the Administrator to provide certain transfer agency, fund accounting and
administration services to the Fund and approving this Agreement;

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<PAGE>

(b) The Fund's Articles of Incorporation ("Articles");

(d) The Fund's Notification of Registration of Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC");

(e) The Fund's Registration Statement. as amended, on Form
N-1A (the "Registration Statement") under the Securities Act of 1933 and
the 1940 Act, as filed with the SEC; and

(f) The Fund's most recent Prospectuses and Statements of Additional
Information and supplements thereto (such Prospectuses and Statements of
Additional Information and supplements thereto, as presently in effect and as
from time to time hereafter amended and supplemented, herein called the
"Prospectuses").

The Fund will furnish the Administrator from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.

3. Services Provided by the Administrator. The Administrator will provide
the following services subject to the control, direction and supervision of the
Board, and in compliance with the objectives, policies and limitations set forth
in the Fund's Registration Statement. Bylaws and applicable laws and
regulations.

(a) General Administration. Unless otherwise provided by the adviser
to the Fund, the Administrator shall manage, administer and conduct the general
business activities of the Fund other than those which have been contracted to
other third parties by the Fund as of the date hereof. The Administrator shall
provide the personnel and facilities necessary to perform such general business
activities. A detailed description of these services is included in Attachment A
to this Agreement.

(b) Fund Accounting. The Administrator shall provide the following
accounting services to the Fund: (i) maintenance of the books and records and
accounting controls for the Fund's assets, including records of all securities
transactions; (ii) calculation of the Portfolios' net asset values in accordance
with the Prospectuses and, if requested by the Fund, transmission of the net
asset values to the NASD for publication of prices; (iii) accounting for
dividends, interest and other income received and distributions made by the
Fund; (iv) preparation and filing of the Fund's state and federal tax returns
and Semi-Annual Reports on Form N-SAR; (v) production of transaction data,
financial reports and such other periodic and special reports as the Board may
reasonably request; (vi) the preparation of financial statements for the
semi-annual and annual reports and other shareholder communications; (vii)
liaison with the Fund's independent auditors; and (viii) monitoring and
administration of arrangements with the Fund's

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<PAGE>

custodian and depository banks. A complete listing of reports that will be
available to the Fund is included in Attachment B of this Agreement.

(i) Maintain records showing for each Fund shareholder the
following: (A) name, address and tax identifying number; (B) number of shares
held of any Portfolio of the Fund; (C) historical information including
dividends paid and the date and price of all transactions including individual
purchases and redemptions: and (D) any dividend reinvestment order, application,
dividend address and correspondence relating to the current maintenance of the
account.

(ii) Record the issuance of shares of common stock of the Fund
and shall notify the Fund in case any proposed issue of shares by the Fund shall
result in an over-issue as identified by Section 8-104(2) of the Uniform
Commercial Code and in case any issue would result in such an over-issue, shall
refuse to countersign and issue, and/or credit, said shares. Except as
specifically agreed in writing between the Administrator and the Fund, the
Administrator shall have no obligation when countersigning and issuing and/or
crediting shares, to take cognizance of any other laws relating to the issue and
sale of such shares except insofar as policies and procedures of the Stock
Transfer Association recognize such laws.

(iii) Process all orders for the purchase of shares of the
Fund in accordance with the Fund's current Registration Statement. Upon receipt
of any check or other payment for purchase of shares of the Fund from an
investor, it will: (A) stamp the envelope with the date of receipt; (B)
forthwith process the same for collection; and (C) determine the amounts thereof
due the Fund, and notify the Fund of such determination and deposit, such
notification to be given on a daily basis of the total amounts determined and
deposited to the Fund's custodian bank account during such day. The
Administrator shall then credit the share account of the investor with the
number of shares to be purchased according to the price of the Fund's shares in
effect for purchases made on the date such payment is received by the
Administrator, determined as set forth in the Fund's current Prospectuses, and
shall promptly mail a confirmation of said purchase to the investor, all subject
to any instructions which the Fund may give to the Administrator with respect to
the timing or manner of acceptance of orders for shares relating to payments so
received by it.

(iv) Receive and stamp with the date of receipt all requests
for redemptions or repurchase of shares held in certificate or non-certificate
form and shall process redemptions and repurchase requests as follows: (A) if
such certificate or redemption request complies with the applicable standards
approved by the Fund, the Administrator shall on each business day notify the
Fund of the total number of shares presented and covered by such requests
received by the Administrator on such day; (B) on or prior to the seventh
calendar day succeeding any such request for redemption, the Administrator shall
notify the custodian, subject to the instructions from the Fund, to

C-37
<PAGE>

transfer monies to such account as designated by the Administrator for such
payment to the redeeming shareholder of the applicable redemption or repurchase
price; (C) if any such certificate or request for redemption or repurchase does
not comply with applicable standards, the Administrator shall promptly notify
the investor of such fact, together with the reason therefor, and shall effect
such redemption at the relevant Portfolio's price next determined after receipt
of documents complying with said standards or at such other time as the Fund
shall so direct.

(v) Acknowledge all correspondence from shareholders relating
to their share accounts and undertake such other shareholder correspondence as
may from time to time be mutually agreed upon.

(vi) Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in accordance
with the procedures set forth in the Fund's current Prospectuses. The
Administrator shall be permitted to act upon the instruction of any person by
telephone to redeem, exchange and/or transfer Fund shares from any account for
which such services have been authorized. The Fund hereby agrees to indemnify
and hold the Administrator harmless against all losses. costs or expenses,
including attorneys' fees and expenses suffered or incurred by the Administrator
directly or indirectly as a result of relying on the telephone instructions of
any person acting on behalf of a shareholder account for which telephone
services have been authorized. However, the Administrator shall not be liable to
the Fund for any returned checks or other order for the payment of money if it
follows reasonable procedures with respect thereto.

(vii) Transfer on the records of the Fund maintained by it,
shares represented by certificates. as well as issued shares held in
non-certificate form, upon the surrender to it of the certificate or, in the
case of non-certificated shares, comparable transfer documents in proper form
for transfer and, upon cancellation thereof to countersign and issue new
certificates or other documents of ownership for a like amount of stock and to
deliver the same pursuant to the transfer instructions.

(viii) Supply, at the expense of the Fund, a supply of
continuous form blank stock certificates. Such blank stock certificates shall be
properly signed, manually or by facsimile, as authorized by the Fund, and shall
bear the Fund's corporate seal or facsimile thereof, and notwithstanding the
death, resignation or removal of any officers of the Fund authorized to sign
certificates of stock, the Administrator may, until otherwise directed by the
Fund, continue to countersign certificates which bear the manual or facsimile
signature of such officer.

(ix) Upon the request of a shareholder of the Fund who
requests a certificate representing his shares, countersign and mail by first
class mail a share certificate to the investor at his address as set forth on
the transfer books of the Fund.

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<PAGE>

(x) In the event that any check or other order for the payment
of money is returned unpaid for any reason, take such steps, including
redepositing said check for collection or returning said check to the investor,
as the Administrator may at its discretion, deem appropriate and notify the Fund
of such action, unless the Fund instructs otherwise. However, the Administrator
shall not be liable to the Fund for any returned checks or other order for the
payment of money if it follows reasonable procedures with respect thereto.

(xi) Prepare, file with the Internal Revenue Service, and mail
to shareholders such returns for reporting payment of dividends and
distributions as are required by applicable laws to be so filed and/or mailed,
and the Administrator shall withhold such sums as are required to be withheld
under applicable Federal income tax laws, rules and regulations.

(xii) Mail proxy statements, proxy cards and other materials
and shall receive, examine and tabulate returned proxies. The Administrator
shall make interim reports of the status of such tabulation to the Fund upon
request, and shall certify the final results of the tabulation.

