BURNHAM FUND INC, 485APOS, 1999-02-18

BURNHAM FUND INC
485APOS, 1999-02-18

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As filed with the Securities and Exchange Commission on February 18, 1999

Registration File Nos. 2-17226, 811-994

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

PRE-EFFECTIVE AMENDMENT NO. [ ]

POST-EFFECTIVE AMENDMENT NO. 67 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]

AMENDMENT NO. 29 [X]

(Check appropriate box or boxes)

BURNHAM INVESTORS TRUST
(Exact Name of Registrant as Specified in Charter)

1325 AVENUE OF THE AMERICAS, 26TH FLOOR
NEW YORK, NEW YORK 10019
(Address of Principal Executive Offices) (Zip Code)

(800) 874-FUND
(Registrant's Telephone Number, Including Area Code)

JON M. BURNHAM
1325 AVENUE OF THE AMERICAS, 26TH FLOOR
NEW YORK, NEW YORK 10019
(Name and Address of Agent for Service)

COPY TO:

PAMELA J. WILSON, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109

It is proposed that this filing will become effective (check appropriate box):

______ immediately upon filing pursuant to paragraph (b)
______ on (date) pursuant to paragraph (b)
______ 60 days after filing pursuant to paragraph (a)(1)
______ on (date) pursuant to paragraph (a)(1)
______ 75 days after filing pursuant to paragraph (a)(2)
X on May 3, 1999 pursuant to paragraph (a)(2) of Rule 485
______
<PAGE>

<PAGE>

This Post-Effective Amendment No. 67 to the Registration Statement of
The Burnham Fund Inc., a Maryland corporation (the "Maryland Corporation"), is
being filed by Burnham Investors Trust, a Delaware business trust (the "Delaware
Trust"), pursuant to Rule 414(d) and Rule 485(a) under the Securities Act of
1933, as amended, for the purpose of the Delaware Trust adopting the Maryland
Corporation's Registration Statement. The Delaware Trust is requesting that the
effective date of this Post-Effective Amendment be 9:00 a.m. on May 3, 1999
which is the start of business on the first business date after the Maryland
Corporation is scheduled to be reorganized as a Delaware business trust.

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

ADOPTION OF REGISTRATION STATEMENT

The Delaware Trust hereby affirmatively adopts the Registration
Statement (File Nos. 2-17226 and 811-994) of the Maryland Corporation effective
as of 9:00 a.m. on May 3, 1999.

May __, 1999

Prospectus

A family of mutual funds that aims to give investors the tools to build prudent
investment portfolios

Burnham Dow 30 Focused Fund
Burnham Fund
Burnham Financial Services Fund BURNHAM INVESTORS TRUST
Burnham Small Cap Value Fund
Burnham Money Market Fund

As with all mutual funds the Securities and Exchange Commission has not judged
whether these funds are good investments or whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.

[LOGO]
Burnham
INVESTORS TRUST

The information in this prospectus (or Statement of Additional Information)
is not complete and may be changed. We may not sell until the registration
statement filed with the Securities and Exchange Commission is effective.
This prospectus (or Statement of Additional Information) is not an offer
to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

Each of the Burnham funds has its own risk profile, so be sure to read this
prospectus carefully before investing in any of the funds.

Mutual funds are not bank accounts and are neither insured nor guaranteed by the
FDIC or any other government agency. An investment in any mutual fund entails
the risk of losing money.

[LOGO]

Introducing
the Burnham Funds

TABLE OF CONTENTS

<TABLE>
<S> <C>
I THE FUNDS .................................................................1

Profiles of the principal strategies and risks of each fund

BURNHAM DOW 30 FOCUSED FUND ...............................................4

BURNHAM FUND ..............................................................8

BURNHAM FINANCIAL SERVICES FUND ..........................................12

BURNHAM SMALL CAP VALUE FUND .............................................16

BURNHAM MONEY MARKET FUND ................................................20

II YOUR ACCOUNT .............................................................26

Instructions and information on investing in the funds

PURCHASE AND REDEMPTION

FLOW CHART ...............................................................26

CHOOSING A SHARE CLASS ...................................................27

PURCHASING SHARES ........................................................29

TRANSACTION POLICIES .....................................................30

HOW TO EXCHANGE AND REDEEM SHARES ........................................31

TRANSACTION POLICIES:

REDEMPTION AND EXCHANGE OF SHARES ........................................32

TAX CONSIDERATIONS and DISTRIBUTIONS .....................................33

III FINANCIAL HIGHLIGHTS .....................................................35

Fund performance data

WHERE TO GET MORE INFORMATION

..................................................................back cover
</TABLE>

Burnham
Dow 30 Focused
Fund

Is this fund for you?

Burnham Dow 30 Focused Fund
is best suited to investors who:

Are investing for the long term

Seek capital appreciation from a portfolio of DJIA stocks

Want to increase their exposure to the largest U.S. companies

Are comfortable with price volatility

Portfolio manager

David Leibowitz has the primary day-to-day responsibility for the fund's
portfolio since its inception. Mr. Liebowitz is a Managing Director of
Burnham Asset Management Corp. and Burnham Securities Inc.

This fund's goal is non-fundamental and may be changed without shareholder
approval.

GOAL AND INVESTMENT STRATEGY
- --------------------------------------------------------------------------------

The fund's goal is capital appreciation.

The fund pursues its goal by investing in stocks represented in the Dow Jones
Industrial Average (DJIA). The fund also invests in closely related securities,
called DJIA equivalents, including:

Securities such as DIAMONDS, which represent percentage interests in a
basket of all 30 DJIA stocks.

Derivatives that are based on U.S. stock indices or on individual DJIA
stocks. Derivatives are a type of investment whose value is determined by
underlying securities or market indices.

The fund will invest approximately 50% of its assets passively in DJIA stocks or
DJIA equivalents in proportions that approximately match the composition of the
DJIA.

How the fund selects securities

The fund manages its remaining assets actively. The fund may continue to hold
stocks that have been dropped from the DJIA. The fund may also emphasize or
overweight certain DJIA companies that appear to have the following
characteristics:

Low price-earnings (P/E) ratios

Attractive cash flows

Higher actual and projected dividends

Above-average growth rates relative to P/E ratios

Perceived momentum in earnings growth

What are DIAMONDS?

DIAMONDS are shares of a publicly traded unit investment trust that owns the
stocks of the DJIA in the same proportion as represented in the DJIA. DIAMONDS
trade on the American Stock Exchange at approximately 99/100th of the value of
the DJIA. DIAMONDS have certain operational expenses that are deducted from the
dividends paid to DIAMOND investors.

4 BURNHAM INVESTORS TRUST

In both parts of the portfolio, the fund may invest in DJIA equivalents rather
than DJIA stocks in order to:

Maintain liquidity

Facilitate trading

Reduce transaction costs

Take advantage of relative bargains

Under normal conditions, the fund intends to remain fully invested. In
extraordinary circumstances, the fund may invest up to 25% of assets in cash or
cash equivalents. In such circumstances, the fund would be assuming a temporary
defensive position and would not be pursuing its goal.

MAIN RISKS
- --------------------------------------------------------------------------------

The main risk of this fund is a downturn in the stock market, and particularly
in the Dow Jones Industrial Average.

Any of the following situations could cause the fund to lose money or
underperform in comparison with its peer group:

Blue-chip stocks could fall out of favor with the market, especially in
relation to small-capitalization stocks.

DJIA companies in the fund's portfolio could fail to achieve earnings
estimates or other market expectations, causing their stock prices to drop.
If the fund overweights its investment in any such company, it could suffer
disproportionately higher losses.

DJIA equivalents could underperform DJIA stocks because of weak price
correlation.

The fund's management strategy, or other stock selection methods, could
prove to be less successful than anticipated.

Investments in derivatives could magnify any of the fund's gains or losses.

Non-Diversification

The fund is non-diversified and may invest a larger portion of its assets in the
securities of a single issuer than diversified funds. An investment in the fund
could go up and down in value more than an investment in a diversified fund.

[dow jones industrial average]

The Dow Jones Industrial Average is the oldest continuing stock market average
in the world. The companies in it are household names and represent about
one-sixth of the market value of the U.S. stock market. Unlike a market index,
the DJIA is weighted by share price rather than market capitalization. Each day,
the prices of one share of each company in the average are totaled. Then,
instead of simply dividing by 30 to get an average, the total is multiplied by a
special divisor calculated to compensate for stock splits and similar events
that would otherwise distort the average.

The composition of the DJIA changes from time to time, as determined by the
editors of The Wall Street Journal. Dow Jones & Company, Inc. has no connections
with or obligations to the adviser or the fund.

Companies in the DJIA as of 12/31/98:
AlliedSignal Inc.
Aluminum Co. of America
American Express Co.
AT & T Corp.
Boeing Co.
Caterpillar Inc.
Chevron Corp.
CitiGroup Inc.
Coca-Cola Co.
DuPont Co.
Eastman Kodak Co.
Exxon Corp.
General Electric Co.
General Motors Corp.
Goodyear Tire & Rubber Co.
Hewlett-Packard Co.
International Business Machines Corp.
International Paper Co.
J.P. Morgan & Co.
Johnson & Johnson
McDonald's Corp.
Merck & Co.
Minnesota Mining & Manufacturing Co.
Philip Morris Cos.
Procter & Gamble Co.
Sears, Roebuck & Co.
Union Carbide Corp.
United Technologies Corp.
Wal-Mart Stores Inc.
Walt Disney Co.

BURNHAM INVESTORS TRUST 5

PAST PERFORMANCE
- --------------------------------------------------------------------------------

No past performance data is available yet for this new fund. Next year's
prospectus will provide the information here

Returns for Shares

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
.00%
-5.00%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year-to-Date Returns xx%

Best Quarter xx% in xnd quarter of 19xx

Worst Quarter xx% in xnd quarter of 19xx

BURNHAM INVESTORS TRUST 6

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

The table below describes the fees and expenses you could expect as an investor
in this fund. Shareholder Transaction Expenses are one-time expenses charged
directly to you. Annual Fund Operating Expenses come out of fund assets, and are
reflected in the fund's total return.

Fee Table

<TABLE>
<S> <C>
Shareholder Transaction Expenses
% of transaction amount

Maximum Redemption Fee 1.00%
charged only when selling shares which have been
owned for less than six months

Annual Fund Operating Expenses
% of average daily net assets

Management fees 0.60%
Distribution (12b-1) fees 0.25%
Other expenses (before expense reimbursement)(1) 0.97%

Total Annual Fund Operating Expenses 1.82%
(before expense reimbursement)

Because the adviser has agreed to cap the annual fund's
operating expenses, its net of reimbursement expenses are projected to be:

Management fees 0.60%
Distribution (12b-1) fees 0.25%
Other expenses(1) (after expense reimbursement) 0.35%

Total annual fund operating expenses (net of reimbursement) 1.20%
</TABLE>

This cap may be changed or dropped at any time.

(1) Other expenses are based on estimated amounts for the current fiscal year.

Expenses Example

This example shows what you could pay in expenses over time. It uses the same
hypothetical assumptions as other mutual fund prospectuses:

$10,000 original investment
5% annual return
No changes in operating expenses
Reinvestment of all dividends and distributions

The figures in the example would be the same whether you sold your shares at the
end of the period or kept them. Because actual return and expenses may be
different, this example is for comparison purposes only.

Understanding Shareholder Expenses

Redemption fees

Fees used to discourage short-term market timers from engaging in frequent
purchases and redemptions. This practice can disrupt the fund's investment
program and result in additional transaction costs that are borne by all
shareholders of the fund. (The fund is intended for investors with a long-term
investment outlook.)

Understanding Fund Expenses

Management fees

Fees paid to the adviser for the supervision of the fund's investment program.

Rule 12b-1 fees

Under SEC Rule 12b-1, mutual funds may use some of their assets to pay
commissions to brokers, other marketing expenses and shareholder service fees.
You should take 12b-1 fees into account when choosing a fund and share class.

Other expenses

Fees paid by the fund for miscellaneous items such as transfer agency,
custodian, professional and registration fees.

6 BURNHAM INVESTORS TRUST

Burnham Fund

Is this fund for you? Ticker Symbol: BURHX

Burnham Fund is best suited to investors who:

Want the relative stability of investments in large-capitalization
companies with some of the growth opportunities of smaller companies

Seek capital growth and income with a focus on risk management

Are investing for the long term.

Portfolio manager

Jon M. Burnham has had primary day-to-day responsibility for the fund's
portfolio since 1995. Mr. Burnham is president, chief executive officer and a
trustee of the fund and the chairman and chief executive officer of the adviser
and distributor.

GOAL AND INVESTMENT STRATEGY
- --------------------------------------------------------------------------------

The fund seeks capital appreciation, mainly long-term: income is generally
of lesser importance.

The fund pursues its goal by investing in a diverse portfolio of common stocks.
The fund will invest predominately in large-capitalization companies.

How the fund selects securities

In managing the fund's stock portfolio, the manager first uses sector research,
which focuses on selecting the industries the fund will invest in (top-down
research). The fund seeks to reduce risk by diversifying across many different
industries and economic sectors. In the past, the fund has tended to favor the
following sectors:

Consumer durables
Energy
Finance
Pharmaceuticals
Technology

The fund may emphasize different sectors in the future.

In selecting individual stocks, the manager looks for companies that appear to
have the following characteristics:

Potential for sustained earnings growth of at least 15%-20% per year

Product leadership and strong management teams that focus on enhancing
shareholder value

Companies with histories of paying regular dividends

Securities that appear undervalued by the market or that seem to be poised
to benefit from restructuring or similar business changes

Although the fund typically favors large "blue-chip" companies, it will consider
opportunities in medium- and small-capitalization companies that meet its
selection criteria.

Other investments

The fund may also invest in debt securities of any maturity,
duration or credit rating (including junk bonds) from any government or
corporate issuer. The fund generally invests in short- to medium-term corporate
bonds and maintains an average portfolio credit rating of A.

8 BURNHAM INVESTORS TRUST

The fund may invest without limit in dollar denominated foreign securities but
only up to 15% of assets in non-dollar foreign securities.

The fund may make limited investments in derivative instruments. Derivatives are
a type of investment whose value is based on other securities or market indices.

Under normal conditions, the fund intends to remain fully invested. In
extraordinary conditions, the fund may invest in cash or short-term investment
grade debt securities. In such circumstances, the fund would be assuming a
temporary defensive position and would not be pursuing its goal.

MAIN RISKS
- --------------------------------------------------------------------------------

The main risk of this fund is a downturn in the stock market, and particularly
in stock of large-capitalization companies. The fund's investments in debt
securities are most significantly affected by changes in interest rates.

Any of the following situations could cause the fund to lose money or
underperform in comparison with its peer group:

Any of the categories of securities that the fund emphasizes--
large-capitalization stocks or particular sectors--could fall
out of favor with the market.

Companies in the fund's portfolio could fail to achieve earnings estimates
or other market expectations, causing their stock prices to drop.

A bond issuer could be downgraded in credit rating or go into default. The
risk of default and the price volatility associated with it are greater for
junk bonds.

If any of the fund's bonds are redeemed substantially earlier or later than
expected, performance could suffer.

Investments in derivatives could magnify any of the fund's gains or losses.

Foreign investments present additional risks compared with domestic
investments. These may include:

Unfavorable currency exchange rates

Inadequate financial information

Political and economic upheavals

These risks are greater in emerging markets.

Definition of
large-capitalization stocks

Large-capitalization stocks (commonly known as "blue-chip") are usually issued
by well established companies. These companies maintain a sound financial base
and offer a variety of product lines and businesses. As compared with
smaller-capitalization companies, securities of large companies historically
have involved less market risk and lower long-term market returns. Their stock
prices tend to rise and fall less dramatically than those of
smaller-capitalization companies.

BURNHAM INVESTORS TRUST 9

PAST PERFORMANCE
- --------------------------------------------------------------------------------

The charts in this section illustrate the fund's historic pattern of returns and
price volatility from several perspectives. All mutual funds present this
information so that you can compare funds more readily. Bear in mind that past
performance is not a guarantee of future performance.

The bar chart shows the fund's annual total returns for the last ten years.
Returns for the fund's single best and single worst quarters give some
indication of how widely short-term performance has varied. These figures would
be lower if they reflected sales charges and account fees.

Returns for Class A Shares

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
.00%
-5.00%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
22.75% (1.76%) 17.98% 7.70% 9.35% (1.77%) 24.45% 17.60% 24.74% 22.08%

Best Quarter 21.07% in 4th quarter of 1998
Worst Quarter (13.36%) in 3rd quarter of 1998

The table presents the fund's average annual returns over 1, 5 and 10 years and
the life of the fund along with those of recognized U.S. common stock and bond
indices. The fund's performance figures assume that all distributions were
reinvested in the fund. The performance calculations reflect the deduction of
the maximum sales charges and annual fund operating expenses.

Average Annual Returns

<TABLE>
<CAPTION>
For the following periods ending 12/31/98 1 years 5 years 10 years Since inception*
<S> <C> <C> <C> <C>
Class A shares 15.98 15.77 13.30 13.75

Class B shares 17.16 16.07 N/A 15.06**

S & P 500 Index 28.58 24.05 19.20 N/A

Lehman Bros Gov't/Corporate Bond Index 9.47 7.30 9.33 N/A
</TABLE>

*6/16/75
**10/18/93

Note: The S&P 500 Index is an unmanaged index of the common stocks of 500 large
U.S. companies. The Lehman Brothers Government/Corporate Bond Index of U.S.
government and corporate bonds. Performance figures for the indices do not
include the costs of investment.

10 BURNHAM INVESTORS TRUST

Understanding Shareholder Expenses

Front End Sales Charge

An amount charged for the sale of some fund shares, usually sold by a broker or
sales professional. A sales charge or load is reflected in the asked offering
price.

Asked or Offering Price

The price at which the fund's shares may be purchased. The asked or offering
price includes the current net asset value plus any sales charge.

Contingent Deferred Sales Charge

A fee imposed when shares are redeemed during the first few years of ownership.
Please refer to "Choosing a Share Class" on page 27 for further information on
alternative purchase arrangements.

Understanding Fund Expenses

Management Fees

Fee paid to the Investment Adviser for the supervision of the Fund's investment
program.

Rule 12b-1 fees
Under SEC Rule 12b-1, mutual funds may use some of their assets to pay
commissions to brokers and other marketing expenses. You should take 12b-1
fees into account when choosing a fund and share class, since it is possible
for accumulated 12b-1 fees on one share class to exceed the front-end load on
another share class.

Other Expenses

Fees paid by the fund for miscellaneous items such as, transfer agency,
custodian, professional fees and registration fees.

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

The table below describes the fees and expenses you could expect as an investor
in this fund. Shareholder Transaction Fees are one-time expenses charged
directly to you. Annual Fund Operating Expenses come out of fund assets, and are
reflected in the fund's total return.

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- -------------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Transaction Expenses
% of transaction amount
Maximum Front-end Sales Charge (Load) 5.00% None
% of offering price
Maximum Contingent Deferred Sales Charge None 5.00%
% of offering price or the amount you receive
when you sell shares, whichever is less

Annual Fund Operating Expenses (as a percentage of average
net assets)

Management Fees 0.60% 0.60%
Distribution and/or Service (12b-1) Fees 0.25% 1.00%
Other Expenses (before expense reimbursement) 0.51% 0.81%
- -------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.36% 2.41%

Because the adviser has agreed to cap the funds' annual
operating expenses, it's net of reimbursement expenses are
projected to be:
Management Fees 0.60% 0.60%
Distribution (12b-1) Fees 0.25% 1.00%
Other Expenses (after expense reimbursement) 0.45% 0.70%
-----------------------------------------------------------------------------------
Total Annual Fund Operating Expenses (net of reimbursement) 1.30% 2.30%
</TABLE>

This cap may be changed or dropped at any time.

Expense Example

This example shows what you could pay in expenses over time.
It uses the same hypothetical assumptions as other mutual fund prospectuses:

$10,000 original investment
5% annual return
No changes in operating expenses
Reinvestment of all dividends and distributions

<TABLE>
<CAPTION>
1 year 3 year 5 year 10 year
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ 632 $ 909 $ 1,207 $ 2,053
Class B with redemption $ 644 $1,051 $ 1,485 $ 2,485
Class B without redemption $ 244 $ 751 $ 1,285 $ 2,485
</TABLE>

Because actual return and expenses may be different, this example is for
comparison purposes only. 10 year figures for Class B shares assume the
conversion to Class A shares after eight years.

BURNHAM INVESTORS TRUST 11

Burnham
Financial Services
Fund

Is this fund for you?

Burnham Financial Services Fund is best suited to investors who:

Are investing for the long term

Wish to increase their exposure in the financial services sector

Seek potentially more rapid capital growth than might be achieved in a
sector-diversified fund

Are comfortable with the likelihood of increased price volatility

Subadviser

Mendon Capital Advisors Corp. is a registered investment adviser
incorporated in the State of Delaware. The subadviser has been providing
investment advisory services focused in the financial services industry
to private investment companies since 1996.

Portfolio manager

Anton V. Schutz has had the primary day-to-day responsibility for the fund's
portfolio since its inception. Mr. Schutz is the President of Mendon Capital
Advisors Corp. and Vice President of Burnham Securities Inc.

This fund's goal is non-fundamental and may be changed without shareholder
approval.

GOAL AND INVESTMENT STRATEGY
- --------------------------------------------------------------------------------

The fund seeks capital appreciation.

The fund pursues its goals by investing at least 75% of assets in stocks of U.S.
companies in the financial services sector. The fund considers all of the
following as part of this sector:

Banks and thrifts

Securities brokers and dealers

Investment management and advisory firms

Insurance companies

Specialty finance companies

Financial conglomerates

Publicly traded, government-sponsored financial intermediaries

Any company that derives at least 50% of its revenues from doing business
with financial services companies, such as a financial software company

How the fund selects securities

In selecting stocks, the fund uses a combination of growth and value strategies.
The fund seeks growth stocks of companies with the following characteristics:

Capable management

Attractive business niches

Sound financial and accounting practices

Demonstrated ability to sustain growth in revenues, earnings and cash flow

Although the fund may invest in companies of any size, it typically focuses on
those with assets of $10 billion or less. The fund generally intends to invest
in U.S. companies, but it may also invest up to 10% of assets in foreign
securities.

The fund looks for opportunities to purchase value stocks of companies that
appear to be:

Undervalued based on their balance sheets or individual circumstances

Temporarily distressed

Poised for a merger or acquisition

This stock selection strategy may lead the fund to concentrate its investments
in a few regions of the U.S.

12 BURNHAM INVESTORS TRUST

Other investments

The fund may invest up to 25% of assets in:

Companies outside the financial services sector

Debt securities of any maturity, duration, or credit rating (including junk
bonds) from any government or corporate issuer, U.S. or foreign

The fund may use derivatives (a type of investment whose value is based on other
securities or market indices) to hedge against market changes or as a substitute
for securities transactions. It may also use derivatives in attempts to profit
from anticipated market movements.

Under normal conditions, the fund intends to remain fully invested. In
extraordinary circumstances, the fund may invest extensively in cash or
short-term investment-grade debt securities. In such circumstances, the fund
would be assuming a temporary defensive position and would not be pursuing its
goal.

MAIN RISKS
- --------------------------------------------------------------------------------

The main risk of this fund is the performance of the stock market and the level
of interest rates. Because this fund concentrates its investments in one sector
of the economy, investors should expect greater volatility than in a fund that
invests across several sectors.

Any of the following situations could cause the fund to lose money or
underperform in comparison with its peer group:

An adverse event could disproportionately affect the financial services
sector.

Rising interest rates increase the cost of financing to, and reduce the
profitability of companies in the financial services sector.

Any of the categories of securities that the fund emphasizes--financial
services companies and companies with less than $10 billion in market
capitalization--could fall out of favor.

Companies in the fund's portfolio could fail to achieve earnings estimates
or other market expectations, causing their stock prices to drop.

Investments in derivatives could magnify any of the fund's gains or losses.

A bond issuer could be downgraded in credit quality or go into default. The
risk of default and the price volatility associated with it are greater for
junk bonds.

Foreign investments present additional risks compared with domestic
investments. These may include:

Unfavorable exchange rates

Inadequate financial information

Political and economic upheavals

These risks are greater in emerging markets.

Why invest in financial companies?

DEMOGRAPHICS

The largest consumers of financial services are those in the 45 to 64 age group,
which is projected to grow significantly over the next 20 years.

CONSOLIDATION

The currently consolidation trend in the financial services sector presents
investment opportunities.

DEREGULATION

Deregulation of the financial services industry is enabling firms to enter a
wider variety of financial service businesses.

GLOBALIZATION

Increasing globalization provides opportunities for foreign firms to expand
their businesses in the financial services sector.

SPECIALIZATION

Financial service providers are "unbundling" financial products to meet customer
needs, provide profit opportunities and expand their markets.

BURNHAM INVESTORS TRUST 13

PAST PERFORMANCE
- --------------------------------------------------------------------------------

No past performance data is available yet for this new fund. Next year's
prospectus will provide the information here

Returns for Class A Shares

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
.00%
-5.00%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year-to-Date Returns xx%

Best Quarter xx% in xnd quarter of 19xx

Worst Quarter xx% in xnd quarter of 19xx

14 BURNHAM INVESTORS TRUST

Understanding Shareholder Expenses

Front End Sales Charge

An amount charged for the sale of some fund shares, usually sold by a broker or
sales professional. A sales charge or load is reflected in the asked offering
price.

Asked or Offering Price

The price at which the fund's shares may be purchased. The asked or offering
price includes the current net asset value plus any sales charge.

Contingent Deferred Sales Charge

A fee imposed when shares are redeemed during the first few years of ownership.
Please refer to "Choosing a Share Class" on page 27 for further information on
alternative purchase arrangements.

Understanding Fund Expenses

Management Fees

Fee paid to the Investment Adviser for the supervision of the Fund's investment
program.

Rule 12b-1 fees

Under SEC Rule 12b-1, mutual funds are permitted to use up to 1% of fund assets
to pay commissions to brokers and other marketing expenses. You should take
12b-1 fees into account when choosing a fund and share class, since it is
possible for accumulated 12b-1 fees on one share class to exceed the front-end
load on another share class.

Other Expenses

Fees paid by the fund for miscellaneous items such as, transfer agency,
custodian, professional and registration fees.

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

The table below describes the fees and expenses you could expect as an investor
in this fund. Shareholder fees are one-time expenses charged directly to you.
Annual Fund Operating Expenses come out of fund assets, and are reflected in the
fund's total return.

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- --------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Transaction Expenses

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average
net assets)

Management Fees 0.75 0.75
Distribution Fees 0.25 1.00
Other Expenses (before expense reimbursement) 1.02% 2.27%
- --------------------------------------------------------------------------------
Total Operating Expenses 2.02% 4.02%

Because the adviser has agreed to cap the annual fund's
operating expenses,its net of reimbursement expenses are
projected to be:

Management Fees 0.75% 0.75%
Distribution (12b-1) Fees 0.25% 1.00%
Other Expenses(1) (after expense reimbursement) 0.60% 0.55%
- --------------------------------------------------------------------------------
Total annual fund operating expenses (net of reimbursement) 1.60% 2.30%
</TABLE>

This cap may be changed or dropped at any time.
(1) Other expenses are based on estimated amounts for the current fiscal year.

Expense Example

This example show what you could pay in expenses over time.
It uses the same hypothetical assumptions as other mutual fund prospectuses:

$10,000 original investment
5% annual return
No changes in operating expenses
Reinvestment of all dividends and distributions

<TABLE>
<CAPTION>
1 year 3 years
- --------------------------------------------------------------
<S> <C> <C>
Class A $ 695 $ 1,102

Class B with redemption 804 1,524

Class B without redemption 404 1,224
</TABLE>

Because actual return and expenses may be different, this example is for
comparison purposes only.

BURNHAM INVESTORS TRUST 15

Burnham
Small Cap Value
Fund

Is this fund for you?

Burnham Small Cap Fund is best suited to investors who:

Are investing for the long term

Want to increase their exposure to small-capitalization companies

Seek potentially more rapid growth than might be achieved in a
larger-capitalization fund

Are comfortable with increased price volatility

Portfolio manager

Jon M. Burnham has had primary day-to-day responsibility for the fund's
portfolio since it's inception. Mr. Burnham is president, chief executive
officer and a trustee of the fund and the chairman and chief executive officer
of the adviser.

This fund's goal is non-fundamental and may be changed without shareholder
approval.

GOAL AND INVESTMENT STRATEGY
- --------------------------------------------------------------------------------

The fund seeks capital appreciation.

The fund pursues its goal by investing in stocks of U.S. and foreign companies
with market capitalizations of $1.____ billion or less. These stocks may trade
on exchanges or over-the-counter (OTC).

How the fund selects securities

In managing its portfolio, the fund emphasizes individual stock selection. Using
a value-oriented strategy, the fund initially seeks to identify a pool of
companies with the potential for long term capital appreciation that are
currently unrecognized by or temporarily out of fashion with the market.

Its research methods include the following:

Fundamental analysis of company balance sheets
On-site visits
Interviews with senior management
Data from research firms, electronic databases and relevant technical
journals

In deciding which companies to invest in, the fund looks for a specific catalyst
that the manager believes will spur share price growth. These catalysts might
include:

Increased investor attention
Asset sales
Corporate restructuring
Upswing in a business or industry cycle
Innovation, such as a new product introduction
Favorable regulatory changes

Other investments

The fund may invest up to 20% of assets in:

Stocks of companies with market capitalizations of more than $1.____
billion.

Derivatives, which are a type of investment whose value is based on
underlying securities or indices

16 BURNHAM INVESTORS TRUST

The fund may use derivatives to hedge against market changes or as a substitute
for securities transactions. It may also use derivatives in attempts to profit
from anticipated market movements.

MAIN RISKS
- --------------------------------------------------------------------------------

The main risk of this fund is the performance of the stock market. Because the
fund concentrates its investments in small capitalization companies, investors
should expect greater volatility than in a fund that invests in large
capitalization companies.

Any of the following situations could cause the fund to lose money or
underperform in comparison with its peer group:

Small-capitalization stocks could fall out of favor with the market,
particularly in comparison with large- or medium-capitalization stocks.

Investments in derivatives could magnify any of the fund's gains or losses.
Derivatives can also make the fund's portfolio less liquid and harder to
value, especially in a declining market.

Foreign investments present additional risks compared with domestic
investments. These may include:

Unfavorable currency exchange rates
Inadequate financial information
Political and economic upheavals

These risks are greater in emerging markets.

Non-Diversification

Definition of small-
capitalization companies

There are thousands of publicly traded companies with assets under $1 billion in
the U.S. alone. Small companies are often volatile, with the potential for rapid
growth and equally rapid decline. Many small companies are young and have yet to
prove their ability to sustain growth. They are generally more vulnerable to
business setbacks because of small product lines, niche markets, and limited
financial resources. In a declining market, these stocks may be harder to sell,
which may further depress their prices.

Why invest in small-
capitalization value stocks?

Small-capitalization stocks offer the potential for superior long-term
performance.

Small-capitalization value stocks have historically tended to outperform
small-cap growth stocks over the long term.

Current market valuations appear to favor small-capitalization stocks.

The absence of investment analysts in the smaller market capitalization
stocks magnifies market inefficiencies. This makes the fund's performance
more dependent on the manager's proprietary research.

BURNHAM INVESTORS TRUST 17

PAST PERFORMANCE
- --------------------------------------------------------------------------------

No past performance data is available yet for this new fund. Next year's
prospectus will provide the information here

Returns for Class A Shares

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
.00%
-5.00%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year-to-Date 6/16/75 Returns xx%

Best Quarter xx% in xnd quarter of 19xx

Worst Quarter xx% in xnd quarter of 19xx

18 SMALL CAP VALUE FUND

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

The table below describes the fees and expenses you could expect as an investor
in this fund. Shareholder Transaction Fees" are one-time expenses charged
directly to you. Annual Fund Operating Expenses come out of fund assets, and are
reflected in the fund's total return.

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- --------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Transaction Expenses

Maximum Front-end Sales Charge (Load) 5.00% None
% of offering price
Maximum Contingent Deferred Sales Charge None 5.00%
% of offering price or the amount you receive
when you sell shares, whichever is less
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a percentage of average
net assets)

Management Fees 1.00% 1.00%
Distribution Fees 0.25% 1.00%
Other Expenses (before expense reimbursement)(1) 0.84% 2.11%
- --------------------------------------------------------------------------------
Total Operating Expenses 2.09% 4.11%

Because the adviser has agreed to cap the annual fund's
operating expenses, its net of reimbursement expenses are
projected to be:

Management Fees 1.00% 1.00%
Distribution (12b-1) Fees 0.25% 1.00%
Other Expenses(1) (after expense reimbursement) 0.35% 0.30%

Total annual fund operating expenses (net of reimbursement) 1.60%* 2.30%*
</TABLE>

This cap may be changed or dropped at any time.
(1) Other expenses are based on estimated amounts for the current fiscal year.

Expense Example

This example show what you could pay in expenses over time.
It uses the same hypothetical assumptions as other mutual fund prospectuses:

$10,000 original investment
5% annual return
No changes in operating expenses
Reinvestment of all dividends and distributions

<TABLE>
<CAPTION>
1 year 3 year
- -----------------------------------------------------------------------
<S> <C> <C>
Class A $701 $1,122
Class B with redemption $813 1,550
Class B without redemption $413 1,250
</TABLE>

Understanding Shareholder Expenses

Front End Sales Charge

An amount charged for the sale of some fund shares, usually sold by a broker or
sales professional. A sales charge or load is reflected in the asked offering
price.

Asked or Offering Price

The price at which the fund's shares may be purchased. The asked or offering
price includes the current net asset value plus any sales charge.

Contingent Deferred Sales Charge

A fee imposed when shares are redeemed during the first few years of ownership.
Please refer to "Choosing a Share Class" on page 27 for further information on
alternative purchase arrangements.

Understanding Fund
Expenses

Management Fees

Fee paid to the Investment Adviser for the supervision of the Fund's investment
program.

Rule 12b-1 fees

Under SEC Rule 12b-1, mutual funds may use some of their assets to pay
commissions to brokers and other marketing expenses. You should take 12b-1
fees into account when choosing a fund and share class, since it is possible
for accumulated 12b-1 fees on one share class to exceed the front-end load on
another share class.

Other Expenses

Fees paid by the fund for miscellaneous items such as, transfer agency,
custodian, professional fees and registration fees.

BURNHAM INVESTORS TRUST 19

Burnham
Money Market
Fund

Is this fund for you?

Burnham Money Market Fund is best suited to investors who:

Seek to preserve capital

Are seeking a temporary holding place for investments

Are investing for the short term

Seeking the highest possible income available from short-term securities

Subadviser

Reich & Tang Asset Management L.P. was formed in 1994. Reich & Tang manages
discretionary equity and money market assets, principally for institutional
clients. The subadviser's investment philosophy is oriented toward the
preservation of capital and long-term appreciation.

This fund's goal is non-fundamental and may be changed without shareholder
approval.

GOAL AND INVESTMENT STRATEGY
- --------------------------------------------------------------------------------

The fund's goal is maximum current income that is consistent with maintaining
liquidity and preserving capital.

The fund is managed to maintain a stable $1.00 share price. The fund invests
only in dollar-denominated money market securities of the highest short-term
credit quality. Each security must have a remaining maturity of 13 months or
less. The fund's average weighted maturity will not exceed 90 days. Its yield
will go up and down with changes in short-term interest rates.

How the fund selects securities

In managing the portfolio, the subadviser looks for securities that appear to
offer the best relative value based on analysis of their:

Credit quality

Interest rate sensitivity

Yield

Price

Definition of a money market fund

A money-market fund is a pool of assets investing in U.S. dollar denominated
short-term debt obligations. Because of the high degree of safety they provide,
money market funds typically offer the lowest return of any type of mutual fund.

20 BURNHAM INVESTORS TRUST

An investment committee meets weekly to determine the fund's portfolio strategy
based on interest rates, credit quality and performance. The primary function of
the committee is to develop an approved list of securities that satisfy the
credit criteria, guidelines and objectives established for the fund. From time
to time, the fund may emphasize, or overweight, its investments in particular
types of issuers or maturities to increase current yields.

The fund may invest in certain foreign securities: dollar-denominated money
market securities of foreign issuers, foreign branches of U.S. banks, and U.S.
branches of foreign banks.

MAIN RISKS
- --------------------------------------------------------------------------------

The main risk of this fund is the level of short-term interest rates. If
short-term interest rates rise steeply, the prices of money market securities
could fall and threaten the $1.00 share price that the fund tries to maintain.

Any of the following situations could cause the fund to lose money or under
perform in comparison with its peer group:

An issuer could be downgraded in credit quality or go into default.

Foreign securities present additional risks compared with domestic
investments. These may include:

Inadequate financial information

Political and economic upheavals

An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency. Although the fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the fund.

Money market fund yield

The fund's current yield reflects the relationship between the fund's current
level of annual income and its price on a particular day.

Types of fund investments in money market securities.

U.S. TREASURY BILLS

Debt obligations sold by the U.S. Treasury that mature in one year or less and
are backed by the U.S. government.

AGENCY NOTES

Debt obligations of U.S. government agencies.

CERTIFICATES OF DEPOSIT

Receipts for funds deposited at banks that guarantee a fixed interest rate over
a specified time period.

REPURCHASE AGREEMENTS

Contracts, usually involving U.S. government securities, whereby one party sells
and agrees to buy back securities at a fixed price on a designated date.

BANKER'S ACCEPTANCES

Bank-issued commitments to pay for merchandise sold in the import/export market.

COMMERCIAL PAPER COMPANIES

Unsecured notes that typically issue to finance current operations and expenses.

MEDIUM-TERM NOTES

Unsecured corporate debt obligations that are continuously offered in a range of
maturities and structures.

BURNHAM FUND 21

PAST PERFORMANCE
- --------------------------------------------------------------------------------

No past performance data is available yet for this new fund. Next year's
prospectus will provide the information here

Returns for Class A Shares

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
.00%
-5.00%
1988 1989 1990 1991 1992 1993 1994 1995 1996 1998

Year-to-Date 6/16/75 Returns xx%

Best Quarter xx% in xnd quarter of 19xx

Worst Quarter xx% in xnd quarter of 19xx

22 BURNHAM FUND

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

The table below describes the fees and expenses you could expect as an investor
in this fund. Shareholder Transaction Fees are one-time expenses charged
directly to you. Annual Fund Operating Expenses" come out of fund assets, and
are reflected in the fund's total return.

Fee Table

<TABLE>
<S> <C>
Shareholder Transaction Expenses NONE
(% of transaction amount)
Annual Fund Operating Expenses
(% of average daily net assets)
Management Fees 0.45%
Distribution (12b-1) Fee NONE
Other Expenses (before expense reimbursement)(1) 0.52%

Total Annual Fund Operating Expenses 0.97%
- --------------------------------------------------------------------------------
* Because the adviser has agreed to cap the annual fund's
operating expenses, its net of reimbursement expenses are
projected to be:

Management Fees .45%
Distribution (12b-1) Fees NONE
Other Expenses(1) (after expense reimbursement) .43%

Total Annual Fund Operating Expenses (net of reimbursement) .88%
</TABLE>

This cap may be changed or dropped at any time.
(1) Other expenses are based on estimated amounts for the current fiscal year.

Expense Example

This example show what you could pay in expenses over time.
It uses the same hypothetical assumptions as other mutual fund prospectuses:

$10,000 original investment
5% annual return
No changes in operating expenses
Reinvestment of all dividends and distributions

Understanding Fund Expenses

Management Fees

Fee paid to the Investment Adviser for the supervision of the Fund's investment
program.

Other Expenses

Fees paid by the fund for miscellaneous items such as, transfer agency,
custodian, professional and registration fees.

BURNHAM INVESTORS TRUST 23

The Investment
Adviser

The funds' investment adviser is Burnham Asset Management Corporation, 1325
Avenue of the Americas, New York, NY 10019.