(d) Dividend Disbursing. The Administrator shall act as Dividend
Disbursing Agent for the Fund, and, as such, shall prepare and mail checks or
credit income and capital gain payments to shareholders. The Fund shall advise
the Administrator of the declaration of any dividend or distribution and the
record and payable date thereof at least five (5) days prior to the record date.
The Administrator shall, on or before the payment date of any such dividend or
distribution, notify the Fund's custodian of the estimated amount required to
pay any portion of said dividend or distribution which is payable in cash, and
on or before the payment date of such distribution, the Fund shall instruct its
custodian to make available to the Administrator sufficient funds for the cash
amount to be paid out. If a shareholder is entitled to receive additional shares
by virtue of any such distribution or dividend, appropriate credits will be made
to his account and/or certificates delivered where requested. A shareholder not
electing issuance of certificates will receive a confirmation from the
Administrator indicating the number of shares credited to his account.

(e) Miscellaneous. Unless otherwise provided by the adviser
to the fund, the Administrator will also:

(i) Provide office facilities (which may be in the offices of
the Administrator or a corporate affiliate of them, but shall be in such
location as the Fund shall reasonably approve) and the services of a principal
financial officer to be appointed by the Fund;

(ii) Furnish statistical and research data, clerical
services and stationery and office supplies;

C-39
<PAGE>

(iii) Assist in the monitoring of regulatory and legislative
developments which may affect the Fund and, in response to such developments,
counsel and assist the Fund in routine regulatory examinations or investigations
of the Fund and work with outside counsel to the Fund in connection with
regulatory matters or litigation.

(iv) In performing its duties: (A) will act in accordance with
the Fund's Articles. Bylaws Prospectuses and the instructions and directions of
the Board and will conform to. and comply with, except as otherwise provided
herein, the requirements of the 1940 Act and all other applicable federal or
state laws and regulations: and (B) will consult with outside legal counsel to
the Fund, as necessary or appropriate.

(v) Preserve for the periods prescribed by Rule 31 a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under said Act
in connection with the services required to be performed hereunder. The
Administrator further agrees that all such records which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request. Upon such request the
Administrator will surrender such records in a mutually agreeable electronic
format.

(vi) Upon request, provide a copy of all historical data
related to the Fund in a mutually agreeable electronic format.

(f) The Administrator may, at its expense and discretion,
subcontract with any entity or person concerning the provisions of the services
contemplated hereunder. The Administrator will provide prompt notice of such
delegation and provide copies of such subcontracts to the Fund; provided, that
such subcontract shall not discharge the Administrator from its obligations
hereunder or delegation of duties to another third party.

4. Fees; Expenses; Expense Reimbursement.

(a) For the services rendered for the Fund pursuant to this
Agreement, the Administrator shall be entitled to a fee based on the average net
assets of the Fund determined at the annual rate outlined in Attachment C of
this Agreement and applied to the average daily net assets of the Fund. Such
fees are to be computed daily and paid monthly on the first business day of the
following month. Upon any termination of this Agreement before the end of any
month, the fee for such part of the month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.

(b) For the purpose of determining fees payable to the
Administrator, the value of the Fund's net assets shall be computed as required
by its Prospectuses, generally accepted accounting principles and resolutions of
the Board.

C-40
<PAGE>

(c) The Administrator will from time to time employ or associate
with such person or persons as may be fit to assist them in the performance of
this Agreement. Such person or persons may be officers and employees who are
employed by both the Administrator and the Fund. The compensation of such person
or persons for such employment shall be paid by the Administrator and no
obligation will be incurred by or on behalf of the Fund in such respect.

(d) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise expressly
provided herein. Other expenses to be incurred in the operation of the Fund will
be borne by the Fund or other parties, including taxes, interest, brokerage fees
and commissions, if any, salaries and fees of officers and members of the Board
who are not officers, directors, shareholders or employees of the Administrator,
or the Fund's investment adviser or distributor, SEC fees and state Blue Sky
fees, EDGAR filing fees, processing services and related fees, advisory and
administration fees, charges and expenses of pricing and data services,
independent public accountants and custodians, insurance premiums including
fidelity bond premiums, outside legal expenses, costs of maintenance of
corporate existence, typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund, printing and
production costs of shareholders' reports and corporate meetings, cost and
expenses of Fund stationery and forms; costs of special telephone and data lines
and devices; trade association dues and expenses; and any extraordinary expenses
and other customary Fund expenses; provided, however, that, except as provided
in any distribution plan adopted by the Fund, the Fund will not bear, directly
or indirectly, the cost of any activity which is primarily intended to result in
the distribution of shares of the Fund. In addition, the Administrator may
utilize one or more independent pricing services, approved from time to time by
the Board, to obtain securities prices in connection with determining the net
asset values of the Fund, and the Fund will reimburse the Administrator for its
share of the cost of such services based upon its actual use of the services for
the benefit of the Fund.

5. Proprietary and Confidential Information The Administrator agrees on
behalf of itself and its employees to treat confidentially and as proprietary,
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and not to use such records and
information for any purpose other than performance of their responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Administrator may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund. Waivers of
confidentiality are automatically effective without further action by the
Administrator with respect to Internal Revenue levies, subpoenas and similar
actions, or with respect to any request by the Fund.

6. Duties, Responsibilities and Limitation of Liability.

C-41
<PAGE>

(a) In the performance of its duties hereunder, the Administrator
shall be obligated to exercise due care and diligence and to act in good faith
in performing the services provided for under this Agreement. In performing its
services hereunder, the Administrator shall be entitled to rely on any oral or
written instructions, notices or other communications from the Fund and its
custodians, officers and directors, investors, agents, legal counsel and other
service providers which communications the Administrator reasonably believes to
be genuine, valid and authorized.

(b) Subject to the foregoing, the Administrator shall not be liable
for any error of judgment or mistake of law or for any loss or expense suffered
by the Fund, in connection with the matters to which this Agreement relates,
except for a loss or expense resulting from willful misfeasance, bad faith or
gross negligence on the Administrator's part in the performance of its duties or
from reckless disregard by the Administrator of its obligations and duties under
this Agreement. Any person, even though also an officer. director, partner,
employee or agent of the Administrator, who may be or become an officer,
director, partner, employee or agent of the Fund, shall be deemed when rendering
services to the Fund or acting on any business of the Fund (other than services
or business in connection with the Administrator's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an officer,
director, partner, employee or agent or person under the control or direction of
the Administrator even though paid by the Administrator. In no event shall the
Administrator be liable to the Fund or any other party for special or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits) even if the Administrator has been advised of such loss or
damage and regardless of the form of action.

(c) The Administrator shall not be responsible for, and the Fund
shall indemnify and hold the Administrator harmless from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities, except for a loss or expense resulting from willful
misfeasance, bad faith or gross negligence on the Administrator's part in the
performance of its duties or from reckless disregard by the Administrator of its
obligations and duties under this Agreement, arising out of or attributable to:

(i) All actions of the Administrator or its officers,
employers or agents required to be taken pursuant to this Agreement;

(ii) The reliance on or use by the Administrator or its
officers, employers or agents of information, records, or documents which are
received by the Administrator or its officers, employers or agents and furnished
to it or them by or on behalf of the Fund, and which have been prepared or
maintained by the Fund or its officers, employees or agents;

C-42
<PAGE>

(iii) The Fund's refusal or failure to comply with the terms
of this Agreement or the Fund's lack of good faith, or its actions, or lack
thereof, involving gross negligence or willful misfeasance;

(iv) The taping or other form of recording of telephone
conversations or other forms of electronic communications with other agents of
the Fund, its investors and shareholders, in accordance with applicable law, or
reliance by the Administrator on telephone or other electronic instructions of
any person acting on behalf of a shareholder or shareholder account reasonably
believed to be genuine for which telephone or other electronic services have
been authorized; and

(v) The offer or sale of shares by the Fund in violation of
any requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop order
or other determination or ruling by any Federal agency or any state agency with
respect to the offer or sale of such shares in such state resulting from
activities, actions, or omissions by the Fund or its officers, employees, or
agents prior to the effective date of this Agreement.