The adviser is responsible for economic research, industry and company analysis,
portfolio recommendations and all investment decisions. In return for these
services, the adviser receives a fee from each fund as described in the table
below.

<TABLE>
<CAPTION>
Fund Fee as a % of average
daily NAV
- -------------------------------------------------------------
<S> <C>
Burnham Dow 30 Focused Fund 0.60%
- -------------------------------------------------------------
Burnham Fund 0.60%
- -------------------------------------------------------------
Burnham Financial Services Fund 0.75%
- -------------------------------------------------------------
Burnham Small Cap Value Fund 1.00%
- -------------------------------------------------------------
Burnham Money Market Fund 0.45%
- -------------------------------------------------------------
</TABLE>

Total annual operating expenses of these funds are
capped (see table below), which may reduce the
adviser's fee. These agreements are temporary and may
be terminated or changed any time.

<TABLE>
<CAPTION>
Fund Operating expense cap
as a % of average daily NAV
- -------------------------------------------------------------
Class A Shares Class B Shares
-------------- --------------
<S> <C> <C>
Burnham Dow 30 Focused Fund 1.20% n/a
- -------------------------------------------------------------------------------
Burnham Fund 1.30% 2.30%
- -------------------------------------------------------------------------------
Burnham Financial Services Fund 1.60% 2.30%
- -------------------------------------------------------------------------------
Burnham Small Cap Value Fund 1.60% 2.30%
- -------------------------------------------------------------------------------
Burnham Money Market Fund 0.88% n/a
- -------------------------------------------------------------------------------
</TABLE>

YEAR 2000 (Y2K) COMPLIANCE

The inability of many older computer systems to recognize the year 2000 is
expected to have an impact on world financial markets, but no one can predict
how much. The adviser has taken steps to ensure that its systems are or will be
Y2K-compliant. It has also obtained assurances from its partners and vendors
that they are taking similar steps.

THE INVESTMENT ADVISOR 24

<PAGE>

Your Account

As an investor, you have flexibility in choosing a share class, setting up your
account, making exchanges between funds and withdrawing money from your account.
The chart below provides a broad overview of the various options available. It
is important to read the detailed information that follows so that you will
understand all of the factors--including tax liability, sales charges, and
transaction volume--that should influence your investment decisions.

PURCHASE AND REDEMPTION FLOW CHART
- --------------------------------------------------------------------------------
$$$
3 WAYS TO PURCHASE SHARES

DIRECT PURCHASE* PURCHASE* AUTOMATIC
THROUGH DEALER INVESTMENT PROGRAM

CLASS A SHARES
SALES CHARGE AT PURCHASE 5 FUNDS TO CHOOSE FROM:
$$

BURNHAM FUND DOW 30 FOCUSED FUND
FINANCIAL SERVICES FUND MONEY MARKET FUND
SMALL CAP VALUE FUND

2 classes available 1 class available

Class A shares or Class B shares Single class shares
[FRONT-END SALES CHARGE] [BACK-END SALES CHARGE] [NO SALES CHARGE]

CLASS B SHARES
SALES CHARGE AT REDEMPTION
$$

$$$
3 WAYS TO REDEEM SHARES

DIRECT REDEMPTION REDEMPTION AUTOMATIC
THROUGH DEALER CASH WITHDRAWAL PLAN

$$$$$$
*Minimum investment: $1,000 per fund
Minimum continuing investment: $250 per fund

Minimum does not apply for individual
retirement accounts

26 BURNHAM INVESTORS TRUST

<PAGE>

CHOOSING A SHARE CLASS
- --------------------------------------------------------------------------------

Shares of Burnham Dow 30 Focused Fund and Burnham Money Market Fund are offered
in one class only, with no sales charge. Burnham Dow 30 Focused Fund pays an
annual Rule 12b-1 distribution fee equal to 0.25% of the fund's average net
assets. Shares of Burnham Money Market Fund are not subject to any Rule 12b-1
distribution or service fees.

Burnham Fund, Burnham Financial Services Fund and Burnham Small Cap Value Fund
offer shares in two classes:

Class A

Front-end sales charge decreases with the amount you invest and is included in
the offering price. [see schedule below]

Rule 12b-1 fee of 0.25% annually of average NAV

Class B

Contingent deferred sales charge (CDSC) decreases with the amount of time you
hold your shares. [see schedule below]

Rule 12b-1 fee of 0.75% and service fee of 0.25% annually of average NAV

Class A Sales Charges

<TABLE>
<CAPTION>
Amount invested Sales charge
% offering price % NAV
<S> <C> <C>
less than $50,000 5.00% 5.26%
$50,000-$99,999 4.50% 4.71%
$100,000-$249,999 4.00% 4.17%
$250,000-$499,999 3.00% 3.09%
$500,000-$999,999 2.00% 2.04%
$1,000,000 and above --* --*
</TABLE>

Class B Deferred Sales Charge
Maximum purchase $250,000

<TABLE>
<CAPTION>
Purchase-to-sale period CDSC
<S> <C>
less than 1 year 5.00%
1-2 years 4.00%
2-4 years 3.00%
4-5 years 2.00%
5-6 years 1.00%
6 years or more --
</TABLE>

After 8 years, Class B shares automatically convert to Class A. Shares not
subject to CDSC are redeemed first; remaining shares are redeemed in the order
purchased. No CDSC applies to shares that:

Represent increases in the NAV above the net cost of the original investment

Were acquired through reinvestment of dividends or distributions

Alternative Purchase Arrangements

The alternative purchase arrangement allows you to choose the method of
purchasing shares that is the most beneficial given the amount of your purchase,
length of time you expect to hold your shares and other relevant circumstances.

*Purchases of $1 million or more (Class A shares)

The following CDSC will be imposed on investments over $1 million if shares are
sold within two years of purchase. The charge is calculated from the NAV at the
time of purchase or sale, whichever is lower.

Purchase-to-sale period CDSC
<TABLE>
<S> <C>
< 1 year 1.00%
1-2 years 0.50%
</TABLE>

YOUR ACCOUNT 27

<PAGE>

Sales charge waivers

Sales charge waivers exist for Class A shares for certain investors and under
certain conditions:

Shareholders of Burnham Fund who purchased shares directly from the fund
before August 27, 1998

Customers of Burnham Securities, Inc. with a cumulative balance of at least
$50,000

Officers, directors, trustees, employees, members of their immediate
families, the adviser, the fund's distributor and any of their affiliated
companies

Employee benefit plans having more than 25 eligible. Employees or a minimum
of $250,000

Employees of dealers that are members of the National Association of
Securities Dealers, Inc. (NASD), members of their immediate families, and
their employee benefit plans

Certain trust companies, bank trust departments and investment advisers that
invest on behalf of their clients and charge account management fees.

Participants in no-transaction-fee programs of discount brokerages that
maintain an omnibus account with the funds

Individuals investing distributions from tax-deferred savings and
retirement plans.

Individuals purchasing shares with the proceeds of a redemption made from
another mutual fund complex within the previous 180 days with proof of
purchase

Class B CDSC Waivers

CDSC charges will be waived on redemptions of Class B shares in connection with:

Distributions from certain employee tax-qualified benefit plans

Any shareholder's death or disability

Withdrawals under an automatic withdrawal plan, provided they are less than
10% of your account's original value.

Ways to reduce sales charges

Investors can reduce or eliminate sales charges on Class A shares under certain
conditions.

Combined purchase

Purchases made at the same time by an individual, his or her spouse and any
children under the age of 21 are added together to determine the sales charge
rate.

Right of accumulation

If you already hold shares of the fund, the sales charge rate on additional
purchases can be based on your total shares in the fund.

Letter of intent

This non-binding agreement allows you to purchase Class A shares over a period
of 13 months with the sales charge that would have applied if you had purchased
them all at once.

Combination privilege

You can use the combined total of Class A shares of multiple Burnham funds for
the purpose of calculating the sales charge.

PLEASE NOTE:

You must advise your dealer, the transfer agent or the fund if you qualify for a
reduction and/or waiver in sales charges.

CALCULATION OF NET ASSET VALUE

Each fund calculates its net asset value per share (NAV) at the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. eastern time) on each
business day defined in the Statement of Additional Information. If the New York
Stock Exchange closes early, the time for calculating the NAV and the deadline
for share transactions will be accelerated to the earlier closing time. Purchase
orders received before the regular close of the New York Stock Exchange will be
executed at the offering price calculated at that day's closing NAV.

Determination of share price

The share price of a fund is the total value of its assets less its liabilities,
divided by the total number of outstanding fund shares. Each fund's securities
are valued on the basis of either market quotations or fair value pricing, which
may include the use of pricing services. Because the value of fund securities
changes daily, the share prices of the funds will change as well.

28 BURNHAM INVESTORS TRUST

<PAGE>

PURCHASING SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Minimum Purchase Amount Initial purchase Subsequent purchases
<S> <C> <C>
individual retirement accounts $50 $50
automatic investment program $50 $50
all other funds and programs $1,000 $250
</TABLE>

These amounts may be waived or changed at the funds' discretion.

<TABLE>
<CAPTION>
METHOD OF PURCHASE PROCEDURE
<S> <C> <C>
Mail Open an account Complete and sign the application form. Send a check drawn on a U.S. bank
for at least the minimum amount required and make the check payable to "Burnham
Investors Trust". Send the check and application form to the address listed below.

Subsequent purchase Send in a check for the appropriate minimum amount with your account name and
number. For your convenience, you may use the deposit slip attached to your
quarterly account statements.

IRA purchase Shares of the Trust are available for purchase through Individual Retirement
Accounts ("IRAs") and other retirement plans. An IRA application and further
details about IRAs and other retirement plans are available from the Distributor
by calling 1-800-874-3863 or your investment professional.

Federal Funds
Wire Subsequent purchase This option is available to existing open accounts only. New accounts must
complete an application form and forward payment to the address listed below.

Wire address: State Street Bank & Trust Co.
225 Franklin Street, Boston MA
ABA # 011000028
DDA # 99046005
Fund Acct #
For credit to Burnham Investor's Trust [indicate Class A or B Shares].

Automatic You can make automatic monthly, quarterly or annual purchases (on the 5th or 15th
Investment day of each month) of $50 or more. To activate the automatic investment plan, complete
Program an account application notifying the fund. Your investment may come from your bank
account or from your balance in the Burnham Money Market Fund. You may change the
purchase amount or terminate the plan at any time by writing to the funds.

Electronic Your bank must be a member of the ACH system to participate in this program. To
Funds Transfer purchase shares via electronic funds transfer, check this option on your account
(ACH) application form.

Dealer Contact your dealer to find out how to purchase fund shares. They can help you
set up your new account and make subsequent investments. Purchase orders
received by your dealer before 4:00 p.m. eastern time on any business day will
receive that day's NAV. Your dealer is responsible for properly forwarding
completed orders to the fund transfer agent.

Send regular mail to: Shareholder Servicing Agent Send Overnight Express Mail to:
Burnham Investors Trust Please call: Burnham Investors Trust
c/o BFDS, Inc. Boston Financial Data Services, Inc. c/o BFDS, Inc.
P.O. Box 8015 toll-free at 66 Brooks Drive
Boston, MA 02266-8015 1-800-462-2392 Braintree, MA 02184-3839
</TABLE>
YOUR ACCOUNT 29

<PAGE>

TRANSACTION POLICIES: PURCHASING SHARES
- --------------------------------------------------------------------------------

Federal funds wires

A federal funds wire transaction must total at least $5,000. Your bank may
also charge a fee to send or receive wires.

Certificates of shares

The funds do not generally issue certificates of shares, although you may
request them. The only way to redeem share certificates is by sending them. If
you lose a certificate, you will be charged a fee to replace it.

Telephone transactions

The funds have procedures to verify that your telephone instructions are
genuine. These may include asking for identifying information and recording the
call. As long as the fund and its representatives take reasonable measures to
verify the authenticity of calls, you will not be held responsible for any
losses caused by unauthorized telephone orders.

Other policies

Under certain circumstances, the funds reserve the right to:

Suspend the offering of shares

Reject any exchange or investment order

Change, suspend or revoke exchange privileges

Suspend the telephone order privilege

Satisfy an order to sell fund shares with securities rather than cash, for
certain large orders

Suspend or postpone your right to sell fund shares on days when trading on
the New York Stock Exchange is restricted, or as otherwise permitted by SEC

Change its investment minimums or other requirements for buying or selling,
or waive minimums and requirements for certain investors

Benefits of dollar-cost averaging

Dollar-cost averaging is the practice of making regular investments over time.
When share prices are high, your investment buys fewer shares. When the share
price is low, your investment buys more shares. This generally lowers the
average price per share that you pay over time.

Dollar-cost averaging cannot guarantee you a profit or prevent a loss in a
declining market.

30 BURNHAM INVESTORS TRUST

HOW TO SELL AND EXCHANGE SHARES
- -----------------------------------------------------------------------------

By Mail: Send a letter of instruction, an endorsed stock power or
share certificates (if you hold certificate shares) to
Burnham Investors Trust to the address listed below.
Please be sure to specify the fund, the account number
and the dollar value or number of shares you wish to sell.
Be sure to include all necessary signatures and any
additional documents, as well as, a signature guarantee if
required (See page 32 for signature guarantee requirements).

By Telephone: As long as the transaction does not require a written or
signature guarantee (See page 32), you or your financial
professional can sell shares by calling Burnham Investors
Trust at 1-800-462-2392. Press 1 and follow the automated
menu to speak to a customer services representative. A check
will be mailed to you on the following business day.

Authorized If you invest through an authorized broker/dealer or
Broker/Dealer or investment professional, they can sell or exchange your
Investment shares for you.
Professional:

By Federal Funds Check with Burnham Investors Trust to make sure that a wire
Wire: redemption privilege, including your bank designation, is
in place on your account. Once this is established, you may
place your request to sell shares with Burnham Investors
Trust. Proceeds will be wired to your pre-designated bank
account, (See "Federal Funds Wires" on page 30).

By Exchange: Read the prospectus for the fund into which you are
exchanging. Call Burnham Investors Trust at 1-800-462-2392.
Press 1 and follow the automated menu to speak to a customer
service representative to place your exchange.

By a Systematic If you have a share balance of at least $5,000, you may
Withdrawal Plan: elect to have monthly, quarterly or annual payments in a
specified amount ($50 minimum) sent to you or someone you
designate. See "Systematic Withdrawal Plan" information
on page 32.

<TABLE>
<S> <C> <C>
Send Overnight Express Send Regular Shareholder Servicing Agent
Mail to: Mail to: Please call:

Burnham Investors Trust Burnham Investors Trust Boston Financial Data Services
C/O BFDS, Inc. C/O BFDS, Inc. toll-free at
66 Brooks Drive PO Box 8015 1-800-462-2392
Braintree, MA 02184-3839 Boston, MA 02266-8015
</TABLE>

YOUR ACCOUNT 31

<PAGE>

What is a signature guarantee?

A signature guarantee ensures that your signature is authentic. Most banks and
financial institutions can provide you with one. Some charge a fee, but it is
usually waived if you are a member of the financial institution.

A notary public cannot provide a signature guarantee.

You will need a signature guarantee in writing to sell shares in certain cases,
including:
When selling more than $25,000 worth of shares

When you want your check to be payable to someone other than the owner of
record, or sent somewhere other than the address of record

When you want the proceeds sent by wire or electronic transfer to a bank
account you have not designated in advance

TRANSACTION POLICIES:
REDEMPTION AND EXCHANGE OF SHARES

Redeeming shares

You may redeem your shares in the fund at any time. The proceeds are generally
sent out within three business days after your order is executed. There are
two cases in which proceeds may be delayed beyond the normal three business
days:

In unusual circumstances where the law allows additional time if needed
If a check you wrote to buy shares hasn't cleared by the time you sell
the shares

If you think you will need to redeem shares soon after buying them, you can
avoid the check clearing time (which may be up to 15 days) by investing by wire
or certified check.

Exchanging privilege

Exchange of shares have the same consequences as redemptions. The fund's general
policy is that sales charges on investments entering the fund complex should be
applied only once. Therefore you may exchange shares freely between funds within
the same share class. The priviledge is not offered to Class B shareholders at
this time. The fund reserves the right to modify this policy in the future.

Exchanges must meet the minimum initial investment requirements of the fund.

The funds may cancel the exchange privilege of any person that, in the opinion
of the funds, is using market timing strategies or making more than four
exchanges per owner or controlling person per calendar year. The fund may also
close the accounts of shareholders whose exchange privilege has been cancelled.

Account balance below minimum amounts

The funds reserve the right to close your account if your balance falls below
the minimum initial investment amount of $1,000. Your fund will notify you and
allow you 60 days to bring the account balance back up to the minimum level.
This does not apply to reduced balances caused by market losses or accounts
established that do not require a minimum investment restriction.

Reinstatement Privileges (Class A only)

You may reinvest your proceeds from a redemption in shares of the same class.
The proceeds will be credited at NAV up to 90 days after the redemption of
shares.

32 BURNHAM INVESTORS TRUST

<PAGE>

TAX CONSIDERATIONS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------

Each fund pays dividend and distributions.

Unless you notify the fund otherwise, your income and capital gains
distributions from a fund will reinvested in that fund. However, if you prefer
you may:

Receive all distributions in cash

Reinvest capital gains distributions, but receive your income distributions
in cash

You may indicate your distribution choice on your application form upon
purchase. Your tax liability is the same in both cases.

TYPE OF DISTRIBUTION DECLARED & PAID FEDERAL TAX STATUS
- -------------------------------------------------------------------------------------
<S> <C> <C>
Dividends from
net investment income ordinary income

Burnham Fund quarterly

Burnham Financial Services annually

Burnham Small Cap Value annually

Burnham Dow 30 Focused annually

Burnham Money Market declared daily
paid monthly
- -----------------------------------------------------------------------------------
Short-term capital gains
(all funds) annually ordinary income
- -----------------------------------------------------------------------------------
long term capital gains
(all funds) annually capital gain
- -----------------------------------------------------------------------------------
</TABLE>

Distributions from Burnham Fund, Burnham Dow 30 Focused Fund, Burnham Financial
Services Fund and Burnham Small Cap Value Fund are expected to be primarily
capital gains. Distributions from Burnham Money Market Fund will be primarily
ordinary income.

The funds issue Form 1099 tax information statements for each recording all
distributions and redemptions for the preceding year. These forms are mailed to
shareholders and to the Internal Revenue Service each year by January 31. Any
shareholder who does not supply a valid taxpayer identification number to the
funds may be subject to federal backup withholding tax.

It is a taxable event whenever you redeem or exchange shares. Depending on their
purchase and redemption prices and how long you held them, you may have a short-
or long term capital gain (or loss).

You should consult your tax adviser about your own particular tax situation.

Distributions are taxable in the year you receive them. In some cases,
distributions you receive in January are taxable as if they had been paid the
previous year.

Buying shares before a distribution

The money a fund earns, either as income or as capital gains, is reflected in
its share price until the fund makes a distribution. At that time, the amount of
the distribution is deducted from the share price and is either reinvested in
additional shares or paid to shareholders in cash.

If you buy fund shares just before a distribution, you will get some of your
investment back in the form of a taxable distribution. You can avoid this by
waiting to invest until after the fund makes its distribution.

Investments in tax-deferred accounts are not affected by the timing of
distribution payments because there are no tax consequences with such accounts.

YOUR ACCOUNT 33

<PAGE>

Retirement plans

The funds offer a number of tax-deferred plans for retirement savings:

TRADITIONAL IRAS allow money to grow tax-deferred until you take it out at
retirement. Contributions may be deductible for some investors.

ROTH IRAS also offer tax-free growth. Contributions are taxable, but withdrawals
in retirement are tax-free for investors who fulfill certain requirements.

SEP-IRA and other types of plans are also available. Consult your tax
professional to determine which type of plan may be beneficial to you.

Backup withholding tax

When you fill out your application form be sure to provide your Social Security
number or taxpayer ID number. Otherwise, the IRS will require the fund to
withhold 31% of all money you receive from the fund.

34 BURNHAM INVESTORS TRUST

<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand Burnham Fund's
financial performance over the past five years. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the fund, assuming reinvestment of all dividends and distributions. This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statement, is included in the annual report, which is
available upon request.

Burnham Fund Financial Highlights

<TABLE>
<CAPTION>
Class A Shares Class B Shares

1998 1997 1996 1995 1994 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value
Beginning of year 30.04 $25.65 $23.19 $19.88 $21.86 $30.75 $26.31 $23.45 $19.94 $21.84
-----------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.25 0.45 0.51 0.71 0.75 0.03 0.13 0.21 0.41 0.49
Net gains or losses on securities
(both realized and unrealized) 5.97 5.54 3.36 3.91 (1.15) 6.12 5.75 3.69 4.10 (1.04)
-----------------------------------------------------------------------------------------------
Total from investment operations 6.22 5.99 3.87 4.62 (0.40) 6.15 5.88 3.90 4.51 (0.55)

Less distributions
Dividends (from not investment income) (0.32) (0.44) (0.55) (0.75) (0.87) (0.06) (0.28) (0.18) (0.44) (0.64)
Distributions from capital gains (from
securities and options transactions) (1.63) (1.16) (0.86) (0.56) (0.71) (1.63) (1.16) (0.86) (0.56) (0.71)
----------------------------------------------------------------------------------------------
Total distributions (1.95) (1.60) (1.41) (1.31) (1.58) (1.69) (1.44) (1.04) (1.00) (1.35)
-----------------------------------------------------------------------------------------------
Net asset value, end of year $34.31 $30.04 $25.65 $23.19 $19.88 $35.21 $30.75 $26.31 $23.45 $19.94
===============================================================================================
Total return 22.08% 24.74% 17.60% 24.45% (1.77%) 21.16% 23.60% 17.34% 23.54% (2.52%)
-----------------------------------------------------------------------------------------------
Ratios/supplemental data
Net assets (in $millions),
end of year 156.7 136.4 117.4 112.0 101.8 2.4 1.6 1.0 0.6 0.3
-----------------------------------------------------------------------------------------------
Ratio of expenses (net)
to average net assets [1] 1.3% 1.1% 1.3% 1.5% 1.5% 2.1% 2.0% 2.1% 2.2% 2.3%
Ratio of net Income to
-----------------------------------------------------------------------------------------------
average net assets 0.8% 1.6% 2.1% 3.3% 3.7% - 0.7% 1.3% 2.5% 2.9%
-----------------------------------------------------------------------------------------------
Portfolio turnover rate 54.7% 59.4% 61.5% 78.3% 87.9% 54.7% 59.4% 61.5% 78.3% 87.9%
-----------------------------------------------------------------------------------------------
</TABLE>
(1) Had the Investment Adviser not agreed to reimburse Class C shares for
expenses in excess of the expense limitation described in Note 6, the ratios
of expenses to average net assets for the years ended December 31, 1998,
1997, 1996 and 1995 would have been 2.4%, 2.5%, 2.5% and 2.5%,
respectively, for Class C shares. For the year ended December 31, 1998,
the Investment Adviser reimbursed Class A and B shares for expenses in
excess of the expense limitation described in Note 6. The ratios of expenses
to average net assets would have been 1.3% and 2.1% respectively, had the
Investment Adviser not agreed to reimburse expenses.

FINANCIAL HIGHLIGHTS 35

Where to Get
More Information

ANNUAL AND QUARTERLY REPORTS
- --------------------------------------------------------------------------------

These include commentary from the fund manager on the market conditions and
investment strategies that significantly affected the fund's performance,
detailed performance data, a complete inventory of the fund's securities, and a
report from the fund's auditor.

STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------

The SAI contains more detailed disclosure on features and policies of the funds.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into this document (that is, it is legally a part of
this prospectus).

HOW TO CONTACT US

You can obtain these documents free of charge by contacting your dealer or:

Burnham Securities, Inc.
1325 Avenue of the Americas, 26th Floor
[LOGO] New York, NY 10019
1-800-874-FUND
www.burnhamfunds.com
[email protected]

These documents are also available from the SEC:

Securities and Exchange Commission
450 Fifth Street NW
Washington, DC 20549-6009
1-800-SEC-0330
www.sec.gov

Note: The SEC requires a duplicating fee for paper copies.

SEC file number: 811-994

Burnham Asset Management was founded in 1989 and today, together with Burnham
Securities, Inc., manages approximately $3 billion in assets for investors. The
Burnham Fund was created in 1975 and has been guided by the same investment team
since inception.

The Burnham family of funds has recently expanded to offer greater flexibility
to investors. All the funds share Burnham's fundamental philosophy of prudent
investment and risk management through all phases of the economic cycle.

BURNHAM INVESTORS TRUST

STATEMENT OF ADDITIONAL INFORMATION

BURNHAM DOW 30 FOCUSED FUND

BURNHAM FUND

BURNHAM FINANCIAL SERVICES FUND

BURNHAM SMALL CAP VALUE FUND

BURNHAM MONEY MARKET FUND

May __, 1999

This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Funds' prospectus dated May __, 1999, which is
incorporated by reference herein. The information in this Statement of
Additional Information expands on information contained in the prospectus. The
prospectus can be obtained without charge by contacting either the dealer
through whom you purchased shares or the Distributor at the phone number or
address below.

BURNHAM SECURITIES INC.
PRINCIPAL DISTRIBUTOR
1325 Avenue of the Americas, 26th Floor,
New York, New York 10019
1-(800) 874-FUND

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Burnham Investors Trust........................................................1

Investment Techniques and Related Risks .......................................1

Investment Restrictions ......................................................18

Services for Shareholders ....................................................19

Purchase and Redemption of Shares ............................................19

Net Asset Value...............................................................25

Taxes.........................................................................26

Trustees and Officers of the Trust ...........................................29

Investment Management and Other Services .....................................31

Control Persons and Principal Shareholders....................................35

Shares of Beneficial Interest.................................................35

Brokerage ....................................................................36

Determination of Performance .................................................37

Financial Statements .........................................................38

Appendix A - Description of Securities Ratings...............................A-1

Appendix B -Description of Dow Jones Industrials Average and DIAMONDS .......B-1
</TABLE>

<PAGE>

BURNHAM INVESTORS TRUST

Burnham Investors Trust (the "Trust"), 1325 Avenue of the Americas, 26th Floor,
New York, New York 10019, is an open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"). The Trust
offers shares of beneficial interest (the "shares") in the following five
series, each of which is a separate portfolio of investments with its own
investment objective: Burnham Dow 30 Focused Fund, Burnham Fund, Burnham
Financial Services Fund, Burnham Small Cap Value Fund and Burnham Money Market
Fund (each a "Fund").

The Trust was organized as a Delaware business trust on August 27, 1998. The
Trust is the surviving entity of the reorganization of The Burnham Fund, Inc.
(the "Corporation"), a Maryland corporation, effected April_____, 1999. Before
the reorganization, the Corporation was an open-end management investment
company in operation since 1961, consisting of a single series, The Burnham
Fund, Inc. Some of the information in this Statement of Additional Information
relates to the Corporation before the reorganization.

INVESTMENT TECHNIQUES AND RELATED RISKS

References in this section to the Adviser include Burnham Asset Management
Corporation and any subadviser that may be managing a Fund's portfolio.

EQUITY INVESTMENTS.

Common Shares. (All Funds except Burnham Money Market Fund) Common shares
represent an equity (ownership) interest in a company or other entity. This
ownership interest often gives a Fund the right to vote on measures affecting
the company's organization and operations. Although common shares generally have
a history of long-term growth in value, their prices, particularly those of
smaller capitalization companies, are often volatile in the short-term.

Preferred Shares. (All Funds except Burnham Money Market Fund) Preferred shares
represent a limited equity interest in a company or other entity and frequently
have debt-like features. Preferred shares are often entitled only to dividends
at a specified rate, and have a preference over common shares with respect to
dividends and on liquidation of assets. Preferred shares generally have lesser
voting rights than common shares. Because their dividends are often fixed, the
value of some preferred shares fluctuates inversely with changes in interest
rates.

Convertible Securities. (Burnham Fund, Burnham Financial Services Fund, Burnham
Small Cap Value Fund) Convertible securities are bonds, preferred shares and
other securities that pay a fixed rate of interest or dividends. However, they
offer the buyer the additional option of converting the security into common
stock. The value of convertible securities depends partially on interest rate
changes and the credit quality of the issuer. The value of convertible
securities is also sensitive to company, market and other economic news, and
will change based on the price of the underlying common stock. Convertible
securities generally have less potential for gain than common stock, but also
less potential for loss, since their income provides a cushion against the
stock's price declines. However, because the buyer is also exposed to the risk
and reward potential of the underlying stock, convertible securities generally
pay less income than similar non-convertible securities.

Warrants and Rights. (All Funds except Burnham Dow 30 Focused Fund and Burnham
Money Market Fund) Warrants and rights are securities permitting, but not
obligating, their holder to purchase the underlying equity or fixed income
securities at a predetermined price. Generally, warrants and stock purchase
rights do not carry with them the right to receive dividends on or exercise
voting rights concerning the underlying equity securities. Further, they do not
represent any rights in the assets of the issuer. In addition, the value of
warrants and rights does not necessarily change with the value of the underlying
securities, and they become worthless if they are not exercised on or before
their expiration date. As a result, an investment in warrants and rights may
entail greater investment risk than certain other types of investments.

Real Estate Investment Trusts. (Burnham Fund, Burnham Financial Services Fund,
Burnham Small Cap Value Fund) REITs are pooled investment vehicles that invest
primarily in income producing real estate or real estate related loans or
interests. REITs are generally classified as equity REITs, mortgage REITs or a
combination of equity and mortgage REITs. Equity REITs invest most of their
assets directly in real property and derive income primarily from the collection
of rents. Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest most of their assets in real
estate mortgages and derive income from interest payments. Like investment
companies, REITs are not taxed on income distributed to shareholders if they
comply with several requirements of the Internal Revenue Code of 1986 (the
"Code"). A Fund will indirectly bear its

<PAGE>

proportionate share of any expenses (such as operating expenses and advisory
fees) paid by REITs in which it invests in addition to the expenses paid by the
Fund.

Risks Associated with the Real Estate Industry. Although a Fund does not invest
directly in real estate, it does invest primarily in real estate equity
securities and may concentrate its investments in the real estate industry, and,
therefore, an investment in the Fund may be subject to certain risks associated
with the direct ownership of real estate and with the real estate industry in
general. These risks include, among others:

possible declines in the value of real estate;

adverse general or local economic conditions;

possible lack of availability of mortgage funds;

overbuilding;

extended vacancies of properties;

increases in competition, property taxes and operating expenses;

changes in zoning or applicable tax law;

costs resulting from the clean-up of, and liability to third parties for
damages resulting from, environmental problems;

casualty or condemnation losses;

uninsured damages from floods, earthquakes or other natural disasters;

limitations on and variations in rents; and

unfavorable changes in interest rates.

In addition, if a Fund has rental income or income from the disposition of real
property acquired as a result of a default on securities the Fund owns, the
receipt of such income may adversely affect its ability to retain its tax status
as a regulated investment company. Investments by the Fund in securities of
companies providing mortgage servicing will be subject to the risks associated
with refinancings and their impact on servicing rights.

Financial Services Companies. (All Funds) Each Fund may invest in financial
services companies. Burnham Financial Services Fund will invest primarily in
these companies and will therefore be subject to risks in addition to those that
apply to the general equity and debt markets. Some events may disproportionately
affect the financial services sector as a whole or a particular industry in this
sector. Accordingly, this Fund may be subject to greater market volatility than
a fund that does not concentrate in a particular economic sector or industry.
Thus, it is recommended that you invest only part of your overall investment
portfolio in this Fund.

In addition, most financial services companies are subject to extensive
governmental regulation, which limits their activities and may (as with
insurance rate regulation) affect their ability to earn a profit from a given
line of business. Certain financial services businesses are subject to intense
competitive pressures, including market share and price competition. The removal
of regulatory barriers to participation in certain segments of the financial
services sector may also increase competitive pressures on different types of
firms. For example, legislative proposals to remove traditional barriers between
banking and investment banking activities would allow large commercial banks to
compete for business that previously was the exclusive domain of securities
firms. Similarly, the removal of regional barriers in the banking industry has
intensified competition within the industry. The availability and cost of funds
to financial services firms is crucial to their profitability. Consequently,
volatile interest rates and unfavorable economic conditions can adversely affect
their financial performance.

Financial services companies in foreign countries are subject to similar
regulatory and interest rate concerns. In particular, government regulation in
certain foreign countries may include controls on interest rates, credit
availability, prices and currency transfers. In some countries, foreign
governments have taken steps to nationalize the operations of banks and other
financial services companies.

The Adviser believes that the ongoing deregulation of many segments of the
financial services sector continues to provide new opportunities for issuers in
this sector. As deregulation of various financial services businesses continues
and new segments of the financial services sector are opened to larger financial
services firms formerly

<PAGE>

prohibited from doing business in these segments (such as national and money
center banks), established companies in these market segments (such as regional
banks or securities firms) may become attractive acquisition candidates for the
larger firm seeking entrance into the segment. Typically, acquisitions
accelerate the capital appreciation of the shares of the company to be acquired.

In addition, financial services companies in growth segments (such as securities
firms during times of stock market expansion) or geographically linked to areas
experiencing strong economic growth (such as certain regional banks) are likely
to participate in and benefit from such growth through increased demand for
their products and services. Many financial services companies which are
actively and aggressively managed are expanding services as deregulation opens
up new opportunities also show potential for capital appreciation, particularly
from expanding into areas where nonregulatory barriers to entry are low.

The Adviser will select for the Funds those financial services companies that it
believes are well positioned to take advantage of the ongoing changes in the
financial services sector. A financial services company may be well positioned
for one or more of the following reasons.

It may be an attractive acquisition for another company wishing to
strengthen its presence in a line of business or a geographic region or
to expand into new lines of business or geographic regions.

It may be planning a merger to strengthen its position in a line of
business or a geographic area.

It may be engaged in a line or lines of business experiencing or likely
to experience strong economic growth.

It be linked to a geographic region experiencing or likely to experience
strong economic growth and be actively seeking to participate in such
growth.

It may be expanding into financial services or geographic regions
previously unavailable to it (due to an easing of regulatory
constraints) in order to take advantage of new market opportunities.

Small Capitalization Companies. (All Funds except Burnham Money Market Fund) The
Funds, and especially Burnham Small Cap Value Fund, may invest in U.S. and
foreign companies with market capitalizations of $1 billion or less. Investing
in the common stock of smaller companies involves special risks and
considerations not typically associated with investing in the common stock of
larger companies. The securities of smaller companies may experience more market
price volatility than the securities of larger companies. These companies are
typically subject to more dramatic changes in earnings and business prospects
than larger, more established companies. In addition, the securities of smaller
companies are less liquid because they tend to trade over-the-counter or on
regional exchanges, and the frequency and volume of their trading are often
substantially less than for securities of larger companies.

Investment Companies. (All Funds) A Fund may acquire securities of another
investment company if, immediately after such acquisition, the Fund does not own
in the aggregate (1) more than 3% of the total outstanding voting stock of such
other investment company, (2) securities issued by such other investment company
having an aggregate value exceeding 5% of the Fund's total assets, or (3)
securities issued by such other investment company and all other investment
companies having an aggregate value exceeding 10% of the Fund's total assets.
Investing in another registered investment company may result in duplication of
fees and expenses.

FIXED INCOME INVESTMENTS.

Temporary Defensive Investments. (All Funds except Burnham Money Market Fund)
For temporary and defensive purposes, each Fund except Burnham Dow 30 Focused
Fund may invest up to 100% of its total assets in investment grade short-term
fixed income securities (including short-term U.S. government securities, money
market instruments, including negotiable certificates of deposit, non-negotiable
fixed time deposits, bankers' acceptances, commercial paper and floating rate
notes) and repurchase agreements. Burnham Dow 30 Focused Fund may invest only
25% of its total assets in temporary defensive investments. Each Fund may also
hold significant amounts of its assets in cash, subject to the applicable
percentage limitations for short-term securities.

General Characteristics and Risks of Fixed Income Securities. (All Funds) Bonds
and other fixed-income securities are used by issuers to borrow money from
investors. The issuer pays the investor a fixed or variable rate of interest,

<PAGE>

and must repay the principal amount at maturity. Some fixed-income securities,
such as zero coupon bonds, do not pay current interest, but are purchased at a
discount from their face values. Fixed-income securities have varying degrees of
quality and varying maturities.

Credit Ratings. In general, the ratings of Moody's Investors Service, Inc.
(Moody's), Standard & Poor's Ratings Group (S&P), FitchIBCA and Duff & Phelps
Credit Rating Co. (Duff) represent the opinions of these agencies as to the
credit quality of the securities which they rate. However, these ratings are
relative and subjective and are not absolute standards of quality. In addition,
changes in these ratings may significantly lag changes in an issuer's
creditworthiness. Changes by recognized agencies in the rating of any
fixed-income security or in the ability of the issuer to make payments of
interest and principal will also affect the value of the security.

After its purchase by a Fund, an issue of securities may cease to be rated or
its rating may be reduced below the minimum required for purchase by the Fund.
Neither of these events will necessarily require the Adviser, on behalf of a
Fund, to sell the securities.

Lower Rated High Yield Fixed Income Securities. (Burnham Fund, Burnham Financial
Services Fund, Burnham Small Cap Value Fund) Lower rated high yield fixed income
securities are those rated below Baa3 by Moody's, or below BBB- by S&P,
FitchIBCA or Duff, or securities which are unrated and determined by the Adviser
to be of comparable quality. Lower rated securities are generally referred to as
high yield bonds or junk bonds. See Appendix A attached to this Statement of
Additional Information for a description of the rating categories. A Fund may
invest in eligible unrated securities which, in the opinion of the Adviser,
offer comparable risks to those permissible rated securities.

Debt obligations rated in the lower ratings categories, or which are unrated,
involve greater volatility of price and risk of loss of principal and income. In
addition, lower ratings reflect a greater possibility of an adverse change in
financial condition affecting the ability of the issuer to make payments of
interest and principal. The market price and liquidity of lower rated fixed
income securities generally respond to short-term economic, corporate and market
developments more dramatically than do higher rated securities. These
developments are perceived to have a more direct relationship to the ability of
an issuer of lower rated securities to meet its ongoing debt obligations.

Reduced volume and liquidity in the high yield bond market, or the reduced
availability of market quotations, will make it more difficult to dispose of the
bonds and accurately value a Fund's assets. The reduced availability of
reliable, objective pricing data may increase a Fund's reliance on management's
judgment in valuing high yield bonds. To the extent that a Fund invests in these
securities, the achievement of the Fund's objective will depend more on the
Adviser's judgment and analysis than it would otherwise be. In addition, high
yield securities in a Fund's portfolio may be susceptible to adverse publicity
and investor perceptions, whether or not these perceptions are justified by
Fundamental factors. In the past, economic downturns and increases in interest
rates have caused a higher incidence of default by the issuers of lower-rated
securities and may do so in the future, particularly with respect to highly
leveraged issuers.

Credit Risk. Credit risk relates to the ability of an issuer to pay interest and
principal as they become due. Generally, lower quality, higher yielding bonds
are subject to more credit risk than higher quality, lower yielding bonds. A
default by the issuer of, or a downgrade in the credit rating assigned to, a
fixed income security in a Fund's portfolio will reduce the value of the
security.

Interest Rate Risk. Interest rate risk refers to the fluctuations in value of
fixed-income securities resulting solely from the inverse relationship between
the market value of outstanding fixed-income securities and changes in interest
rates. An increase in interest rates will generally reduce the market value of
fixed-income investments, and a decline in interest rates will tend to increase
their value. In addition, debt securities with longer maturities, which tend to
produce higher yields, are subject to potentially greater capital appreciation
and depreciation than obligations with shorter maturities. Fluctuations in the
market value of fixed-income securities after their acquisition will not affect
the cash interest payable on those securities but will be reflected in the
valuations of those securities used to compute a Fund's net asset value.

Call (Prepayment) Risk and Extension Risk. Call risk is the risk that an issuer
will pay principal on an obligation earlier than scheduled or expected, which
would accelerate cash flows from, and shorten the average life and

<PAGE>

duration of, the security. This typically happens when interest rates have
declined, and a Fund will suffer from having to reinvest in lower yielding
securities.

Extension risk is the risk that an issuer may pay principal on an obligation
slower than expected. This typically happens when interest rates have increased.
Slower than expected prepayment will have the effect of extending the average
life and duration of the obligation and possibly of a Fund's fixed income
portfolio.

Prepayments that are faster or slower than expected may reduce the value of the
affected security.

Maturity and Duration. The effective maturity of an individual portfolio
security in which a Fund invests is defined as the period remaining until the
earliest date when the Fund can recover the principal amount of such security
through mandatory redemption or prepayment by the issuer, the exercise by the
Fund of a put option, demand feature or tender option granted by the issuer or a
third party or the payment of the principal on the stated maturity date. The
effective maturity of variable rate securities is calculated by reference to
their coupon reset dates. Thus, the effective maturity of a security may be
substantially shorter than its final stated maturity.

Duration is a measure of a debt security's price sensitivity taking into account
expected cash flows and prepayments under a wide range of interest rate
scenarios. In computing the duration of its portfolio, a Fund will have to
estimate the duration of obligations that are subject to prepayment or
redemption by the issuer taking into account the influence of interest rates on
prepayments and coupon flows. Each Fund may use various techniques to shorten or
lengthen the option-adjusted duration of its fixed income portfolio, including
the acquisition of debt obligations at premium or discount, and the use of
mortgage swaps and interest rate swaps, caps, floors and collars.

Bank and Corporate Obligations. (All Funds) Commercial paper represents
short-term unsecured promissory notes issued in bearer form by banks or bank
holding companies, corporations and finance companies. The commercial paper
purchased by the Funds consists of direct obligations of domestic or foreign
issuers. Bank obligations in which the Funds may invest include certificates of
deposit, bankers' acceptances and fixed time deposits.

Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Fixed time deposits are bank obligations payable at a stated maturity date and
bearing interest at a fixed rate. Fixed time deposits may be withdrawn on demand
by the investor, but may be subject to early withdrawal penalties which vary
depending upon market conditions and the remaining maturity of the obligation.
There are no contractual restrictions on the right to transfer a beneficial
interest in a fixed time deposit to a third party, although there is no market
for such deposits. Bank notes and bankers' acceptances rank junior to domestic
deposit liabilities of the bank and pari passu with other senior, unsecured
obligations of the bank. Bank notes are not insured by the Federal Deposit
Insurance Corporation or any other insurer. Deposit notes are insured by the
Federal Deposit Insurance Corporation only to the extent of $100,000 per
depositor per bank.

Repurchase Agreements. (All Funds) The Funds may enter repurchase agreements
with approved banks and broker-dealers. In a repurchase agreement, a Fund
purchases securities with the understanding that they will be repurchased by the
seller at a set price on a set date. This allows a Fund to keep its assets at
work but retain overnight flexibility pending longer term investments.

Repurchase agreements involve credit risk. For example, if a seller defaults, a
Fund will suffer a loss if the proceeds from the sale of the collateral are
lower than the repurchase price. If the seller becomes bankrupt, a Fund may be
delayed or incur additional costs to sell the collateral. To minimize risk,
collateral must be held with the Funds' custodian and at least equal the market
value of the securities subject to the repurchase agreement plus any accrued
interest.

U.S. Government Securities. (All Funds) U.S. government securities include: U.S.
Treasury obligations and obligations issued or guaranteed by U.S. government
agencies, instrumentalities or sponsored enterprises which are supported by

the full faith and credit of the U.S. Treasury (such as the Government
National Mortgage Association

<PAGE>

(GNMA)),

the right of the issuer to borrow from the U.S. Treasury (Federal Home
Loan Banks),

the discretionary authority of the U.S. government to purchase certain
obligations of the issuer (Fannie Mae (formerly, the Federal National
Mortgage Association) and Federal Home Loan Mortgage Corporation
(FHLMC)), or

only the credit of the agency and a perceived "moral obligation" of the
U.S. government.

No assurance can be given that the U.S. government will provide financial
support to U.S. government agencies, instrumentalities or sponsored enterprises
in the future.

U.S. government securities also include Treasury receipts, zero coupon bonds,
U.S. Treasury inflation-indexed bonds, deferred interest securities and other
stripped U.S. government securities. The interest and principal components of
stripped U.S. government securities are traded independently. The most widely
recognized trading program for such securities is the Separate Trading of
Registered Interest and Principal of Securities Program. U.S. Treasury
inflation-indexed obligations provide a measure of protection against inflation
by adjusting the principal amount for inflation. The semi-annual interest
payments on these obligations are equal to a fixed percentage of the
inflation-adjusted principal amount.

Mortgage-Backed Securities. (All Funds except Burnham Dow 30 Focused Fund)
Burnham Money Market Fund may invest only in those mortgage-backed securities
that meet its credit quality and portfolio maturity requirements.
Mortgage-backed securities represent participation interests in pools of
adjustable and fixed rate mortgage loans secured by real property.

Unlike conventional debt obligations, mortgage-backed securities provide monthly
payments derived from the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans. The
mortgage loans underlying mortgage-backed securities are generally subject to a
greater rate of principal prepayments in a declining interest rate environment
and to a lesser rate of principal prepayments in an increasing interest rate
environment. Under certain interest rate and prepayment scenarios, a Fund may
fail to recover the full amount of its investment in mortgage-backed securities
notwithstanding any direct or indirect governmental or agency guarantee. Since
faster than expected prepayments must usually be invested in lower yielding
securities, mortgage-backed securities are less effective than conventional
bonds in "locking" in a specified interest rate. In a rising interest rate
environment, a declining prepayment rate may extend the average life of many
mortgage-backed securities. Extending the average life of a mortgage-backed
security reduces its value and increases the risk of depreciation due to future
increases in market interest rates.

A Fund's investments in mortgage-backed securities may include conventional
mortgage pass through securities and certain classes of multiple class
collateralized mortgage obligations ("CMOs"). Mortgage pass-through securities
are fixed or adjustable rate mortgage-backed securities that provide for monthly
payments that are a "pass-through" of the monthly interest and principal
payments (including any prepayments) made by the individual borrowers on the
pooled mortgage loans, net of any fees or other amounts paid to any guarantor,
administrator and/or servicer of the underlying mortgage loans. CMOs are issued
in multiple classes, each having different maturities, interest rates, payment
schedules and allocations of principal and interest on the underlying mortgages.
Senior CMO classes will typically have priority over residual CMO classes as to
the receipt of principal and/or interest payments on the underlying mortgages.
The CMO classes in which a Fund may invest include but are not limited to
sequential and parallel pay CMOs, including planned amortization class ("PAC")
and target amortization class ("TAC") securities. Sequential pay CMOs apply
payments of principal, including any prepayments, to each class of CMO in the
order of the final distribution date. Thus, no payment of principal is made on
any class until all other classes having an earlier final distribution date have
been paid in full. Parallel pay CMOs apply principal payments and prepayments to
two or more classes concurrently on a proportionate or disproportionate basis.
The simultaneous payments are taken into account in calculating the final
distribution date of each class. Each Fund may invest in the most junior classes
of CMOs, which involve the most interest rate, prepayment and extension risk.

Different types of mortgage-backed securities are subject to different
combinations of prepayment, extension, interest rate and other market risks.
Conventional mortgage pass through securities and sequential pay CMOs are
subject to all of these risks, but are typically not leveraged. PACs, TACs and
other senior classes of sequential and parallel pay CMOs involve less exposure
to prepayment, extension and interest rate risk than other mortgage-backed

<PAGE>

securities, provided that prepayment rates remain within expected prepayment
ranges or "collars." To the extent that the prepayment rates remain within these
prepayment ranges, the residual or support tranches of PAC and TAC CMOs assume
the extra prepayment, extension and interest rate risks associated with the
underlying mortgage assets.

Agency Mortgage Securities. (All Funds except Burnham Dow 30 Focused Fund) The
Funds may invest in mortgage-backed securities issued or guaranteed by the U.S.
government, foreign governments or any of their agencies, instrumentalities or
sponsored enterprises. There are several types of agency mortgage securities
currently available, including, but not limited to, guaranteed mortgage
pass-through certificates and multiple class securities.

Privately-Issued Mortgage-Backed Securities. (All Funds except Burnham Dow 30
Focused Fund and Burnham Money Market Fund) Mortgage-backed securities may also
be issued by trusts or other entities formed or sponsored by private originators
of and institutional investors in mortgage loans and other foreign or domestic
non-governmental entities (or represent custodial arrangements administered by
such institutions). These private originators and institutions include domestic
and foreign savings and loan associations, mortgage bankers, commercial banks,
insurance companies, investment banks and special purpose subsidiaries of the
foregoing. Privately issued mortgage-backed securities are generally backed by
pools of conventional (i.e., non-government guaranteed or insured) mortgage
loans.

These mortgage-backed securities are not guaranteed by an entity having the
credit standing of a U.S. government agency. In order to receive a high quality
rating, they normally are structured with one or more types of "credit
enhancement." These credit enhancements fall generally into two categories: (1)
liquidity protection and (2) protection against losses resulting after default
by a borrower and liquidation of the collateral. Liquidity protection refers to
the providing of cash advances to holders of mortgage-backed securities when a
borrower on an underlying mortgage fails to make its monthly payment on time.
Protection against losses resulting after default and liquidation is designed to
cover losses resulting when, for example, the proceeds of a foreclosure sale are
insufficient to cover the outstanding amount on the mortgage. This protection
may be provided through guarantees, insurance policies or letters of credit,
through various means of structuring the transaction or through a combination of
such approaches.

Asset-Backed Securities. (All Funds except Burnham Dow 30 Focused Fund)
Asset-backed securities represent individual interests in pools of consumer
loans, home equity loans, trade receivables, credit card receivables, and other
debt and are similar in structure to mortgage-backed securities. The assets are
securitized either in a pass-through structure (similar to a mortgage
pass-through structure) or in a pay-through structure (similar to a CMO
structure). Asset-backed securities may be subject to more rapid repayment than
their stated maturity date would indicate as a result of the pass-through of
prepayments of principal on the underlying loans. During periods of declining
interest rates, prepayment of certain types of loans underlying asset-backed
securities can be expected to accelerate. Accordingly, a Fund's ability to
maintain positions in these securities will be affected by reductions in the
principal amount of the securities resulting from prepayments, and the Fund must
reinvest the returned principal at prevailing interest rates, which may be
lower. Asset-backed securities may also be subject to extension risk during
periods of rising interest rates.

Asset-backed securities entail certain risks not presented by mortgage-backed
securities. The collateral underlying asset-backed securities may be less
effective as security for payments than real estate collateral. Debtors may have
the right to set off certain amounts owed on the credit cards or other
obligations underlying the asset-backed security, or the debt holder may not
have a first (or proper) security interest in all of the obligations backing the
receivable because of the nature of the receivable or state or federal laws
protecting the debtor. Certain collateral may be difficult to locate in the
event of default, and recoveries on depreciated or damaged collateral may not
fully cover payments due on these securities.

A Fund may invest in any type of asset-backed security if the Adviser determines
that the security is consistent with the Fund's investment objective and
policies. Burnham Money Market Fund may invest only in those asset-backed
securities that meet its credit quality and portfolio maturity requirements.

<PAGE>

Floating Rate/Variable Rate Notes. (All Funds) Some notes purchased by a Fund
may have variable or floating interest rates. Variable rates are adjustable at
stated periodic intervals; floating rates are automatically adjusted according
to a specified market rate for such investments, such as the percentage of the
prime rate of a bank, or the 91-day U.S. Treasury Bill rate. These obligations
may be secured by bank letters of credit or other support arrangements. If a
security would not satisfy a Fund's credit quality standards without such a
credit support, the entity providing a bank letter or line of credit, guarantee
or loan commitment must meet a Fund's credit quality standards.

The absence of an active secondary market for certain variable and floating rate
notes could make it difficult for a Fund to dispose of the instruments, and a
Fund could suffer a loss if the issuer defaults or there are periods during
which the Fund is not entitled to exercise its demand rights. Variable and
floating rate instruments held by a Fund will be subject to the Fund's
limitation on investments in illiquid securities if a reliable trading market
for the instruments does not exist and the Fund cannot demand payment of the
principal amount of such instruments within seven days.

Structured Securities. (Burnham Fund, Burnham Financial Services Fund, Burnham
Small Cap Value Fund) Structured securities include notes, bonds or debentures
that provide for the payment of principal of and/or interest in amounts
determined by reference to changes in the value of specific currencies, interest
rates, commodities, indices or other financial indicators (the Reference) or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of structured
securities may provide that in certain circumstances no principal is due at
maturity and, therefore, may result in the loss of the Fund's investment.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, the change in
interest rate or the value of the security at maturity may be a multiple of the
change in the value of the Reference. Consequently, leveraged structured
securities entail a greater degree of market risk than other types of debt
obligations. Structured securities may also be more volatile, less liquid and
more difficult to accurately price than less complex fixed income investments.

Pay-In-Kind, Delayed Payment and Zero Coupon Bonds. (Burnham Fund, Burnham
Financial Services Fund, Burnham Small Cap Value Fund) These securities are
generally issued at a discount from their face value because cash interest
payments are typically postponed until maturity or after a stated period. The
amount of the discount rate varies depending on such factors as the time
remaining until maturity, prevailing interest rates, the security's liquidity
and the issuer's credit quality. These securities also may take the form of debt
securities that have been stripped of their interest payments. The market prices
of pay-in-kind, delayed payment and zero coupon bonds generally are more
volatile than the market prices of securities that pay interest periodically and
in cash, and are likely to respond more to changes in interest rates than
interest-bearing securities having similar maturities and credit quality. A Fund
generally accrues income on securities that are issued at a discount and/or do
not make current cash payments of interest for tax and accounting purposes. This
income is required to be distributed to shareholders. A Fund's investments in
pay-in-kind, delayed payment and zero coupon bonds may require the Fund to sell
portfolio securities to generate sufficient cash to satisfy its income
distribution requirements.

FOREIGN SECURITIES.

(All Funds except Burnham Dow 30 Focused Fund and Burnham Money Market Fund)
Each Fund may invest in the securities of corporate and governmental issuers
located in or doing business in a foreign country (foreign issuers). A company
is considered to be located in or doing business in a foreign country if it
satisfies at least one of the following criteria: (i) the equity securities of
the company are traded principally on stock exchanges in one or more foreign
countries; (ii) it derives 50% or more of its total revenue from goods produced,
sales made or services performed in one or more foreign countries; (iii) it
maintains 50% or more of its assets in one or more foreign countries; (iv) it is
organized under the laws of a foreign country; or (v) its principal executive
offices are located in a foreign country.

ADRs, EDRs, IDRs and GDRs. (All Funds except Burnham Dow 30 Focused Fund and
Burnham Money Market Fund) American Depository Receipts (ADRs) (sponsored or
unsponsored) are receipts typically issued by a U.S. bank, trust company or
other entity and evidence ownership of the underlying foreign securities. Most
ADRs are traded on a U.S. stock exchange. Issuers of unsponsored ADRs are not
contractually obligated to disclose material

<PAGE>

information in the U.S., so there may not be a correlation between this
information and the market value of the unsponsored ADR. European Depository
Receipts (EDRs) and International Depository Receipts (IDRs) are receipts
typically issued by a European bank or trust company evidencing ownership of the
underlying foreign securities. Global Depository Receipts (GDRs) are receipts
issued by either a U.S. or non-U.S. banking institution evidencing ownership of
the underlying foreign securities.

Brady Bonds. (Burnham Fund, Burnham Financial Services Fund, Burnham Small Cap
Value Fund) Brady bonds are securities created through the exchange of existing
commercial bank loans to sovereign entities for new obligations in connection
with debt restructurings under a debt restructuring plan introduced by former
U.S. Secretary of the Treasury, Nicholas P. Brady. Brady bonds may be
collateralized or uncollateralized, are issued in various currencies (but
primarily the U.S. dollar), and are actively traded in the over-the-counter
secondary market. Certain Brady bonds may be collateralized as to principal due
at maturity by U.S. Treasury zero coupon bonds with a maturity equal to the
final maturity of the bonds, although the collateral is not available to
investors until the final maturity of the bonds. Collateral purchases are
financed by the International Monetary Fund, the World Bank and the debtor
nation's reserves. Although Brady bonds may be collateralized by U.S. government
securities, repayment of principal and interest is not guaranteed by the U.S.
government. In light of the residual risk of Brady bonds and, among other
factors, the history of defaults with respect to commercial bank loans by public
and private entities in countries issuing Brady bonds, investments in Brady
bonds may be viewed as speculative. Brady bonds acquired by a Fund might be
subject to restructuring arrangements or to requests for new credit, which may
reduce the value of the Brady bonds held by the Fund.

Sovereign Debt Obligations. (All Funds except Burnham Dow 30 Focused Fund and
Burnham Money Market Fund) Investment in sovereign debt obligations involves
special risks not present in domestic corporate debt obligations. The issuer of
the sovereign debt or the governmental authorities that control the repayment of
the debt may be unable or unwilling to repay principal or interest when due, and
a Fund may have limited recourse in the event of a default. During periods of
economic uncertainty, the market prices of sovereign debt, and a Fund's net
asset value, may be more volatile than prices of U.S. debt obligations. In the
past, certain emerging market countries have encountered difficulties in
servicing their debt obligations, withheld payments of principal and interest
and declared moratoria on the payment of principal and interest on their
sovereign debts.

A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign currency reserves, the availability of
sufficient foreign exchange, the relative size of the debt service burden, the
sovereign debtor's policy toward principal international lenders and local
political constraints. Sovereign debtors may also be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
to reduce principal and interest arrearages on their debt. The failure of a
sovereign debtor to implement economic policies or repay principal or interest
when due may result in the cancellation of third-party commitments to lend funds
to the sovereign debtor, which may further impair such debtor's ability or
willingness to service its debts.

Obligations of Supranational Entities. (All Funds except Burnham Dow 30 Focused
Fund and Burnham Money Market Fund) Each Fund may invest in obligations of
supranational entities designated or supported by governmental entities to
promote economic reconstruction or development and of international banking
institutions and related government agencies. Examples include the International
Bank for Reconstruction and Development (the World Bank), the Asian Development
Bank and the Inter-American Development Bank. Each supranational entity's
lending activities are limited to a percentage of its total capital (including
"callable capital" contributed by its governmental members at the entity's
call), reserves and net income. Participating governments may not be able or
willing to honor their commitments to make capital contributions to a
supranational entity.

Risks of Foreign Securities. Investments in foreign securities may involve a
greater degree of risk than securities of U.S. issuers. There is generally less
publicly available information about foreign companies in the form of reports
and ratings similar to those published about issuers in the United States. Also,
foreign issuers are generally not subject to uniform accounting, auditing and
financial reporting requirements comparable to those applicable to United States
issuers.

To the extent that a Fund's foreign securities are denominated in currencies
other than the U.S. dollar, changes in foreign currency exchange rates will
affect the Fund's net asset value, the value of dividends and interest earned,

<PAGE>

gains and losses realized on the sale of securities, and any net investment
income and gains that the Fund distributes to shareholders. Securities
transactions in some foreign markets may not be settled promptly so that a
Fund's foreign investments may be less liquid and subject to the risk of
fluctuating currency exchange rates pending settlement.

Foreign securities may be purchased on over-the-counter markets or exchanges
located in the countries where an issuer's securities are principally traded.
Many foreign markets are not as developed or efficient as those in the United
States. While growing in volume, they usually have substantially less volume
than U.S. markets. Securities of some foreign issuers are less liquid and more
volatile than securities of comparable United States issuers. Fixed commissions
on foreign exchanges are generally higher than negotiated commissions on United
States exchanges, although a Fund will endeavor to achieve the most favorable
net results on its portfolio transactions. There is generally less government
supervision and regulation of securities exchanges, brokers and listed issuers
than in the United States.

In certain foreign countries, there is the possibility of adverse changes in
investment or exchange control regulations, expropriation, nationalization or
confiscatory taxation, limitations on the removal of assets of a Fund from a
country, political or social instability, or diplomatic developments. Moreover,
individual foreign economies may differ favorably or unfavorably from the United
States economy in terms of growth of gross national product, rate of inflation,
capital reinvestment, resource self-sufficiency and balance of payments
position. Dividends, interest, and, in some cases, capital gains earned by a
Fund on certain foreign securities may be subject to foreign taxes, thus
reducing the net amount of income or gains available for distribution to the
Fund's shareholders.

The above risks may be intensified for investments in emerging markets or
countries with limited or developing capital markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Latin and South America and
Africa. Security prices in these markets can be significantly more volatile than
in more developed countries, reflecting the greater uncertainties of investing
in less established markets and economies. Political, legal and economic
structures in many of these emerging market countries may be undergoing
significant evolution and rapid development, and they may lack the social,
political, legal and economic stability characteristic of more developed
countries. Emerging market countries may have failed in the past to recognize
private property rights. They may have relatively unstable governments, present
the risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less protection of property
rights than more developed countries. Their economies may be predominantly based
on only a few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt burdens or
inflation rates. Local securities markets may trade a small number of securities
and may be unable to respond effectively to increases in trading volume,
potentially making prompt liquidation of substantial holdings difficult or
impossible at times. A Fund may be required to establish special custodial or
other arrangements before making certain investments in those countries.
Securities of issuers located in these countries may have limited marketability
and may be subject to more abrupt or erratic price movements.

RESTRICTED SECURITIES.

(All Funds) A Fund may purchase securities that are not registered (restricted
securities) under the Securities Act of 1933 (1933 Act), including commercial
paper issued in reliance on Section 4(2) of the 1933 Act, and which are,
therefore, restricted as to their resale. However, a Fund will not invest more
than 15% of its net assets (10% for Money Market Fund) in illiquid investments.
The Trustees may adopt guidelines and delegate to the Adviser the daily function
of determining the monitoring and liquidity of restricted securities. The
Trustees, however, will retain oversight as to, and be ultimately responsible
for, these determinations. If the Adviser determines, based upon a continuing
review of the trading markets for specific Section 4(2) paper or Rule 144A
securities, that they are liquid, they will not be subject to the 15% limit (10%
for Money Market Fund) in illiquid investments. This investment practice could
have the effect of decreasing the level of liquidity in the Fund if sufficient
numbers of qualified institutional buyers are not interested in purchasing these
restricted securities.

DERIVATIVE INSTRUMENTS.

General. (All Funds except Burnham Money Market Fund) The Funds may, but are not
required to, invest in derivative instruments, which are commonly defined as
financial instruments whose performance and value are

<PAGE>

derived, at least in part, from another source, such as the performance of an
underlying asset, security or index. The Funds' transactions in derivative
instruments may include:

the purchase and writing of options on securities (including index
options) and options on foreign currencies;

the purchase and sale of futures contracts based on financial, interest
rate and securities indices, equity securities or fixed income
securities; and

entering into forward contracts, swaps and swap related products, such
as equity index, interest rate or currency swaps, and related caps,
collars, floors and swaptions.

The success of transactions in derivative instruments depends on the Adviser's
judgment as to their potential risks and rewards. Use of these instruments
exposes a Fund to additional investment risks and transaction costs. If the
Adviser incorrectly analyzes market conditions or does not employ the
appropriate strategy with these instruments, the Fund's return could be lower
than if derivative instruments had not been used. Additional risks inherent in
the use of derivative instruments include: adverse movements in the prices of
securities or currencies and the possible absence of a liquid secondary market
for any particular instrument. A Fund could experience losses if the prices of
its derivative positions correlate poorly with those of its other investments.
The loss from investing in derivative instruments is potentially unlimited.

Each Fund may invest in derivatives for hedging purposes, to enhance returns, as
a substitute for purchasing or selling securities, to maintain liquidity or in
anticipation of changes in the composition of its portfolio holdings. The risks
and policies of various types of derivative investments in which the Funds may
invest are described in greater detail above.

Options on Securities and Securities Indices. (All Funds except Burnham Money
Market Fund) A Fund may purchase and write (sell) call and put options on any
securities in which it may invest or on any securities index containing
securities in which it may invest. These options may be listed on securities
exchanges or traded in the over-the-counter market. A Fund may write covered put
and call options and purchase put and call options to enhance total return, as a
substitute for the purchase or sale of securities, or to protect against
declines in the value of portfolio securities and against increases in the cost
of securities to be acquired.

Writing Covered Options. A call option on securities written by a Fund obligates
the Fund to sell specified securities to the holder of the option at a specified
price if the option is exercised at any time before the expiration date. A put
option on securities written by a Fund obligates the Fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. Options on securities indices
are similar to options on securities, except that the exercise of securities
index options requires cash settlement payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.
Writing covered call options may deprive a Fund of the opportunity to profit
from an increase in the market price of the securities in its portfolio. Writing
covered put options may deprive a Fund of the opportunity to profit from a
decrease in the market price of the securities to be acquired for its portfolio.

All call and put options written by a Fund are covered. A written call option or
put option may be covered by (1) maintaining cash or liquid securities in a
segregated account with a value at least equal to a Fund's obligation under the
option, (2) entering into an offsetting forward commitment and/or (3) purchasing
an offsetting option or any other option which, by virtue of its exercise price
or otherwise, reduces the Fund's net exposure on its written option position. A
written call option on securities is typically covered by maintaining the
securities that are subject to the option in a segregated account. A Fund may
cover call options on a securities index by owning securities whose price
changes are expected to be similar to those of the underlying index.

A Fund may terminate its obligations under an exchange traded call or put option
by purchasing an option identical to the one it has written. Obligations under
over-the-counter options may be terminated only by entering into an offsetting
transaction with the counterparty to the option. These purchases are referred to
as "closing purchase transactions."

<PAGE>

Purchasing Options. A Fund would normally purchase call options in anticipation
of an increase, or put options in anticipation of a decrease ("protective puts")
in the market value of securities of the type in which it may invest. A Fund may
also sell call and put options to close out its purchased options.

The purchase of a call option would entitle a Fund, in return for the premium
paid, to purchase specified securities at a specified price during the option
period. A Fund would ordinarily realize a gain on the purchase of a call option
if, during the option period, the value of such securities exceeded the sum of
the exercise price, the premium paid and transaction costs; otherwise the Fund
would realize either no gain or a loss on the purchase of the call option.

The purchase of a put option would entitle a Fund, in exchange for the premium
paid, to sell specified securities at a specified price during the option
period. The purchase of protective puts is designed to offset or hedge against a
decline in the market value of a Fund's portfolio securities. Put options may
also be purchased by a Fund for the purpose of affirmatively benefiting from a
decline in the price of securities which it does not own. A Fund would
ordinarily realize a gain if, during the option period, the value of the
underlying securities decreased below the exercise price sufficiently to cover
the premium and transaction costs; otherwise the Fund would realize either no
gain or a loss on the purchase of the put option. Gains and losses on the
purchase of put options may be offset by countervailing changes in the value of
the Fund's portfolio securities.

A Fund's options transactions will be subject to limitations established by each
of the exchanges, boards of trade or other trading facilities on which such
options are traded. These limitations govern the maximum number of options in
each class which may be written or purchased by a single investor or group of
investors acting in concert, regardless of whether the options are written or
purchased on the same or different exchanges, boards of trade or other trading
facilities or are held or written in one or more accounts or through one or more
brokers. Thus, the number of options which a Fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
the Adviser. An exchange, board of trade or other trading facility may order the
liquidation of positions found to be in excess of these limits, and it may
impose certain other sanctions.

Risks Associated with Options Transactions. There is no assurance that a liquid
secondary market on a domestic or foreign options exchange will exist for any
particular exchange-traded option or at any particular time. If a Fund is unable
to effect a closing purchase transaction with respect to covered options it has
written, the Fund will not be able to sell the underlying securities or dispose
of assets held in a segregated account until the options expire or are
exercised. Similarly, if a Fund is unable to effect a closing sale transaction
with respect to options it has purchased, it would have to exercise the options
in order to realize any profit and will incur transaction costs upon the
purchase or sale of underlying securities.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (1) there may be insufficient trading interest in certain options;
(2) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (3) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (4) unusual or unforeseen circumstances may interrupt normal operations
on an exchange; (5) the facilities of an exchange or the Options Clearing
Corporation may not at all times be adequate to handle current trading volume;
or (6) 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). If trading were discontinued, the
secondary market on that exchange (or in that class or series of options) would
cease to exist. However, outstanding options on that exchange that had been
issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.

A Fund's ability to terminate over-the-counter options is more limited than with
exchange-traded options and may involve the risk that broker-dealers
participating in such transactions will not fulfill their obligations. The
Adviser will determine the liquidity of each over-the-counter option in
accordance with guidelines adopted by the Trustees.

The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of options
depends in part on the Adviser's ability to predict future price fluctuations
and, for hedging transactions, the degree of correlation between the options and
securities markets.

Futures Contracts and Options on Futures Contracts. (Burnham Fund, Burnham
Financial Services Fund, Burnham

<PAGE>

Small Cap Value Fund) To seek to increase total return or hedge against changes
in interest rates or securities prices, a Fund may purchase and sell futures
contracts, and purchase and write call and put options on these futures
contracts. A Fund may also enter into closing purchase and sale transactions
with respect to any of these contracts and options. These futures contracts may
be based on various securities (such as U.S. government securities), securities
indices and any other financial instruments and indices. All futures contracts
entered into by a Fund are traded on U.S. exchanges or boards of trade that are
licensed, regulated or approved by the Commodity Futures Trading Commission
("CFTC").

Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).

Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities will usually be liquidated in
this manner, a Fund may instead make, or take, delivery of the underlying
securities whenever it appears economically advantageous to do so. A clearing
corporation associated with the exchange on which futures contracts are traded
guarantees that, if still open, the sale or purchase will be performed on the
settlement date.

Hedging and Other Strategies. Hedging is an attempt to establish with more
certainty than would otherwise be possible the effective price or rate of return
on portfolio securities or securities that a Fund proposes to acquire. When
interest rates are rising or securities prices are falling, a Fund can seek to
offset a decline in the value of its current portfolio securities through the
sale of futures contracts. When interest rates are falling or securities prices
are rising, a Fund, through the purchase of futures contracts, can attempt to
secure better rates or prices than might later be available in the market when
it effects anticipated purchases.

A Fund may, for example, take a "short" position in the futures market by
selling futures contracts in an attempt to hedge against an anticipated rise in
interest rates or a decline in market prices that would adversely affect the
value of the Fund's portfolio securities. These futures contracts may include
contracts for the future delivery of securities held by the Fund or securities
with characteristics similar to those of the Fund's portfolio securities.

If, in the opinion of the Adviser, there is a sufficient degree of correlation
between price trends for a Fund's portfolio securities and futures contracts
based on other financial instruments, securities indices or other indices, the
Fund may also enter into such futures contracts as part of its hedging strategy.
Although under some circumstances prices of securities in a Fund's portfolio may
be more or less volatile than prices of these futures contracts, the Adviser
will attempt to estimate the extent of this volatility difference based on
historical patterns and compensate for any differential by having the Fund enter
into a greater or lesser number of futures contracts or by attempting to achieve
only a partial hedge against price changes affecting the Fund's portfolio
securities.

When a short hedging position is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of a Fund's portfolio securities would be substantially offset by a
decline in the value of the futures position.

On other occasions, a Fund may take a "long" position by purchasing futures
contracts. This would be done, for example, when the Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices then available in the applicable market to be less favorable
than prices that are currently available. The Fund may also purchase futures
contracts as a substitute for transactions in securities, to alter the
investment characteristics of portfolio securities or to gain or increase its
exposure to a particular securities market.

Options on Futures Contracts. A Fund may purchase and write options on futures
for the same purposes as its transactions in futures contracts. The purchase of
put and call options on futures contracts will give a Fund the right (but not
the obligation) for a specified price to sell or to purchase, respectively, the
underlying futures contract at any time during the option period. As the
purchaser of an option on a futures contract, the Fund obtains the benefit of
the futures position if prices move in a favorable direction but limits its risk
of loss in the event of an unfavorable price movement to the loss of the premium
and transaction costs.

<PAGE>

The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of a Fund's assets. By writing a call
option, a Fund becomes obligated, in exchange for the premium (upon exercise of
the option) to sell a futures contract if the option is exercised, which may
have a value higher than the exercise price. Conversely, the writing of a put
option on a futures contract generates a premium which may partially offset an
increase in the price of securities that a Fund intends to purchase. However,
the Fund becomes obligated (upon exercise of the option) to purchase a futures
contract if the option is exercised, which may have a value lower than the
exercise price. The loss incurred by the Fund in writing options on futures is
potentially unlimited and may exceed the amount of the premium received.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option of the same series. There
is no guarantee that such closing transactions can be effected. A Fund's ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid market.

Other Considerations. A Fund may engage in futures and related options
transactions either for bona fide hedging purposes or to seek to increase total
return as permitted by the CFTC. To the extent that a Fund is using futures and
related options for hedging purposes, futures contracts will be sold to protect
against a decline in the price of securities that the Fund owns or futures
contracts will be purchased to protect the Fund against an increase in the price
of securities it intends to purchase. The Adviser will determine that the price
fluctuations in the futures contracts and options on futures used for hedging
purposes are substantially related to price fluctuations in securities held by
the Fund or securities or instruments which it expects to purchase. As evidence
of its hedging intent, each Fund expects that, on 75% or more of the occasions
on which it takes a long futures or option position (involving the purchase of
futures contracts), the Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities in the cash market at the
time when the futures or option position is closed out. However, in particular
cases, when it is economically advantageous for a Fund to do so, a long futures
position may be terminated or an option may expire without the corresponding
purchase of securities or other assets.

To the extent that a Fund engages in nonhedging transactions in futures
contracts and options on futures, the aggregate initial margin and premiums
required to establish these nonhedging positions will not exceed 5% of the net
asset value of the Fund's portfolio, after taking into account unrealized
profits and losses on any such positions and excluding the amount by which such
options were in-the-money at the time of purchase.

Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating the Fund to purchase securities, require the Fund to establish a
segregated account consisting of cash or liquid securities in an amount equal to
the underlying value of such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, these transactions themselves entail certain other risks. For
example, unanticipated changes in interest rates or securities prices may result
in a poorer overall performance for a Fund than if it had not entered into any
futures contracts or options transactions.

Perfect correlation between a Fund's futures positions and portfolio positions
will be impossible to achieve. In the event of an imperfect correlation between
a futures position and a portfolio position which is intended to be protected,
the desired protection may not be obtained and the Fund may be exposed to risk
of loss.

Some futures contracts or options on futures may become illiquid under adverse
market conditions. In addition, during periods of market volatility, a commodity
exchange may suspend or limit trading in a futures contract or related option,
which may make the instrument temporarily illiquid and difficult to price.
Commodity exchanges may also establish daily limits on the amount that the price
of a futures contract or related option can vary from the previous day's
settlement price. Once the daily limit is reached, no trades may be made that
day at a price beyond the limit. This may prevent a Fund from closing out
positions and limiting its losses.

Foreign Currency Transactions. (Burnham Fund, Burnham Financial Services Fund,
Burnham Small Cap Value Fund) A Fund's foreign currency exchange transactions
may be conducted on a spot (i.e., cash) basis at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market. A Fund may also
enter into forward

<PAGE>

foreign currency exchange contracts to enhance return, to hedge against
fluctuations in currency exchange rates affecting a particular transaction or
portfolio position, or as a substitute for the purchase or sale of a currency or
assets denominated in that currency. Forward contracts are agreements to
purchase or sell a specified currency at a specified future date and price set
at the time of the contract. Transaction hedging is the purchase or sale of
forward foreign currency contracts with respect to specific receivables or
payables of a Fund accruing in connection with the purchase and sale of its
portfolio securities quoted or denominated in the same or related foreign
currencies. Portfolio hedging is the use of forward foreign currency contracts
to offset portfolio security positions denominated or quoted in the same or
related foreign currencies. A Fund may elect to hedge less than all of its
foreign currency portfolio positions if deemed appropriate by the Adviser.

If a Fund purchases a forward contract or sells a forward contract for
non-hedging purposes, it will segregate cash or liquid securities, of any type
or maturity, in a separate account in an amount equal to the value of the Fund's
total assets committed to the consummation of the forward contract. The assets
in the segregated account will be valued at market daily and if the value of the
securities in the separate account declines, additional cash or securities will
be placed in the account so that the value of the account will be equal to the
amount of the Fund's commitment with respect to such contracts.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. These transactions also preclude the
opportunity for currency gains if the value of the hedged currency rises.
Moreover, it may not be possible for the Fund to hedge against a devaluation
that is so generally expected that the Fund is not able to contract to sell the
currency at a price above the devaluation level it anticipates.

The cost to a Fund of engaging in foreign currency transactions varies with such
factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency are
usually conducted on a principal basis, no fees or commissions are involved.

Foreign Currency Options. Each Fund may purchase or sell (write) call and put
options on currency. A foreign currency option provides the option buyer with
the right to buy or sell a stated amount of foreign currency at the exercise
price on a specified date or during the option period. The owner of a call
option has the right, but not the obligation, to buy the currency. Conversely,
the owner of a put option has the right, but not the obligation, to sell the
currency. When the option is exercised, the seller of the option is obligated to
fulfill the terms of the written option. However, either the seller or the buyer
may, in the secondary market, close its position during the option period at any
time before expiration.

A purchased call option on a foreign currency generally rises in value if the
underlying currency appreciates in value. A purchased put option on a foreign
currency generally rises in value if the underlying currency depreciates in
value. Although purchasing a foreign currency option can protect a Fund against
an adverse movement in the value of a foreign currency, the option will not
limit changes in the value of such currency. For example, if a Fund was holding
securities denominated in a foreign currency that was appreciating and had
purchased a foreign currency put to hedge against a decline in the value of the
currency, the Fund would not have to exercise its put option. Likewise, a Fund
might enter into a contract to purchase a security denominated in foreign
currency and, in conjunction with that purchase, might purchase a foreign
currency call option to hedge against a rise in value of the currency. If the
value of the currency instead depreciated between the date of purchase and the
settlement date, the Fund would not have to exercise its call. Instead, the Fund
could acquire in the spot market the amount of foreign currency needed for
settlement.

Special Risks Associated with Foreign Currency Options. Buyers and sellers of
foreign currency options are subject to the same risks that apply to options
generally. In addition, there are certain additional risks associated with
foreign currency options. The markets in foreign currency options are relatively
thin, and a Fund's ability to establish and close out positions on such options
is subject to the maintenance of a liquid secondary market. A Fund will not
purchase or write such options unless and until, in the opinion of the Adviser,
the market for them has developed sufficiently to ensure that the risks in
connection with such options are not greater than the risks in connection with
the underlying currency. Nevertheless, there can be no assurance that a liquid
secondary market will exist for a particular option at any specific time. In
addition, options on foreign currencies are affected by most of the same factors
that influence foreign exchange rates and investments generally.

<PAGE>

The value of a foreign currency option depends upon the value of the underlying
currency relative to the U.S. dollar. As a result, the price of the option
position may vary with changes in the value of either or both currencies and may
have no relationship to the investment performance of a foreign security.
Because foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.

There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirement that quotations available through dealers or other
market sources be firm or revised on a timely basis. Available quotation
information is generally representative of very large transactions in the
interbank market and thus may not reflect relatively smaller transactions (i.e.,
less than $1 million) where rates may be less favorable. The interbank market in
foreign currencies is a global, around-the-clock market. To the extent that the
U.S. currency option markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that cannot be reflected in the options markets until
they reopen.

Foreign Currency Futures Transactions. By using foreign currency futures
contracts and options on such contracts, the Fund may be able to achieve many of
the same objectives as it would through the use of forward foreign currency
exchange contracts. The Fund may sometimes be able to achieve these objectives
more effectively and at a lower cost by using futures transactions instead of
forward foreign currency exchange contracts.