(d) The Administrator shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, reasonable
attorneys' fees and expenses, payments, expenses and liability arising out of or
attributable to the Administrator's refusal or failure to comply with the terms
of this Agreement; the Administrator's breach of any representation or warranty
made by it herein; or the Administrator's lack of good faith, or acts involving
gross negligence, willful misfeasance or reckless disregard of its duties
hereunder.

7. Term. The Administrator will start the provision of the services
contemplated by this Agreement on the date first hereinabove written or whenever
the current service provider ceases to provide its services and the operative
terms of the Agreement will be effective for a period of one (1) year from such
date, unless sooner terminated as provided herein. Thereafter, unless sooner
terminated as provided herein, this Agreement shall continue in effect from year
to year provided such continuance is specifically approved at least annually by
the Board. This Agreement is terminable, without penalty, by the Board or by the
Administrator, on not less than ninety (90) days' written notice. Except as
provided in Section 8 hereof, this Agreement shall automatically terminate upon
its assignment by the Administrator without the prior written consent of the
Fund. Upon termination of this Agreement, the Fund shall pay to the
Administrator such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is later.

8. Non-Assignability. This Agreement shall not be assigned by
either of the parties hereto without the prior consent in writing of the
other party; provided, however, that the Administrator may in its own
discretion and without limitation or prior consent of the Fund, whenever
and on such terms and conditions as it deems necessary or

C-43
<PAGE>

appropriate, enter into subcontracts, agreements and understandings with
non-affiliated third parties; provided, that such subcontract, agreement or
understanding shall not discharge the Administrator from its obligations
hereunder or delegation of duties to another third party.

9. Force Majeure. The Administrator shall not be responsible or liable for
any failure or delay in performance of its obligations under this Agreement. any
damages, loss of data, or any other loss whatsoever, arising out of or caused,
directly or indirectly, by circumstances beyond its control, including without
limitation, acts of God, earthquakes fires. floods, wars. civil or military
authority or governmental actions, nor shall any such failure or delay give the
Fund the right to terminate this Agreement, unless such failure or delay shall
result in the Fund's inability to comply with the requirements of state and
federal law. Administrator shall use its best efforts to minimize any such loss
of data or delay by all practicable steps. Administrator further agrees not to
discriminate against the Fund in favor of any other customer of Administrator in
making its computer time and personnel available to input and process
transactions hereunder when such a loss or delay occurs.

10. Use of Name. The Fund and the Administrator agree not to use the
other's name nor the names of such other's affiliates, designees or assignees in
any prospectus, sales literature or other printed material written in a manner
not previously expressly approved in writing by the other or such other's
affiliates, designees or assignees except where required by the SEC or any state
agency responsible for securities regulation.

11. Notice. Any notice required or permitted hereunder shall be
in writing to the parties at the following address (or such other address
as a party may specify by notice to the other):

If to the Fund: Analytic Optioned Equity Fund
700 South Flower Street
Los Angeles, CA 90017
Attention: _______________________

If to Administrator: UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Attn: Gary L. French, President

Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.

C-44
<PAGE>

12. Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.

13. Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

14. Successor and Assigns. The covenants and conditions herein
contained shall, subject to the provisions as to assignment, apply to and
bind the successors and assigns of the parties hereto.

15. Governing Law. This Agreement shall be governed by
Massachusetts law including its choice of law provisions.

16. Amendments. This Agreement may be modified or amended from time to
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date indicated above.

ANALYTIC OPTIONED EQUITY FUND, INC.

By: /s/ Harindra de Silva
----------------------------
Name: Harindra de Silva
Title: President

UAM FUND SERVICES, INC.

By: /s/ Michael DeFao
----------------------------
Name: Michael DeFao
Title: Vice President

C-45
<PAGE>

Attachment A

Fund Administration Services

Compliance

Prepare and update compliance manuals and procedures.

Assist in the training of portfolio managers, management and Fund accountants
concerning compliance manuals and procedures.

Monitor each Portfolio's compliance with investment restrictions (i.e. issuer or
industry diversification, etc.) listed in the current Prospectuses and Statement
of Additional Information. (Frequency - Daily)

Monitor each Portfolio's compliance with the requirements of Internal Revenue
Code (the "Code") Section 851 for qualification as regulated investment
companies. (Frequency - Monthly)

Calculate and recommend dividend and capital gain distributions in accordance
with distribution policies detailed in the Prospectuses. (Frequency - Determined
by Prospectus)

Prepare year-end dividend and capital gain distributions to establish Fund's
status as RIC under Section 4982 of the Code regarding minimum distribution
requirements. File Federal Excise Tax Return (Form 8613). (Frequency - Annually)

Mail quarterly requests for "Securities Transaction Reports" to the Fund's
Trustees/Directors and Officers and "access persons" under the terms of the
Fund's Code of Ethics and SEC regulations.

Monitor investment manager's compliance with Board directives such as "Approved
Issuers Listings for Repurchase Agreements" and provisions of Rule 2a-7 for
money market funds. (Frequency - Daily)

Review investments involving interests in any broker, dealer, underwriter or
investment adviser to ensure continued compliance with Section 12(d)(3) of the
1940 Act. (Frequency - Quarterly)

Monitor the Fund's brokerage allocation and prepare quarterly brokerage
allocation reports for Board meetings (consistent with reporting from the
current service provider).

C-46
<PAGE>

Reporting

Prepare agreed upon management reports and Board materials such as unaudited
financial statements, distribution summaries and deviations of mark-to-market
valuation and the amortized cost for money market funds.

Report Fund performance to outside services as directed by Fund management.

Prepare and file Fund's Semi-Annual Reports on Form N-SAR with the SEC.

Prepare and file Portfolio Federal tax returns along with all state and local
tax returns and State Expense Limitation returns, where applicable.

Prepare and coordinate printing of Fund's Semi-Annual and Annual Reports to
shareholders.

File copies of every report to shareholders with the SEC under Rule 30b2-1.

Notify shareholders as to what portion, if any, of the distributions made by the
Fund during the prior fiscal year were exempt-interest dividends under Section
852(b)(5)(A) of the Code.

Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees/Directors) to whom the Fund paid more than $600 during the year.

Prepare reports relating to the Fund's compliance with respect to Section 851 of
the Code.

Administration

Serve as officers of the Fund and attend Fund Board meetings.

Prepare Fund portfolio expense projections, establish accruals and review on a
periodic basis.

Expenses based on a percentage of Fund's average daily net assets (advisory and
administrative fees).

Expenses based on actual charges annualized and accrued daily (audit fees,
registration fees, directors' fees, etc.).

For new Portfolios, obtain Employer Identification Number and CUSIP number.

Estimate organization (offering) costs and monitor against actual disbursements.

C-47
<PAGE>

Provide financial information for Fund proxies and Prospectuses (Expense Table).

Coordinate all communications and data collection with regards to any regulatory
examinations and yearly audit by independent accountants.

Act as liaison to investment advisors concerning new products.

Legal Affairs

Assist with preparing and updating documents, such as Articles of
Incorporation/Declaration of Trust, foreign corporation qualification filings,
Bylaws and stock certificates.

Assist with updating and filing post-effective amendments to the Fund's
registration statement on Form N-1A and prepare supplements as needed.

Assist with preparing and filing Rule 24f-2 Notice.

Assist with preparing proxy materials and administer shareholder meetings.

Assist with the review of contracts between the Fund and its service providers
(must be sensitive to conflict of interest situations).

Research technical issues and questions arising out of a Fund's special status
under the tax and securities laws and monitor legal trends, developments and
changes.

Apprise and train management and staff with respect to important legal issues.

Prepare and maintain all state registrations and exemptions of the Fund's
securities including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and final
prospectus and statement of additional information, and increasing registered
amounts of securities in individual states.

Review and monitor fidelity bond and errors and omissions insurance coverage and
make any related regulatory filings.

Assist with preparation of agenda and Board materials, including materials
relating to contract renewals, for all Board meetings.

Assist with maintaining minutes of Board and shareholder meetings.

Act as liaison with Fund's distributor and outside Fund counsel: Coordinate and
monitor the work of outside counsel.

C-48
<PAGE>

Respond to questions from the investment advisors concerning legal
questions relating to investments.

C-49
<PAGE>

Attachment B

Domestic Fund Accounting Daily Reports

A) General Ledger Reports

1. Trial Balance Report
2. General Ledger Activity Report

B) Portfolio Reports

1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report

C) Pricing Reports

1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report

D) Accounts Receivable/Payable Reports

1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report

E) Other

1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal

C-50
<PAGE>

International Fund Accounting Daily Reports

A) General Ledger

1. Trial Balance Report
2. General Ledger Activity Report

B) Portfolio Reports

1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal

C) Currency Reports

1. Currency Purchase/Sales Journal
2. Currency Valuation Report

D) Pricing Reports

1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report

E) Accounts Receivable/Payable Reports

1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax

F) Other

1. Exchange Rate Report

C-51
<PAGE>

Monthly Fund Accounting Reports

A) Standard Reports

1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet

B) International Reports

1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report

C-52
<PAGE>

Attachment C

Fee Schedule to the Fund Administration Agreement

I. Base Fee Schedule

Fees for the services under the Fund Administration Agreement:

19 Basis Points on the 1st $200 million of total net assets of the Fund
11 Basis Points on the next $800 million of total net assets
7 Basis Points on total net assets over $1 billion up to $3 billion
5 Basis Points on total net assets over $3 billion

II. Fund-Specific Fee Schedule

All portfolios will be billed a fee of 6 Basis Points, in addition
to the Base fee in I. above.

III. Minimum Fee Schedule

All Portfolios will be billed per the above Fund-Specific Fee Schedule
plus an amount equal to the fees calculated under the Base fee schedule or
a minimum fee per the following schedule, whichever is greater:

Monthly Rate

1st 6 mos. $ 2,000
2nd 6 mos. $ 3,500
3rd 6 mos. $ 5,000
Thereafter $ 5,833

Except as otherwise indicated, all time periods are determined from the
date of a Portfolio's initial funding.

If a separate class of shares is added to an existing Portfolio, the
minimum annual fee would increase by $20,000. However, there would be no
extra charge for an additional class of shares where a Portfolio's fee
already exceeded the minimum applicable fee by $20,000.

These fees do not include out-of-pocket expenses, which under this
Agreement will be billed separately.

C-53

EXHIBIT 9.2

MUTUAL FUNDS SERVICE AGREEMENT

o FUND ADMINISTRATION SERVICES

o FUND ACCOUNTING SERVICES

o TRANSFER AGENCY SERVICES

ANALYTIC OPTIONED EQUITY FUND, INC.

MAY 16, 1997

C-54
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

Table of Contents

Section/Paragraph Page
- ----------------- ----

1. Appointment ........................................................ C-57

2. Representations and Warranties ..................................... C-58

3. Delivery of Documents .............................................. C-60

4. Services Provided .................................................. C-61

5. Fees; Expenses; Expense Reimbursement .............................. C-62

6 Proprietary and Confidential Information ........................... C-64

7. Duties, Responsibilities and Limitation of Liability ............... C-64

8. Term ............................................................... C-67

9. Notices ............................................................ C-67

10. Assignability ...................................................... C-68

11. Waiver ............................................................. C-68

12. Force Majeure ...................................................... C-69

13. Amendments ......................................................... C-69

14. Severability ....................................................... C-69

15. Governing Law ...................................................... C-69

Signatures ............................................................... C-69

C-55
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

Table of Contents (continued)

Section/Paragraph Page
- ----------------- ----

Schedule A -- Fees and Expenses ........................................ C-70

Schedule B -- Fund Administration Services Description ................. C-71

Schedule C -- Fund Accounting Services Description ..................... C-74

Schedule D -- Transfer Agency Services Description ..................... C-77

C-56
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

AGREEMENT made as of May 16, 1997 by and between UAM FUND SERVICES,
INC. ("UAMFSI"), a Delaware corporation, and CHASE GLOBAL FUNDS SERVICES COMPANY
("Chase"), a Delaware corporation.

W I T N E S S E T H:

WHEREAS, Analytic Optioned Equity Fund, Inc. (the "Fund") is
registered as an open-end management, investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and currently offers for sale
to investors its shares in several investment portfolios ("Portfolios") and
classes of such Portfolios ("Classes");

WHEREAS, UAMFSI is responsible for the provision of certain fund
administration, fund accounting and transfer agent services with respect to the
Fund pursuant to the Agreement between UAMFSI and the Fund dated , 1997 (the
"Administration Agreement"); and

WHEREAS, UAMFSI wishes to retain Chase to provide certain fund
administration, fund accounting and transfer agent services with respect to the
Fund, and Chase is willing to furnish such services;

NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. APPOINTMENT. UAMFSI hereby appoints Chase to provide certain fund
administration, fund accounting and transfer agent services for the Fund,
subject to the supervision of UAMFSI and the Board of Directors of the Fund (the
"Board"), for the period and on the terms set forth in this Agreement. Chase
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 5, of and Schedule A, to
this Agreement.

C-57
<PAGE>

2. REPRESENTATIONS AND WARRANTIES.

(a) Chase represents and warrants to UAMFSI that:

(i) Chase is a corporation existing under the laws of the
State of Delaware;

(ii) Chase is duly qualified to carry on its business in the
Commonwealth of Massachusetts;

(iii) Chase is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;

(iv) all requisite corporate proceedings have been taken to
authorize Chase to enter into and perform this Agreement;

(v) Chase has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;

(vi) Chase is registered as a transfer agent pursuant to
Section 17A of the Securities Exchange Act of 1934;

(vii) no legal or administrative proceedings have been
instituted or threatened which would impair Chase's ability to perform its
duties and obligations under this Agreement; and

(viii) Chase's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of Chase or any law or regulation applicable to Chase;

(b) UAMFSI represents and warrants to Chase that:

(i) UAMFSI is a corporation existing under the laws of the
State of Delaware;

(ii) UAMFSI is duly qualified to carry on its business in the
Commonwealth of Massachusetts;

(iii) UAMFSI is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;

C-58
<PAGE>

(iv) all requisite corporate proceedings have been taken to
authorize UAMFSI to enter into and perform this Agreement;

(v) UAMFSI has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;

(vi) no legal or administrative proceedings have been
instituted or threatened which would impair UAMFSI's ability to perform its
duties and obligations under this Agreement; and

(vii) UAMFSI's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of UAMFSI or any law or regulation applicable to UAMFSI;

(i) the Fund is a California corporation, duly organized and
existing and in good standing under the laws of the State of California;

(ii) the Fund is an investment company properly registered
under the 1940 Act;

(iii) a registration statement for the Fund under the
Securities Act of 1933, as amended ("1933 Act") and the 1940 Act on Form N-1A
has been filed and will be effective and will remain effective during the term
of this Agreement, and all necessary filings under the laws of the states will
have been made and will be current during the term of this Agreement; and

(iv) to the best of the Fund's knowledge, the Fund's
registration statements comply in all material respects with the Securities Act
of 1933 ("1933 Act") and the 1940 Act (including the rules and regulations
thereunder) and none of the Fund's prospectuses contain any untrue statement of
material fact or omit to state a material fact necessary to make the statements
therein not misleading.