The sale of a foreign currency futures contract creates an obligation by the
Fund, as seller, to deliver the amount of currency called for in the contract at
a specified future time for a specified price. The purchase of a currency
futures contract creates an obligation by the Fund, as purchaser, to take
delivery of an amount of currency at a specified future time at a specified
price. Although the terms of currency futures contracts specify actual delivery
or receipt, in most instances the contracts are closed out before the settlement
date without the making or taking of delivery of the currency. Currency futures
contracts are closed out by entering into an offsetting purchase or sale
transaction for the same aggregate amount of currency and delivery date. If the
sale price of a currency futures contract exceeds the price of the offsetting
purchase, the Fund realizes a gain. If the sale price is less than the
offsetting purchase price, the Fund realizes a loss. If the purchase price of a
currency futures contract is less than the offsetting sale price, the Fund
realizes a gain. If the purchase price of a currency futures contract exceeds
the offsetting sale price, the Fund realizes a loss.

Special Risks Associated with Foreign Currency Futures Contracts and Related
Options. Buyers and sellers of foreign currency futures contracts and related
options are subject to the same risks that apply to the use of futures
generally. In addition, the risks associated with foreign currency futures
contracts and options on futures are similar to those associated with options on
foreign currencies, as described above.

Swaps, Caps, Floors, Collars and Swaptions. (Burnham Fund, Burnham Financial
Services Fund, Burnham Small Cap Value Fund) As one way of managing its exposure
to different types of investments, a Fund may enter into interest rate swaps,
currency swaps, and other types of swap agreements such as caps, collars, floors
and swaptions. In a typical interest rate swap, one party agrees to make regular
payments equal to a floating interest rate times a "notional principal amount,"
in return for payments equal to a fixed rate times the same notional amount, for
a specified period of time. If a swap agreement provides for payment in
different currencies, the parties might agree to exchange the notional principal
amount as well. Swaps may also depend on other prices or rates, such as the
value of an index or mortgage prepayment rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor. A swaption is an option to buy or sell a swap position.

<PAGE>

Swap agreements will tend to shift a Fund's investment exposure from one type of
investment to another. For example, if the Fund agreed to exchange payments in
dollars for payments in a foreign currency, the swap agreement would tend to
decrease the Fund's exposure to U.S. interest rates and increase its exposure to
foreign currency and interest rates. Caps and floors have an effect similar to
buying or writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a Fund's investments and its
share price and yield.

Swap agreements are sophisticated risk management instruments that typically
require a small cash investment relative to the magnitude of risks assumed. As a
result, swaps can be highly volatile and may have a considerable impact on a
Fund's performance. Swap agreements are subject to credit risks related to the
counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. A Fund may also suffer losses if
it is unable to terminate outstanding swap agreements or reduce its exposure
through offsetting transactions. A Fund will maintain in a segregated account
cash or liquid securities equal to the net amount, if any, of the excess of the
Fund's obligations over its entitlements with respect to swap, cap, collar,
floor or swaption transactions.

Forward Commitments, When-Issued Securities and Delayed Delivery Transactions.
(All Funds) The Funds may purchase or sell securities on a when-issued or
delayed delivery basis and make contracts to purchase or sell securities for a
set price at a set date beyond customary settlement time. A Fund will engage in
when-issued purchases of securities in order to obtain what is considered to be
an advantageous price and yield at the time of purchase. Securities purchased or
sold on a when-issued, delayed delivery or forward commitment basis involve a
risk of loss if the security to be purchased declines in value, or a security to
be sold increases in value, before the settlement date. The failure of the
issuer or other party to consummate the transaction may result in a Fund's
losing the opportunity to obtain an advantageous price. Although a Fund usually
intends to acquire the underlying securities, the Fund may dispose of such
securities before settlement. For purposes of determining a Fund's average
dollar-weighted maturity, the maturity of when-issued or forward commitment
securities will be calculated from the commitment date.

When a Fund purchases securities on a when-issued, delayed delivery or forward
commitment basis, the Fund will segregate in a separate account cash or liquid
securities of any type or maturity, having a value (determined daily) at least
equal to the amount of the Fund's purchase commitments.

Dow Jones Index Equivalent Securities. (Burnham Dow 30 Focused Fund) The Fund
may invest in the securities of the thirty companies which comprise the Dow
Jones Industrial Average (DJIA). In addition to the securities of the DJIA, the
Fund may also invest in securities which are considered "equivalents" of
investing in DJIA securities. Equity equivalents may be used for several
purposes: to simulate full investment in the underlying index while retaining a
cash balance for fund management purposes, to facilitate trading, to reduce
transactions costs or to seek higher investment returns where an equity
equivalent is priced more attractively then securities in the DJIA. These equity
equivalents include options, warrants, futures and other derivative instruments
based on the DJIA. Another equity equivalent of the DJIA is DIAMONDS, which
represent interests in a unit investment trust investing in DJIA stocks. For a
more detailed discussion of DIAMONDS and a history of the DJIA, see Appendix B.

OTHER INVESTMENT PRACTICES AND RISKS.

Lending Portfolio Securities. The Funds may lend their portfolio securities.
These loans are secured by the delivery to a Fund of cash collateral, which may
be invested in short-term debt securities and money market funds. The Funds may
make loans only to broker-dealers who are members of the New York Stock Exchange
(NYSE), or who have net capital of at least $10,000,000. Such loans will not be
made against less than 100% cash collateral maintained at 100% of the market
value (marked-to-market daily) of the loaned securities. Loans will be made only
if a Fund can terminate the loan at any time.

When a Fund lends portfolio securities, there is a risk that the borrower may
fail to return the securities. As a result, a Fund may incur a loss or, in the
event of a borrower's bankruptcy, may be delayed in, or prevented from,
liquidating the collateral.

Reverse Repurchase Agreements. (Burnham Fund, Burnham Financial Services Fund,
Burnham Small Cap Value Fund) The Funds may enter reverse repurchase agreements
whereby a Fund sells portfolio assets with an agreement to repurchase the assets
at a later date at a set price. A Fund continues to receive principal and
interest payments on these securities. The Funds will maintain a segregated
custodial account consisting of cash or liquid securities of any

<PAGE>

type or maturity, having a value at least equal to the repurchase price, plus
accrued interest.

Reverse repurchase agreements involve the risk that the value of the securities
sold by a Fund may decline below the price of the securities the Fund is
obligated to repurchase. Reverse repurchase agreements are borrowings by a Fund
and are subject to its investment restrictions on borrowing.

Risks of Non-Diversification. Burnham Dow 30 Focused Fund and Burnham Small Cap
Value Fund are classified as "non-diversified" under the 1940 Act.
Non-diversification means that the proportion of a Fund's assets that may be
invested in the securities of a single issuer is not limited by the Act. Since
they may invest a larger proportion of their assets in a single issuer, an
investment in these Funds may be subject to greater fluctuations in value than
an investment in a diversified fund.

Short-Term Trading and Portfolio Turnover. (All Funds except Burnham Dow 30
Focused Fund) Short-term trading means the purchase and subsequent sale of a
security after it has been held for a relatively brief period of time. A Fund
may engage in short-term trading in response to stock market conditions, changes
in interest rates or other economic trends and developments, or to take
advantage of yield disparities between various fixed income securities in order
to realize capital gains or enhance income. Short-term trading may have the
effect of increasing a Fund's portfolio turnover rate. A high rate of portfolio
turnover (100% or more) involves correspondingly higher brokerage costs that
must be borne directly by the Fund and thus indirectly by the shareholders,
reducing the shareholder's return. Short-term trading may also increase the
amount of taxable gains that must be distributed to shareholders.

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT RESTRICTIONS.

The following investment restrictions are considered fundamental, which means
they may be changed only with the approval of the holders of a majority of a
Fund's outstanding voting securities, defined in the 1940 Act as the lesser of:
(1) 67% or more of that Fund's voting securities present at a meeting if the
holders of more than 50% of that Fund's outstanding voting securities are
present or represented by proxy, or (2) more than 50% of that Fund's outstanding
voting securities.

1. A Fund may not borrow money or issue senior securities, except to the
extent permitted by the 1940 Act.

2. A Fund may not make loans to other persons, except loans of securities
not exceeding one-third of the Fund's total assets, investments in debt
obligations and transactions in repurchase agreements.

3. A Fund may not purchase, sell or invest in real estate, but, subject to
its other investment policies and restrictions may invest in securities
of companies that deal in real estate or are engaged in the real estate
business. These companies include real estate investment trusts and
securities secured by real estate or interests in real estate. A Fund
may hold and sell real estate acquired through default, liquidation or
other distribution of an interest in real estate as a result of the
Fund's ownership of securities.

4. A Fund may not invest in commodities or commodity futures contracts,
except for transactions in financial derivative contracts, such as
forward currency contracts; financial futures contracts and options on
financial futures contracts; options on securities, currencies and
financial indices; and swaps, caps, floors, collars and swaptions.

5. A Fund may not underwrite securities of other issuers, except insofar as
a Fund may be deemed an underwriter under the 1933 Act when selling
portfolio securities.

6. Each Fund, except Burnham Small Cap Value Fund and Burnham Dow 30
Focused Fund, with respect to 75% of its total assets, may not invest
more than 5% of its total assets in the securities of any single issuer,
or own more than 10% of the outstanding voting securities of any one
issuer, in each case other than (1) securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or (2) securities
of other investment companies.

<PAGE>

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS.

The following restrictions may be modified by the Trustees without shareholder
approval.

1. A Fund (other than Burnham Money Market Fund) may not invest more than
15% of its net assets in illiquid securities. Burnham Money Market Fund
may not invest more than 10% of its net assets in illiquid securities. A
security is illiquid if it cannot be disposed of in 7 days at a price
approximately equal to the price at which the Fund is valuing the
security.

2. A Fund may not invest in other open-end investment companies except to
the extent allowed in the 1940 Act.

3. A Fund may not invest in a company for the purpose of exercising control
or management of the company.

4. A Fund may not write or purchase options in excess of 4% of the value of
the Fund's total net assets.

5. A Fund may not engage in short sales.

Except with respect to 300% asset coverage for borrowing, whenever any
investment restriction states a maximum percentage of a Fund's assets that may
be invested in any security, such percentage limitation will be applied only at
the time the Fund acquires such security and will not be violated by subsequent
increases in value relative to other assets held by the Fund.

SERVICES FOR SHAREHOLDERS

SHAREHOLDER ACCOUNTS.

When an investor initially purchases shares, an account will be opened on the
books of the Trust by the transfer agent. The investor appoints the transfer
agent as agent to receive all dividends and distributions and to automatically
reinvest them in additional shares of the same class of shares. Distributions or
dividends are reinvested at a price equal to the net asset value of these shares
as of the ex-dividend date.

Shareholders who do not want automatic dividend and distribution reinvestment
may notify the transfer agent and, ten business days after receipt of such
notice, all dividends and distributions will be paid by check.

PURCHASE AND REDEMPTION OF SHARES

PURCHASE OF SHARES.

Shares of Burnham Dow 30 Focused Fund and Burnham Money Market Fund are offered
in one class only, with no sales charge. Burnham Fund, Burnham Financial
Services Fund and Burnham Small Cap Value Fund offer Class A and Class B shares.
The Trustees and officers reserve the right to change or waive a Fund's minimum
investment requirements and to reject any order to purchase shares (including
purchases by exchange) when in their judgment the rejection is in the Fund's
best interest.

FOR BURNHAM FUND, BURNHAM FINANCIAL SERVICES FUND AND BURNHAM SMALL CAP VALUE
FUND ONLY:

INITIAL SALES CHARGES ON CLASS A SHARES.

Shares are offered at a price equal to their net asset value plus a sales charge
which is imposed at the time of purchase. The sales charges applicable to
purchases of shares of Class A shares of each Fund are described in the
prospectus. Up to 100% of the sales charge may be re-allowed to dealers who
achieve certain levels of sales or who have rendered coordinated sales support
efforts. These dealers may be deemed underwriters. Other dealers will receive
the following compensation:

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Amount Invested Dealer Concession as a %
of Offering Price of
Shares Purchased
- -------------------------------------------------------------------
<S> <C>
Less than $50,000 4.50%
- -------------------------------------------------------------------
$50,000 but less than $100,000 4.00%
- -------------------------------------------------------------------
$100,000 but less than $250,000 3.50%
- -------------------------------------------------------------------
$250,000 but less than $500,000 2.75%
- -------------------------------------------------------------------
$500,000 but less than $1,000,000 1.75%
- -------------------------------------------------------------------
$1,000,000 or more See below.
- -------------------------------------------------------------------
</TABLE>

OBTAINING A REDUCED SALES CHARGE FOR CLASS A SHARES.

Methods of obtaining a reduced sales charge referred to in the prospectus are
described in more detail below.

Purchases of Class A Shares of $1 Million or More. On purchases by a single
purchaser aggregating $1 million or more, the investor will not pay an initial
sales charge. The Distributor may pay a commission to broker-dealers who
initiate and are responsible for such purchases as follows:

1% on amounts between $1 million and $2 million

0.80% on the next $1 million

0.40% on the excess over $3 million

A CDSC will be imposed on the proceeds of the redemptions of these shares if
they are redeemed within 24 months of the end of the calendar month of their
purchase. The CDSC will be equal to

1% if the redemption occurs within the first 12 months and

0.50% if the redemption occurs within the next 12 months.

The CDSC will be based on the NAV at the time of purchase or sale, whichever is
lower.

No sales charge will be imposed on increases in net asset value, dividends or
capital gain distributions, or reinvestment of distributions in additional Class
A shares. In determining whether the sales charge is payable, the first Class A
shares redeemed will be those, if any, on which a sales charge was paid at the
time of purchase, and the remaining Class A shares will be redeemed in the order
in which they were purchased. Class B shares will not be sold to investors who
qualify to purchase Class A shares at net asset value.

Rights of Accumulation (Class A Shares). If you already hold Class A shares, you
may qualify for a reduced sales charge on your purchase of additional Class A
shares. If the value of the Class A shares you currently hold plus the amount
you wish to purchase is $50,000 or more, the sales charge on the Class A shares
being purchased will be at the rate applicable to the total aggregate amount.
The Distributor's policy is to give investors the lowest commission rate
possible under the sales charge structure. However, to take full advantage of
rights of accumulation, at the time of placing a purchase order, the investor or
his dealer must request the discount and give the Distributor sufficient
information to determine and confirm whether the purchase qualifies for the
discount. Rights of accumulation may be amended or terminated at any time as to
all purchases occurring thereafter.

Letter of Intent (Class A Shares). If you intend to purchase Class A shares
valued at $50,000 or more during a 13-month period, you may make the purchases
under a Letter of Intent so that the initial Class A shares you purchase qualify
for the reduced sales charge applicable to the aggregate amount of your
projected purchase. Your initial purchase must be at least 5% of the intended
purchase. Purchases made within 90 days before the signing of the Letter of
Intent may be included in such total amount and will be valued on the date of
the Letter of Intent. The Letter of Intent will not impose a binding obligation
to buy or sell shares on either the purchaser or the Fund.

During the period of the Letter of Intent, the transfer agent will hold shares
representing 3% of the intended purchase in escrow to provide payment of
additional sales charges that may have to be paid if the total amount purchased
under the Letter of Intent is reduced. These shares will be released upon
completion of the intended investment. If the total Class A shares covered by
the Letter of Intent are not purchased, a price adjustment is made,

<PAGE>

depending upon the actual amount invested within the period covered by the
Letter of Intent, by a redemption of sufficient shares held in escrow for the
account of the investor. A Letter of Intent can be amended: (a) during the
13-month period if the purchaser files an amended Letter of Intent with the same
expiration date as the original; and (b) automatically after the end of the
period, if the total purchases of Class A shares credited to the Letter of
Intent qualify for an additional reduction in the sales charge. For more
information concerning the Letter of Intent, see the application form or contact
the Distributor.

CLASS B SHARE PURCHASES.

Purchases of Class B shares will be processed at net asset value next determined
after receipt of your purchase order for less than $250,000. Class B shares are
not subject to an initial sales charge but may be subject to a CDSC upon
redemption.

If Class B shares of a Fund are redeemed within six years after the end of the
calendar month in which a purchase order was accepted, a CDSC will be charged by
calculating the appropriate percentage on the NAV at the time of purchase or
sale, whichever is lower. The CDSC will be deducted from the redemption proceeds
otherwise payable to the shareholder and retained by the Distributor.

<PAGE>

<TABLE>
<S> <C>
- ---------------------------------------------------
Purchase-to-sale period CDSC
- ---------------------------------------------------
Up to one year 5.00%
- ---------------------------------------------------
One year but less than two years 4.00%
- ---------------------------------------------------
Two years but less than four years 3.00%
- ---------------------------------------------------
Four years but less than five years 2.00%
- ---------------------------------------------------
Five years but less than six years 1.00%
- ---------------------------------------------------
Six years or more None
- ---------------------------------------------------
</TABLE>

Conversion of Class B Shares. Class B shares will automatically convert to Class
A shares of a Fund eight years after the calendar month in which the purchase
order for Class B shares was accepted, on the basis of the relative net asset
values of the two classes and subject to the following terms. Class B shares
acquired through the reinvestment of dividends and distributions ("reinvested
Class B shares") will be converted to Class A shares on a pro-rata basis only
when Class B shares not acquired through reinvestment of dividends or
distributions ("purchased Class B shares") are converted. The portion of
reinvested Class B shares to be converted will be determined by the ratio that
the purchased Class B shares eligible for conversion bear to the total amount of
the purchased Class shares in the shareholder's account. For the purposes of
calculating the holding period, reinvested Class B shares will be deemed to have
been issued on the date on which the issuance of Class B shares occurred.

This conversion to Class A shares will relieve Class B shares that have been
outstanding for at least eight years (a period of time sufficient for the
Distributor to have been compensated for distribution expenses related to such
Class B shares) from the higher ongoing distribution fee paid by Class B shares.

Conversion of Class B shares to Class A shares is contingent on a determination
that such conversion does not constitute a taxable event for the shareholder
under the Internal Revenue Code. If such determination is no longer available,
conversion of Class B shares to Class A shares would have to be suspended, and
Class B shares would continue to be subject to the Class B distribution fee
until redeemed.

EXEMPTIONS FROM CDSC.

No CDSC will be imposed on Class A or Class B shares in the following instances:

(a) redemptions of shares or amounts representing increases in the
value of an account above the net cost of the investment due to
increases in the net asset value per share;

(b) redemptions of shares acquired through reinvestment of income,
dividends or capital gains distributions;

(c) redemptions of Class A shares purchased in the amount of $1
million or more and held for more than 24 months or Class B
shares held for more than six years from the end of the calendar
month in which the shares were purchased.

The CDSC will not apply to purchases of Class A shares at net asset value
described under "Waivers of Sales Charge" in the prospectus and will be waived
for redemptions of Class A and Class B shares in connection with:

distributions to participants or beneficiaries of plans qualified under
Section 401(a) of the Code or from custodial accounts under Code Section
403(b)(7), individual retirement accounts under Code Section

<PAGE>

408(a), deferred compensation plans under Code Section 457 and other
employee benefit plans ("plans"),

withdrawals under an automatic withdrawal plan where the annual
withdrawal does not exceed 10% of the opening value of the account (only
for Class B shares); and

redemptions following the death or disability of a shareholder.

In determining whether the CDSC on Class A or Class B shares is payable, it is
assumed that shares not subject to a CDSC are redeemed first and that other
shares are then redeemed in the order purchased. A shareholder will be credited
with any CDSC paid in connection with the redemption of any Class A or Class B
shares if, within 120 days after such redemption, the proceeds are invested in
the same class of shares of the Fund.

REDEMPTION OF SHARES.

Investors in the Funds may redeem shares on any day the Funds are open for
business--normally when the NYSE is open--using the proper procedures described
below. See "Net Asset Value" for a list of the days on which the NYSE will be
closed.

1. Through The Distributor or Other Participating Dealers. If your
account has been established by the Distributor or a participating dealer,
contact the Distributor or your account executive at a participating dealer to
assist you with your redemption. Requests received by your dealer before the
close of the NYSE and transmitted to the transfer agent by its close of business
that day will receive that day's net asset value per share.

2. Regular Redemption Through Transfer Agent. Redemption requests may be
sent by mail to the transfer agent and will receive the net asset value of the
shares being redeemed which is next determined after the request is received in
"good form." "Good form" means that the request is signed in the name in which
the account is registered and the signature is guaranteed by an eligible
guarantee. Eligible guarantors include member firms of a national securities
exchange, certain banks and savings associations and, credit unions, as defined
by the Federal Deposit Insurance Act. You should verify with the transfer agent
that the institution is an acceptable (eligible) guarantor before signing. The
transfer agent reserves the right to request additional confirmation from
guarantor institutions, on a case by case basis, to establish eligibility. A
GUARANTEE FROM A NOTARY PUBLIC IS NOT ACCEPTABLE.

Redemption requests by a corporation, trust fiduciary, executor or administrator
(if the name and title of the individual(s) authorizing such redemption is not
shown in the account registration) must be accompanied by a copy of the
corporate resolution or other legal documentation appointing the authorized
individual, signed and certified within the prior 60 days. You may obtain from
the Distributor, the Fund or the transfer agent, forms of resolutions and other
documentation which have been prepared in advance to help you comply with the
Funds' procedures.

The Distributor does not charge for its services in connection with the
redemption of Fund shares, but upon prior notice may charge for such services in
the future. Other securities firms may charge their clients a fee for their
services in effecting redemptions of shares of the Funds.

Terms of Redemptions. The amount of your redemption proceeds will be based on
the net asset value per share next computed after the Distributor, the Funds or
the Transfer Agent receives the redemption request in proper form. Payment for
your redemption normally will be mailed to you, except as provided below. Your
redemption proceeds, reduced by any applicable CDSC, will normally be mailed or
wired the day after your redemption is processed. If you have purchased shares
by check, the payment of your redemption proceeds may be delayed until the
purchase check has cleared, which may take fifteen or more days. This potential
delay can be avoided by purchasing shares with federal funds or a certified
check.

Beneficial owners of shares held of record in the name of the Distributor or a
participating dealer may redeem their shares only through that firm. The right
of redemption may be suspended or the date of payment postponed under certain
emergency or extraordinary situations, such as suspension of trading on the
NYSE, or when trading in the markets a Fund normally uses is restricted or an
emergency exists, as determined by the Securities and Exchange Commission (the
"Commission"), so that disposal of a Fund's assets or determination of its net
asset value is not reasonably practicable, or for such other periods as the
Commission by order may permit.

<PAGE>

Each Fund reserves the right to redeem your account if its value is less than
$1,000 due to redemptions. The affected Fund will give the shareholder 30 days'
notice to increase the account value to at least $1,000. Redemption proceeds
will be mailed in accordance with the procedures described above.

Redemptions in Kind. Although the Funds would not normally do so, each Fund has
the right to pay the redemption price of shares of the Fund in whole or in part
in portfolio securities as prescribed by the Trustees. When the shareholder
sells portfolio securities received in this fashion, a brokerage charge would be
incurred. The Funds will value securities distributed in an in kind redemption
at the same value as is used in determining NAV.

REINSTATEMENT PRIVILEGE (CLASS A SHARES).

A shareholder of Class A shares who has redeemed such shares and has not
previously exercised the reinstatement privilege may reinvest any portion or all
the redemption proceeds in Class A shares at net asset value, provided that such
reinstatement occurs within 120 calendar days after such redemption and the
account meets the minimum account size requirement. This privilege may be
modified or terminated at any time by the Funds.

In order to use this privilege, the shareholder must clearly indicate by written
request to the applicable Fund that the purchase represents a reinvestment of
proceeds from previously redeemed Class A shares. If a shareholder realizes a
capital gain on redemption of shares, this gain is taxable for federal income
tax purposes even though all of such proceeds are reinvested. If a shareholder
incurs a capital loss on a redemption and reinvests the proceeds in a Fund, part
or all of such loss may not be deductible for such tax purposes.

THE REINSTATEMENT PRIVILEGE MAY BE USED BY EACH SHAREHOLDER ONLY ONCE,
REGARDLESS OF THE NUMBER OF SHARES REDEEMED OR REPURCHASED. However, the
privilege may be used without limit in connection with transactions for the sole
purpose of transferring a shareholder's interest in a Fund to his or her
Individual Retirement Account or other tax-qualified retirement plan account.

NET ASSET VALUE

Each Fund determines its net asset value per share (NAV) each business day at
the close of regular trading (typically 4:00 p.m. eastern time) on the New York
Stock Exchange (NYSE) by dividing the Fund's net assets by the number of its
shares outstanding. If the NYSE closes early, the Funds accelerate the
determination of NAV to that time. For purposes of calculating the NAV of Fund
shares, the Funds use the following procedures.

The Funds generally value equity securities traded on a national exchange or the
Nasdaq Stock Market at their last sale price on the day of valuation. The Funds
generally value equity securities for which no sales are reported on a valuation
day, and securities traded over-the-counter, at the last available bid price.

The Funds value debt securities on the basis of valuations furnished by a
principal market maker or a pricing service, both of which generally use
electronic data processing techniques (matrix pricing) to value normal
institutional size trading units of debt securities without exclusive reliance
upon quoted prices.

The Funds value short-term debt instruments that have a remaining maturity of 60
days or less at the time of purchase at amortized cost, which approximates
market value.

If market quotations are not readily available or if in the opinion of the
Adviser any quotation or market price is not representative of true market
value, the Funds may determine the fair value of any security in good faith in
accordance with procedures approved by the Trustees.

Burnham Money Market Fund generally uses the amortized cost valuation method of
valuing portfolio securities. Under the amortized cost method, assets are valued
by constantly amortizing over the remaining life of a security the difference
between the principal amount due at maturity and the cost of the security to the
Fund. The Trustees will from time to time review the extent of any deviation
between the amortized cost value of the Fund's portfolio and the portfolio's net
asset value as determined on the basis of available market quotations. If any
deviation occurs that

<PAGE>

may result in unfairness either to new investors or existing shareholders, the
Trustees will take such actions, if any, as they deem appropriate to eliminate
or reduce this unfairness to the extent reasonably practicable. These actions
may include selling portfolio securities before maturity to realize gains or
losses or to shorten the Fund's average portfolio maturity, withholding
dividends, splitting, combining or otherwise recapitalizing outstanding shares
or using available market quotations to determine net asset value per share.

The Funds value foreign securities, if any, on the basis of quotations from the
primary market in which they are traded. The Funds' custodian translates assets
or liabilities expressed in foreign currencies into U.S. dollars based on London
currency exchange quotations as of 5:00 p.m., London time (12:00 noon, New York
time) on the date of determining a Fund's NAV. If quotations are not readily
available, or the value of foreign securities has been materially affected by
events occurring after the closing of a foreign market, the Funds may value
their assets by a method that the Trustees believe accurately reflects fair
value.

On any day an international market is closed and the NYSE is open, any foreign
securities will be valued at the prior day's close with the current day's
exchange rate. Trading of foreign securities may take place on Saturdays and
U.S. business holidays on which a Fund's NAV is not calculated. Consequently, a
Fund's portfolio securities may trade and the NAV of that Fund's shares may be
significantly affected on days when a shareholder has no access to that Fund.

The NYSE is closed on the following holidays:

<TABLE>
<S> <C> <C>
New Year's Day Good Friday Labor Day
Martin Luther King, Jr. Day Memorial Day Thanksgiving Day
Presidents Day Independence Day Christmas Day
</TABLE>

TAXES

Each series of the Trust, including each Fund, is treated as a separate entity
under the Code. Each Fund has qualified and elected or intends to qualify and
elect to be treated as a "regulated investment company" under Subchapter M of
the Code and intends to continue to so qualify for each taxable year. As such
and by complying with the applicable provisions of the Code regarding the
sources of its income, the timing of its distributions, and the diversification
of its assets, each Fund will not be subject to federal income tax on its
investment company taxable income (i.e., all taxable income, after reduction by
deductible expenses, other than its "net capital gain," which is the excess, if
any, of its net long-term capital gain over its net short-term capital loss) and
net capital gain which are distributed to shareholders in accordance with the
timing and other requirements of the Code.

Each Fund will be subject to a 4% non-deductible federal excise tax on certain
amounts not distributed (and not treated as having been distributed) on a timely
basis in accordance with annual minimum distribution requirements. Each Fund
intends under normal circumstances to seek to avoid liability for such tax by
satisfying such distribution requirements. Certain distributions made in order
to satisfy the Code's distribution requirements may be declared by the Funds
during October, November or December of the year but paid during the following
January. Such distributions should be treated by shareholders under the Code as
if received on December 31 of the year the distributions are declared, rather
than the year in which the distributions are received.

Each Fund will not distribute net capital gains realized in any year to the
extent that a capital loss is carried forward from prior years against such
gain. For federal income tax purposes, a Fund is permitted to carry forward a
net capital loss in any year to offset its own net capital gains, if any, during
the eight years following the year of the loss. To the extent subsequent net
capital gains are offset by such losses, they would not result in federal income
tax liability to a Fund and, as noted above, would not be distributed to
shareholders.

A Fund's investment in debt obligations that are at risk of or in default
presents special tax issues for the applicable Fund. Tax rules are not entirely
clear about issues such as when the Fund may cease to accrue interest, original
issue discount, or market discount; when and to what extent deductions may be
taken for bad debts or worthless securities; how payments received on
obligations in default should be allocated between principal and income; and
whether exchanges of debt obligations in a workout context are taxable. These
and other issues will be addressed by

<PAGE>

a Fund, in the event that it holds such obligations, in order to reduce the risk
of distributing insufficient income to preserve its status as a regulated
investment company or becoming subject to federal income or excise tax.

If a Fund invests in zero coupon securities, certain increasing rate or deferred
interest securities, pay-in-kind ("PIK") securities or, in general, other
securities with original issue discount (or with market discount if a Fund
elects to include market discount in income currently), the Fund must accrue
income on such investments before the receipt of the corresponding cash
payments. However, a Fund must distribute, at least annually, all or
substantially all of its net income, including such income, to shareholders to
qualify as a regulated investment company under the Code and avoid federal
income and excise taxes. Therefore, a Fund may have to dispose of its portfolio
securities under disadvantageous circumstances to generate cash, or may have to
leverage itself by borrowing the cash, to allow satisfaction of the distribution
requirements.

Limitations imposed by the Code on regulated investment companies like the Funds
may restrict a Fund's ability to enter into futures, options or currency forward
transactions. Certain options, futures or currency forward transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though the Fund's positions have not been sold or
terminated and affect the character as long-term or short-term (or, in the case
of certain options, futures or forward contracts relating to foreign currency,
as ordinary income or loss) and timing of some capital gains and losses realized
by the Fund. Additionally, a Fund may be required to recognize gain if an
option, future, forward contract, swap or other transaction that is not subject
to the mark to market rules is treated as a "constructive sale" of an
"appreciated financial position" held by the Fund under Section 1259 of the
Code. Any net mark to market gains and/or gains from constructive sales may also
have to be distributed by a Fund to satisfy the distribution requirements
referred to above even though no corresponding cash amounts may concurrently be
received, possibly requiring the disposition of portfolio securities or
borrowing to obtain the necessary cash. Also, certain losses on transactions
involving options, futures or forward contracts and/or offsetting or successor
positions may be deferred rather than being taken into account currently in
calculating the Fund's taxable income or gain. Certain of the applicable tax
rules may be modified if a Fund is eligible and chooses to make one or more of
certain tax elections that may be available. These transactions may therefore
affect the amount, timing and character of a Fund's distributions to
shareholders. Each Fund that is permitted to engage in these derivative
transactions will take into account the special tax rules applicable to options,
futures, forward contracts and constructive sales in order to minimize any
potential adverse tax consequences.

The federal income tax rules applicable to certain structured or hybrid
securities, currency swaps or interest rate swaps, caps, floors, collars and
swaptions are unclear in certain respects. The Funds will account for these
instruments in a manner that is intended to allow the Funds to continue to
qualify as regulated investment companies. Due to possible unfavorable
consequences under present tax law, each Fund does not currently intend to
acquire "residual" interests in real estate mortgage investment conduits
("REMICs"), although the Funds may acquire "regular" interests in REMICs.

In some countries, restrictions on repatriation may make it difficult or
impossible for a Fund to obtain cash corresponding to its earnings from such
countries, which may cause a Fund to have difficulty obtaining cash necessary to
satisfy tax distribution requirements.

Foreign exchange gains and losses realized by a Fund in connection with certain
transactions, if any, involving foreign currency-denominated debt securities,
certain foreign currency futures and options, foreign currency forward
contracts, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code. Section 988 generally
causes such gains and losses to be treated as ordinary income and losses and may
affect the amount, timing and character of Fund distributions to shareholders.
In some cases, elections may be available that would alter this treatment. Any
such transactions that are not directly related to a Fund's investment in stock
or securities, possibly including speculative currency positions or currency
derivatives not used for hedging purposes, could under future Treasury
regulations produce income not among the types of "qualifying income" from which
each Fund must derive at least 90% of its gross income for its taxable year.

Each Fund other than Burnham Dow 30 Focused Fund and Burnham Money Market Fund
may be subject to withholding and other taxes imposed by foreign countries with
respect to investments in foreign securities. Tax conventions between certain
countries and the U.S. may reduce or eliminate such taxes in some cases.
Investors in a Fund would be entitled to claim U.S. foreign tax credits or
deductions with respect to such taxes, subject to certain

<PAGE>

holding period requirements and other provisions and limitations contained in
the Code, only if more than 50% of the value of the applicable Fund's total
assets at the close of the taxable year were to consist of stock or securities
of foreign corporations and the Fund were to file an election with the Internal
Revenue Service. Because the investments of the Funds are such that each Fund
expects that it generally will not meet this 50% requirement, shareholders of
each Fund generally will not directly take into account the foreign taxes, if
any, paid by that Fund and will not be entitled to any related tax deductions or
credits. Such taxes will reduce the amounts these Funds would otherwise have
available to distribute.

If a Fund acquires stock (including, under proposed regulations, an option to
acquire stock such as is inherent in a convertible bond) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, certain rents and royalties, or capital
gains) or hold at least 50% of their assets in investments producing such
passive income ("passive foreign investment companies"), the Fund could be
subject to federal income tax and additional interest charges on "excess
distributions" actually or constructively received from such companies or gain
from the actual or deemed sale of stock in such companies, even if all income or
gain actually realized is timely distributed to its shareholders. They would not
be able to pass through to their shareholders any credit or deduction for such a
tax. Certain elections may, if available, ameliorate these adverse tax
consequences, but any such election would require the Funds to recognize taxable
income or gain (subject to tax distribution requirements) without the concurrent
receipt of cash. These investments could also result in the treatment of
associated capital gains as ordinary income. The Funds (other than Burnham Money
Market Fund, which is not permitted to acquire stock) may limit and/or manage
stock holdings, if any, in passive foreign investment companies to minimize each
Fund's tax liability or maximize its return from these investments.

Distributions from a Fund's current or accumulated earnings and profits ("E&P"),
as computed for federal income tax purposes, will be treated under the Code as
ordinary income (if they are from the Fund's investment company taxable income)
or long-term capital gain (if they are from the Fund's net capital gain and are
designated by the Fund as "capital gain dividends") whether taken in shares or
in cash. Distributions, if any, in excess of E&P will constitute a return of
capital, which will first reduce an investor's tax basis in Fund shares and
thereafter (after such basis is reduced to zero) will generally give rise to
capital gains. Shareholders that receive distributions in the form of additional
shares will have a cost basis for federal income tax purposes in each share so
received equal to the amount of cash they would have received had they elected
to receive the distributions in cash, divided by the number of shares received.

For purposes of the dividends received reduction available to corporations,
dividends received by a Fund, if any, from U.S. domestic corporations in respect
of the stock of such corporations held by the Fund, for U.S. federal income tax
purposes, for at least a minimum holding period, generally 46 days, extending
before and after each dividend and distributed and designated by the Fund may be
treated as qualifying dividends. Corporate shareholders must meet the minimum
holding period requirements referred to above with respect to their shares of
the applicable Fund in order to qualify for the deduction and, if they borrow to
acquire or otherwise incur debt attributable to such shares, may be denied a
portion of the dividends received deduction. The entire qualifying dividend,
including the otherwise deductible amount, will be included in determining the
excess (if any) of a corporate shareholder's adjusted current earnings over its
alternative minimum taxable income, which may increase its alternative minimum
tax liability.

Additionally, any corporate shareholder should consult its tax adviser regarding
the possibility that its basis in its Fund shares may be reduced, for federal
income tax purposes, by reason of "extraordinary dividends" received with
respect to the shares, and, to the extent such basis would be reduced below
zero, current recognition of income would be required.

At the time of an investor's purchase of Fund shares (other than shares of
Burnham Money Market Fund), a portion of the purchase price may be attributable
to undistributed net investment income and/or realized or unrealized
appreciation in the Fund's portfolio. Consequently, subsequent distributions by
a Fund on such shares from such income and/or appreciation may be taxable to
such investor even if the net asset value of the investor's shares is, as a
result of the distributions, reduced below the investor's cost for such shares,
and the distributions economically represent a return of a portion of the
purchase price.

Upon a redemption or other disposition of shares of a Fund in a transaction that
is treated as a sale for tax purposes,

<PAGE>

a shareholder may realize a taxable gain or loss, depending upon the difference
between the redemption proceeds and the shareholder's tax basis in his shares.
Generally, no gain or loss should result upon a redemption of shares of Burnham
Money Market Fund, provided that it maintains a constant net asset value per
share. With respect to the other Funds, such gain or loss will generally be
treated as capital gain or loss if the shares are capital assets in the
shareholder's hands.

In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment in a Fund at net asset value
pursuant to the reinvestment privilege, the sales charge paid on such shares is
not included in their tax basis under the Code and (2) in the case of an
exchange, all or a portion of the sales charge paid on such shares is not
included in their tax basis under the Code, to the extent a sales charge that
would otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange.

Any loss realized on a redemption may be disallowed under "wash sale" rules to
the extent the shares disposed of are replaced with other shares of the same
Fund within a period of 61 days beginning 30 days before and ending 30 days
after the shares are disposed of, such as pursuant to automatic dividend
reinvestments. In such a case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss. Any loss realized upon the redemption of shares
with a tax holding period of six months or less will be treated as a long-term
capital loss to the extent of any amounts treated as distributions of long-term
capital gain with respect to such shares. Withdrawals under the automatic
withdrawal plan involve redemptions of shares, which are subject to the tax
rules described above. Additionally, reinvesting pursuant to the reinvestment
privilege does not eliminate the possible recognition of gain or loss upon the
initial redemption of Fund shares but may require application of some of these
tax rules, e.g., the wash sale rule.

Shareholders should consult their own tax advisers regarding their particular
circumstances to determine whether a disposition of Fund shares is properly
treated as a sale for tax purposes, as is assumed in the foregoing discussion.

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

The foregoing discussion relates solely to U.S. federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to certain classes
of investors, such as tax-exempt entities, insurance companies, and financial
institutions. Dividends, capital gain distributions, and ownership of or gains
realized on the redemption (including an exchange) of Fund shares may also be
subject to state and local taxes. A state income (and possibly local income
and/or intangible property) tax exemption is generally available to the extent,
if any, a Fund's distributions are derived from interest on (or, in the case of
intangible property taxes, the value of its assets is attributable to)
investments in certain U.S. government obligations, provided in some states that
certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Shareholders should consult their tax advisers
regarding the applicable requirements in their particular states, as well as the
federal, and any other state or local, tax consequences of ownership of shares
of, and receipt of distributions from, a Fund in their particular circumstances.

Individuals and certain other classes of shareholders may be subject to 31%
backup withholding of federal income tax on dividends, capital gain
distributions, and, except in the case of Burnham Money Market Fund, the
proceeds of redemptions (including exchanges) or repurchases of shares, if they
fail to furnish the Funds with their correct taxpayer identification number and
certain certifications or if they are otherwise subject to backup withholding.