C-59
<PAGE>

3. DELIVERY OF DOCUMENTS. UAMFSI will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and other
related information that Chase may reasonably request or require to properly
discharge its duties. Such documents may include but are not limited to the
following:

(a) Resolutions of the Fund's Board authorizing the appointment of
UAMFSI to provide certain fund administration, fund accounting and transfer
agency services to the Fund and approving this Agreement;

(b) UAMFSI's and the Fund's Articles of Incorporation;

(d) Authorization by the Fund contained in the Administration
Agreement allowing UAMFSI to make representations to Chase on its behalf;

(e) The Fund's Notification of Registration on Form N-8A under the
1940 Act, as filed with the Securities and Exchange Commission ("SEC");

(f) The Fund's registration statement including exhibits, as
amended, on Form N-1A (the "Registration Statement") under the 1933 Act and the
1940 Act, as filed with the SEC;

(g) Copies of the Investment Advisory Agreements between the Fund
and its investment advisers (the "Advisory Agreements");

(h) Opinions of counsel and auditors' reports;

(i) The Fund's Prospectus(es) and Statement(s) of Additional
Information relating to all Portfolios and all amendments and supplements
thereto (such Prospectus(es) and Statement(s) of Additional Information and
supplements thereto, as presently in effect and as from time to time hereafter
amended and supplemented, herein called the "Prospectuses"); and

(j) Such other agreements as the Fund may enter into from time to
time which may be relevant to the performance of Chase's duties and obligations
under the terms of this Agreement, including securities lending agreements,
futures and commodities account agreements, brokerage agreements, and options
agreements.

C-60
<PAGE>

4. SERVICES PROVIDED

(a) Chase will provide the following services subject to the
control, direction and supervision of UAMFSI and the Fund's Board and in
compliance with the objectives, policies and limitations set forth in the Fund's
Registration Statement, Articles of Incorporation and By-Laws; applicable laws
and regulations; and all resolutions and policies implemented by the Board:

(i) Fund Administration

(ii) Fund Accounting

(iii) Transfer Agency

A description of each of the above services is contained in Schedules B, C, and
D respectively, to this Agreement.

(b) Chase will also:

(i) provide office facilities with respect to the provision of
the services contemplated herein (which may be in the offices of Chase or a
corporate affiliate of Chase );

(ii) provide the services of individuals to serve as officers
of the Fund who will be designated by Chase with the approval of UAMFSI, and
elected by the Board;

(iii) provide or otherwise obtain personnel sufficient for
provision of the services contemplated herein;

(iv) furnish equipment and other materials, which Chase
believes are necessary or desirable for provision of the services contemplated
herein; and

(v) keep records relating to the services provided hereunder
in such form and manner as set forth in Schedules B, C and D in accordance with
the 1940 Act. To the extent required by Section 31 of the 1940 Act and the rules
thereunder, Chase agrees that all such records prepared or maintained by Chase
relating to the services provided hereunder are the property of UAMFSI and the
Fund and will be preserved for the periods prescribed under Rule 31a-2 under the
1940 Act, maintained at UAMFSI's and/or the Fund's expense, and made available
in accordance with such Section and rules. Chase further agrees to surrender
promptly to UAMFSI or the Fund upon its request and cease to retain in its
records and files those records

C-61
<PAGE>

and documents created and maintained by Chase pursuant to this Agreement, unless
otherwise required by law. Upon such request, Chase will surrender such records
in a mutually agreeable electronic format.

5. FEES; EXPENSES; EXPENSE REIMBURSEMENT.

(a) As compensation for the services rendered to the Fund and UAMFSI
pursuant to this Agreement, UAMFSI shall pay Chase monthly fees determined as
set forth in Schedule A to this Agreement. Such fees are to be billed monthly
and shall be due and payable upon receipt of the invoice. Upon any termination
of this Agreement before the end of any month, the fee for the part of the month
before such termination shall be prorated according to the proportion which such
part bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.

(b) For the purpose of determining fees calculated as a function of
the Fund's assets, the value of the Fund's assets and net assets shall be
computed as required by its currently effective Prospectus, generally accepted
accounting principles, and resolutions of the Fund's Board.

(c) Chase may, in its sole discretion, from time to time employ or
associate with such person or persons as may be appropriate to assist Chase in
the performance of this Agreement. Such person or persons may be officers and
employees who are employed or designated as officers by both Chase and the Fund.
The compensation of such person or persons for such employment shall be paid by
Chase and no obligation will be incurred by or on behalf of the Fund or UAMFSI
in such respect.

(d) UAMFSI may request additional services, additional processing,
or special reports on behalf of the Fund or itself. UAMFSI shall submit such
requests in writing together with such specifications and requirements
documentation as may be reasonably required by Chase. If Chase elects to provide
such services or arrange for their provision, it shall be entitled to reasonable
additional fees and expenses at its customary rates and charges, or such other
fees, if any, mutually agreed to by Chase and UAMFSI.

(e) Chase will bear all of its own expenses in connection with the
performance of the services under this Agreement except as otherwise expressly
provided herein. UAMFSI agrees to promptly reimburse Chase for any equipment and
supplies specially ordered by or for

C-62
<PAGE>

UAMFSI or the Fund through Chase and for any other expenses not contemplated by
this Agreement that Chase may incur on the Fund's and/or UAMFSI's behalf at the
Fund's and/or UAMFSI's request or as consented to by the Fund and/or UAMFSI,
provided that Chase will notify the Fund and/or UAMFSI of the approximate amount
of such expenses prior to incurring them. Such other expenses to be incurred in
the operation of the Fund and to be borne by the Fund and/or UAMFSI, include,
but are not limited to: taxes; interest; brokerage fees and commissions;
salaries and fees of officers and directors who are not officers, directors,
shareholders or employees of Chase, or the Fund's investment advisers or
distributor; SEC and state Blue Sky registration and qualification fees, levies,
fines and other charges; EDGAR filing fees, processing services and related
fees; advisory and administration fees; charges and expenses of pricing and data
services, independent public accountants and custodians; insurance premiums
including fidelity bond premiums; auditing and legal expenses; costs of
maintenance of corporate existence; expenses of typesetting and printing of
prospectuses for regulatory purposes and for distribution to current
shareholders of the Fund (the Fund's distributor to bear the expense of all
other printing, production, and distribution of prospectuses, statements of
additional information, and marketing materials); expenses of printing and
production costs of shareholders' reports and proxy statements and materials;
costs and expenses of Fund stationery and forms; costs and expenses of special
telephone and data lines and devices; costs associated with corporate,
shareholder, and Board meetings; trade association dues and expenses; and any
extraordinary expenses and other customary Fund expenses. In addition, Chase may
utilize one or more independent pricing services, approved from time to time by
the Fund's Board, to obtain securities prices and to act as backup to the
primary pricing services, in connection with determining the net asset values of
the Fund, and UAMFSI and/or the Fund will reimburse Chase for the Fund's share
of the cost of such services based upon the actual usage, or a pro-rata estimate
of the use, of the services for the benefit of the Fund.

(f) All fees, out-of-pocket expenses, or additional charges of Chase
shall be billed on a monthly basis and shall be due and payable upon receipt of
the invoice.

C-63
<PAGE>

Chase will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days of receipt shall bear interest
in finance charges equivalent to, in the aggregate, the Prime Rate (as
determined by Chase) plus two percent per year and all costs and expenses of
effecting collection of any such sums, including reasonable attorney's fees,
shall be paid by UAMFSI to Chase.

In the event that UAMFSI is more than sixty (60) days delinquent in
its payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by UAMFSI),
this Agreement may be terminated upon thirty (30) days' written notice to UAMFSI
by Chase. UAMFSI must notify Chase in writing of any contested amounts within
thirty (30) days of receipt of a billing for such amounts. Disputed amounts are
not due and payable while they are being disputed. The fees set forth in
Schedule A may be changed from time to time upon agreement of the parties.

6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Chase agrees on behalf of
itself and its employees to treat confidentially and as proprietary information
of the Fund, all records and other information relative to the Fund's prior,
present or potential shareholders, and to not use such records and information
for any purpose other than performance of Chase's responsibilities and duties
hereunder. Chase may seek a waiver of such confidentiality provisions by
furnishing reasonable prior notice to the Fund and UAMFSI and obtaining approval
in writing from the Fund and UAMFSI, which approval shall not be unreasonably
withheld and may not be withheld where Chase may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities. Waivers of confidentiality are
automatically effective without further action by Chase with respect to Internal
Revenue Service levies, subpoenas and similar actions, or with respect to any
request by the Fund or UAMFSI.

7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY.

(a) In the performance of its duties hereunder, Chase shall be
obligated to act in good faith in performing the services provided for under
this Agreement. In performing its

C-64
<PAGE>

services hereunder, UAMFSI represents and warrants that Chase shall be entitled
to rely on any oral or written instructions, notices or other communications,
including electronic transmissions, from UAMFSI and the Fund and its custodians,
officers and directors, investors, agents, legal counsel and other service
providers which Chase reasonably believes to be genuine, valid and authorized,
and that Chase shall also be entitled to consult with and rely on the advice and
opinions of outside legal counsel retained by UAMFSI and/or the Fund, as
necessary or appropriate. Also, Chase shall be entitled to rely on any
financial, regulatory, tax or other records or information provided by the Fund
or third parties prior to the date of this Agreement without verification by
Chase.

(b) Chase shall not be liable for any error of judgment or mistake
of law or for any loss or expense suffered by the Fund or UAMFSI, in connection
with the matters to which this Agreement relates, except for a loss or expense
solely caused by or resulting from willful misfeasance, bad faith or gross
negligence on Chase's part in the performance of its duties or from reckless
disregard by Chase of its obligations and duties under this Agreement. Any
person, even though also an officer, director, partner, employee or agent of
Chase, who may be or become an officer, director, partner, employee or agent of
the Fund, shall be deemed when rendering services to the Fund or acting on any
business of the Fund (other than services or business in connection with Chase's
duties hereunder) to be rendering such services to or acting solely for the Fund
and not as an officer, director, partner, employee or agent or person under the
control or direction of Chase even though paid by Chase. In no event shall Chase
be liable to the Fund, UAMFSI or any other party for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if Chase has been advised of the likelihood of such loss
or damage and regardless of the form of action.

(c) Subject to Paragraph 7 (b) above, Chase shall not be responsible
for, and UAMFSI shall indemnify and hold Chase harmless from and against, any
and all losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities arising out of or attributable to:

(i) all actions of Chase or its officers or agents required to
be taken pursuant to this Agreement;

C-65
<PAGE>

(ii) the reliance on or use by Chase or its officers or agents
of information, records, or documents which are received by Chase or its
officers or agents and furnished to it or them by or on behalf of UAMFSI and/or
the Fund, and which have been prepared or maintained by UAMFSI and/or the Fund
or any third party on behalf of UAMFSI and/or the Fund;

(iii) UAMFSI's refusal or failure to comply with the terms of
this Agreement or UAMFSI's lack of good faith, or its actions, or lack thereof,
involving negligence or willful misfeasance;

(iv) the breach of any representation or warranty of UAMFSI
hereunder;

(v) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors and
shareholders, or reliance by Chase on telephone or other electronic instructions
of any person acting on behalf of a shareholder or shareholder account for which
telephone or other electronic services have been authorized;

(vi) the reliance on or the carrying out by Chase or its
officers or agents of any proper instructions reasonably believed to be duly
authorized, or requests of the Fund or UAMFSI, or recognition by Chase of any
share certificates which are reasonably believed to bear the proper signatures
of the officers of the Fund and the proper countersignature of any transfer
agent or registrar of the Fund;

(vii) any delays, inaccuracies, errors in or omissions from
data provided to Chase by data, pricing and/or corporate action services;

(viii) the offer or sale of shares by the Fund in violation of
any requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop order
or other determination or ruling by any Federal agency or any state agency with
respect to the offer or sale of such shares in such state (1) resulting from
activities, actions, or omissions by the Fund or its other service providers and
agents, or (2) existing or arising out of activities, actions or omissions by or
on behalf of the Fund prior to the effective date of this Agreement;

C-66
<PAGE>

(ix) any failure of the Fund's registration statement to
comply with the 1933 Act and the 1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or any untrue statement of a material
fact or omission of a material fact necessary to make any statement therein not
misleading in a Fund's prospectus; and

(x) the actions taken by UAMFSI, its investment advisers, and
its distributor in compliance with applicable securities, tax, commodities and
other laws, rules and regulations, or the failure to so comply.

8. TERM. This Agreement shall become effective on the date first
hereinabove written and shall continue for an initial term of one year, unless
sooner terminated, as provided herein. Thereafter, unless so terminated, this
Agreement shall continue in effect from year to year provided such continuance
is specificially approved by UAMFSI. This Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto. This Agreement
may be terminated by either party on 90 days' prior written notice; subject to
renegotiation after the initial term. Upon termination of this Agreement, UAMFSI
shall pay to Chase such compensation and any out-of-pocket or other reimbursable
expenses which may become due or payable under the terms hereof as of the date
of termination or after the date that the provision of services ceases,
whichever is later.

9. NOTICES. Any notice required or permitted hereunder shall be in
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):

If to UAMFSI:

UAM Fund Services, Inc.
211 Congress Street, 4th Floor
Boston, MA 02110
Attention: Gary L. French, President
Fax: (617) 542-7440

If to Chase:

Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
Attention: Karl O. Hartmann, General Counsel
Fax: (617) 557-8616

C-67
<PAGE>

Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon confirmed
receipt of telex or facsimile, whichever occurs first.

10. ASSIGNABILITY. This Agreement shall not be assigned by either of the
parties hereto without the prior consent in writing of the other party;
provided, however, that Chase may in its own discretion and without limitation
or prior consent of the Fund or UAMFSI, whenever and on such terms and
conditions as Chase deems necessary or appropriate, subcontract, delegate or
assign its rights, duties, obligations and liabilities to subsidiaries or
affiliates of Chase; provided, further, that any such subcontract, agreement or
understanding shall not discharge Chase or its affiliates or subsidiaries, as
the case may be, from its obligations hereunder. Similarly, Chase or its
affiliated subcontractor, designee, or assignee may at its discretion, without
notice to the Fund or UAMFSI, enter into such subcontracts, agreements and
understandings, whenever and on such terms and conditions as Chase or they deem
necessary or appropriate to perform services hereunder, with non-affiliated
third parties; provided, that such subcontract, agreement or understanding shall
not discharge Chase, or its subcontractor, designee, or assignee, as the case
may be, from Chase's obligations hereunder. Chase or its affiliated
subcontractor, designee, or assignee shall, however, be discharged from Chase's
obligations hereunder, if UAMFSI, the Fund or its sponsor, investment advisers
or distributor require Chase or its affiliated subcontractor, designee, or
assignee to enter into any subcontract, agreement or understanding to perform
services hereunder with any non-affiliated third party; and UAMFSI shall
indemnify and hold harmless Chase and its affiliated subcontractor, designee, or
assignee from and against, any and all losses, damages, costs, reasonable
attorneys' fees and expenses, payments, expenses and liabilities arising out of
or attributable to such subcontract, agreement or understanding.

11. WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.

C-68
<PAGE>

12. FORCE MAJEURE. Chase shall not be responsible or liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its control,
including without limitation, acts of God, earthquakes, fires, floods, wars,
acts of civil or military authorities, or governmental actions, nor shall any
such failure or delay give the Fund the right to terminate this Agreement.

13. AMENDMENTS. This Agreement may be modified or amended from time to
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.

14. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.

15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK, INCLUDING THE DETERMINATION OF WHEN AN
"ASSIGNMENT" HAS OCCURRED.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.

UAM FUND SERVICES, INC.