Non-U.S. investors not engaged in a U.S. trade or business with which their
investment in a Fund is effectively connected will be subject to U.S. federal
income tax treatment that is different from that described above. These
investors may be subject to nonresident alien withholding tax at the rate of 30%
(or a lower rate under an applicable tax treaty) on amounts treated as ordinary
dividends from the Fund and, unless an effective IRS Form W-8 or authorized
substitute is on file, to 31% backup withholding on certain other payments from
the Fund. Non-U.S. investors should consult their tax advisers regarding such
treatment and the application of foreign taxes to an investment in the Funds.

<PAGE>

The Funds may be subject to state or local taxes in any jurisdiction where the
Funds may be deemed to be doing business. In addition, in those states or
localities which have income tax laws, the treatment of a Fund and its
shareholders under such laws may differ from their treatment under federal
income tax laws, and an investment in the Fund may have tax consequences for
shareholders different from those of a direct investment in the Fund's portfolio
securities. Shareholders should consult their own tax advisers concerning these
matters.

TRUSTEES AND OFFICERS OF THE TRUST

TRUSTEES AND OFFICERS.

The direction and supervision of the Trust is the responsibility of the Board of
Trustees, which has been elected by the shareholders of the Trust. The Board
establishes each Fund's policies and oversees and reviews the management of each
Fund. The Board meets regularly to review the activities of the officers, who
are responsible for day-to-day operations of the Funds. The Board also reviews
the various services provided by the Adviser, the subadvisers and the
Administrator to ensure that each Fund's general investment policies and
programs are being carried out and administrative services are being provided to
the Funds in a satisfactory manner. The Trustees and officers of the Trust and
their principal occupations during the past five years are:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
POSITION(S) PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
I.W. BURNHAM, II* (90) Chairman and Honorary Chairman of the Board of Burnham
1325 Avenue of the Americas New Trustee Asset Management Corporation and Burnham
York, New York Securities Inc.
- ---------------------------------------------------------------------------------------------
JON M. BURNHAM* (63) President, Chairman, Chief Executive Officer and
1325 Avenue of the Americas New Chief Director of Burnham Asset Management
York, New York Executive Corporation and Burnham Securities Inc.
Officer and Son of I.W. Burnham, II
Trustee
- ---------------------------------------------------------------------------------------------
CLAIRE B. BENENSON (80) Trustee Consultant on Financial Conferences;
870 United Nations Plaza Trustee of Zweig Series Trust. Trustee of
New York, New York Euclid Market Neutral Fund. Former
Trustee of Simms Global Fund
and former Director of
Financial Conferences and
Chairman, Department of
Business and Financial
Affairs, The New School for
Social Research.
- ---------------------------------------------------------------------------------------------
LAWRENCE N. BRANDT (71) Trustee Director and President of Lawrence N.
2510 Rockcreek Drive, N.W. Brandt, Inc. (Real Estate Development).
Washington, D.C.
- ---------------------------------------------------------------------------------------------
ALVIN P. GUTMAN (81) Trustee Chairman of the Board of Pressman-Gutman
8350 Fisher Rd. Co., Inc. (textile converters).
Elkins Park, Pennsylvania
- ---------------------------------------------------------------------------------------------
WILLIAM W. KARATZ (72) Trustee Senior counsel to, and formerly a partner
700 Park Avenue in, the law firm of Winthrop, Stimson,
New York, New York Putnam & Roberts
- ---------------------------------------------------------------------------------------------
JOHN C. MCDONALD (63) Trustee President of MBX Inc.
49-035 Calle Flora (telecommunications).
La Quinta, CA
- ---------------------------------------------------------------------------------------------
DONALD B. ROMANS (67) Trustee President of Romans and Company (Private
233 East Wacker Drive Investors and Financial Consultants);
Chicago, Illinois Chairman of Merlin Corp. Trustee of Zweig
Series Trust. Trustee of Euclid Market
Neutral Fund.
- ---------------------------------------------------------------------------------------------
ROBERT F. SHAPIRO (64) Trustee Vice Chairman and Partner of Klingenstein,
787 Seventh Avenue Fields & Co., Inc. President of RFS &
New York, New York Associates, Inc. (investment and
consulting firm). Former Chairman, New
Street Capital Corp.
- ---------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
ROBERT M. SHAVICK (72) Trustee Legal Consultant; Member, Panel of
601 Bayport Way Arbitrators, American Arbitration
Longboat Key, Florida Association, New York Stock Exchange,
American Stock Exchange and
National Association of
Securities Dealers, Inc.
Former Director of Florida
Business Journal, Public
Trustee-Pension Funds for
employees of the Town of
Longboat Key, Florida;
Hearing Officer, Sarasota
Manatee Airport Authority;
and Mediator, Circuit and
County Courts, Florida.
- ---------------------------------------------------------------------------------------------
DAVID H. SOLMS (93) Trustee Retired. Former consultant to GMAC
Coventry House 7301 Coventry Mortgage Corporation, and former President
Avenue of the Investment Adviser to GMAC Mortgage
Melrose Park, Pennsylvania. and Realty Trust.
- ---------------------------------------------------------------------------------------------
ROBERT S. WEINBERG (71) Trustee President of R.S. Weinberg & Associates
265 North Union Boulevard (management consultants) and former
St. Louis, Missouri Professor of Marketing Management, John
M. Olin School of Business, Washington
University, St. Louis, Mo.
- ---------------------------------------------------------------------------------------------
ROBERT J. WILBUR (75) Trustee Former Vice President and General Manager
5141 S.E. Brandywine Way of the Nassau Branch of Morgan Guaranty
Stuart, Florida Trust Company.
- ---------------------------------------------------------------------------------------------
MICHAEL E. BARNA (38) Executive Executive Vice President and Assistant
1325 Avenue of the Americas Vice Secretary of Burnham Asset Management
New York, New York. President, Corporation.
Chief
Financial
Officer,
Treasurer and
Secretary
- ---------------------------------------------------------------------------------------------
RONALD M. GEFFEN (47) Vice Managing Director of Burnham Asset
1325 Avenue of the Americas President Management Corporation and Burnham
New York, New York Securities Inc.
- ---------------------------------------------------------------------------------------------
DEBRA B. HYMAN (37) Executive Vice President of Burnham Asset Management
1325 Avenue of the Americas Vice President Corporation and Burnham Securities Inc.
New York, New York Daughter of Jon M. Burnham and
granddaughter of I.W. Burnham, II.
- ---------------------------------------------------------------------------------------------
FRANK A. PASSANTINO (34) Vice Vice President of Burnham Asset Management
1325 Avenue of the Americas New President and Corporation and Burnham Securities Inc.
York, New York Assistant
Secretary
LOUIS S. ROSENTHAL (71) Vice President First Vice President of Prudential
30 South 17th Street Securities Inc.
Philadelphia, Pennsylvania
GEORGE SOMMERFELD (64) Compliance Executive Vice President of Burnham Asset
1325 Avenue of the Americas New Officer Management Corporation and Burnham
York, New York Securities Inc.
- ---------------------------------------------------------------------------------------------
</TABLE>

* Interested person of the Trust as that term is defined in the 1940 Act..

On April __, 1999, the Trustees and officers, as a group, owned ____% of the
outstanding shares of The Burnham Fund, Inc.

COMPENSATION OF TRUSTEES AND OFFICERS.

Trustees and officers affiliated with the Distributor or the Adviser are not
compensated by the Trust for their services.

The following table sets forth the compensation paid by The Burnham Fund, Inc.
to its Directors during the fiscal year ended December 31, 1998:

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
TOTAL COMPENSATION FROM THE BURNHAM FUND, INC.
NAME OF PERSON, POSITION PAID TO TRUSTEES*
- ----------------------------------------------------------------------------------------
<S> <C>
Claire B. Benenson, Director $ 7,000
- ----------------------------------------------------------------------------------------
Lawrence N. Brandt, Director $ 1,500
- ----------------------------------------------------------------------------------------
Alvin P. Gutman, Director $ 4,500
- ----------------------------------------------------------------------------------------
William W. Karatz, Director $ 5,500
- ----------------------------------------------------------------------------------------
John C. McDonald, Director $ 5,000
- ----------------------------------------------------------------------------------------
Donald B. Romans, Director $ 7,000
- ----------------------------------------------------------------------------------------
Robert F. Shapiro, Director $ 6,500
- ----------------------------------------------------------------------------------------
Robert M. Shavick, Director $ 5,500
- ----------------------------------------------------------------------------------------
David H. Solms, Director $ 5,500
- ----------------------------------------------------------------------------------------
Robert S. Weinberg, Director $ 5,500
- ----------------------------------------------------------------------------------------
Robert J. Wilbur, Director $ 5,500
- ----------------------------------------------------------------------------------------
TOTAL $59,500
- ----------------------------------------------------------------------------------------
</TABLE>

* As of December 31, 1998, there were no other investment companies in
the fund complex.

INVESTMENT MANAGEMENT AND OTHER SERVICES

INVESTMENT ADVISER.

Burnham Asset Management Corporation, located at 1325 Avenue of the Americas,
New York, New York, was organized in 1989 and has more than $400 in assets under
management in its capacity as investment adviser to the Funds, high net worth
individuals and tax-exempt institutional investors.

The Funds have entered into an investment advisory contract (the "Advisory
Agreement") with the Adviser, which was approved by the Funds' Board of Trustees
and shareholders. Pursuant to the Advisory Agreement, the Adviser will: (a)
either furnish continuously an investment program for each Fund and determine,
subject to the overall supervision and review of the Trustees, which investments
should be purchased, held, sold or exchanged, or select a subadviser to carry
out this responsibility, and (b) supervise all aspects of each Fund's investment
operations except those which are delegated to an administrator, custodian,
transfer agent or other agent. The Funds bear all costs of their organization
and operation not specifically required to be borne by another provider.

As compensation for its services under the Advisory Agreement, each Fund pays
the Adviser monthly a fee based on a stated percentage of the average daily net
assets of the Fund as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------
FUND ANNUAL ADVISORY FEE
NAME (%)
--------------------------------------------------------------
<S> <C>
Burnham Dow 30 Focused Fund 0.600
--------------------------------------------------------------
Burnham Fund* 0.600
--------------------------------------------------------------
Burnham Financial Services Fund 0.75
--------------------------------------------------------------
Burnham Small Cap Value Fund 1.000
--------------------------------------------------------------
Burnham Money Market Fund 0.450
--------------------------------------------------------------
</TABLE>

* Before May __, 1999, The Burnham Fund, Inc. paid the Adviser an advisory fee
of 0.625% annually of average daily net assets. For the fiscal years ended
December 31, 1996, 1997 and 1998, this Fund paid the Adviser $711,676, $811,886
and $905,674, respectively. For the fiscal years ended December 31, 1997 and
1998, the Adviser reimbursed this Fund $386 and $32,247, respectively, for
expenses that exceeded the Fund's expense cap.

From time to time, the Adviser may reduce its fee or make other arrangements to
limit a Fund's expenses to a specified percentage of average daily net assets.
The Adviser retains the right to re-impose a fee and recover any other payments
to the extent that, at the end of any fiscal year, that Fund's annual expenses
fall below this limit.

<PAGE>

Securities held by the Funds may also be held by other investment advisory
clients for which the Adviser or its affiliates provides investment advice.
Because of different investment objectives or other factors, a particular
security may be bought for one or more Funds or clients when one or more are
selling the same security. If opportunities for purchase or sale of securities
by the Adviser for the Funds or for other investment advisory clients arise for
consideration at or about the same time, transactions in such securities will be
made, insofar as feasible, for the respective Funds or clients in a manner
deemed equitable to all of them. To the extent that transactions on behalf of
more than one client of the Adviser or its affiliates may increase the demand
for securities being purchased or the supply of securities being sold, there may
be an adverse effect on price.

Pursuant to the Advisory Agreement, the Adviser is not liable to the Funds or
their shareholders for any error of judgment or mistake of law or for any loss
suffered by the Funds in connection with the matters to which the Advisory
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the Adviser in the performance of its duties
or from reckless disregard by the Adviser of its obligations and duties under
the Advisory Agreement.

Under the Advisory Agreement, the Trust and the Funds may use the name "Burnham"
or any name derived from or similar to it only for so long as the Advisory
Agreement or any extension, renewal or amendment thereof remains in effect. If
the Advisory Agreement is no longer in effect, the Trust and the Funds (to the
extent that they lawfully can) will cease to use such a name or any other name
indicating that it is advised by or otherwise connected with the Adviser.

The continuation of the Advisory Agreement and the Subadvisory Agreements, the
Administration Agreement and the Distribution Agreement (discussed below), was
approved by all of the Trustees. These agreements will continue in effect from
year to year, provided that their continuance is approved annually in accordance
with the requirements of the 1940 Act. The 1940 Act currently requires approval
by both (i) the holders of a majority of the outstanding voting securities of
the Trust or the Trustees, and (ii) a majority of the Trustees who are not
parties to the Agreement or "interested persons" of any such parties. These
agreements may be terminated on 60 days written notice by any party or by vote
of a majority of the outstanding voting securities of the affected Fund and will
terminate automatically if assigned.

In order to avoid conflicts with portfolio trades for the Funds, the Adviser and
the Funds have adopted restrictions on personal securities trading by personnel
of the Adviser and its affiliates. These restrictions are a continuation of the
basic principle that the interests of the Funds and their shareholders come
first.

SUBADVISERS.

The Adviser has engaged the services of subadvisers to provide portfolio
management services to certain of the Funds. For their services to these Funds,
the Adviser pays each subadviser a subadvisory fee expressed as an annual
percentage of the applicable Fund's average daily net assets. These Funds have
no obligation to pay subadvisory fees.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SUBADVISER SUBADVISED FUND SUBADVISORY FEE (%)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Mendon Capital Advisers Corp. Financial Services Fund 0.__%
- ---------------------------------------------------------------------------------------------------
Reich & Tang Asset Management LP Money Market Fund 0.15--%
- ---------------------------------------------------------------------------------------------------
</TABLE>

Mendon Capital Advisors Corp. is the subadviser to Burnham Financial Services
Fund. Their principal office is located at 1325 Avenue of the Americas, 26th
floor, New York, New York 10019. Mendon Capital is a corporation organized in
the state of Delaware. Mendon Capital is a registered investment adviser and has
been providing investment advisory services focused in the financial services
industry to private investment companies since 1996.

Reich & Tang Asset Management L.P. is the subadviser to Burnham Money Market
Fund. Reich & Tang is a Delaware limited partnership with its principal office
at 600 Fifth Avenue, New York, New York 10020. Nvest Companies L.P. is the
limited partner and owner of a 99.5% interest in Reich & Tang. Reich & Tang is a
registered investment adviser and has been providing investment advisory
services to mutual funds and other institutional clients since 1994.

<PAGE>

ADMINISTRATOR.

Burnham Asset Management Corporation serves as administrator ("Administrator")
to the Funds pursuant to an Administration Agreement. Under the Administration
Agreement, the Administrator provides the Funds with office space and personnel
to assist the Funds in managing their affairs. The Administrator's duties
require it to superviseall aspects of the Funds' operations not related to the
Funds' investments. For its services to the Funds, the Administrator is paid by
each Fund at the following annual percentage of each Fund's average daily net
assets:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------
AVERAGE DAILY ADMINISTRATION FEE
NET ASSETS
- --------------------------------------------------------------------
<S> <C>
For amounts up to $150,000,000 0.15%
- --------------------------------------------------------------------
$150,000,000 to 300,000,000 0.125%
- --------------------------------------------------------------------
Over $300,000,000 0.10%
- --------------------------------------------------------------------
</TABLE>

DISTRIBUTOR.

Distribution Agreement. The Funds have a Distribution Agreement with Burnham
Securities Inc. Under the Distribution Agreement, the Distributor is obligated
to use its best efforts to sell shares of each class of the Funds. Shares of the
Funds are also sold by selected broker-dealers (the "Selling Brokers") which
have entered into selling agency agreements with the Distributor. The
Distributor accepts orders for the purchase of shares of the Funds which are
continually offered at net asset value next determined, plus any applicable
sales charge. If connection with the sale of Class A or Class B shares, the
Distributor and Selling Brokers receive compensation from a sales charge
imposed, in the case of Class A shares, at the time of sale. In the case of
Class B shares, the broker receives compensation immediately, but the
Distributor is compensated on a deferred basis. The Distributor may pay extra
compensation to financial services firms selling large amounts of fund shares.
This compensation would be calculated as a percentage of fund shares sold by the
firm.

The table below sets forth both the aggregate amounts of sales charges paid by
The Burnham Fund, Inc. and the amount retained by the Distributor for the fiscal
years indicated:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
DECEMBER 31, 1996 DECEMBER 31, 1997 DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------------
Aggregate Amount Aggregate Amount Aggregate Amount
Amount Paid Received by Amount Paid Received by Amount Paid Received by
Distributor Distributor Distributor
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 173,299 $ 173,299 $ 64,435 $ 64,435 $ 304,781 $ 304,781
- -----------------------------------------------------------------------------------------------
</TABLE>

During the fiscal year ended December 31, 1998, the Distributor Inc, received
commissions and compensation from The Burnham Fund, Inc. as listed in the table
below:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
NET UNDERWRITING COMPENSATION ON
DISCOUNTS AND REDEMPTIONS AND BROKERAGE COMMISSIONS OTHER COMPENSATION
COMMISSIONS REPURCHASES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$15,188 $878 $102,991 -0-
- -----------------------------------------------------------------------------------------------
</TABLE>

Distribution Plans. The Trust has adopted distribution plans for Burnham Dow 30
Focused Fund and for the Class A and Class B Shares of Burnham Fund, Burnham
Financial Services Fund and Burnham Small Cap Value Fund (the "Plans" ) in
accordance with Rule 12b-1 under the 1940 Act. The Plans compensate the
Distributor for its services and distribution expenses under the Distribution
Contract. The principal services and expenses for which such compensation may be
used include: compensation to employees or account executives and reimbursement
of their expenses; overhead and telephone costs of such employees or account
executives; printing of prospectuses or reports for prospective shareholders;
advertising; preparation, printing and distribution of sales literature; and
allowances to other broker-dealers. A report of the amounts expended under each
Plan is submitted to and approved by the Trustees each quarter.

<PAGE>

The Plans are subject to annual approval by the Trustees. The Plans are
terminable at any time by vote of the Trustees or by vote of a majority of the
shares of the applicable class or Fund. Pursuant to each Plan, a new Trustee who
is not an interested person (as defined in the 1940 Act) must be nominated by
existing Trustees who are not interested persons.

If a Plan is terminated (or not renewed) with respect to any one or more
classes or Funds, the Plan may continue in effect with respect to a class
or Fund as to which it has not been terminated (or has been renewed).
Although there is no obligation for the Trust to pay expenses incurred by
the Distributor in excess of those paid to the Distributor under a Plan, if
the Plan is terminated, the Board will consider how to treat such expenses.
Any expenses incurred by the Distributor but not yet recovered through
distribution fees could be recovered through future distribution fees. If
the Distributor's actual distribution expenditures in a given year are less
than the Rule 12b-1 payments it receives from the Funds for that year, and
no effect is given to previously accumulated distribution expenditures in
excess of the Rule 12b-1 payments borne by the Distributor out of its own
resources in other years, the difference would be profit to the Distributor
for that year.

Because amounts paid pursuant to a Plan are paid to the Distributor, the
Distributor and its officers, directors and employees may be deemed to have
a financial interest in the operation of the Plans. None of the Trustees
who is not an interested person of the Trust has a financial interest in
the operation of any Plan.

The Plans were adopted because of their anticipated benefits to the Funds.
These anticipated benefits include: increased promotion and distribution of
the Fund's shares, an enhancement in each Fund's ability to maintain
accounts and improve asset retention, increased stability of net assets for
the Funds, increased stability in each Fund's positions, and greater
flexibility in achieving investment objectives. The costs of any joint
distribution activities between the Funds will be allocated among the
Fund's in proportion to their net assets.

For the fiscal year ended December 31, 1998, The Burnham Fund, Inc. paid
fees under its 12b-1 Plan according to the table below.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
ADVERTISING PRINTING AND UNDERWRITER BROKER-DEALER SALES
MAILING OF COMPENSATION COMPENSATION PERSONNEL
PROSPECTUSES COMPENSATION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
</TABLE>

CUSTODIAN.

Investors Fiduciary Trust Company, 801 Pennsylvania Avenue, Kansas City, MO
64105, serves as custodian of the Trust's securities and cash.

TRANSFER AGENT AND DIVIDEND PAYING AGENT.

State Street Bank and Trust Company, P.O. Box 8505, Boston, Massachusetts
02266-8505, is transfer and dividend paying agent for the Trust. Its
compensation is based on schedules agreed on by the Trust and the transfer
agent.

INDEPENDENT ACCOUNTANTS.

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, is the independent accountant for the Trust. In addition to reporting
annually on the financial statements of the Trust, the accountants assist and
consult with the Trust in connection with the preparation of certain filings of
the Trust with the SEC.

CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS

As of April __, 1999, the persons listed in the table below are deemed to be
control persons or principal owners of The Burnham Fund, Inc., as defined in the
1940 Act. Control persons are presumed to control the Fund for purposes of
voting on matters submitted to a vote of shareholders. Principal holders own of
record or beneficially

<PAGE>

5% or more of the Fund's outstanding voting securities.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME OF FUND NAME OF CONTROL PERSON OR PRINCIPAL HOLDER
AND PERCENTAGE OWNERSHIP
- --------------------------------------------------------------------------------
<S> <C>
The Burnham Fund, Inc. - Class A None
Shares
- --------------------------------------------------------------------------------
The Burnham Fund, Inc. - Class B Lewco Securities Corp.
Shares 34 Exchange Place, 4th Floor
Jersey City, NJ 07302-3901
_____%
- --------------------------------------------------------------------------------
Donaldson, Lufkin Jenrette
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-2052
_____%
- --------------------------------------------------------------------------------
</TABLE>

SHARES OF BENEFICIAL INTEREST

DESCRIPTION OF THE TRUST'S SHARES.

The Trust is a business trust organized on August 20, 1998 under Delaware law.
The Trustees are responsible for the management and supervision of the Funds.
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest of the Funds, without par
value. Under the Declaration of Trust, the Trustees have the authority to create
and classify shares of beneficial interest in separate series, without further
action by shareholders. As of the date of this Statement of Additional
Information, the Trustees have authorized shares only of the Funds described in
the prospectus. Additional series may be added in the future. The Declaration of
Trust also authorizes the Trustees to classify and reclassify the shares of the
Funds, or any other series of the Trust, into one or more classes. As of the
date of this Statement of Additional Information, the Trustees have authorized
the issuance of the classes of shares of the Funds described in the prospectus.

Each share of a Fund represents an equal proportionate interest in the assets
belonging to that Fund. When issued, shares are fully paid and nonassessable. In
the event of liquidation of a Fund, shareholders are entitled to share pro rata
in the net assets of the Fund available for distribution to such shareholders.
Shares of a Fund are freely transferable and have no preemptive, subscription or
conversion rights.

In accordance with the provisions of the Declaration of Trust, the Trustees have
initially determined that shares entitle their holders to one vote per share on
any matter on which such shares are entitled to vote. The Trustees may determine
in the future, without the vote or consent of shareholders, that each dollar of
net asset value (number of shares owned times net asset value per share) will be
entitled to one vote on any matter on which such shares are entitled to vote.

Unless otherwise required by the 1940 Act or the Declaration of Trust, the Funds
have no intention of holding annual meetings of shareholders. Shareholders may
remove a Trustee by the affirmative vote of at least two-thirds of the Trust's
outstanding shares. At any time that less than a majority of the Trustees
holding office were elected by the shareholders, the Trustees will call a
special meeting of shareholders for the purpose of electing Trustees.

Under Delaware law, shareholders of a Delaware business trust are protected from
liability for acts or obligations of the Trust to the same extent as
shareholders of a private, for-profit Delaware corporation. In addition, the
Declaration of Trust expressly provides that the Trust has been organized under
Delaware law and that the Declaration of Trust will be governed by Delaware law.
It is possible that the Trust might become a party to an action in another state
whose courts refused to apply Delaware law, in which case the Trust's
shareholders could be subject to personal liability.

<PAGE>

To guard against this risk, the Declaration of Trust:

contains an express disclaimer of shareholder liability for acts or
obligations of the Trust and provides that notice of this disclaimer may be
given in each agreement, obligation and instrument entered into or executed
by the Trust or its Trustees,

provides for the indemnification out of Trust or Fund property of any
shareholders held personally liable for any obligations of the Trust or of
the Fund and

provides that the Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Trust
and satisfy any judgment thereon.

Thus, the risk of a shareholder incurring financial loss beyond his or her
investment because of shareholder liability with respect to a Fund is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the Fund
itself would be unable to meet its obligations. In the light of Delaware law,
the nature of the Trust's business and the nature of its assets, the risk of
personal liability to a shareholder is remote.

The Declaration of Trust further provides that the Trust will indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving the Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Trust.
The Declaration of Trust does not authorize the Trust or any Fund to indemnify
any Trustee or officer against any liability to which he or she would otherwise
be subject by reason of or for willful misfeasance, bad faith, gross negligence
or reckless disregard of such person's duties.

BROKERAGE

Purchases and sales of portfolio securities are generally placed with
broker-dealers who provide the best price (inclusive of brokerage commissions)
and execution for orders. However, transactions may be allocated to
broker-dealers who provide research. Also, higher fees may be paid to brokers
that do not furnish research or furnish less valuable research if a good faith
determination is made that the commissions paid are reasonable in relation to
the value of the brokerage and research services provided. Among these services
are those that brokerage houses customarily provide to institutional investors,
such statistical and economic data and research reports on companies and
industries.

Research services might be useful and valuable to the Adviser, the subadvisers
and their affiliates in serving other clients as well as the Funds. Similarly,
research services obtained by the Adviser, subadvisers or the Distributor from
the placement of portfolio brokerage of other clients might be useful and of
value to the Adviser or subadvisers in carrying out their obligations to the
Funds.

A Fund may execute purchases and sales of portfolio securities through the
Distributor if it is able to obtain the best combination of price (inclusive of
brokerage commissions) and execution. The Distributor can charge a Fund
commissions for these transactions, subject to review by the non-interested
Trustees. The Trustees may permit payment of commissions which, though higher
than the lowest available, are deemed reasonable. The Trustees have adopted
procedures pursuant to Rule 17e-1 under the 1940 Act to ascertain that the
brokerage commissions paid to the Distributor are reasonable.

No transactions may be effected by a Fund with the Distributor acting as
principal for its own account. Over-the-counter purchases and sales normally are
made with principal market makers except where, in management's opinion, better
executions are available elsewhere. For the fiscal years ended December 31,
1996, 1997 and 1998, The Burnham Fund, Inc. paid brokerage commissions of
$227,867, $216,771, and $191,061, respectively.

For the fiscal year ended December 31, 1996, 1997 and 1998, The Burnham Fund,
Inc. paid brokerage commissions of $127,402, $147,149 and $102,991,respectively,
to the Distributor. For the fiscal year ended December 31, 1998, the aggregate
brokerage commissions paid by The Burnham Fund, Inc. to the Distributor were
53.90% of the Fund's total brokerage commissions.

<PAGE>

DETERMINATION OF PERFORMANCE

TOTAL RETURN.

The Funds may quote their performance in terms of total return in communications
to shareholders, or in advertising material. Total return is calculated
according to the following formula:

P (1 + T)'pp'n = ERV

Where:

P = a hypothetical initial payment of $1,000,
T = average annual total return, and
n = number of years.

In calculating the above, it is assumed that the maximum sales load (or other
charges deducted from payments) is deducted from the initial $1,000 payment and
all recurring fees that are charged to all shareholder accounts are included.

The average annual total return of the Class A shares of The Burnham Fund, Inc.,
assuming the reinvestment of dividends, for the one, five and ten year periods
ended December 31, 1998, was 15.98%, 15.77% and 13.30%, respectively. The
average annual returns of the Class B shares of The Burnham Fund, Inc., assuming
the reinvestment of dividends, for the one and five year periods ended December
31, 1998 and the life of the class period (October 18, 1993 to December 31,
1998) were 17.16%, 16.07% and 15.06%, respectively.

A Fund's performance depends on market conditions, portfolio composition and
expenses. Thus, investment yields, current distributions or total returns may
differ from past results, and there is no assurance that historical performance
will continue. With respect to Class B shares, results are reduced if a
contingent deferred sales charge were imposed on the redemption of these shares.

EFFECTIVE YIELD.

Burnham Money Market Fund's yield quotations as they appear in reports and other
material distributed by the Fund or by the Distributor are calculated as
prescribed by the Commission. The yield of this Fund for a 7-day period (the
"base period") will be computed by determining the net change in value
(calculated as set forth below) of a hypothetical account having a balance of
one share at the beginning of the period, dividing the net change in account
value by the value of the account at the beginning of the base period to obtain
the base period return, and multiplying the base period return by 365/7 with the
resulting yield figure carried to the nearest hundredth of one percent.

Net changes in value of a hypothetical account will include the value of
additional shares purchased with dividends from the original share and dividends
declared on both the original share and any such additional shares, but will not
include realized gains or losses or unrealized appreciation or depreciation on
portfolio investments.

The Fund's effective yield is computed by compounding the unannualized base
period return by adding 1 to the base period return, raising the sum to a power
equal to 365 divided by 7, and subtracting one from the result, according to the
following formula:

Effective Yield = [(base period return + 1) 'pp'365/7] -1

FINANCIAL STATEMENTS

The audited financial statements of the Corporation for the annual period ended
December 31, 1998 are included in the Corporation's Annual Report to
Shareholders dated December 31, 1998. These audited financial statements, in the
opinion of management, reflect all adjustments necessary to a fair statement of
the results for the periods presented. You can obtain a copy of the
Corporation's Annual Report dated December 31, 1998 by writing or calling the
Distributor at the address or telephone numbers set forth on the cover of this
Statement of Additional Information. The Annual Report is incorporated by
reference into this Statement of Additional Information.

<PAGE>

APPENDIX A -- DESCRIPTIONS OF SECURITIES RATINGS

COMMERCIAL PAPER RATINGS.

MOODY'S INVESTORS SERVICE, INC. (MOODY'S): "PRIME-1" and "PRIME-2" are
Moody's two highest commercial paper rating categories. Moody's evaluates the
salient features that affect a commercial paper issuer's financial and
competitive position. The appraisal includes, but is not limited to the review
of such factors as:

1. Quality of management.
2. Industry strengths and risks.
3. Vulnerability to business cycles.
4. Competitive position.
5. Liquidity measurements.
6. Debt structures.
7. Operating trends and access to capital markets.

Differing degrees of weight are applied to the above factors as deemed
appropriate for individual situations.

STANDARD & POOR'S RATINGS GROUP, A DIVISION OF MCGRAW-HILL COMPANIES,
INC. (S&P): "A-1" and "A-2" are S&P's two highest commercial paper rating
categories and issuers rated in these categories have the following
characteristics:

1. Liquidity ratios are adequate to meet cash requirements.
2. Long-term senior debt is rated A or better.
3. The issuer has access to at least two additional channels of
borrowing.
4. Basic earnings and cash flow have an upward trend with allowance
made for unusual circumstances.
5. Typically, the issuer is in a strong position in a
well-established industry or industries.
6. The reliability and quality of management is unquestioned.

Relative strength or weakness of the above characteristics determine whether an
issuer's paper is rated "A-1" or "A-2". Additionally, within the "A-1"
designation, those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) rating category.

BOND RATINGS.

S&P: An S&P bond rating is a current assessment of the creditworthiness of an
obligor with respect to a specific debt obligation. This assessment may take
into consideration obligors such as guarantors, insurers or lessees.

The bond ratings are not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.

The ratings are based on current information furnished by the issuer or obtained
by S&P from other sources it considers reliable. S&P does not perform any audit
in connection with any ratings and may, on occasion, rely on unaudited financial
information. The ratings may be changed, suspended or withdrawn as a result of
changes in, or unavailability of, such information, or for other circumstances.

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

I. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligation;

II. Nature of and provisions of the obligation;

III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditor's rights.

A-1

<PAGE>

The S&P bond ratings and their meanings are:

"AAA" Bonds rated "AAA" have the highest rating assigned by S&P to a
debt obligation. Capacity to pay interest and repay principal is
extremely strong.

"AA" Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in
small degree.

"A" Bonds rated "A" have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds in higher rated categories.

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

"BB" Bonds rated "BB" are regarded as less vulnerable in the near term
than lower rated obligors. However, they face major ongoing
uncertainties and exposure to adverse business, financial, or
economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitments.

"B" Bonds rated "B" are regarded as more vulnerable than obligors
rated "BB", but the obligor currently has the capacity to meet its
financial commitments. Adverse business, financial, or economic
conditions will impair the obligor's capacity or willingness to meet
its financial commitments.

"CCC" An obligor rated "CCC" is currently vulnerable, and is dependent
upon favorable business, financial, or economic conditions to meet
its financial commitments.

"CC" An obligor rated "CC" is currently highly vulnerable.

Plus (+) or Minus (-): The ratings from "AA" to "CC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

Provisional Ratings. The letter P indicates a provisional rating which assumes
successful completion of a project financed by the bonds being rated and
indicates that payment of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the project. This rating,
while addressing credit quality after completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion. The investor should exercise his own judgement with respect to such
likelihood and risk.

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories ("AAA" , "AA", "A", and "BBB ",
commonly known as "investment-grade" ratings) are generally regarded as eligible
for bank investment.

MOODY'S: The Moody's ratings and their meanings are:

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

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

A-2

<PAGE>

somewhat larger than in Aaa securities.

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

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

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

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

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

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

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

Con. Bonds rated Con. are bonds for which the security depends on the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by: (a) earnings of projects
under construction, (b) earnings of projects unseasoned in operating
experience, (c) rentals that begin when facilities are completed, or (d)
payments to which some other limiting condition attaches. Parenthetical
rating denotes probable credit stature upon completion of construction
or elimination of basis of condition.

A-3

<PAGE>

APPENDIX B
DESCRIPTION OF DOW JONES INDUSTRIAL AVERAGE AND DIAMONDS
(BURNHAM DOW 30 FOCUS FUND ONLY)

DOW JONES INDUSTRIAL AVERAGE.

The Dow Jones Industrial Average was introduced to the investing public by
Charles Dow on May 26, 1896 and originally was composed of only 12 stocks. It
has since become one of the most well known and widely followed indicators of
the U.S. stock market and is the oldest continuing stock market average in the
world. As of March, 1998, the 30 blue-chip stocks in the DJIA represented
approximately one-sixth of the over $12 trillion market value of all U.S. stocks
and one-fifth of the market value of all stocks listed on the New York Stock
Exchange. Many of the companies represented in the DJIA are household names and
leaders in their respective industries, and their stocks are broadly held by
both individual and institutional investors. Because the DJIA is so well known
and its performance is generally perceived to reflect that of the overall
domestic equity market, it is often used as benchmark for investments in
equities, mutual funds, and other asset classes.

The DJIA is unique for a market index. It is price-weighted rather than market
capitalizationweighted. In essence, the DJIA consists of one share of each of
the 30 stocks included in the DJIA. Thus, the weightings of the components of
the DJIA are affected only by changes in their prices, while the weightings of
stocks in other indices are affected by price changes and changes in shares
outstanding. This distinction stems from the fact that, when initially created,
the DJIA was a simple average and was computed merely by adding up the prices of
stocks in the average and dividing the sum by the total number of stocks in the
average. However, it eventually became clear that a method was needed to smooth
out the effects of stock splits and composition changes to prevent these events
from distorting the level of the average. Therefore, a divisor was created that
has been periodically adjusted over time. This divisor, when divided into the
sum of the prices of the stocks in the DJIA, generates the number that is
reported every day in newspapers, on television and radio, and over the
Internet. With the incorporation of the divisor, the DJIA is not technically an
average anymore.

The DJIA is computed and maintained by the editors of The Wall Street Journal,
which is published by Dow Jones. Periodically, the editors review and make
changes to the composition of the DJIA. In selecting a company's stock to be
included in the DJIA, the following criteria are generally used: (1) the firm is
not a utility or a transportation company (there are separate Dow Jones averages
for these sectors); (2) the company has an excellent reputation in its field;
(3) the company has grown successfully, and (4) the company has a large
individual and institutional investor base. All of the 30 stocks currently
included in the DJIA are listed in the New York Stock Exchange, although this is
not a criterion for selection. The inclusion of any particular company in the
DJIA does not constitute a prediction as to the company's future results of
operations or stock market performance. For the sake of continuity, composition
changes are rare, and generally have occurred only after corporate acquisitions
or other dramatic shifts in a company's core business. When the editors do
decide that a component stock needs to be changed, they also review the other
stocks in the average to confirm their continued presence. Thus, when a review
is completed, multiple changes often occur.

The DJIA currently consists of the common stocks of the following 30 companies:

Allied Signal Inc.
Aluminum Co. of America
American Express Co.
AT&T Corp.
The Boeing Co.
Caterpillar Co.
Chevron Corp.
Citigroup
The Coca-Cola Company
E.I. duPont de Nemours and Co.
Eastman Kodak Co.
Exxon Corp.
General Electric Co.

B-1

<PAGE>

General Motor Co.
The Goodyear Tire & Rubber Co.
Hewlett-Packard Co.
International Business Machines Corp.
International Paper Co.
J.P. Morgan & Co., Inc.
Johnson & Johnson
McDonald's Corp.
Merck & Co., Inc.
Minnesota, Mining & Manufacturing Co.
Philip Morris Cos. Inc.
The Procter & Gamble Co.
Sears, Roebuck and Co.
Union Carbide Corp.
United Technologies Corp.
Wal-Mart Stores, Inc.
The Walt Disney Co.

Dow Jones, Dow Jones Industrial Average, DJIA and DIAMONDS are service marks of
Dow Jones & Company, Inc. and have been licensed by the Fund in connection with
the operation of the Fund. The Fund is not sponsored, endorsed, sold or promoted
by Dow Jones. Dow Jones makes no representation, or warranty, express or
implied, to the shareholders of the Fund or any member of the public regarding
the advisability of investing in securities generally or in the Fund
particularly. Dow Jones' only relationship to the Fund is the licensing of
certain trademarks and trade names of Dow Jones and of the Dow Jones Industrial
Average which is determined, composed and calculated by Dow Jones without regard
to the Fund. Dow Jones has no obligation to take the needs of the Fund or its
shareholders into consideration in determining, composing or calculating the Dow
Jones Industrial Average. Dow Jones is not responsible for and has not
participated in the determination of the timing of issuing, the purchase prices
of, or quantities of the Fund's shares or in the determination or calculation of
the redemption price the Fund's shares. Dow Jones has no obligations or
liability in connection with the administration or marketing of the Fund.

DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW
JONES INDUSTRIAL AVERAGE OR ANY DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONES
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND,
SHAREHOLDERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW
JONES INDUSTRIAL AVERAGE OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO
EXPRESS OR IMPLIED WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE DOW JONES INDUSTRIAL AVERAGE OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW
JONES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY
AGREEMENTS OR ARRANGEMENTS BETWEEN DOW JONES AND THE FUND.

DIAMONDS.

DIAMONDS are shares of a publicly-traded unit investment trust that owns the
stocks in the DJIA in approximately the same proportions as represented in the
DJIA. DIAMONDS trade on the American Stock Exchange (AMEX) at approximately .01
(or 1/100) of the value of the DJIA. Because DIAMONDS replicate the DJIA, any
price movement away from the value of the underlying stocks is generally quickly
eliminated by professional traders. In light of the structural features of
DIAMONDS, the Adviser believes that the movement of DIAMONDS share prices should
closely track the movement of the DJIA. The DIAMONDS program bears operational
expenses, which are deducted from the dividends paid to DIAMONDS investors. To
the extent that the Fund invests in DIAMONDS, the Fund must bear these expenses
in addition to the expenses of its own operation.