By: /s/ Gary L. French
--------------------

Name: Gary L. French
-----------------

Title: President
----------------

CHASE GLOBAL FUNDS
SERVICES COMPANY

By: /s/ B. Dagnall
--------------------

Name: /s/ B. Dagnall
-----------------

Title: President
----------------

C-69
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

SCHEDULE A
FEES AND EXPENSES

Fees for Fund Accounting, Fund Administration, and Transfer Agency Services
for Analytic Optioned Equity Fund, Inc. and all other UAM affiliated mutual
funds for which Chase provides services (the "Funds")

o 19 Basis Points on the first $200 million of total net assets of the
Funds,

o 11 Basis Points on the next $800 million of total net assets of the
Funds,

o 7 Basis Points on the next $2 billion of total net assets of the Funds,

o 5 Basis Points on total net assets of the Funds in excess of $3 billion.

A minimum annual fee of $70,000 per Portfolio will apply and shall be phased in
according to the following schedule:

o $2,000 per month per Portfolio for the first six months of service,

o $3,500 per month per Portfolio for the second six months of service,

o $5,000 per month per Portfolio for the third six months of service,

o $5,833 per month per Portfolio thereafter.

All Portfolios will have an additional minimum annual charge of $20,000 per
Portfolio class of shares. However, there will be no extra charge for an
additional class of shares where the Portfolio's fees already exceed the minimum
applicable fee by $20,000.

These fees do not include out-of-pocket expenses, which under the terms of this
Agreement will be billed monthly and due upon billing. In addition to the
out-of-pocket expenses set forth in Section 5(e), there will be a charge of
$35.00 per hour for services relating to option tax accounting.

C-70
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES

I. Financial and Tax Reporting

A. Prepare agreed upon management reports and Board of Directors
materials such as unaudited financial statements and distribution
summaries.

B. Report Fund performance to outside services as directed by Fund
management or UAMFSI.

C. Calculate dividend and capital gain distributions in accordance
with distribution policies detailed in the Fund's
prospectus(es). Assist UAMFSI in making final determinations of
distribution amounts.

D. Estimate and recommend year-end dividend and capital gain
distributions necessary to establish the Portfolio's status as a
regulated investment company ("RIC") under Section 4982 of the
Internal Revenue Code of 1986, as amended (the "Code") regarding
minimum distribution requirements.

E. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along
with all state and local tax returns where applicable. Prepare and
file Federal Excise Tax Return (Form 8613).

F. Prepare and file Fund's Form N-SAR with the SEC.

G. Prepare and coordinate printing of Fund's Semiannual and Annual
Reports to Shareholders.

H. Notify shareholders as to what portion, if any, of the distributions
made by the Fund's during the prior fiscal year were exempt-interest
dividends under Section 852 (b)(5)(A) of the Code.

I. Provide Form 1099-MISC to persons other than corporations (i.e.,
Directors to whom the Fund paid more than $600 during the year).

J. Prepare and file California State Expense Limitation Report, if
applicable.

K. Provide financial information for Fund proxies and prospectuses
(Expense Table).

C-71
<PAGE>

II. Portfolio Compliance

A. Assist with monitoring each Portfolio's compliance with investment
restrictions (e.g., issuer or industry diversification, etc.) listed
in the current prospectus(es) and Statement(s) of Additional
Information, although primary responsibility for such compliance
shall remain with the Fund's investment adviser or investment
manager.

B. Assist with monitoring each Portfolio's compliance with the
requirements of Section 851 of the Code for qualification as a RIC
(i.e., 90% Income, 30% Income - Short Three, Diversification Tests)
and provide reports regarding such compliance although primary
responsibility for such compliance shall remain with the Fund's
investment adviser or investment manager.

C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, and Rule 12d-3 procedures, although primary
responsibility for such compliance shall remain with the Fund's
investment adviser or investment manager.

D. Mail quarterly requests for "Securities Transaction Reports" to the
Fund's Directors and Officers and "access persons" under the terms
of the Fund's Code of Ethics and SEC regulations.

E. Prepare and update compliance manuals and procedures.

III. Regulatory Affairs and Corporate Governance

A. Prepare and file post-effective amendments to the Fund's
registration statement on Form N-1A and supplements as needed.

B. Prepare and file proxy materials and administer shareholder
meetings.

C. Prepare and file all state registrations of the Fund's securities
including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement
and final prospectus and statement of additional information, and
increasing registered amounts of securities in individual states.

D. Prepare Board materials for all Board meetings.

E. Assist with the review and monitoring of fidelity bond and errors
and omissions insurance coverage and make any related regulatory
filings.

F. Prepare and update documents such as charter document, by-laws,
foreign qualification filings.

C-72
<PAGE>

G. Prepare and file Rule 24f-2 Notice.

H. Assist in identifying and monitoring pertinent regulatory and
legislative developments which may affect the Fund and, in
response to the results of such monitoring, coordinate and
provide support to UAMFSI, the Fund and the Fund's investment
adviser with respect to those developments and results, including
support with respect to routine regulatory examinations or
investigations of the Fund, and with respect to such matters, to
work in conjunction with outside counsel, auditors and other
professional organizations engaged by the Fund.

I. File copies of financial reports to shareholders with the SEC
under Rule 30b2-1.

J. Liaison with the Fund's Distributor and outside counsel.

IV. General Administration

A. Furnish officers of the Fund, subject to reasonable UAMFSI and
Board approval.

B. Prepare Fund or Portfolio expense projections, establish accruals
and review on a periodic basis, including expenses based on a
percentage of Fund's average daily net assets (advisory and
administrative fees) and expenses based on actual charges annualized
and accrued daily (audit fees, registration fees, directors' fees,
etc.).

C. For new Portfolios, obtain Employer or Taxpayer Identification
Number and CUSIP numbers. Estimate organizational costs and
expenses and monitor against actual disbursements.

D. Coordinate all communications and data collection with regard to
any regulatory examinations and yearly audits by independent
accountants.

C-73
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

SCHEDULE C
GENERAL DESCRIPTION OF FUND ACCOUNTING SERVICES

I. General Description

Chase shall provide the following accounting services to the Fund:

A. Maintenance of the books and records and accounting controls for
the Fund's assets, including records of all securities
transactions;

B. Calculation of each Portfolio's Net Asset Value in accordance
with the prospectus and once the Portfolio meets eligibility
requirements, transmission to NASDAQ and to such other entities
as directed by the Fund and/or UAMFSI;

C. Accounting for dividends and interest received and distributions
made by the Fund;

D. Production of transaction data, financial reports and such other
periodic and special reports as UAMFSI and/or the Board may
reasonably request;

E. Liaison with the Fund's independent auditors; and

F. A listing of reports that will be available to UAMFSI and the
Fund is included below.

II. Domestic Fund Accounting Daily Reports

A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report

B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report

C-74
<PAGE>

C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report

D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report

E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal

III. International Fund Accounting Daily Reports

A. General Ledger
1. Trial Balance Report
2. General Ledger Activity Report

B. Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal

C. Currency Reports
1. Currency Purchase /Sales Journal
2. Currency Valuation Report

D. Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report

C-75
<PAGE>

E. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax

F. Other Reports
1. Exchange Rate Report

IV. Monthly Fund Accounting Reports

A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report

B. International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report

C-76
<PAGE>

MUTUAL FUNDS SERVICE AGREEMENT

SCHEDULE D
GENERAL DESCRIPTION OF TRANSFER AGENCY SERVICES

The following is a general description of the transfer agency
services Chase shall provide to the Fund.

A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address, appropriate tax
certification and tax identifying number; (ii) number of shares of
each Portfolio and/or Class; (iii) historical information including,
but not limited to, dividends paid and date and price of all
transactions, including individual purchases and redemptions, with
appropriate supporting documents; and (iv) any dividend reinvestment
order, application, dividend to a specific address and
correspondence relating to the current maintenance of the account.