Investments in DIAMONDS are subject to limits in the 1940 Act on investments in
other investment companies. Under one of the 1940 Act limitations, the Fund may
invest in DIAMONDS only to the extent that the Fund and its affiliated persons
do not own more than 3% of the outstanding securities of DIAMONDS' issuer. The
issuer of DIAMONDS is not obligated to redeem DIAMONDS representing more than 1%
of the issuer's total outstanding securities during any period of less than 30
days. DIAMONDS are subject to certain risks, including (1) the risk that

B-2

<PAGE>

their prices may not correlate perfectly with changes in the DJIA; and (2) the
risk of possible trading halts due to market conditions or other reasons that,
in the view of the AMEX, would make trading in DIAMONDS inadvisable.

B-3

<PAGE>

BURNHAM INVESTORS TRUST

Post-Effective Amendment No. 67

PART C

OTHER INFORMATION

ITEM 23. EXHIBITS.

(a) Agreement and Declaration of Trust, dated August 20, 1998.*

(b) By-Laws dated August 20, 1998, as amended on August 27, 1998.*

(d)(1) Investment Advisory Agreement between the Registrant and Burnham
Asset Management Corporation.*

(d)(2) Form of Investment Subadvisory Agreement between Burnham Asset
Management Corporation and Mendon Capital Advisers Corp. with
respect to Burnham Financial Services Fund.*

(d)(3) Form of Investment Subadvisory Agreement between Burnham Asset
Management Corporation and Reich & Tang Asset Management LP with
respect to Burnham Money Market Fund.**

(e)(1) Distribution Agreement between the Registrant and Burnham
Securities Inc.*

(e)(2) Specimen Selling and Service Agreement between the Registrant and
_____________________.(1)

(f) None.

(g)(1) Custodian Contract between the Registrant and Investor Fiduciary
Trust Company.(1)

(g)(2) Letter Agreement between the Registrant and Investors Fiduciary
Trust Company.*

(h)(1) Transfer Agency Agreement between the Registrant and State Street
Bank and Trust Company.(1)

<PAGE>

(h)(2) Letter Agreement between the Registrant and State Street Bank and
Trust Company.*

(h)(3) Administration Agreement between the Registrant and Burnham Asset
Management Corporation.*

(i) Opinion and consent of counsel.*

(j) Consent of independent accountants.*

(k) Financial Statements:

The following reports and financial statements are incorporated in
Part C by reference to The Burnham's Fund's Annual Report to
Shareholders for the year ended December 31, 1998 filed on
February, 1999 (accession #)

Report of Independent Accountants for the year ended December 31,
1998; Statement of Net Assets at December 31, 1998, Statement of
Assets and Liabilities at December 31, 1998, Statement of
Operations for the year ended December 31, 1998, Statement of
Changes in Net Assets for each of the two years in the period ended
December 31, 1998 and Note to Financial Statements.

(l) None.*

(m)(1) Rule 12b-1 Plans for Class A and Class B shares of Burnham Fund,
Burnham Financial Services Fund and Burnham Small Cap Value Fund.*

(m)(2) Rule 12b-1 Plan for the Dow 30 Focused Fund.*

(n) Financial Data Schedule.*

(o) Rule 18f-3 Multiple Class Plan.*

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

* Filed herewith

** Refer to Form of Subadvisory Agreement Filed as Exhibit (d)(2)

(1) Incorporated by reference to post effective amendment no. 66
(File Nos. 2-17226 and 811-994) (filed April 30, 1998).

<PAGE>

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT.

To the knowledge of the Registrant, it does not control, is not
controlled by, and is not under common control with any other
person.

ITEM 25. INDEMNIFICATION.

Except for the Agreement and Declaration of Trust, dated August 20,
1998, establishing the Registrant as a trust under Delaware law,
there is no contract, arrangement or statute under which any
director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified. The Declaration of Trust
provides that no trustee or officer will be indemnified against any
liability of which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence
of reckless disregard of such person's duties.

Registrant's Trustees and officers are insured under a standard
investment company errors and omissions insurance policy covering
loss incurred by reason of negligent errors and omissions committed
in their capacities as such.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

The information required by this item is set forth in the Form ADV
of the Registrant's investment adviser, Burnham Asset Management
Corporation. The following sections of the Form ADV are
incorporated herein by reference:

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

(b) Section IV, Business Background, of each Schedule D

The information required by this item is set forth in the Form ADV
of the Registrant's investment subadvisor, Mendon Capital Advisers
Corp. The following sections of the Form ADV are incorporated
herein by reference:

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

(b) Section IV, Business Background, of each Schedule D

The information required by this item is set forth in the Form ADV
of the Registrant's investment subadvisor, Reich & Tang Asset
Management LP. The following sections of the Form ADV are
incorporated herein by reference:

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

(b) Section IV, Business Background, of each Schedule D

<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS.

(1) Burnham Securities Inc. is the principal distributor of the
Registrant's shares.

(2) The officers and directors of the Distributor who also serve
the Registrant are as follows:

<TABLE>
<CAPTION>
Name Position with Distributor Position with Registrant
- ---- ------------------------- ------------------------
<S> <C> <C>
I.W. Burnham, II Honorary Chairman of Honorary Chairman of
the Board and Director the Board and
Director/Trustee

Jon M. Burnham Chairman of the Board, President, Chief
Chief Executive Officer Executive Officer and
and Director Director/Trustee

Debra B. Hyman Vice President and Executive Vice President
Director

Ronald M. Geffen Managing Director Vice President

Frank A. Passantino Vice President Vice President and
Assistant Secretary
</TABLE>

The principal business address of all such persons is 1325 Avenue of the
Americas, 26th Floor, New York, New York 10019.

(3) No commissions or other compensation have been paid by the
Registrant, directly or indirectly, to any principal underwriter
who is not an affiliated person of the Registrant or an affiliated
person of such an affiliated person during the last fiscal year.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.

Burnham Asset Management Corporation
1325 Avenue of the Americas, 26th Floor
New York, New York 10019

Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, MO 64105

First Data Investor Services Group
3200 Horizon Drive
P.O. Box 61503
King of Prussia, PA 19406-0903

<PAGE>

ITEM 29. MANAGEMENT SERVICES.

The Registrant has not entered into any management-related service
contracts not discussed in Part A or B of this Registration
Statement.

ITEM 30. UNDERTAKINGS.

None.

<PAGE>

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, The Burnham Fund, Inc. has duly caused this post-effective
amendment no. 67 to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York on the
____ day of February, 1999.

THE BURNHAM FUND INC.

By: /s/ Jon M. Burnham*
-------------------------------------
Jon M. Burnham
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this post-effective amendment no. 67 to the registration statement on Form N-1A
has been signed below by the following persons in the capacities and on the
dates indicated:

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ I.W. Burnham, II* Chairman and Director February __, 1999
---------------------------
I.W. Burnham, II

/s/ Jon M. Bunham* President, Chief February __, 1999
--------------------------- Executive Officer and
Jon M. Burnham Director

/s/ Claire B. Benenson* Director February __, 1999
---------------------------
Claire B. Benenson

/s/ Alvin P. Gutman* Director February __, 1999
---------------------------
Alvin P. Gutman

/s/ William W. Karatz* Director February __, 1999
---------------------------
William W. Karatz

/s/ John C. McDonald* Director February __, 1999
---------------------------
John C. McDonald

/s/ Donald B. Romans* Director February __, 1999
---------------------------
Donald B. Romans

/s/ Robert F. Shapiro* Director February __, 1999
---------------------------
Robert F. Shapiro

/s/ Robert M. Shavick* Director February __, 1999
--------------------------
Robert M. Shavick

/s/ David H. Solms* Director February __, 1999
--------------------------
David H. Solms

/s/ Robert S. Weinberg* Director February __, 1999
--------------------------
Robert S. Weinberg
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert J. Wilbur* Director February __, 1999
--------------------------
Robert J. Wilbur
</TABLE>

*By: /s/ Michael E. Barna
----------------------
Attorney-in-fact under powers
of attorney previously filed.

<PAGE>

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

<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
(a) Agreement and Declaration of Trust.

(b) By-Laws.

(d)(1) Investment Advisory Agreement.

(d)(2) Form of Investment Subadvisory Agreement.

(d)(3) Form of Investment Subadvisory Agreement.

(e)(1) Distribution Agreement.

(g)(2) Letter Agreement with Investors Fiduciary Trust Company.

(h)(2) Letter Agreement with State Street Bank and Trust Company.

(h)(3) Administration Agreement.

(i) Opinion and consent of counsel.

(j) Consent of independent accountants.

(m)(1) Rule 12b-1 Plan for Class A and Class B shares of Burnham Fund, Burnham
Financial Services Fund and Burnham Small Cap Value Fund.

(m)(2) Rule 12b-1 Plan for Dow 30 Focused Fund.

(n) Financial Data Schedule.

(o) Rule 18f-3 Multiple Class Plan.

(p) Powers of Attorney.
</TABLE>

STATEMENT OF DIFFERENCES
------------------------

Characters normally expressed as superscript shall be preceded by...... 'pp'
The section symbol shall be expressed as............................... 'SS'

<PAGE>

BURNHAM INVESTORS TRUST

AGREEMENT AND

DECLARATION OF TRUST

August 20, 1998

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I NAME AND DEFINITIONS.......................................1

Section 1. Name.......................................................1
Section 2. Definitions................................................1

ARTICLE II THE TRUSTEES...............................................3

Section 1. Management of the Trust....................................3
Section 2. Powers.....................................................3
Section 3. Certain Transactions.......................................8
Section 4. Initial Trustees; Election and Number of Trustees..........8
Section 5. Term of Office of Trustees.................................8
Section 6. Vacancies; Appointment of Trustees.........................9
Section 7. Temporary Vacancy or Absence...............................9
Section 8. Chairman...................................................9
Section 9. Action by the Trustees....................................10
Section 10. Ownership of Trust Property...............................10
Section 11. Effect of Trustees Not Serving............................11
Section 12. Trustees, etc. as Shareholders............................11
Section 13. Series Trustees...........................................11

ARTICLE III CONTRACTS WITH SERVICE PROVIDERS..........................11

Section 1. Underwriting Contracts....................................11
Section 2. Advisory or Management Contract...........................12
Section 3. Administration Agreement..................................12
Section 4. Service Agreement.........................................12
Section 5. Transfer Agent............................................12
Section 6. Custodian.................................................13
Section 7. Affiliations of Trustees or Officers, Etc.................13

ARTICLE IV COMPENSATION, LIMITATION OF LIABILITY AND
INDEMNIFICATION...........................................14

Section 1. Compensation..............................................14
Section 2. Limitation of Liability...................................14
Section 3. Indemnification...........................................14
Section 4. Indemnification of Shareholders...........................16
</TABLE>

<PAGE>

Section 5. No Bond Required of Trustees..............................16
Section 6. No Duty of Investigation; Notice in Trust Instruments,
Etc.......................................................16
Section 7. Reliance on Experts, Etc..................................17

ARTICLE V SERIES; CLASSES; SHARES...................................17

Section 1. Establishment of Series or Class..........................17
Section 2. Shares....................................................18
Section 3. Investment in the Trust...................................19
Section 4. Assets and Liabilities of Series..........................19
Section 5. Ownership and Transfer of Shares..........................20
Section 6. Status of Shares; Limitation of Shareholder Liability.....21

ARTICLE VI DISTRIBUTION AND REDEMPTIONS..............................21

Section 1. Distributions.............................................21
Section 2. Redemptions...............................................22
Section 3. Determination of Net Asset Value..........................23
Section 4. Suspension of Right of Redemption.........................23
Section 5. Repurchase by Agreement...................................23

ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS..................24

Section 1. Voting Powers.............................................24
Section 2. Quorum; Required Vote.....................................24
Section 3. Record Dates..............................................25
Section 4. Additional Provisions.....................................25

ARTICLE VIII EXPENSES OF THE TRUST AND SERIES..........................26

Section 1. Payment of Expenses by the Trust..........................26
Section 2. Payment of Expenses by Shareholders.......................26

ARTICLE IX MISCELLANEOUS.............................................27

Section 1. Trust Not a Partnership...................................27
Section 2. Trustee Action............................................27
Section 3. Termination of the Trust..................................27
Section 4. Reorganization............................................28
Section 5. Declaration of Trust......................................28
Section 6. Applicable Law............................................29
Section 7 Amendments................................................29
Section 8 Derivative Actions........................................30
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
Section 9 Fiscal Year...............................................30
Section 10 Severability..............................................30
</TABLE>

iii

<PAGE>

BURNHAM INVESTORS TRUST

AGREEMENT AND
DECLARATION OF TRUST

This AGREEMENT AND DECLARATION OF TRUST is made on August 20, 1998 by the
undersigned Trustees (together with all other persons from time to time duly
elected, qualified and serving as Trustees in accordance with the provisions of
Article II hereof, the "Trustees");

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.

ARTICLE I

NAME AND DEFINITIONS

Section 1. Name. The name of the Trust created by this Agreement and
Declaration of Trust is "Burnham Investors Trust".

Section 2. Definitions. Unless otherwise provided or required by the
context:

(a) "Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.

(b) "By-laws" means the By-laws of the Trust adopted by the
Trustees, as amended from time to time, which By-laws are expressly herein
incorporated by reference as part of the "governing instrument" within the
meaning of the Delaware Act.

(d) "Commission," "Eligible Foreign Custodian," "Qualified Foreign
Bank," "Interested Person" and "Principal Underwriter" have the meanings
provided in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series of Shares, the term
"Majority Shareholder Vote" shall have the same meaning as is assigned to the
term "vote of a majority of the outstanding voting securities" in the 1940 Act.

(e) "Covered Person" means a person so defined in Article IV,
Section 2.

<PAGE>

(f) "Custodian" means any Person other than the Trust who has
custody of any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities described in
said Section 17(f).

(g) "Declaration" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time. Reference in this Declaration
of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed
to refer to this Declaration rather than exclusively to the article or section
in which such words appear.

(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as amended from time to
time.

(i) "Fund Complex" has the meaning provided in the Securities
Exchange Act of 1934, as amended.

(j) "Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.

(k) "His" shall include the feminine and neuter, as well as the
masculine, genders.

(l) "Investment Adviser" means the party, other than the Trust, to
the contract described in Article III, Section 2 hereof.

(m) "Net Asset Value" means the net asset value of each Series of
the Trust, determined as provided in Article VI, Section 3.

(n) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, limited liability companies, joint ventures,
estates and other entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign.

(o) "Series" means a series of Shares established pursuant to
Article V.

(p) "Shareholder" means a record owner of Outstanding Shares;

(q) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.

<PAGE>

(r) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.

(s) "Trust" means Burnham Investors Trust established hereby, and
reference to the Trust, when applicable to one or more Series, refers to that
Series.

(t) "Trustees" means the persons who have signed this Declaration
of Trust, so long as they shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in accordance with Article II, in all cases in their
capacities as Trustees hereunder.

(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.

(v) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.

ARTICLE II

THE TRUSTEES

Section 1. Management of the Trust. The business and affairs of the Trust
shall be managed by or under the direction of the Trustees, and they shall have
all powers necessary or desirable to carry out that responsibility. The Trustees
may execute all instruments and take all action they deem necessary or desirable
to promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.

Section 2. Powers. The Trustees in all instances shall act as principals,
free of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By-laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:

<PAGE>

(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct of
such operations.

(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.

(c) To acquire (by purchase, subscription or otherwise), to hold,
to trade in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts, options on futures contracts, swaps, collars, caps, floors
and swaptions of all descriptions and to engage in all types of hedging and
risk-management transactions.

(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.

(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.

(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or

<PAGE>

become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.

(h) To adopt By-laws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent such right is not reserved to the Shareholders.

(i) To elect and remove such officers and appoint and terminate
such agents as they deem appropriate.

(j) To employ as custodian of any assets of the Trust, subject to
any provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.

(k) To retain one or more transfer agents and shareholder
servicing agents, or both.

(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.

(m) To set record dates in the manner provided for herein or in
the By-laws.

(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.

(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies.

(p) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.

(q) To the full extent permitted by Section 3804 of the Delaware
Act, to allocate assets, liabilities and expenses of the Trust to a particular
Series and assets, liabilities and expenses to a particular Class or to
apportion the same between or among two or more Series or Classes, provided that
any liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as provided
for in Article V, Section 4.

<PAGE>

(r) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern; and to pay calls
or subscriptions with respect to any security held in the Trust.

(s) To compromise, arbitrate, or otherwise adjust claims in favor
of or against the Trust or any matter in controversy including, but not limited
to, claims for taxes.

(t) To make distributions of income, capital gains, returns of
capital (if any) and redemption proceeds to Shareholders in the manner
hereinafter provided for.

(u) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider proper,
including a committee consisting of fewer than all of the Trustees then in
office, which may act for and bind the Trustees and the Trust with respect to
the institution, prosecution, dismissal, settlement, review or investigation of
any legal action, suit or proceeding, pending or threatened.

(v) To issue, sell, repurchase, redeem, cancel, retire, acquire,
hold, resell, reissue, dispose of and otherwise deal in Shares; to establish
terms and conditions regarding the issuance, sale, repurchase, redemption,
cancellation, retirement, acquisition, holding, resale, reissuance, disposition
of or dealing in Shares; and, subject to Articles V and VI, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust or of the particular Series with respect to which
such Shares are issued.

(w) To invest part or all of the Trust Property (or part or all of
the assets of any Series), or to dispose of part or all of the Trust Property
(or part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of Delaware or of any other state) which is
classified as a partnership for federal income tax purposes.

(x) To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary or
desirable to accomplish any purpose or to further any of the foregoing powers,
and to take every other action incidental to the foregoing business or purposes,
objects or powers.

(y) To sell or exchange any or all of the assets of the Trust,
subject to Article IX, Section 4.

(z) To enter into joint ventures, partnerships and other
combinations and associations.

<PAGE>

(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;

(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal Underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;

(cc) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;

(dd) To enter into contracts of any kind and description;

(ee) To interpret the investment policies, practices or limitations
of any Series or Class; and

(ff) To guarantee indebtedness and contractual obligations of
others.

The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.

<PAGE>

Section 3. Certain Transactions. Except as prohibited by applicable law,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.

Section 4. Initial Trustees; Election and Number of Trustees. The initial
Trustees shall be the persons signing this Declaration. The number of Trustees
shall be fixed from time to time by a majority of the Trustees; provided, that
there shall be at least one (1) Trustee. The Shareholders shall elect the
Trustees (other than the initial Trustee) on such dates as the Trustees may fix
from time to time.

Section 5. Term of Office of Trustees. Each Trustee shall hold office for
life or until his successor is elected or the Trust terminates; except that (a)
any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, who has reached any mandatory retirement age established by the
Trustees, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.

Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in the number of Trustees, provided that such
appointment shall become effective only at or after the expected vacancy occurs
and provided further that any new Trustee shall have reached the age of majority
in the state in which heresides and in the State of New York. As soon as any
such Trustee has accepted his appointment, the trust estate shall vest in the
new Trustee, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. Whenever a vacancy in
the number of Trustees shall occur, until such vacancy is filled as provided in
this Article II, the Trustees in office, regardless of their number, shall have
all the powers

<PAGE>

granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration.

Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board
of Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence, or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.

Section 8. Chairman. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.

Section 9. Action by the Trustees. The Trustees shall act by majority vote
at a meeting duly called at which a quorum is present, including a meeting held
by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the Chairman, the
President or by any one of the Trustees. Notice of the time, date and place of
all Trustees' meetings shall be given to each Trustee as set forth in the
By-laws; provided, however, that no notice is required if the Trustees provide
for regular or stated meetings. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who signs a
waiver of notice either before or after the meeting. The Trustees by majority
vote may delegate to any Trustee or Trustees or committee authority to approve
particular matters or take particular actions on behalf of the Trust. Any
written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.

Section 10. Ownership of Trust Property. The Trust Property of the Trust
and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof

<PAGE>

represented by Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Trust Instrument. The Trust, or at the
determination of the Trustees one or more of the Trustees or a nominee acting
for and on behalf of the Trust, shall be deemed to hold legal title and
beneficial ownership of any income earned on securities of the Trust issued by
any business entities formed, organized, or existing under the laws of any
jurisdiction, including the laws of any foreign country. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any Trust Property
held in the name of the resigning or removed Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall execute and deliver on his
behalf such documents as the remaining Trustees shall require as provided in the
preceding sentence.

Section 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.

Section 12. Trustees, etc. as Shareholders. Subject to any restrictions in
the By-laws, any Trustee, officer, agent or independent contractor of the Trust
may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.

Section 13. Series Trustees. In connection with the establishment of one
or more Series or Classes, the Trustees establishing such Series or Class may
appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders shall entitle only the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.

<PAGE>

ARTICLE III

CONTRACTS WITH SERVICE PROVIDERS

Section 1. Underwriting Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of the Shares whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.

Section 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Advisers
delegate certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.

Section 3. Administration Agreement. The Trustees may in their discretion
from time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes, separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical, bookkeeping and
recordkeeping services at such office facilities, and other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine.

Section 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services

<PAGE>

pursuant to administration plans and service plans, and all upon such terms and
conditions as the Trustees in their discretion may determine.

Section 5. Transfer Agent. The Trustees may in their discretion from time
to time enter into a transfer agency and shareholder services contract whereby
the other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine. Such services may
be provided by one or more Persons.

Section 6. Custodian. The Trustees may appoint or otherwise engage one or
more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians as meet the requirements of
applicable provisions of the 1940 Act, and upon such terms and conditions as may
be agreed upon between the Custodian and such sub-custodian, to hold securities
and other assets of the Trust and to perform the acts and services of the
Custodian, subject to applicable provisions of law and resolutions adopted by
the Trustees. The Trustees may delegate to the Trust's officers, Investment
Adviser, Custodian or a Qualified Foreign Bank the responsibility to select
Eligible Foreign Custodians in accordance with the provisions of the 1940 Act or
any rule, regulation or order of the Commission thereunder.

Section 7. Affiliations of Trustees or Officers, Etc. The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust or
any Series thereof is a shareholder, director, officer, partner, trustee,
employee, manager, adviser or distributor of or for any partnership,
corporation, trust, association or other organization or of or for any
parent or affiliate of any organization, with which a contract of the
character described in this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have been
or may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the Trust, or
that

(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
1, 2, 3 or 4 of this Article III or for services as Custodian, Transfer
Agent or disbursing agent or for related services may have been or may
hereafter be made also has any one or more of such contracts with one or
more other partnerships, corporations, trusts, associations or other
organizations, or has other business or interests,

<PAGE>

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE IV

COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.

Section 2. Limitation of Liability. All persons contracting with or having
any claim against the Trust or a particular Series shall look only to the assets
of all Series or such particular Series for payment under such contract or
claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, Investment Adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Section 3. Indemnification. (a) Subject to the exceptions and limitations
contained in subsection (b) below:

(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who serves
at its request as director, officer, partner, trustee or the like of
another organization in which it has any interest as a shareholder,
creditor or otherwise) ("Covered Person") shall be indemnified by
the Trust or the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit
or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Covered Person and against
amounts paid or incurred by him in the settlement thereof; and

<PAGE>

(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals), actual or
threatened, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid
in settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered Person:

(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office, or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or

(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office; (A) by the court
or other body approving the settlement; (B) by at least a majority
of those Trustees who are neither Interested Persons of the Trust
nor are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); (C) by
written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled to
vote (excluding any Outstanding Shares owned of record or
beneficially by such individual).

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be exclusive
of or affect any other rights to which any Covered Person may now or hereafter
be entitled, and shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.

(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.

<PAGE>

(e) Any repeal or modification of this Article IV by the Shareholders, or
adoption or modification of any other provision of the Declaration or By-laws
that would be inconsistent with this Article, shall be prospective only, to the
extent that such repeal, or modification would, if applied retrospectively,
adversely affect any limitation on the liability of any Covered Person or
indemnification available to any Covered Person with respect to any act or
omission which occurred prior to such repeal, modification or adoption.

Section 4. Indemnification of Shareholders. If any Shareholder or former
Shareholder of any Series shall be held personally liable solely by reason of
his being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or in the case of any
entity, its general successor) shall be entitled out of the assets belonging to
the applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by such Shareholder, assume the defense of any claim
made against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.

Section 5. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.

Section 6. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or a Series thereof shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.

<PAGE>

Section 7. Reliance on Experts, Etc. Each Trustee, officer or employee of
the Trust or a Series thereof shall, in the performance of his duties, powers
and discretion hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.

<PAGE>

ARTICLE V

SERIES; CLASSES; SHARES

Section 1. Establishment of Series or Class. The Trust shall consist of
one or more Series. Without limiting the authority of the Trustees to establish
and designate any further Series, the Trustees hereby establish five Series
which shall be designated as Burnham Fund, Burnham Dow 30 Focus Fund, Burnham
Financial Services Fund, Burnham Small Cap Value Fund and Burnham Money Market
Fund. The preferences, voting powers, rights and privileges of such Series and
any classes thereof shall be as set forth in the Trust's registration statement
or statements filed with the Commission, as from time to time in effect. Each
additional Series shall be established and is effective upon the adoption of a
resolution of a majority of the Trustees or any alternative date specified in
such resolution. The Trustees shall designate the relative rights and
preferences of the Shares of each Series. The Trustees may divide the Shares of
any Series into Classes. Without limiting the authority of the Trustees to
establish and designate any further Classes, the Trustees hereby establish two
Classes of Shares which shall be designated Class A and Class B Shares. The
Classes of Shares of the existing Series herein established and designated and
any Shares of any further Series and Classes that may from time to time be
established and designated by the Trustees shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series or Classes shall be fixed and determined, by the Trustees;
provided, that all Shares shall be identical except for such variations as shall
be fixed and determined between different Series or Classes by the Trustees in
establishing and designating such Series or Class. Such designation may be
directly set forth by resolution or may be made by a resolution referring to, or
authorizing or approving of, another document that sets forth such relative
rights and preferences of such Series (or Class) including, without limitation,
any registration statement of the Trust, or as otherwise provided in such
resolution.

All references to Shares in this Declaration shall be deemed to be Shares
of any or all Series or Classes as the context may require. The Trust shall
maintain separate and distinct records for each Series and hold and account for
the assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares of any Class thereof and need
not issue Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
a Class thereof shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of
his Shares, such Shareholder shall be paid solely out of the funds and property
of such Series. The Trustees may adopt and change the name of any Series or
Class.

Section 2. Shares. The beneficial interest in the Trust shall be divided
into transferable Shares of one or more separate and distinct Series or Classes
established by the Trustees. The number of Shares of each Series and Class is
unlimited and each Share shall have a par value of $0.10 per Share or such other
amount as the Trustees may establish. All Shares issued hereunder shall be fully
paid and nonassessable. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining Shareholder approval, to issue original or additional Shares
at such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Series or Classes with such preferences,
terms of conversion, voting

<PAGE>

powers, rights and privileges as the Trustees may determine (but the Trustees
may not change Outstanding Shares in a manner materially adverse to the
Shareholders of such Shares); to divide or combine the Shares of any Series or
Classes into a greater or lesser number; to classify or reclassify any unissued
Shares of any Series or Classes into one or more Series or Classes of Shares; to
abolish any one or more Series or Classes of Shares; to issue Shares to acquire
other assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses; and to take such other action with
respect to the Shares as the Trustees may deem desirable. Shares held in the
treasury shall not confer any voting rights on the Trustees and shall not be
entitled to any dividends or other distributions declared with respect to the
Shares.

Section 3. Investment in the Trust. The Trustees shall accept investments
in any Series or Class from such persons and on such terms as they may from time
to time authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which that Series is
authorized to invest, valued as provided in Article VI, Section 3. Investments
in a Series shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the investment is
received or accepted as may be determined by the Trustees; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class, (b) issue fractional Shares, (c) determine
the Net Asset Value per Share of the initial capital contribution or (d)
authorize the issuance of Shares at a price other than Net Asset Value to the
extent permitted by the 1940 Act or any rule, order or interpretation of the
Commission thereunder. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.

Section 4. Assets and Liabilities of Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof (including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the assets of every other Series and
are referred to as "assets belonging to" that Series. The assets belonging to a
Series shall belong only to that Series for all purposes, subject only to the
rights of creditors of that Series, and to no other Series. Any assets, income,
earnings, profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Series shall be allocated by
the Trustees between and among one or more Series as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, earnings, income,
profits or funds, or payments and proceeds thereof shall be referred to as
assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that liabilities
and expenses allocated solely to a particular Class shall be borne by that
Class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to

<PAGE>

any particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.

Without limiting the foregoing, but subject to the right of the Trustees
to allocate general liabilities, expenses, costs, charges or reserves as herein
provided, and subject to the statutory provision of Section 3804 of the Delaware
Act referred to below, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
Series shall be enforceable against the assets of such Series only, and not
against the assets of the Trust generally or any other Series, and none of the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other Series shall
be enforceable against the assets of such Series. Notice of this contractual
limitation on liabilities among Series may, in the Trustees' discretion, be set
forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on liabilities among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any debt
with respect to that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or belonging to any
other Series.

Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence of the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer. Without limitation of the foregoing, the Trust or its agent
may issue certificates representing Shares and transfer such certificates to a
governmental unit, agency,

<PAGE>

authority, or authorized depository without prior notice to a Shareholder and
without liability to such Shareholder, to the extent such action is taken (1) in
the response to a notice of levy, lien or similar action from the Internal
Revenue Service or a state tax authority, (2) in compliance with state laws
governing escheat or abandonment of property, or (3) otherwise in compliance
with any applicable legal obligation.

Section 6. Status of Shares; Limitation of Shareholder Liability. Shares
shall be deemed to be personal property giving Shareholders only the rights
provided in this Declaration. Every Shareholder, by virtue of having acquired a
Share, shall be held expressly to have assented to and agreed to be bound by the
terms of this Declaration and to have become a party hereto. No Shareholder
shall be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
any Series. The death, incapacity, dissolution, termination or bankruptcy of a
Shareholder during the existence of the Trust shall not operate to terminate the
Trust, nor entitle the representative of any such Shareholder to an accounting
or to take any action in court or elsewhere against the Trust or the Trustees,
but entitles such representative only to the rights of such Shareholder under
this Trust. Ownership of Shares shall not entitle the Shareholder to any title
in or to the whole or any part of the Trust Property or right to call for a
partition or division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders as partners. Neither the Trust nor the
Trustees shall have any power to bind any Shareholder personally or to demand
payment from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal liability
as is extended to shareholders of a private corporation for profit incorporated
in the State of Delaware. Every written obligation of the Trust or any Series
shall contain a statement to the effect that such obligation may only be
enforced against the assets of the appropriate Series or all Series; however,
the omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.

ARTICLE VI

DISTRIBUTIONS AND REDEMPTIONS

Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether

<PAGE>

they are in cash, Shares or other Trust Property, shall be determined by the
Trustees. Dividends and other distributions may be paid pursuant to a standing
resolution adopted once or more often as the Trustees determine. All dividends
and other distributions on Shares of a particular Series shall be distributed
pro rata to the Shareholders of that Series in proportion to the number of
Shares of that Series they held on the record date established for such payment,
except that such dividends and distributions shall appropriately reflect
expenses allocated to a particular Class of such Series and shall be reduced by
any required backup, nonresident alien, or other withholding taxes, which shall
be deposited by the Trust in accordance with applicable law. The Trustees may
adopt and offer to Shareholders such dividend reinvestment plans, cash dividend
payout plans or similar plans as the Trustees deem appropriate.

Section 2. Redemptions. Each Shareholder of a Series shall have the right
at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less (1) such charges as are determined by
the Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933 and (2) any required withholding taxes, which
shall be deposited by the Trust in accordance with applicable law. The Trustees
may specify conditions, prices, and places of redemption, may specify binding
requirements for the proper form or forms of requests for redemption and may
specify the amount of any deferred sales charge or redemption fee to be withheld
from redemption proceeds. Payment of the redemption price may be wholly or
partly in securities or other assets at the value of such securities or assets
used in such determination of Net Asset Value, or may be in cash. Upon
redemption, Shares may be reissued from time to time. The Trustees may require
Shareholders to redeem Shares for any reason under terms set by the Trustees,
including, but not limited to, the failure of a Shareholder to supply a taxpayer
identification number or other information or certification required by federal
or state tax laws, or to have the minimum investment required, or to pay when
due for the purchase of Shares issued to him. To the extent permitted by law,
the Trustees may retain the proceeds of any redemption of Shares required by
them for payment of amounts due and owing by a Shareholder to the Trust or any
Series or Class or any governmental authority. Without limitation of the
foregoing, the Trust may mandatorily redeem shares and the Trust or its agent
may transfer the proceeds of such a redemption to a governmental unit, agency,
authority, or authorized depository without prior notice to a Shareholder and
without liability to such shareholder, to the extent such action is taken (1) in
response to a notice of levy, lien, or similar action from the Internal Revenue
Service or a state tax authority, (2) in compliance with state laws governing
escheat or abandonment of property, (3) in satisfaction of withholding tax
requirements (including any applicable interest and penalties) applicable to any
prior distribution or distributions (including a redemption or redemptions) to
the Shareholder that were not satisfied at the time of such distribution or
distributions or (4) otherwise in compliance with any applicable legal
obligation. Notwithstanding the foregoing, the Trustees may postpone payment of
the redemption price and may suspend the

<PAGE>

right of the Shareholders to require any Series or Class to redeem Shares during
any period of time when and to the extent permissible under the 1940 Act.

Section 3. Determination of Net Asset Value. The Trustees shall cause the
Net Asset Value of Shares of each Series or Class to be determined from time to
time in a manner consistent with applicable laws and regulations. The Trustees
may delegate the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository or other
agent appointed for such purpose. The Net Asset Value of Shares shall be
determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.

Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.

Section 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.

ARTICLE VII

SHAREHOLDERS' VOTING POWERS AND MEETINGS

Section 1. Voting Powers. The Shareholders shall have power to vote only
with respect to (a) the election of Trustees as provided in Article II, Section
4; (b) the removal of Trustees as provided in Article II, Section 5(d); (c) any
investment advisory or management contract entered into pursuant to Article III,
Section 2, unless a shareholder vote is not required pursuant to the provisions
of the 1940 Act or any rule, regulation or order of the Commission thereunder;
(d) any termination of the Trust to the extent and as provided in Article IX,
Section 3; (e) the amendment of this Declaration to the extent and as provided
in Article IX, Section 7; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or as the Trustees may consider
desirable.

<PAGE>

On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series or Class, except (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series or Class,
and (b) when the Trustees have determined that the matter affects the interests
of more than one Series or Class, then the Shareholders of all such Series or
Classes shall be entitled to vote together thereon. As determined by the
Trustees without the vote or consent of Shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any manner
provided for in the By-laws. The By-laws may provide that proxies may be given
by any electronic or telecommunications device or in any other manner, but if a
proposal by anyone other than the officers or Trustees is submitted to a vote of
the Shareholders of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series are issued, as to that Series the Trustees may exercise all rights
of Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Declaration or the By-laws. Meetings of Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the By-laws.

Section 2. Quorum; Required Vote. One-third of the Outstanding Shares of
each affected Series or Class, or one-third (33 1/3%) of the Outstanding Shares
of the Trust, entitled to vote in person or by proxy shall be a quorum for the
transaction of business at a Shareholders' meeting with respect to such Series
or Class, or with respect to the entire Trust, respectively. Any lesser number
shall be sufficient for adjournments. Any adjourned session of a Shareholders'
meeting may be held within a reasonable time without further notice. Except when
a larger vote is required by law, this Declaration or the By-laws, a majority of
the Outstanding Shares voting at a Shareholders' meeting in person or by proxy
shall decide any matters to be voted upon with respect to the entire Trust and a
plurality of such Outstanding Shares shall elect a Trustee; provided, that if
this Declaration or applicable law permits or requires that Shares be voted on
any matter by individual Series or Classes, then a majority of the Outstanding
Shares of that Series or Class voting at a Shareholders' meeting in person or by
proxy on the matter shall decide that matter insofar as that Series or Class is
concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.

Section 3. Record Dates.

<PAGE>

(a) For the purpose of determining the Shareholders of any Series
(or Class) who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date, which shall be
before the date for the payment of such dividend or such other payment, as the
record date for determining the Shareholders of such Series (or Class) having
the right to receive such dividend or distribution. Without fixing a record
date, the Trustees may for distribution purposes close the register or transfer
books for one or more Series (or Classes) any time prior to the payment of a
distribution. Nothing in this Section shall be construed as precluding the
Trustees from setting different record dates for different Series (or Classes).

(b) The Trustees may fix in advance a date up to one hundred twenty
(120) days before the date of any Shareholders' meeting, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.

Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.

<PAGE>

ARTICLE VIII

EXPENSES OF THE TRUST AND SERIES

Section 1. Payment of Expenses by the Trust. Subject to Article V, Section
4, the Trust or a particular Series shall pay, or shall reimburse the Trustees
from the assets belonging to all Series or the particular Series, for their
expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents, fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration and notice fees and related expenses; and
for such non-recurring items as may arise, including litigation to which the
Trust or a Series (or a Trustee or officer of the Trust acting as such) is a
party, and for all losses and liabilities by them incurred in administering the
Trust. The Trustees shall have a lien on the assets belonging to the appropriate
Series, or in the case of an expense allocable to more than one Series, on the
assets of each such Series, prior to any rights or interests of the Shareholders
thereto, for the reimbursement to them of such expenses, disbursements, losses
and liabilities.

Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.

<PAGE>

ARTICLE IX

MISCELLANEOUS

Section 1. Trust Not a Partnership. This Declaration creates a trust and
not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.

Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.

Section 3. Termination of the Trust. (a) This Trust shall have perpetual
existence. Subject to the vote of a majority of the Outstanding Shares of the
Trust or of each Series to be affected, voting at a Shareholders' meeting in
person or by proxy the Trustees may

(i) sell and convey all or substantially all of the assets of all
Series or any affected Series to another Series or to another entity
which is an open-end investment company as defined in the 1940 Act,
or is a series thereof, for adequate consideration, which may
include the assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Trust or any
affected Series, and which may include shares of or interests in
such Series, entity, or series thereof; or

(ii) at any time sell and convert into money all or substantially
all of the assets of all Series or any affected Series.

Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.

(b) The Trustees may take any of the actions specified in subsection (a)
(i) and (ii) above without obtaining the vote of a majority of the Outstanding
Shares of the Trust or any Series voting at a Shareholders' meeting in person or
by proxy if a majority of the Trustees determines that the continuation of the
Trust or Series is not in the best interests of the Trust, such Series, or their
respective Shareholders as a result of factors or events adversely affecting the
ability of the Trust or such Series to conduct its business and operations in an
economically viable manner. Such factors and events may include the inability of
the Trust or a Series to maintain its assets at an appropriate size, changes in
laws or regulations governing the Trust or the Series or affecting assets of the
type in which the Trust or Series invests, or economic developments or

<PAGE>

trends having a significant adverse impact on the business or operations of the
Trust or such Series.

(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a) the Trustees and the Trust or affected Series
shall be discharged of any and all further liabilities and duties hereunder with
respect thereto and the right, title and interest of all parties therein shall
be canceled and discharged and any such Series shall terminate. Following
completion of winding up of its business, the Trustees shall cause a certificate
of cancellation of the Trust's certificate of trust to be filed in accordance
with the Delaware Act, which certificate of cancellation may be signed by any
one Trustee, and upon filing of such certificate of cancellation, the Trust
shall terminate.

Section 4. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval (unless such approval is required by applicable law), (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.

(b) Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 4 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.

(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.

Section 5. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.

<PAGE>

Section 6. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.

Section 7. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section 1, (b) to this Section 7, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, (i) any amendment to Article IV
which would have the effect of reducing the indemnification or other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon and (ii) no
amendment to Article IV that would have the effect of reducing the
indemnification or other rights provided thereby to Trustees, officers,
employees, and agents of the Trust or to Shareholders or former Shareholders
shall be effective with respect to any acts or omissions of any such Persons
occurring or otherwise relating to any time period prior to the adoption of such
amendment or shall otherwise have any retroactive effect.

<PAGE>

Section 8. Derivative Actions. In addition to the requirements set forth
in Section 3816 of the Delaware Act, a Shareholder may bring a derivative action
on behalf of the Trust only if the following conditions are met:

(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action;

(b) the Trustees must be afforded a reasonable amount of time to consider
such shareholder request and to investigate the basis of such claim. The
Trustees shall be entitled to retain counsel or other advisers in considering
the merits of the request and shall require an undertaking by the Shareholders
making such request to reimburse the Trust for the expense of any such advisers
in the event that the Trustees determine not to bring such action; and

(c) Shareholders are not relieved of the conditions in Sections 8(a) and
(b) if a Trustee who is not an Interested Person of the Trust or any Series
serves as a trustee of any other investment company in the Fund Complex.

(d) Shareholders of an unaffected Series or Class may not bring a
derivative action on behalf of another Series or Class.

Section 9. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as adopted by resolution of the Trustees. The taxable year of
each Series of the Trust shall be as determined by the Trustees from time to
time.

Section 10. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.

<PAGE>

IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust
executed this instrument as of the date first written above.

/s/ Michael E. Barna
- -----------------------------------
Michael E. Barna
as Trustee and not individually

1325 Avenue of the Americas
New York, NY 10019

<PAGE>

BY-LAWS

BURNHAM INVESTORS TRUST

AUGUST 27, 1998

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS...............................................1

ARTICLE II OFFICES ...............................................1

Section 1. Principal Office.........................................1
Section 2. Other Offices............................................1
Section 3. Registered Office and Registered Agent...................1

ARTICLE III SHAREHOLDERS.............................................1

Section 1. Meetings.................................................1
Section 2. Notice of Meetings.......................................2
Section 3. Record Date for Meetings and Other Purposes..............2
Section 4. Proxies..................................................2
Section 5. Abstentions and Broker Non-Votes.........................3
Section 6. Inspection of Records....................................4
Section 7. Action Without Meeting...................................4

ARTICLE IV TRUSTEES.................................................4

Section 1. Meetings of the Trustees and Action by Written Consent...4
Section 2. Quorum and Manner of Acting at Meetings..................5

ARTICLE V COMMITTEES...............................................5

Section 1. Executive and Other Committees...........................5
Section 2. Meetings, Quorum and Manner of Acting....................5

ARTICLE VI OFFICERS.................................................6

Section 1. General Provisions.......................................6
Section 2. Term of Office and Qualifications........................6
Section 3. Removal..................................................6
Section 4. Powers and Duties of the Chairman........................6
Section 5. Powers and Duties of the President.......................6
Section 6. Powers and Duties of Vice Presidents.....................7
Section 7. Powers and Duties of the Treasurer.......................7
Section 8. Powers and Duties of the Secretary.......................7
Section 9. Powers and Duties of Assistant Officers..................7
Section 10. Powers and Duties of Assistant Secretaries...............8
Section 11. Powers and Duties of the Compliance Officer..............8
Section 12. Compensation of Officers and Trustees and
Members of the Advisory Board............................8

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VII FISCAL YEAR..............................................8

ARTICLE VIII SEAL.....................................................8

ARTICLE IX SUFFICIENCY AND WAIVERS OF NOTICE........................8

ARTICLE X AMENDMENTS...............................................9
</TABLE>

<PAGE>

BY-LAWS

BURNHAM INVESTORS TRUST

ARTICLE I

DEFINITIONS

All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Burnham Investors Trust dated August [20],
1998, as amended or restated from time to time.

ARTICLE II

OFFICES

Section 1. Principal Office. Until changed by the Trustees, the
principal office of the Trust shall be in New York, New York.

Section 2. Other Offices. The Trust may have offices in such other
places without as well as within the State of Delaware as the Trustees may
from time to time determine.

Section 3. Registered Office and Registered Agent. The Board of Trustees
shall establish a registered office in the State of Delaware and shall appoint
as the Trust's registered agent for service of process in the State of Delaware
an individual resident of the State of Delaware or a Delaware corporation or a
corporation authorized to transact business in the State of Delaware; in each
case the business office of such registered agent for service of process shall
be identical with the registered Delaware office of the Trust.

ARTICLE III

SHAREHOLDERS

Section 1. Meetings. Meetings of the Shareholders of the Trust or a
Series or Class thereof shall be held as provided in the Declaration of Trust
at such place within or without the State of Delaware as the Trustees shall
designate. One-third of

<PAGE>

the Outstanding Shares of each Series or Class, or one-third of the Outstanding
Shares of the Trust, entitled to vote in person or by proxy shall be a quorum
for the transaction of business at a Shareholders' meeting with respect to such
Series or Class, or with respect to the entire Trust, respectively. Any lesser
number shall be sufficient for adjournments.

Section 2. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail or telegraphic or electronic means to each Shareholder at his
address as recorded on the register of the Trust mailed at least (10) days and
not more than ninety (90) days before the meeting, provided, however, that
notice of a meeting need not be given to a Shareholder to whom such notice need
not be given under the proxy rules of the Commission under the 1940 Act and the
Securities Exchange Act of 1934, as amended. Only the business stated in the
notice of the meeting shall be considered at such meeting. Any adjourned meeting
may be held as adjourned without further notice. No notice need be given to any
Shareholder who shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.

Section 3. Record Date for Meetings and Other Purposes. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than one
hundred twenty (120) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.

Section 4. Proxies. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic (including
computerized) or telecommunication device except as otherwise provided in the
Declaration of Trust. The placing of a shareholder's name on a proxy pursuant to
telephonic or electronically (including by computer) transmitted instructions
pursuant to procedures reasonably designed, as determined by the Trustees, to
verify that such instructions have been authorized by the shareholder shall
constitute execution of the proxy by or on behalf of the shareholder. Proxies
may be solicited in the name of one or more Trustees or one or more of the
officers of the Trust. Only Shareholders of record shall be entitled to vote. As
set forth by the Trustees in the

<PAGE>

Declaration of Trust, on any matter submitted to a vote of Shareholders either
(i) each whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote or (ii) each dollar of net asset value (number of
Shares owned times net asset value per Share of such Series or Class, as
applicable) shall be entitled to one vote on any matter on which such Shares are
entitled to vote and each fractional dollar amount shall be entitled to a
proportionate fractional vote. Without limiting their power to designate
otherwise in accordance with the preceding sentence, the Trustees shall by
resolution establish the means of voting on each proposal at any time a meeting
of Shareholders is called to cover such proposals. When any Share is held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Share, but if more than one of them shall be present
at such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.

Section 5. Abstentions and Broker Non-Votes. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the number of Shares that are present and
entitled to vote with respect to any particular proposal, but will not be
counted as a vote in favor of such proposal. If a broker or nominee holding
Shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those Shares will
not be considered as present and entitled to vote with respect to such proposal.

Section 6. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Delaware business corporation.

Section 7. Action Without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.

Any stockholder entitled to vote at any meeting of stockholders may vote
either in person or by proxy, but no proxy which is dated more than eleven
months before the meeting named therein shall be accepted unless otherwise
provided in the proxy. Every proxy shall be in writing

<PAGE>

and signed by the stockholder or his authorized agent or be in such form as may
be permitted by the Maryland General Corporation Law, including electronic
transmissions from the stockholder or his authorized agent. Authorization may be
given orally, in writing, by telephone, by electronic transmission, or by other
means of communication. A copy, facsimile transmission or other reproduction of
a writing or transmission may be substituted for the original writing or
transmission for any purpose for which the original writing or transmission
could be used. Every proxy shall be dated, but need not be sealed, witnessed or
acknowledged. Where shares are held of record by more than one person, any
co-owner or co-fiduciary may appoint a proxy holder as provided above unless the
Secretary of the Company is notified in writing by any co-owner or co-fiduciary
that the joinder of more than one is to be required. All proxies shall be filed
with and verified by the Secretary or an Assistant Secretary of the Company, or
the person acting as Secretary of the Meeting. Unless otherwise specifically
limited by their term, all proxies shall entitle the holders thereof to vote at
any adjournment of such meeting but shall not be valid after the final
adjournment of such meeting. Every proxy shall be revocable at the pleasure of
the person executing it or of his agents, personal representatives or assigns,
unless otherwise provided therein. At all meetings of stockholders, unless the
voting is conducted by inspectors, all questions relating to the qualifications
of voters and the validity of proxies and the acceptance or rejection of votes
shall be decided by the chairman of the meeting.

ARTICLE IV

TRUSTEES

Section 1. Meetings of the Trustees and Action by Written Consent. The
Trustees may in their discretion provide for regular or stated meetings of the
Trustees. Notice of regular or stated meetings need not be given. Meetings of
the Trustees other than regular or stated meetings shall be held whenever called
by the President, the Chairman or by any one of the Trustees, at the time being
in office. Notice of the time and place of each meeting other than regular or
stated meetings shall be given by the Secretary or an Assistant Secretary or by
the officer or Trustee calling the meeting and shall be mailed to each Trustee
at least two days before the meeting, or shall be given by telephone, cable,
wireless, facsimile or other electronic mechanism to each Trustee at his
business address, or personally delivered to him at least one day before the
meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any meeting. The Trustees may meet by conference
telephone, teleconference or other electronic media or communication equipment
by means of which all persons participating in the meeting can communicate with
each other and participation by such means shall be deemed to have been held at
a place designated by the Trustees at the meeting.

<PAGE>

Participation in a telephone conference meeting shall constitute presence in
person at such meeting. Any action required or permitted to be taken at any
meeting of the Trustees may be taken by the Trustees without a meeting if a
majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.

Section 2. Quorum and Manner of Acting at Meetings. A majority of the
Trustees shall be present in person at any regular or special meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise required by law, the Declaration of Trust or
these By-laws) the act of a majority of the Trustees present at any such
meeting, at which a quorum is present, shall be the act of the Trustees. In the
absence of a quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of an adjourned
meeting need not be given.

ARTICLE V

COMMITTEES

Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than two (2) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own chairman.

Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.

<PAGE>

The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.

ARTICLE VI

OFFICERS

Section 1. General Provisions. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Trustees.
The Trustees may elect or appoint such other officers or agents as the business
of the Trust may require, including one or more Vice Presidents, one or more
Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any subordinate
officers or agents.

Section 2. Term of Office and Qualifications. Except as otherwise provided
by law, the Declaration of Trust or these By-laws, the President, the Treasurer,
the Secretary and any other officer shall each hold office at the pleasure of
the Board of Trustees or until his successor shall have been duly elected and
qualified. Any two offices may be held by the same person. Any officer may be
but none need be a Trustee or Shareholder.

Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer with or without cause, by a vote of a majority
of the Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.

Section 4. Powers and Duties of the Chairman. The Trustees may, but need
not, appoint from among their number a Chairman. When present he shall preside
at the meetings of the Shareholders and of the Trustees. He may call meetings of
the Trustees and of any committee thereof whenever he deems it necessary. He
shall be an executive officer of the Trust and shall have, with the President,
general supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 5 of this Article
VI.

Section 5. Powers and Duties of the President. The President shall be the
Chief Executive Officer of the Trust. The President may call meetings of the
Trustees and of any Committee thereof when he deems it necessary and shall
preside at all meetings of the Shareholders. Subject to the control of the
Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such

<PAGE>

subordinate officers, agents, clerks and employees as he may find necessary to
transact the business of the Trust or any Series or Class thereof. He shall also
have the power to grant, issue, execute or sign such powers of attorney, proxies
or other documents as may be deemed advisable or necessary in furtherance of the
interests of the Trust or any Series thereof. The President shall have such
other powers and duties, as from time to time may be conferred upon or assigned
to him by the Trustees.

Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.

Section 7. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust or any Series or Class thereof which may come into his hands
to such Custodian as the Trustees may employ. He shall render a statement of
condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.

Section 8. Powers and Duties of the Secretary. The Secretary shall keep
the minutes of all meetings of the Trustees and of the Shareholders in proper
books provided for that purpose; he shall have custody of the seal of the Trust;
he shall have charge of the Share transfer books, lists and records unless the
same are in the charge of a transfer agent. He shall attend to the giving and
serving of all notices by the Trust in accordance with the provisions of these
By-laws and as required by law; and subject to these By-laws, he shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Trustees.

Section 9. Powers and Duties of Assistant Officers. In the absence or
disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.

<PAGE>

Section 10. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees and the President.

Section 11. Powers and Duties of the Compliance Officer. The Compliance
Officer shall be responsible for implementing, administering and enforcing the
Trust's Code of Ethics. The Compliance Officer shall report annually to the
Trustees on the operation of the Code of Ethics. The Compliance Officer shall
perform such other duties as may be assigned from time to time by the Trustees
or the President.

Section 12. Compensation of Officers and Trustees and Members of the
Advisory Board. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.

ARTICLE VII

FISCAL YEAR

The fiscal year of the Trust shall end on a specified date as adopted by
resolution of the Trustees. The taxable year of each Series of the Trust shall
be as determined by the Trustees from time to time.

ARTICLE VIII

SEAL

The Trustees may adopt a seal which shall be in such form and shall have
such inscription thereon as the Trustees may from time to time prescribe.

ARTICLE IX

SUFFICIENCY AND WAIVERS OF NOTICE

Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice,

<PAGE>

whether before or after the time stated therein, shall be deemed equivalent
thereto. A notice shall be deemed to have been sent by mail, telegraph, cable,
wireless, facsimile or other electronic means for the purposes of these By-laws
when it has been delivered to a representative of any company holding itself out
as capable of sending notice by such means with instructions that it be so sent.

ARTICLE X

AMENDMENTS

These By-laws, or any of them, may be altered, amended or repealed, or new
By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees; provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.

END OF BY-LAWS

<PAGE>

INVESTMENT ADVISORY AGREEMENT

May 3, 1999

BURNHAM ASSET MANAGEMENT CORPORATION
1325 Avenue of the Americas
26th Floor
New York, NY 10019

Gentlemen:

The undersigned, Burnham Investors Trust, a Delaware business trust
(the "Trust"), is an investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"). The Trust hereby engages you
to act as the investment adviser to each series of the Trust set forth on
Schedule I and any other series of the Trust as the parties may agree from
time to time (collectively, the "Funds"), subject to the terms and conditions
set forth below.

SECTION 1. INVESTMENT ADVISORY SERVICES.

a. You will regularly provide each Fund with investment research,
advice and supervision and will furnish continuously an investment program
for each Fund, consistent with the investment objectives and policies of each
Fund. You will from time to time recommend to each Fund what securities, in
your opinion, should be purchased or sold by the Fund and what portion of the
assets of the Fund should remain uninvested. In conducting such review and
making such recommendations, you will be guided by each Fund's investment
policies and restrictions as described in the Trust's registration statement
under the Securities Act of 1933, as amended, and the 1940 Act, as filed with
the Securities and Exchange Commission and as amended from time to time; by
policies adopted by the Board of Trustees; and by the provisions of the 1940
Act and the rules promulgated thereunder, so that at all times each Fund will
be in compliance with its investment policies and restrictions and with the
requirements of the 1940 Act. The Trust agrees to supply you with copies of
all such documents and to notify you of any changes in the Funds' investment
policies and restrictions.

b. In rendering such investment advisory services to the Fund
pursuant to this Agreement, you may employ, retain or otherwise avail
yourself of the services or facilities of other persons or organizations for
the purpose of providing you or the Fund with statistical and other factual
information, advice regarding economic factors and trends, advice as to
occasional transactions in specific securities or any other information,
advice or assistance that you may deem necessary, appropriate or convenient
for the discharge of your obligations hereunder or otherwise helpful to the
Fund or in the discharge of your overall responsibilities with respect to the
other accounts for which you or your affiliates serve as investment adviser.

c. You may employ one or more sub-investment advisers (each a
"Subadviser") to provide investment advisory services to one or more of the
Funds by entering into a written agreement with each Subadviser. However, any
agreement first will be approved in accordance

<PAGE>

with the requirements of the 1940 Act as such requirements may be modified or
superseded by rule, regulation, order or interpretive position of the Securities
and Exchange Commission. The authority given to you in this Agreement may be
delegated by you under any such agreement; provided, that any Subadviser will be
subject to the same restrictions and limitations on investments and brokerage
discretion as you are. The Trust agrees that you will not be accountable to any
Fund or its shareholders for any loss or other liability relating to specific
investments directed by any Subadviser, even though you retain the right to
reverse any such investment, because, in the event a Subadviser is retained, you
and the Funds will rely almost exclusively on the expertise of such Subadviser
for the selection and monitoring of specific investments.

d. You and any person performing executive or trading functions for
a Fund, whose services were made available to the Fund by you, are
specifically authorized to allocate brokerage and principal business to firms
that provide such services or facilities and to cause a Fund to pay a member
of a securities exchange or any other securities broker or dealer an amount
of commission for effecting a securities transaction in excess of the amount
of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if you or such person determine in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services (as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided by such
member, broker or dealer, viewed in terms of either that particular
transaction or your or such person's overall responsibilities with respect to
the accounts as to which you or such person exercise investment discretion
(as that term is defined in Section 3(a)(35) of the Securities Exchange Act
of 1934).

SECTION 2. BOOKS, RECORDS AND REPORTS, ETC.

a. You will maintain all books and records with respect to each
Fund's securities transactions required by sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's administrator, custodian or transfer
agent) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act.

b. You will furnish to the Board of Trustees, at its regularly
scheduled meetings, and at such other times as the Board may reasonably
request, a resume of the portfolio and report on all matters pertaining to
your services as investment adviser. In addition, you will furnish the Trust
with such reports and other data as the Board may request, including, without
being limited to, industry surveys, news of recent developments, statistical
data, and such other information as may keep the Board properly informed on
developments relating to each Fund's portfolio, or similar data relating to
securities which you recommend for inclusion in the portfolio of each Fund.

-70-

<PAGE>

SECTION 3. MULTIPLE CAPACITIES.

a. Nothing contained in this Agreement will prohibit you from
acting, and being separately compensated for acting, in one or more
capacities on behalf of the Trust including, but not limited to, the
capacities of administrator, broker and distributor. The Trust understands
that you may act as investment adviser or in other capacities on behalf of
other investment companies and customers. While information and
recommendations you supply to the Funds will in your judgment be appropriate
under the circumstances and in light of the investment objectives of each
Fund, they may be different from the information and recommendations you
supply to other Funds, investment companies and customers. You will give the
Funds equitable treatment under the circumstances in supplying information,
recommendations and any other services requested of you, but you will not be
required to give preferential treatment to the Funds as compared with the
treatment given to any other investment company or customer. Whenever you
will act in multiple capacities on behalf of the Funds, you will maintain the
appropriate separate accounts and records for each such capacity. All
information and advice supplied by you to each Fund hereunder will be for its
own use exclusively.

b. Nothing in this Agreement will in any way limit or restrict you
or any of your officers, directors, or employees from buying, selling or
trading in any securities for your or their own accounts or other accounts.

c. When you deem the purchase or sale of a security to be in the
best interest of a Fund as well as other clients, you may, to the extent
permitted by applicable laws and regulations, aggregate the securities to be
sold or purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, you will allocate the securities so
purchased or sold, as well as the expenses incurred in the transaction, in
the manner you consider to be the most equitable and consistent with your
fiduciary obligations to the Funds and to your other clients.

d. You are an independent contractor and not an employee of the
Trust for any purpose. If you ever give any advice to your clients
concerning the shares of the Trust, you will act solely as investment counsel
for such clients and not in any way on behalf of the Trust or any Fund.

SECTION 4. PAYMENT OF EXPENSES.

a. Except as otherwise provided herein, you will at your own expense
furnish to the Trust office space in your offices or in such other place as
may be agreed upon from time to time, and all necessary office facilities,
equipment and personnel for managing each Fund's investments, and you will
arrange, if desired by the Trust, for members of your organization to serve
as trustees, officers or agents of the Trust.

-71-

<PAGE>

b. You will pay directly or reimburse the Trust for the compensation
(if any) of the Trustees who are affiliated with, or "interested persons" (as
defined in the 1940 Act) of, you and all officers of the Trust.

c. The Trust, on behalf of each Fund to the extent allowable to that
Fund, will assume and will pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by your personnel, or your
affiliates, office space and facilities and personnel compensation, training
and benefits; (ii) the charges and expenses of auditors; (iii) the charges
and expenses of any administrator, custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust; (iv) issue
and transfer taxes chargeable to a Fund in connection with securities
transactions to which the Fund is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state or
blue sky securities agencies and foreign countries, including the preparation
of prospectuses and statements of additional information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements,
and reports to shareholders and reports to governmental agencies;
(viii) charges and expenses of legal counsel to the Trust and the Trustees;
(ix) any distribution fees paid by a Fund in accordance with Rule 12b-1 under
the 1940 Act; (x) compensation of those Trustees of the Trust who are not
affiliated with or interested persons of you, the Trust (other than as
Trustees) or Burnham Securities, Inc.; (xi) the cost of preparing and
printing share certificates; and (xii) interest on borrowed money, if any.

d. In addition to the expenses described in Section 4(c) above, each
Fund will pay all brokers' and underwriting commissions chargeable to the
Fund in connection with securities transactions to which the Fund is a party.

SECTION 5. COMPENSATION FOR SERVICES.

a. Each Fund will pay you, as compensation for your services and
expenses assumed hereunder, a fee as set forth in Schedule II. Management
fees payable hereunder will be computed daily and paid monthly in arrears.
If this Agreement is effective subsequent to the first day of the month, or
if this Agreement is terminated, the fee provided in this section will be
computed on the basis of the number of days in the month for which this
Agreement is in effect, subject to a pro rata adjustment based on the number
of days elapsed in the current month as a percentage of the total number of
days in such month.

-72-

<PAGE>

b. You may from time to time agree not to impose all or a portion of
your fee otherwise payable hereunder (in advance of the time such fee or a
portion thereof would otherwise accrue) and/or undertake to pay or reimburse
the Trust for all or a portion of its expenses not otherwise required to be
borne or reimbursed by you. Any such fee reduction or undertaking may be
discontinued or modified by you at any time.

c. Nothing herein will preclude you or your affiliates from
executing brokerage transactions for the Funds, charging the Funds brokerage
commissions for these transactions and deriving a profit from these
transactions.

SECTION 6. LIABILITY OF THE INVESTMENT ADVISER AND TRUST.

a. You will be liable for your own acts and omissions caused by your
willful misfeasance, bad faith, or gross negligence in the performance of
your duties or by your reckless disregard of your obligations under this
Agreement, and nothing herein will protect you against any such liability to
the Trust or its shareholders. You will not be liable for the acts and
omissions of any agent employed by you, nor for those of any bank, trust
company, broker or other person with whom or into whose hands any moneys,
shares of the Trust or securities and investments may be deposited or come in
compliance with the provisions of this Agreement. You will not be liable for
any defect in title of any property acquired, nor for any loss unless it
occurs through your own willful default. Subject to the first sentence of
this section, you will not be liable for any action taken or omitted on
advice, obtained in good faith, of counsel, provided such counsel is
satisfactory to the Trust.

b. None of the trustees, officers, agents or shareholders of the
Trust will be personally liable hereunder or are assuming any liability for
obligations entered into on behalf of the Trust. All persons dealing with
the Trust must look solely to the property of the Trust for the enforcement
of any claims against the Trust. No Fund will be liable for any claims
against any other Fund of the Trust.

SECTION 7. USE OF THE NAME "BURNHAM."

a. The Trust agrees that in the event that neither you nor any of
your affiliates acts as an investment adviser to the Trust or a Fund, the
name of the Trust or Fund will be changed to one that does not contain the
name "Burnham" or otherwise suggest an affiliation with you.

SECTION 8. TERMINATION OF AGREEMENT, ASSIGNMENT AND AMENDMENT.

a. This Agreement may be terminated at any time with respect to any
Fund without the payment of any penalty upon 60 days' written notice by the
terminating party to the other party, by you or by the Trust acting pursuant
to a resolution adopted by the Board, or by the vote of the holders of the
lesser of (1) 67% of the affected Fund's voting shares present at a meeting
if

-73-

<PAGE>

the holders of more than 50% of the outstanding shares of that Fund are present
in person or by proxy, or (2) more than 50% of the outstanding shares of that
Fund.

b. This Agreement will automatically terminate in the event of its
assignment. Termination will not affect rights of the parties which have
accrued prior thereto.

c. This Agreement contains the entire agreement of the parties
hereto, and is intended to be the complete and exclusive statement of the
terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with any applicable requirements of the 1940 Act as modified or
superseded by any rule, regulation, order or interpretive position of the
Commission.

SECTION 9. DURATION OF AGREEMENT.

a. Unless sooner terminated, this Agreement will continue in effect
until July 31, 2001, and from year to year thereafter until terminated,
provided that the continuation of the Agreement and the terms thereof are
approved annually in accordance with the requirements of the 1940 Act, as
modified or superseded by rule, regulation, order or interpretative position
of the Commission, subject to your right and the Trust's right to terminate
this Agreement as provided in Section 8 hereof.

SECTION 10. DEFINITIONS.

a. The terms "assignment" and interested person" when used in this
Agreement will have the meanings given such terms in the 1940 Act.

SECTION 11. CONCERNING APPLICABLE PROVISIONS OF LAW.

a. This Agreement will be subject to all applicable provisions of
law, including, without being limited to, the applicable provisions of the
1940 Act. To the extent that any provisions herein conflict with any
applicable provisions of law, the latter will control.

b. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

c. This Agreement will be governed by the substantive law of the
State of New York and the applicable provisions of the 1940 Act.

-74-

<PAGE>

d. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

SECTION 12. EFFECTIVE DATE.

a. This Agreement is effective May 3, 1999.

SECTION 13. MISCELLANEOUS.

a. The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.

Very truly yours,

BURNHAM INVESTORS TRUST

By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------

Attest:
--------------------------------
Michael E. Barna
Secretary

-75-

<PAGE>

Accepted:

BURNHAM ASSET MANAGEMENT CORPORATION

By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------

Attest:
-----------------------------------
Jon M. Burnham
Chief Executive Officer

-76-

<PAGE>

SCHEDULE I

As of May 3, 1999:

Burnham Fund
Burnham Money Market Fund
Burnham Dow 30 Focused Fund
Burnham Financial Services Fund
Burnham Small Cap Value Fund

-77-

<PAGE>

SCHEDULE II

<TABLE>
<CAPTION>
Annual Fee Rate as a Percentage Fund
of Average Daily Net Asset Value
------------------------------------
<S> <C>
Burnham Fund 0.60
Burnham Money Market Fund 0.45
Burnham Dow 30 Focused Fund 0.60
Burnham Financial Services Fund 0.75
Burnham Small Cap Value Fund 1.00
</TABLE>

The average net asset value for the month will be based on the net
asset value used in determining the price at which Fund shares are sold,
repurchased or redeemed on each day of the month.

If this Agreement becomes effective as to a Fund subsequent to the
first day of a month, or terminates before the last day of a month, your
compensation for such fraction of the month will be determined by applying
the foregoing percentages to the average daily net asset value of the Fund
during such fraction of a month and in the proportion that such fraction of a
month bears to the entire month.

-78-

<PAGE>

BURNHAM ASSET MANAGEMENT CORP.
1325 Avenue of the Americas, 26th Floor
New York, NY 10019

May 3, 1999

BURNHAM INVESTORS TRUST, on behalf of
Burnham Money Market Fund
1325 Avenue of the Americas, 26th Floor
New York, NY 10019

REICH & TANG ASSET MANAGEMENT L.P.
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302

Sub-advisory Agreement

Dear Sirs:

Burnham Investors Trust (the "trust"), of which Burnham Money Market Fund
(the "fund") is a series, has been organized as a business trust under the laws
of the State of Delaware to engage in the business of an investment company. The
trust's shares of beneficial interest are currently divided into five series
(including the fund), each series representing the entire undivided interest in
a separate portfolio of assets.

The board of trustees of the trust (the "trustees") has selected Burnham
Asset Management Corp. (the "adviser") to provide overall investment advice and
management for the fund, and to provide certain other services, under the terms
and conditions provided in the investment advisory agreement, dated as of the
date hereof, between the trust, on behalf of the fund, and the adviser (the
"investment advisory agreement").

The adviser and the trustees have selected Reich & Tang Asset Management
L.P. (the "sub-adviser") to provide the adviser and the fund with the advice and
services set forth below, and the sub-adviser is willing to provide such advice
and services, subject to the review of the trustees and overall supervision of
the adviser, under the terms and conditions hereinafter set forth. The
sub-adviser hereby represents and warrants that it is registered

<PAGE>

as an investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). Accordingly, the trust, on behalf of the fund, and the
adviser agree with the sub-adviser as follows:

1. Delivery of Documents. The trust has furnished the sub-adviser with
copies, properly certified or otherwise authenticated, of each of
the following:

(1) agreement and declaration of trust of the trust, dated August
20, 1998 (the "declaration of trust");

(2) by-laws of the trust as in effect on the date hereof;

(3) resolutions of the trustees selecting the sub-adviser as the
investment sub-adviser to the fund and approving this
sub-advisory agreement (the "agreement");

(4) resolutions of the trustees selecting the adviser as
investment adviser to the fund and approving the investment
advisory agreement and resolutions adopted by the initial
shareholder of the fund approving the investment advisory
agreement;

(5) the adviser's investment advisory agreement;

(6) the fund's prospectus and statement of additional information;
and

(7) the trust's code of ethics.

The adviser will furnish the sub-adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.

2. Investment Services. The sub-adviser will use its best efforts to
provide to the fund continuing and suitable investment advice with
respect to investments, consistent with the investment policies,
objectives and restrictions of the fund as set forth in the fund's
prospectus and statement of additional information. In the
performance of the sub-adviser's duties hereunder, subject always to
the provisions contained in the documents delivered to the
sub-adviser pursuant to Section 1 above, as from time to time
amended or supplemented, the sub-adviser will, at its own expense:

-44-

<PAGE>

(1) furnish the adviser and the fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the fund as set forth above, with
respect to the purchase, holding and disposition of portfolio
securities and other permitted investments;

(2) furnish the adviser and the fund with advice in connection
with policy decisions to be made by the board of trustees or
any committee thereof about the fund's investments and, as
requested, furnish the fund with research, economic and
statistical data in connection with the fund's investments and
investment policies;

(3) submit such reports relating to the valuation of the fund's
securities as the adviser may reasonably request;

(4) subject to prior consultation with the adviser, assist the fund
in any negotiations relating to the fund's investments with
issuers, investment banking firms, securities brokers or dealers
and other institutions or investors;

(5) consistent with the provisions of Section 7 of this agreement,
place orders for the purchase, sale or exchange of portfolio
securities for the fund's account with brokers or dealers
selected by the adviser or the sub-adviser, provided that in
connection with the placing of such orders and the selection of
such brokers or dealers the sub-adviser will seek to obtain best
price and execution, except as otherwise provided in the
prospectus and statement of additional information of the fund;

(6) from time to time or at any time requested by the adviser or the
trustees, make reports to the adviser or the trustees, as
requested, of the sub-adviser's performance of the foregoing
services;

(7) subject to the supervision of the adviser, maintain and preserve
the records required by the Investment Company Act of 1940 (the
"1940 Act") to be maintained by the sub-adviser (the sub-adviser
agrees that such records are the property of the trust and
copies will be surrendered to the trust promptly upon request
therefor);

-45-

<PAGE>

(8) give instructions to the custodian (including any sub-custodian)
of the fund as to deliveries of securities to and from such
custodian and payments of cash for the account of the fund, and
advise the adviser on the same day such instructions are given;

(9) cooperate generally with the fund and the adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the Securities
and Exchange Commission, including Form N-1A, semi-annual
reports on Form N-SAR, periodic statements, shareholder
communications and proxy materials furnished to holders of
shares of the fund, filings with states and with United States
agencies responsible for tax matters, and other reports and
filings of like nature.

In the performance of its duties hereunder, the sub-adviser is and will be an
independent contractor and unless otherwise expressly provided or authorized
will have no authority to act for or represent the fund or trust in any way or
otherwise be deemed to be an agent of the fund, the trust or of the adviser.

3. Expenses Paid by the Sub-adviser. The sub-adviser will pay the cost
of maintaining the staff and personnel necessary for it to perform
its obligations under this agreement, the expenses of office rent,
telephone, telecommunications and other facilities that it is
obligated to provide in order to perform the services specified in
Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.

4. Expenses of the Fund Not Paid by the Sub-adviser. The sub-adviser
will not be required to pay any expenses which this agreement does
not expressly state will be payable by the sub-adviser. In
particular, and without limiting the generality of the foregoing but
subject to the provisions of Section 3, the sub-adviser will not be
required to pay any fund expense or to reimburse the adviser for any
such expense that the adviser is required to pay.

5. Compensation of the Sub-adviser. The adviser will pay the
sub-adviser, as compensation for services and expenses assumed
hereunder, a fee as set forth in Schedule I. Sub-advisory fees
payable hereunder will be computed daily and paid monthly in
arrears. If this agreement is effective subsequent to the first day
of the month, or if this agreement is terminated, the fee provided
in

-46-

<PAGE>

this section will be computed on the basis of the number of days in
the month for which this Agreement is in effect, subject to a pro
rata adjustment based on the number of days elapsed in the current
month as a percentage of the total number of days in such month. The
sub-adviser understands and agrees that neither the trust nor the
fund has any liability for the sub-adviser's fee hereunder.
Calculations of the sub-adviser's fee will be based on average net
asset values as provided by the adviser.

6. Other Activities of the Sub-adviser and Its Affiliates. Nothing
herein contained will prevent the sub-adviser or any of its
affiliates or associates from engaging in any other business or from
acting as investment adviser or investment manager for any other
person or entity, whether or not having investment policies or a
portfolio similar to the fund. It is specifically understood that
officers, directors and employees of the sub-adviser and its
affiliates may engage in providing portfolio management services and
advice to other investment advisory clients of the sub-adviser or of
its affiliates.

7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the fund, neither
the sub-adviser nor any of its directors, officers or employees will
act as principal or agent or receive any commission. The sub-adviser
will not knowingly recommend that the fund purchase, sell or retain
securities of any issuer in which the sub-adviser has a financial
interest without obtaining prior approval of the adviser prior to
the execution of any such transaction. Access persons (as defined in
Rule 17j-1 under the 1940 Act) of the sub-adviser will provide
personal trading reports to a designated representative of the
adviser in accordance with the trust's code of ethics.

8. No Partnership or Joint Venture. The trust, the fund, the adviser
and the sub-adviser are not partners of or joint venturers with each
other and nothing herein shall be construed so as to make them such
partners or joint venturers or impose any liability as such on any
of them.

9. Limitation of Liability of the Sub-adviser. The sub-adviser will not
be liable for any error of judgment or mistake of law or for any
loss suffered by the trust, the fund or the adviser in connection
with the matters to which this agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the sub-

-47-

<PAGE>

adviser's part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this agreement.

10. Duration and Termination of this Agreement. This agreement will
remain in effect until April 30, 2001 and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually by (a) a majority of the trustees who are
not interested persons of the adviser, of the sub-adviser or (other
than as board members) of the trust, cast in person at a meeting
called for the purpose of voting on such approval, and (b) either
(i) the trustees or (ii) a majority of the outstanding voting
securities of the fund. This agreement may, on 60 days written
notice, be terminated at any time without the payment of any penalty
by the fund by vote of a majority of the outstanding voting
securities of the fund or by the board of trustees or by the adviser
or by the sub-adviser. Termination of this agreement with respect to
the fund will not be deemed to terminate or otherwise invalidate any
provisions of any contract between you and any other series of the
trust. This agreement will automatically terminate in the event of
its assignment or upon the termination of the adviser's investment
advisory agreement. In interpreting the provisions of this Section
10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and
"voting security"), will apply.

11. Amendment of this Agreement. No provision of this agreement may be
changed or waived orally, but only by an instrument in writing
signed by the party against which enforcement of the change or
waiver is sought. No amendment, transfer, assignment, sale,
hypothecation or pledge of this agreement shall be effective until
approved by (a) the trustees, including a majority of the trustees
who are not interested persons of the adviser, the sub-adviser or
(other than as board members) the trust, cast in person at a meeting
called for the purpose of voting on such approval, and (b) a
majority of the outstanding voting securities of the fund, as
defined in the 1940 Act.

12. Miscellaneous.

(1) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an

-48-

<PAGE>

original, but all of which together shall constitute one and the
same instrument. The name Burnham Investors Trust is the
designation of the trustees under the declaration of trust,
dated August 20, 1998 and the declaration of trust has been
filed with the Secretary of State of the State of Delaware. The
obligations of the trust and the fund are not personally binding
upon, nor will resort be had to the private property of, any of
the trustees, shareholders, officers, employees or agents of the
trust or the fund, but only the fund's property shall be bound.
The fund will not be liable for the obligations of any other
series of the trust.

(2) Nothing herein contained will limit or restrict the sub-adviser
or any of its officers, affiliates or employees from buying,
selling or trading in any securities for its or their own
account or accounts. The trust and fund acknowledge that the
sub-adviser and its officers, affiliates and employees, and its
other clients may at any time have, acquire, increase, decrease
or dispose of positions in investments which are at the same
time being acquired or disposed of by the fund. The sub-adviser
will have no obligation to acquire for the fund, a position in
any investment which the sub-adviser, its officers, affiliates
or employees may acquire for its or their own accounts or for
the account of another client if, in the sole discretion of the
sub-adviser, it is not feasible or desirable to acquire a
position in such investment for the fund. Nothing herein
contained will prevent the sub-adviser from purchasing or
recommending the purchase of a particular security for one or
more funds or clients while other funds or clients may be
selling the same security.

(3) Any information supplied by the sub-adviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is confidential and may be
used only by the fund and/or its agents, and only in connection
with the fund and its investments.

(4) Governing Law. This agreement shall be governed by the
substantive law of the State of New York and the applicable
provisions of the 1940 Act.

Yours very truly,

BURNHAM ASSET MANAGEMENT CORP.

By:_______________________________

Its: ______________________________

-49-

<PAGE>

The foregoing agreement is hereby
agreed to as of the date thereof.

BURNHAM INVESTORS TRUST
on behalf of Burnham Money
Market Fund

By:______________________________

Its:______________________________

REICH & TANG ASSET MANAGEMENT L.P.

By:______________________________

Its:______________________________

-50-

<PAGE>

SCHEDULE I

Annual Fee Rate as a Percentage
Fund of Average Daily Net Asset Value
- ---- --------------------------------

<S> <C>
Burnham Money Market Fund 0.15% of first $100,000,000
0.10% of next $50,000,000
0.05% over $150,000,000
</TABLE>

The average net asset value for the month will be based on the net asset
value used in determining the price at which fund shares are sold, repurchased
or redeemed on each day of the month.

If this agreement becomes effective as to a fund subsequent to the first
day of a month, or terminates before the last day of a month, your compensation
for such fraction of the month will be determined by applying the foregoing
percentages to the average daily net asset value of the fund during such
fraction of a month and in the proportion that such fraction of a month bears to
the entire month.

-51-

<PAGE>

BURNHAM ASSET MANAGEMENT CORP.
1325 Avenue of the Americas, 26th Floor
New York, NY 10019

May 3, 1999

BURNHAM INVESTORS TRUST, on behalf of
Burnham Financial Services Fund
1325 Avenue of the Americas, 26th Floor
New York, NY 10019

MENDON CAPITAL ADVISORS CORP.
1325 Avenue of the Americas
26th Floor
New York, New York 10019

Sub-advisory Agreement

Dear Sirs:

Burnham Investors Trust (the "trust"), of which Burnham Financial Services
Fund (the "fund") is a series, has been organized as a business trust under the
laws of the State of Delaware to engage in the business of an investment
company. The trust's shares of beneficial interest are currently divided into
five series (including the fund), each series representing the entire undivided
interest in a separate portfolio of assets.