B. Shareholder Issuance. Record the issuance of shares of common stock
of each Portfolio and/or Class and notify the Fund in case any
proposed issue of shares by the Fund shall result in an over-issue
as identified by Section 8-104(2) of the Uniform Commercial Code and
in case any issue would result in such an over-issue, shall refuse
to countersign and issue, and/or credit, said shares. Except as
specifically agreed in writing between Chase and the Fund, Chase
shall have no obligation when countersigning and issuing and/or
crediting shares to take cognizance of any other laws relating to
the issue and sale of such shares except insofar as policies and
procedures of the Stock Transfer Association recognize such laws.

C. Purchase Orders. Process all orders for the purchase of shares of
the Fund in accordance with the Fund's current prospectus, including
electronic transmissions, which the Fund acknowledges it has
authorized. Upon receipt of any check or other payment for purchase
of shares of the Fund from an investor, Chase will (i) stamp the
order or other documentation with the date and time of receipt, (ii)
forthwith process the same for collection, (iii) determine the
amounts thereof due the Fund, and notify the Fund of such
determination and deposit, such notification to be given on a daily
basis of the total amounts determined and deposited to the Fund's
custodian bank account during such day. Chase shall then credit the
share account of the investor with the number of Fund shares to be
purchased according to the price of the Fund's shares in effect for
purchases made on the date such payment is received by Chase, as set
forth in the Fund's current prospectus and shall promptly mail a
confirmation of said purchase to the investor, all subject to any
instructions which the Fund may give to Chase with respect to the
timing or manner of acceptance of orders for shares relating to
payments so received by it. Any purchase order received by Chase,
which is deemed not in good order by Chase, will be rejected
immediately.

C-77
<PAGE>

D. Redemption Orders. Receive and stamp with the date and time of
receipt all requests for redemptions or repurchase of shares held in
certificate or non-certificate form, and process redemptions and
repurchase requests as follows: (i) if such certificate or
redemption request complies with the applicable standards approved
by the Fund, Chase shall on each business day notify the Fund of the
total number of shares presented and covered by such requests
received by Chase on such day; (ii) on or prior to the seventh
calendar day succeeding any such requests received by Chase, Chase
shall notify the Custodian, subject to instructions from the Fund,
to transfer monies to such account as designated by Chase for such
payment to the redeeming shareholder of the applicable redemption or
repurchase price; and (iii) if any such certificate or request for
redemption or repurchase does not comply with applicable standards,
Chase shall promptly notify the investor of such fact, together with
the reason therefor, and shall effect such redemption at the
Portfolio's price next determined after receipt of documents
complying with said standards or, at such other time as the Fund
shall so direct.

E. Telephone Orders. Process redemptions, exchanges and transfers of
Fund shares upon telephone instructions from qualified shareholders
in accordance with the procedures set forth in the Fund's current
prospectus. Chase shall be permitted to redeem, exchange and/or
transfer Fund shares from any account for which such services have
been authorized, including electronic transmissions.

F. Transfer of Shares. Upon receipt by Chase of documentation in proper
form to effect a transfer of shares, including in the case of shares
for which certificates have been issued, the share certificates in
proper form for transfer, Chase will register such transfer on the
Fund's shareholder records maintained by Chase pursuant to
instructions received from the transferor in good form, cancel the
certificates representing such shares, if any, and if so requested,
countersign, register, issue and mail by first class mail new
certificates for the same or a smaller whole number of shares.

G. Shareholder Communications. Address and mail all communications by
the Fund to its shareholders promptly following the delivery by the
Fund of the material to be mailed.

H. Proxy Materials. Prepare shareholder lists, mail and certify as to
the mailing of proxy materials, receive the tabulated proxy cards,
render periodic reports to the Fund on the progress of such
tabulation, and provide the Fund with inspectors of election at any
meeting of shareholders.

I. Share Certificates. If a shareholder of the Fund requests a
certificate representing his shares, Chase as Transfer Agent, will
countersign and mail, a share certificate to the investor at his/her
address as it appears on the Fund's transfer books. Chase shall

C-78
<PAGE>

supply, at the expense of the Fund a supply of blank share
certificates. The certificates shall be properly signed, manually or
by facsimile, as authorized by the Fund, and shall bear the Fund's
seal or facsimile; and notwithstanding the death, resignation or
removal of any officers of the Fund authorized to sign certificates,
Chase may, until otherwise directed by the Fund, continue to
countersign certificates which bear the manual or facsimile
signature of such officer.

J. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, Chase will take
such steps, including redepositing the check for collection,
returning the check to the investor, or redeeming appropriate shares
as Chase may, at its discretion, deem appropriate and notify the
Fund of such action, or as the Fund may instruct. However, the Fund
remains ultimately liable for any returned checks of its
shareholders.

K. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such
other shareholder correspondence as may from time to time be
mutually agreed upon.

L. Tax Reporting. Chase shall issue appropriate shareholder tax forms
on an annual basis.

M. Escheatment. All Fund assets shall be subject to the escheatment
laws of the Commonwealth of Massachusetts, including those which
relate to reciprocal agreements with other states.

N. Dividend Disbursing. Chase will serve as the Fund's dividend
disbursing agent. Chase will prepare and mail checks, place wire
transfers and credit income and capital gain payments to
shareholders. UAMFSI and/or the Fund will advise Chase of the
declaration of any dividend or distribution and the record and
payable date thereof at least five (5) days prior to the record
date. Chase will, on or before the payment date of any such dividend
or distribution, notify the Fund's Custodian of the estimated amount
required to pay any portion of such dividend or distribution payable
in cash, and on or before the payment date of such distribution, the
Fund will instruct its Custodian to make available to Chase
sufficient funds for the cash amount to be paid out. If a
shareholder is entitled to receive additional shares by virtue of
any such distribution or dividend, appropriate credits will be made
to each shareholder's account.

C-79

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to (a) the use in this Post-Effective No. 27 to Registration
Statement No. 2-60792 on Form N-1A of our report dated February 10, 1997 on the
statement of assets and liabilities of The Analytic Optioned Equity Fund, Inc.,
including the schedule of investments, as of December 31, 1996, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended appearing in Part
B, the Statement of Additional Information of such Registration Statement, (b)
the reference to us under the heading "Financial Highlights" in the Prospectus,
which are a part of such Registration Statement, and (c) the reference to us
under the headings "Independent Auditors" and "Financial Statements" in the
Statement of Additional Information of such Registration Statement.

DELOITTE & TOUCHE LLP
Los Angeles, California
August 21, 1997

C-80

<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 41,954,586
<INVESTMENTS-AT-VALUE> 53,950,561
<RECEIVABLES> 276,543
<ASSETS-OTHER> 1,204,459
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 55,431,563
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,947,759
<TOTAL-LIABILITIES> 2,947,759
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41,491,019
<SHARES-COMMON-STOCK> 3,648,722
<SHARES-COMMON-PRIOR> 3,216,021
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 405
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,992,380
<NET-ASSETS> 52,483,804
<DIVIDEND-INCOME> 1,060,436
<INTEREST-INCOME> 229,685
<OTHER-INCOME> 0
<EXPENSES-NET> (596,021)
<NET-INVESTMENT-INCOME> 694,100
<REALIZED-GAINS-CURRENT> 2,783,447
<APPREC-INCREASE-CURRENT> 3,607,945
<NET-CHANGE-FROM-OPS> 7,085,492
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (700,644)
<DISTRIBUTIONS-OF-GAINS> (2,598,524)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 865,241
<NUMBER-OF-SHARES-REDEEMED> 624,996
<SHARES-REINVESTED> 192,456
<NET-CHANGE-IN-ASSETS> 9,836,195
<ACCUMULATED-NII-PRIOR> 6,544
<ACCUMULATED-GAINS-PRIOR> (184,518)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 363,576
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 649,224
<AVERAGE-NET-ASSETS> 48,476,807
<PER-SHARE-NAV-BEGIN> 13.26
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 1.87
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> (0.75)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.38
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>