The adviser and the trustees have selected Mendon Capital Advisors Corp.
(the "sub-adviser") to provide the adviser and the fund with the advice and
services set forth below, and the sub-adviser is willing to provide such advice
and services, subject to the review of the trustees and overall supervision of
the adviser, under the terms and conditions hereinafter set forth. The
sub-adviser hereby represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended

<PAGE>

(the "Advisers Act"). Accordingly, the trust, on behalf of the fund, and the
adviser agree with the sub-adviser as follows:

1. Delivery of Documents. The trust has furnished the sub-adviser with copies,
properly certified or otherwise authenticated, of each of the following:

(a) agreement and declaration of trust of the trust, dated August 20,
1998 (the "declaration of trust");

(b) by-laws of the trust as in effect on the date hereof;

(c) resolutions of the trustees selecting the sub-adviser as the
investment sub-adviser to the fund and approving this sub-advisory
agreement (the "agreement");

(d) resolutions of the trustees selecting the adviser as investment
adviser to the fund and approving the investment advisory agreement
and resolutions adopted by the initial shareholder of the fund
approving the investment advisory agreement;

(e) the adviser's investment advisory agreement;

(f) the fund's prospectus and statement of additional information; and

(g) the trust's code of ethics.

The adviser will furnish the sub-adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.

2. Investment Services. The sub-adviser will use its best efforts to provide to
the fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the fund as set forth in the fund's prospectus and statement
of additional information. In the performance of the sub-adviser's duties
hereunder, subject always to the provisions contained in the documents
delivered to the sub-adviser pursuant to Section 1 above, as from time to
time amended or supplemented, the sub-adviser will, at its own expense:

-54-

<PAGE>

(a) furnish the adviser and the fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions
of the fund as set forth above, with respect to the purchase,
holding and disposition of portfolio securities and other permitted
investments;

(b) furnish the adviser and the fund with advice in connection with
policy decisions to be made by the board of trustees or any
committee thereof about the fund's investments and, as requested,
furnish the fund with research, economic and statistical data in
connection with the fund's investments and investment policies;

(d) subject to prior consultation with the adviser, assist the fund in
any negotiations relating to the fund's investments with issuers,
investment banking firms, securities brokers or dealers and other
institutions or investors;

(e) consistent with the provisions of Section 7 of this agreement, place
orders for the purchase, sale or exchange of portfolio securities
for the fund's account with brokers or dealers selected by the
adviser or the sub-adviser, provided that in connection with the
placing of such orders and the selection of such brokers or dealers
the sub-adviser will seek to obtain best price and execution, except
as otherwise provided in the prospectus and statement of additional
information of the fund;

(f) from time to time or at any time requested by the adviser or the
trustees, make reports to the adviser or the trustees, as requested,
of the sub-adviser's performance of the foregoing services;

(g) subject to the supervision of the adviser, maintain and preserve the
records required by the Investment Company Act of 1940 (the "1940
Act") to be maintained by the sub-adviser (the sub-adviser agrees
that such records are the property of the trust and copies will be
surrendered to the trust promptly upon request therefor);

-55-

<PAGE>

(h) give instructions to the custodian (including any sub-custodian) of
the fund as to deliveries of securities to and from such custodian
and payments of cash for the account of the fund, and advise the
adviser on the same day such instructions are given;

(i) cooperate generally with the fund and the adviser to provide
information necessary for the preparation of registration statements
and periodic reports to be filed with the Securities and Exchange
Commission, including Form N-1A, semi-annual reports on Form N-SAR,
periodic statements, shareholder communications and proxy materials
furnished to holders of shares of the fund, filings with states and
with United States agencies responsible for tax matters, and other
reports and filings of like nature.

In the performance of its duties hereunder, the sub-adviser is and will be
an independent contractor and unless otherwise expressly provided or
authorized will have no authority to act for or represent the fund or trust
in any way or otherwise be deemed to be an agent of the fund, the trust or
of the adviser.

3. Expenses Paid by the Sub-adviser. The sub-adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its
obligations under this agreement, the expenses of office rent, telephone,
telecommunications and other facilities that it is obligated to provide in
order to perform the services specified in Section 2, and any other expenses
incurred by it in connection with the performance of its duties hereunder.

4. Expenses of the Fund Not Paid by the Sub-adviser. The sub-adviser will not
be required to pay any expenses which this agreement does not expressly
state will be payable by the sub-adviser. In particular, and without
limiting the generality of the foregoing but subject to the provisions of
Section 3, the sub-adviser will not be required to pay any fund expense or
to reimburse the adviser for any such expense that the adviser is required
to pay.

5. Compensation of the Sub-adviser. The adviser will pay the sub-adviser, as
compensation for services and expenses assumed hereunder, a fee as set forth
in Schedule I. Sub-advisory fees payable hereunder will be computed daily
and paid monthly in arrears. If this agreement is effective subsequent to
the first day of the month, or if this agreement is terminated, the fee
provided in this section will be computed on the basis

-56-

<PAGE>

of the number of days in the month for which this agreement is in effect,
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month. The
sub-adviser understands and agrees that neither the trust nor the fund has
any liability for the sub-adviser's fee hereunder. Calculations of the
sub-adviser's fee will be based on average net asset values as provided by
the adviser.

6. Other Activities of the Sub-adviser and Its Affiliates. Nothing herein
contained will prevent the sub-adviser or any of its affiliates or
associates from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, whether or not
having investment policies or a portfolio similar to the fund. It is
specifically understood that officers, directors and employees of the
sub-adviser and its affiliates may engage in providing portfolio management
services and advice to other investment advisory clients of the sub-adviser
or of its affiliates.

7. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of the fund, neither the sub-adviser
nor any of its directors, officers or employees will act as principal or
agent or receive any commission. The sub-adviser will not knowingly
recommend that the fund purchase, sell or retain securities of any issuer in
which the sub-adviser has a financial interest without obtaining prior
approval of the adviser prior to the execution of any such transaction.
Access persons (as defined in Rule 17j-1 under the 1940 Act) of the
sub-adviser will provide personal trading reports to a designated
representative of the adviser in accordance with the trust's code of ethics.

8. No Partnership or Joint Venture. The trust, the fund, the adviser and the
sub-adviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or joint
venturers or impose any liability as such on any of them.

9. Limitation of Liability of the Sub-adviser. The sub-adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered
by the trust, the fund or the adviser in connection with the matters to
which this agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the subadviser's part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this agreement.

10. Duration and Termination of this Agreement. This agreement will remain in
effect until April 30, 2001 and from year to year thereafter, but only so

-57-

<PAGE>

long as such continuance is specifically approved at least annually by (a) a
majority of the trustees who are not interested persons of the adviser, of
the sub-adviser or (other than as board members) of the trust, cast in
person at a meeting called for the purpose of voting on such approval, and
(b) either (i) the trustees or (ii) a majority of the outstanding voting
securities of the fund. This agreement may, on 60 days written notice, be
terminated at any time without the payment of any penalty by the fund by
vote of a majority of the outstanding voting securities of the fund or by
the board of trustees or by the adviser or by the sub-adviser. Termination
of this agreement with respect to the fund will not be deemed to terminate
or otherwise invalidate any provisions of any contract between you and any
other series of the trust. This agreement will automatically terminate in
the event of its assignment or upon the termination of the adviser's
investment advisory agreement. In interpreting the provisions of this
Section 10, the definitions contained in Section 2(a) of the 1940 Act
(including the definitions of "assignment," "interested person" and "voting
security"), will be applied.

11. Amendment of this Agreement. No provision of this agreement may be changed
or waived orally, but only by an instrument in writing signed by the party
against which enforcement of the change or waiver is sought. No amendment,
transfer, assignment, sale, hypothecation or pledge of this agreement will
be effective until approved by (a) the trustees, including a majority of the
trustees who are not interested persons of the adviser, the sub-adviser or
(other than as board members) the trust, cast in person at a meeting called
for the purpose of voting on such approval, and (b) a majority of the
outstanding voting securities of the fund, as defined in the 1940 Act.

12. Miscellaneous.

(a) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This
agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The
name Burnham Investors Trust is the designation of the trustees
under the declaration of trust, dated August 20, 1998 and the
declaration of trust has been filed with the Secretary of State of
the State of Delaware. The obligations of the trust and the fund are
not personally binding upon, nor will resort be had to the private
property of, any of the trustees, shareholders, officers, employees
or agents of the trust or the fund, but only the fund's property
will

-58-

<PAGE>

be bound. The fund will not be liable for the obligations of any
other series of the trust.

(b) Nothing herein contained will limit or restrict the sub-adviser or
any of its officers, affiliates or employees from buying, selling or
trading in any securities for its or their own account or accounts.
The trust and fund acknowledge that the sub-adviser and its
officers, affiliates and employees, and its other clients may at any
time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of
by the fund. The sub-adviser will have no obligation to acquire for
the fund, a position in any investment which the sub-adviser, its
officers, affiliates or employees may acquire for its or their own
accounts or for the account of another client if, in the sole
discretion of the sub-adviser, it is not feasible or desirable to
acquire a position in such investment for the fund. Nothing herein
contained will prevent the sub-adviser from purchasing or
recommending the purchase of a particular security for one or more
funds or clients while other funds or clients may be selling the
same security.

(c) Any information supplied by the sub-adviser, which is not otherwise
in the public domain, in connection with the performance of its
duties hereunder is confidential and may be used only by the fund
and/or its agents, and only in connection with the fund and its
investments.

(d) Governing Law. This agreement shall be governed by the substantive
law of the State of New York and the applicable provisions of the
1940 Act.

Yours very truly,

BURNHAM ASSET MANAGEMENT CORP.

By:_______________________________

Its: ______________________________

The foregoing agreement is hereby
agreed to as of the date thereof.

BURNHAM INVESTORS TRUST
on behalf of Burnham Financial
Services Fund

By:______________________________

Its:______________________________

MENDON CAPITAL ADVISORS CORP.

By:______________________________

Its:______________________________

-59-

<PAGE>

SCHEDULE I

Annual Fee Rate as a Percentage
Fund of Average Daily Net Asset Value
- ---- --------------------------------

<S> <C>
Burnham Financial Services Fund _____
</TABLE>

The average net asset value for the month will be based on the net asset
value used in determining the price at which fund shares are sold, repurchased
or redeemed on each day of the month.

-60-

<PAGE>

September 7, 1989, as amended and restated August 24, 1998

BURNHAM INVESTORS TRUST

AMENDED AND RESTATED DISTRIBUTION CONTRACT

BURNHAM SECURITIES INC.
1325 Avenue of the Americas
New York, New York 10019

Gentlemen:

The undersigned, Burnham Investors Trust, a Delaware business trust (the
"Trust"), is an open-end investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Trust may sell its shares
to, and repurchase or redeem its shares from, the public.

Section 1. GENERAL DUTIES AS DISTRIBUTOR OF THE FUND'S SHARES.

It is hereby agreed that you shall act as principal distributor
("Distributor") for each series of the Trust set forth on Schedule I and any
other series of the Trust as the parties may agree from time to time (each, a
"Fund" and collectively, the "Funds"). Each Fund may be authorized to issue
multiple classes of shares pursuant to Rule 18f-3 under the 1940 Act. As
Distributor, you will have the exclusive right to purchase, as principal, from
each Fund, shares of each class authorized and issued by the Fund and it is
further agreed that during the term of this contract, you will use your best
efforts to solicit or otherwise cause sales of the shares of each Fund and any
authorized class of the Funds' shares and which such shares are registered or
qualified for sale. You agree, as agent for each Fund, to repurchase, and accept
for redemption, the shares of each class authorized and issued by the Fund;
whenever the officers of the Trust deem it advisable for the protection of
shareholders, they may suspend or cancel such authority with respect to one or
more of the Funds. In the performance of these duties you shall be guided by the
requirements of this contract, the applicable provisions of the Trust's
Agreement and Declaration of Trust, By-laws, and applicable federal and state
law, all as amended and/or supplemented from time to time, and each Fund's
then-current Prospectus and Statement of Additional Information, which is from
time to time in effect under the Trust's Registration Statement filed with the
Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act.

Section 2. DEALERS.

You may solicit qualified dealers for orders to purchase, as principal,
shares of the Funds and may enter into dealer agreements with any such dealers,
the form thereof to be determined by you.

<PAGE>

Section 3. SALES LITERATURE AND ADVERTISEMENTS.

All sales literature and advertisements used by you in connection with the
sale of the Trust's shares must be submitted to the Trust for its advance
approval. In connection with the sale or arranging for the sale of the Trust's
shares, you are authorized to give only such information and to make only such
statements or representations as are contained in each Fund's Prospectus which
is from time to time in effect under the Trust's Registration Statement on Form
N-1A, or any superseding form, filed with the SEC under the 1933 Act and 1940
Act, or in sales literature or advertisements approved by the Trust.

Section 4. LIMITATION UPON INITIAL INVESTMENT IN THE TRUST BY SHAREHOLDERS.

You shall not accept any initial or subsequent investment in shares of a
Fund, except as described in the Fund's then-current Prospectus. The Trust's
Board of Trustees (the "Board") may increase, modify or eliminate any such
investment limitations on written notice to you.

Section 5. OFFERING PRICE. NET ASSET VALUE PER SHARE.

Shares of each Fund sold under this contract shall be sold only at the
Offering Price in effect at the time of such sale, as described in the
then-current Prospectus and Statement of Additional Information of each Fund as
the same may be supplemented from time to time, and each Fund shall receive not
less than the full net asset value thereof. Any front-end sales charge payable
upon purchases and any contingent deferred sales charge ("CDSC") payable on
redemptions shall be retained by you, it being understood that such amounts will
not exceed those set forth in each Fund's then-current Prospectus. You may
re-allow to dealers all or any part of these sales charges.

Any reference to "net asset value per share" shall refer to each Fund's
net asset value per share computed in accordance with the Trust's Agreement and
Declaration of Trust, each Fund's then-current Prospectus and Statement of
Additional Information and the instructions of the Board, all as changed or
amended from time to time. The Trust or the investment adviser will advise you
as promptly as practicable of each Fund's net asset value per share on each day
on which it is determined.

Section 6. DUTIES UPON SALE OR REPURCHASE OR REDEMPTION OF SHARES OF THE
TRUST.

You shall remit to the Trust's custodian the net asset value per share of
all shares of each Fund sold by you. Each Fund will, as promptly as practicable,
cause the account of the purchaser to be credited with the number of shares
purchased. The Trust will not issue share certificates.

You shall process or cause to be processed requests received from each
Fund's shareholders for repurchase or redemption of its shares, in the manner
prescribed from time to time by the Board. Subject to Section 5 hereof, shares
redeemed shall be redeemed at their net asset value per share next computed
after receipt of the redemption request. You shall arrange

<PAGE>

for payment to such shareholders from each Fund's account with the custodian.
You shall reimburse the respective Fund for any loss caused by the failure of a
shareholder to confirm in writing any repurchase or redemption order accepted by
you. In the event that orders for the purchase or repurchase or redemption of
shares of a Fund are placed and subsequently canceled, you shall pay to that
Fund, on at least an annual basis, an amount equal to the losses (net of any
gains) realized by the Fund as a result of such cancellations.

Section 7. INFORMATION RELATING TO THE TRUST.

The Trust will keep you fully informed with regard to its affairs, and
will furnish you with a certified copy of all financial statements and a signed
copy of each report prepared by its independent public accountants, and will
cooperate fully with you in your efforts to sell the Funds' shares, and in the
performance by you of all of your duties under this contract.

Section 8. FILING OF REGISTRATION STATEMENTS.

The Trust will from time to time file (and furnish you with copies of)
such registration statements, amendments thereto, and reports or other documents
as may be required under the 1933 Act, the 1940 Act, or the laws of the states
in which you desire to sell shares of the Funds.

Section 9. MULTIPLE CAPACITIES.

Nothing contained in this contract shall be deemed to prohibit you from
acting, and being separately compensated for acting, in one or more capacities
on behalf of the Trust, including, but not limited to, the capacities of
investment adviser, administrator, broker and distributor. The Trust understands
that you may act in one or more such capacities on behalf of other investment
companies and customers. You shall give the Trust equitable treatment under the
circumstances in supplying services in any capacity, but the Trust recognizes
that it is not entitled to receive preferential treatment from you as compared
with the treatment given to any other investment company or customer. Whenever
you shall act in multiple capacities on behalf of the Trust, you shall maintain
the appropriate separate account and records for each such capacity.

-64-

<PAGE>

Section 10. PAYMENT OF FEES AND EXPENSES.

The Trust, on behalf of the Funds, shall assume and pay, or reimburse you
for, all expenses arising from this contract, except that the following expenses
shall be allocated to you, and you shall pay for (i) expenses of printing all
sales literature of the Funds, including shareholder reports and prospectuses
required for your purposes (expenses of printing quarterly and annual reports
and of maintaining and printing a current Prospectus for the Funds' shareholders
will be paid for by the respective Funds); and (ii) any payments by you to other
persons for selling shares of the Funds. The foregoing allocations to you shall
not, however, be deemed to limit (i) your right to receive and retain any
front-end sales charges or CDSCs referred to in Section 5 hereof, (ii) the fees
payable to you in accordance with any plans adopted by the Funds (or a class of
shares of the respective Funds) pursuant to Rule 12b-1 under the 1940 Act, as
set forth in each Fund's then-current Prospectus and Statement of Additional
Information, which you shall be entitled to receive for your services as
Distributor in accordance with such plans, or (iii) the amount of any service
fees payable to you by the Funds to be used to compensate persons for providing
personal service to shareholders and maintaining shareholder accounts, as set
forth in each Fund's then-current Prospectus and Statement of Additional
Information.

Section 11. LIABILITY OF THE DISTRIBUTOR.

You shall be liable for your own acts and omissions caused by your willful
misfeasance, bad faith, or gross negligence in the performance of your duties,
or by your reckless disregard of your obligations under this contract, and
nothing herein shall protect you against any such liability to the Trust or its
shareholders. Subject to the first sentence of this section, you shall not be
liable for any action taken or omitted on advice, obtained in good faith, of
counsel, provided such counsel is satisfactory to the Trust.

Section 12. USE OF WORD "BURNHAM" IN NAME OF TRUST.

The word "Burnham" in the name of the Trust or the Funds is understood to
be used by the Trust with your consent, and the Trust is hereby granted a
non-exclusive license to use the name "Burnham Investors Trust" and to use the
word "Burnham" in any Fund's name provided that the Trust and the Funds may use
such name only so long as (i) Burnham Asset Management Corporation ("Adviser"),
which currently acts as investment adviser to the Trust and the Funds, shall
continue to be retained by the Trust and the Funds as its investment adviser
pursuant to an investment advisory contract between the Trust and the Adviser,
as from time to time amended or supplemented, or (ii) you shall specifically
consent in writing to such continued use. Any such use by the Trust and the
Funds shall in no way prevent you or any of your successors or assigns from
using or permitting the use of the name "Burnham Investors Trust" along or with
any other word or business, other than the Trust or its business, whether or not
the same directly or indirectly competes or conflicts with the Trust or its
business in any manner. To the extent permitted by the 1940 Act and the rules
and regulations thereunder, and Investment Company Act Release No. 5510, in the
event that the Adviser shall cease to be the investment adviser of the Trust and
the Funds, the Trust, upon your written request, shall take such further action
as may be necessary to

-65-

<PAGE>

delete from its name and the name of the Funds the word "Burnham" and thereafter
(i) cease to use the name "Burnham Investors Trust" and shall omit the word
"Burnham" from the Funds' names or any name deceptively similar thereto or to
"Burnham Securities Inc." in any way whatsoever, and (ii) for such period and in
such manner as may reasonably be required by you, on all letterheads and other
material designed to be read or used by salesmen, distributors or investors,
state in a prominent position and prominent type that Burnham Asset Management
Corporation has ceased to be the investment adviser of the Trust and the Funds.

Section 13. TERMINATION OF CONTRACT; ASSIGNMENT.

This contract may be terminated at any time, without the payment of any
penalty, on 60 days written notice (i) by you; (ii) by the Trust, acting
pursuant to a resolution adopted by the Board; or (iii) by the vote of the
holders of the lesser of (1) 67% of the Trust's shares present at a meeting if
the holders of more than 50% of the outstanding shares are present in person or
represented by proxy, or (2) more than 50% of the outstanding shares of the
Trust. This contract shall automatically terminate in the event of its
assignment. Termination shall not affect the rights of the parties which have
accrued prior thereto.

Section 14. DURATION OF CONTRACT.

Unless sooner terminated, this contract shall continue in effect until
April 30, 2001, and from year to year thereafter until terminated, provided that
the continuation of this contract and the terms thereof are specifically
approved annually in accordance with the requirements of the 1940 Act as
modified or superseded by any rule, regulation, order or interpretive position
of the SEC.

Section 15. DEFINITIONS.

The terms "assignment" and "interested person" when used in this contract
shall have the meanings given such terms in the 1940 Act.

Section 16. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.

This contract shall be subject to all applicable provisions of law,
including, without being limited to, the applicable provisions of the 1940 Act,
the 1933 Act, and the Securities Exchange Act of 1934, as amended; and to the
extent that any provisions of law are in conflict, the latter shall control.

This contract is executed and delivered in New York, and the laws of the
State of New York shall, except to the extent that any applicable provisions of
some other laws shall be controlling, govern the construction, validity and
effect of this contract.

-66-

<PAGE>

Section 17. MISCELLANEOUS.

The obligations of the Trust and each Fund are not personally binding
upon, nor shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or any Fund, but only
the relevant Fund's property shall be bound. No Fund shall be liable for the
obligations of any other Fund.

If the contract set forth herein is acceptable to you, please so indicate
by executing my enclosed copy of this letter and returning the same to the
undersigned, whereupon this letter shall constitute a binding contract between
the parties hereto effective May 3, 1999.

Very truly yours,
BURNHAM INVESTORS TRUST

By:_______________________________

Accepted:
BURNHAM SECURITIES INC.

By:_______________________________

-67-

<PAGE>

SCHEDULE I

<TABLE>
<CAPTION>
Annual Fee Rate as a Percentage of
Average Daily Net Value
----------------------------------
<S> <C>
Burnham Fund
Class A Shares 0.25%
Class B Shares 0.75%

Burnham Financial Services Fund
Class A Shares 0.25%
Class B Shares 0.75%

Burnham Small Cap Value Fund
Class A Shares 0.25%
Class B Shares 0.75%

Burnham Dow 30 Focused Fund 0.25%

Burnham Money Market Fund n/a
</TABLE>

-68-

<PAGE>

April _____, 1999

Investors Fiduciary Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105

Ladies and Gentlemen:

This Letter of Acceptance executed by and among The Burnham Fund, Inc.,
Burnham Investors Trust and Investors Fiduciary Trust Company concerns the
transfer of certain rights and obligations under the Custody and Investment
Accounting Agreement between Investors Fiduciary Trust Company (the "Custodian")
and The Burnham Fund, Inc., a Maryland corporation (the "Corporation"), dated
April 22, 1998 (the "Agreement") by the Corporation to Burnham Investors Trust,
a Delaware business trust (the "Trust").

The Trust hereby agrees to assume all of the Corporation's rights and
obligations under the Agreement and all modifications and amendments thereof, as
attached in Exhibit A.

The Custodian consents to the transfer and agrees to continue the
performance of all of the terms, covenants and conditions of the Agreement and
all modifications and amendments thereof, as if the Trust had originally signed
and was a party to the Agreement.

Accepted,

THE BURNHAM FUND, INC.

By:____________________________________

Name:__________________________________

Title:_________________________________

Date:__________________________________

<PAGE>

BURNHAM INVESTORS TRUST

By:____________________________________

Name:__________________________________

Title:_________________________________

Date:__________________________________

INVESTORS FIDUCIARY TRUST COMPANY

By:____________________________________

Name:__________________________________

Title:_________________________________

Date:__________________________________

<PAGE>

April ___, 1999

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Ladies and Gentlemen:

This Letter of Acceptance executed by and among The Burnham Fund, Inc.,
Burnham Investors Trust and State Street Bank and Trust Company concerns the
transfer of certain rights and obligations under the Transfer Agency and Service
Agreement between State Street Bank and Trust Company (the "Transfer Agent") and
The Burnham Fund, Inc., a Maryland corporation (the "Corporation"), dated
____________, 1989 (the "Agreement") by the Corporation to Burnham Investors
Trust, a Delaware business trust (the "Trust").

The Trust hereby agrees to assume all of the Corporation's rights and
obligations under the Agreement and all modifications and amendments thereof, as
attached in Exhibit A.

The Transfer Agent consents to the transfer and agrees to continue the
performance of all of the terms, covenants and conditions of the Agreement and
all modifications and amendments thereof, as if the Trust had originally signed
and was a party to the Agreement.

Accepted,

THE BURNHAM FUND, INC.

By:__________________________________

Name:_________________________________

Title:________________________________

Date:_________________________________

<PAGE>

BURNHAM INVESTORS TRUST

By:__________________________________

Name:________________________________

Title:_______________________________

Date:________________________________

STATE STREET BANK AND TRUST COMPANY

By:__________________________________

Name:________________________________

Title:_______________________________

Date:________________________________

<PAGE>

ADMINISTRATION AGREEMENT

BURNHAM INVESTORS TRUST

AGREEMENT made as of the _____ day of ________, 1999, by and between
BURNHAM INVESTORS TRUST, a Delaware business trust (the "Trust"), on behalf of
each of the Funds listed on Appendix A hereto, as it may be amended from time to
time (collectively, the "Funds"), and BURNHAM ASSET MANAGEMENT CORP., a Delaware
corporation (the "Administrator").

The Trust is an open-end, management investment company, registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The
Administrator is an investment adviser registered under the Investment Advisers
Act of 1940, as amended.

The Trust desires the Administrator to render administrative services to
the Trust and to arrange for certain other services needed by the Trust, and the
Administrator is willing to render and arrange for such services upon the terms
and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:

1. Administrative and Other Services.

(1) Subject to the general supervision of the Board of Trustees of the
Trust, the Administrator will provide certain administrative services
to the Trust. Specifically, the Administrator will (i) provide
supervision of all aspects of the Trust's operations not referred to
in Section 1 of the current Investment Advisory Agreement between the
Trust and the Trust's investment adviser (the "Investment Advisory
Agreement"); (ii) provide the Trust with personnel to perform such
executive, administrative, accounting and clerical services as are
reasonably necessary to provide effective administration of the Trust;
(iii) arrange for, (a) the preparation for the Trust of all required
tax returns, (b) the preparation and submission of reports to existing
shareholders and (c) the periodic updating of the Trust's prospectus
and statement of additional information and the preparation of reports
filed with the Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Trust's records not required to
be maintained by the investment adviser pursuant to the Investment
Advisory Agreement; and (v) provide the Trust with adequate office
space and all necessary office equipment and services, including,
without limitation, telephone service, heat, utilities, stationery
supplies and similar items.

(2) The Administrator will supervise the performance of services by the
Trust's: (i) custodian (ii) transfer agent; and (iii) fund accounting
agent.

<PAGE>

(3) The Administrator will also provide to the Trust's Board of Trustees
such periodic and special reports as the Board may reasonably request,
including but not limited to reports concerning the services of the
administrator, custodian, and fund accounting and transfer agents. The
Administrator will for all purposes herein be deemed to be an
independent contractor and will, except as otherwise expressly
provided or authorized, have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust.

(4) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.

(5) The services hereunder are not deemed exclusive and the Administrator
will be free to render similar services to others so long as its
services under this Agreement are not impaired thereby.

2. Allocation of Charges and Expenses. Except as otherwise provided in Section
1 above and this Section 2, the Administrator will pay all costs it incurs
in connection with the performance of its duties under Section 1 of this
Agreement. The Administrator will pay the compensation and expenses of all
of its personnel and will make available, without expense to the Trust, the
services of such of its directors, officers and employees as may duly be
elected officers or Trustees of the Trust, subject to their individual
consent to serve and to any limitations imposed by law. The Administrator
will not be required to pay any expenses of the Trust other than those
specifically allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the foregoing, the
Administrator will not be required to pay:

(i) fees and expenses of any investment adviser of the Trust;

(ii) charges and expenses for fund accounting, pricing and appraisal
services and related overhead, including, to the extent such services
are performed by personnel of the investment adviser or its
affiliates, office space and facilities and personnel compensation,
training and benefits;

(iii) the charges and expenses of auditors;

(iv) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust;

(v) issue and transfer taxes chargeable to a Fund in connection with
securities transactions to which the Fund is a party;

(vi) insurance premiums, interest charges, dues and fees for membership in
trade associations and all taxes and corporate fees payable by the
Trust to federal, state or other governmental agencies;

-84-

<PAGE>

(vii) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including
the preparation of prospectuses and statements of additional
information for filing with the Commission;

(vii) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements, and
reports to shareholders and reports to governmental agencies;

(viii) charges and expenses of legal counsel to the Trust and the Trustees;

(ix) any distribution fees paid by a Fund in accordance with Rule 12b-1
under the 1940 Act;

(x) compensation of those Trustees of the Trust who are not affiliated
with or interested persons of the investment adviser, the Trust (other
than as Trustees) or Burnham Securities, Inc.;

(xi) the cost of preparing and printing share certificates; and

(xii) interest on borrowed money, if any.

3. Compensation of the Administrator.

(1) For all services to be rendered and payments made as provided in
Sections 1 and 2 hereof, the Trust will cause each Fund to pay the
Administrator on the last day of each month a fee at an annual rate
equal to a percentage of the average daily net assets of such Fund as
set forth in Appendix A hereto. The "average daily net assets" of a
Fund shall be determined in accordance with the Trust's prospectus or
otherwise consistent with the 1940 Act and the rules thereunder.

(2) The Administrator may from time to time agree not to impose all or a
portion of its fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/or undertake
to pay or reimburse any Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Administrator. Any
such fee reduction or undertaking may be discontinued or modified by
the Administrator at any time.

4. Other Interests. It is understood that the Trustees and officers of the Trust
and shareholders of the Funds are or may be or become interested in the
Administrator as directors, officers, employees, shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
are or may be or become similarly

-85-

<PAGE>

interested in the Funds, and that the Administrator may be or become
interested in the Funds as a shareholder or otherwise. It is also understood
that directors, officers, employees and shareholders of the Administrator may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) controlling, controlled by or under
common control with the Administrator or which the Administrator may in the
future organize, sponsor or acquire, or with which it may merge or
consolidate, and which may include the words "Burnham" or any combination or
derivation thereof as part of their name. The Administrator or its affiliates
may enter into advisory or management or administration agreements or other
contracts or relationships with such other companies or entities.

5. Sub-Administrators. The Administrator may employ, at its own expense, one or
more sub-administrators from time to time to perform such of the acts and
services of the Administrator and upon such terms and conditions as may be
agreed upon between the Administrator and such sub-administrators and
approved by the Board of Trustees of the Trust.

6. Limitation of Liability of Administrator and Trust. The Administrator will
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its 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 employed by the Administrator, who
may be or become an employee of and paid by the Trust shall be deemed, when
acting within the scope of his employment by the Trust, to be acting in such
employment solely for the Trust and not as the Administrator's employee or
agent. None of the trustees, officers, agents or shareholders of the Trust
will be personally liable hereunder or are assuming any personal liability
for obligations entered into on behalf of the Trust. All persons dealing with
the Trust must look solely to the property of the Trust for the enforcement
of any claims against the Trust. No Fund will be liable for any claims
against any other Fund of the Trust.

7. Name of the Trust. In the event that neither the Administrator nor any of its
affiliates acts as the administrator or investment adviser to the Trust, the
name of the Trust and the Funds will be changed to one that does not contain
the name "Burnham" or otherwise suggest an affiliation with the
Administrator.

8. Duration and Termination of this Agreement. This Agreement will become
effective on the date hereof. Unless terminated as herein provided, this
Agreement will remain in full force and effect until July 31, 2000 and will
continue in full force and effect for successive periods of one year
thereafter, but only so long as such continuance is specifically approved at
least annually by the vote of a majority of the Board of Trustees of the
Trust.

-86-

<PAGE>

This Agreement may, on 60 days' written notice to the other party, be
terminated at any time without the payment of any penalty by the Trust or by
the Administrator.

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

10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. This Agreement
may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.

-87-

<PAGE>

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

BURNHAM INVESTORS TRUST
on behalf of each Fund listed on
Appendix A

By: ______________________________
Michael E. Barna, Secretary

BURNHAM ASSET MANAGEMENT CORP.

By: _______________________________
Jon M. Burnham, President

-88-

Appendix A

Fund

Burnham Fund
Burnham Money Market Fund
Burnham Dow 30 Focused Fund
Burnham Financial Services Fund
Burnham Small Cap Value Fund

Annual Administration Fee for each fund is calculated according to the
following:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Net Assets Annual Administration Fee as a
percentage of assets
- -------------------------------------------------------------------------------
<S> <C>
For amounts up to $150,000,000 0.15%
- -------------------------------------------------------------------------------
$150,000,000 to 300,000,000 0.125%
- -------------------------------------------------------------------------------
over $300,000,000 0.10%
- -------------------------------------------------------------------------------
</TABLE>

<PAGE>

Morris, Nichols, Arsht & Tunnell
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347

------

Telephone (302) 658-9200
Telecopy (302) 658-3989

February 11, 1999

Burnham Investors Trust
1325 Avenue of the Americas, 17th Floor
New York, New York 10019

Re: Burnham Investors Trust

Ladies and Gentlemen:

We have acted as special Delaware counsel to Burnham Investors Trust, a
Delaware business trust (the "Trust"), in connection with certain matters
relating to the formation of the Trust and the issuance of Shares of beneficial
interest in the Trust. Capitalized terms used herein and not otherwise herein
defined are used as defined in the Agreement and Declaration of Trust of the
Trust dated August 20, 1998 (the "Governing Instrument").

In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on August 20, 1998 (the "Certificate"); the Governing
Instrument; the By-laws of the Trust, as amended by an Amendment to the By-laws
of Burnham Investors Trust approved by the Board of Trustees on August 27, 1998
(the "By-laws"); certain resolutions of the Trustees of the Trust dated October
5, 1998 relating to the organization of the Trust; an Adoption of and Amendment
to Notification of Registration to be filed with the Securities and Exchange
Commission on or about the date hereof by which the Trust will adopt the
Notification of Registration Filed Pursuant to Section 8(a) of the Investment
Company Act of 1940 on Form N-8A of The Burnham Fund, Inc., a Maryland
corporation (the "Fund"); Post-Effective Amendment No. 67 to the Registration
Statement under the Securities Act of 1933 on Form N-1A of the Fund, by which
the Trust will adopt such Registration Statement to be filed with the Securities
and Exchange Commission on the date hereof (the "Post-Effective Amendment"); and
a certification of good standing of the Trust obtained as of a recent date from
the Recording Office. In such examinations, we have assumed the genuineness of
all signatures, the conformity to original documents of all documents submitted
to us as copies or drafts of documents to be executed, and the legal capacity of
natural persons to complete the execution of documents. We have further

Burnham Investors Trust
February 11, 1999
Page 2

assumed for the purpose of this opinion: (i) the due authorization, execution
and delivery by, or on behalf of, each of the parties thereto of the
above-referenced instruments, certificates and other documents, and of all
documents contemplated by the Governing Instrument, the By-laws and applicable
resolutions of the Trustees to be executed by investors desiring to become
Shareholders; (ii) the payment of consideration for Shares, and the application
of such consideration, as provided in the Governing Instrument, and compliance
with the other terms, conditions and restrictions set forth in the Governing
Instrument and all applicable resolutions of the Trustees of the Trust in
connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series and Classes
of Shares and the rights and preferences attributable thereto as contemplated by
the Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consideration paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance, redemption or transfer of
Shares; (iv) that no event has occurred subsequent to the filing of the
Certificate that would cause a termination or reorganization of the Trust under
Section 3 or Section 4 of Article IX of the Governing Instrument; (v) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 Del.
C. 'SS' 'SS' 3801 et seq. (the "Delaware Act"); and (vi) that each of the
documents examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended, except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or "blue sky" laws. Further, we express no opinion
on the sufficiency or accuracy of any registration or offering documentation
relating to the Trust or the Shares. As to any facts material to our opinion,
other than those assumed, we have relied without independent investigation on
the above-referenced documents and on the accuracy, as of the date hereof, of
the matters therein contained.

Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:

1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.

2. The Shares, when issued to Shareholders in accordance with the terms,
conditions, requirements and procedures set forth in the Governing Instrument,
will constitute legally issued, fully paid and non-assessable Shares of
beneficial interest in the Trust.

3. Under the Delaware Act and the terms of the Governing Instrument, each
Shareholder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware; provided, however, that we express no opinion with respect to the
liability of any Shareholder who is, was or may become a named Trustee of the
Trust. Neither the existence nor exercise of the voting rights granted to
Shareholders under the Governing Instru-

Burnham Investors Trust
February 11, 1999
Page 3

ment will, of itself, cause a Shareholder to be deemed a trustee of the Trust
under the Delaware Act. Notwithstanding the foregoing or the opinion expressed
in paragraph 2 above, we note that, pursuant to Section 2 of Article VIII of the
Governing Instrument, the Trustees have the power to cause Shareholders, or
Shareholders of a particular Series, to pay certain custodian, transfer,
servicing or similar agent charges by setting off the same against declared but
unpaid dividends or by reducing Share ownership (or by both means).

We understand that you are currently in the process of registering or
qualifying Shares in the various states, and we hereby consent to the filing of
a copy of this opinion with the Securities and Exchange Commission as part of
the Post-Effective Amendment and with the securities administrators of such
states. In giving this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as provided in this paragraph, the
opinion set forth above is expressed solely for the benefit of the addressee
hereof and may not be relied upon by, or filed with, any other person or entity
for any purpose without our prior written consent. This opinion speaks only as
of the date hereof and is based on our understandings and assumptions as to
present facts and our review of the above-referenced documents and certificates
and the application of Delaware law as the same exists on the date hereof, and
we undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect.

Sincerely,

MORRIS, NICHOLS, ARSHT & TUNNELL

/s/ Morris, Nichols, Arsht & Tunnell

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 67 to the registration statement on Form N-1A (Securities Act File
No. 2-17226 and Investment Company Act File No. 811-994) of our report dated
February 12, 1999, relating to the financial statements and financial highlights
appearing in the December 31, 1998 annual report to shareholders of The Burnham
Fund, Inc., which are also incorporated by reference into the registration
statement.

We also consent to the reference to our firm under the captions "Financial
Highlights" in the prospectus and "Independent Accountants" in the statement of
additional information.

PricewaterhouseCoopers LLP

New York, New York
February 16, 1999

<PAGE>

BURNHAM INVESTORS TRUST
on behalf of

Burnham Fund
Burnham Financial Services Fund
Burnham Small Cap Value Fund
(each, a "Fund")

RULE 12b-1 DISTRIBUTION PLAN

Class A and Class B Shares

WHEREAS, BURNHAM INVESTORS TRUST, a Delaware business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");

WHEREAS, the Trust has issued and is authorized to issue shares of
beneficial interest with a par value per share as set forth in the Agreement and
Declaration of Trust ("Shares");

WHEREAS, the Board of Trustees of the Trust (the "Board") has established
and designated two classes of Shares of each Fund, Class A Shares and Class B
Shares;

WHEREAS, Burnham Securities Inc. (the "Distributor") serves as the
principal distributor of the Shares pursuant to the Distribution Contract
between the Trust and the Distributor dated September 7, 1989 and amended as of
August 27, 1998, which Distribution Contract, as amended, has been duly
approved by the Board, in accordance with the requirements of the Act
(the "Distribution Contract");

WHEREAS, each Fund plans to offer Class A Shares and Class B Shares
pursuant to Rule 18f-3 under the Act, which permits each Fund to implement a
multiple class distribution system providing investors with the option of
purchasing shares of various classes;

WHEREAS, the Board as a whole, and the trustees who are not interested
persons of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 plan provided for herein
(the "Plan") or any agreements related to the Plan (the "Qualified Trustees"),
have determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination of whether the
Plan should be implemented, in the exercise of reasonable business judgment and
in light of their fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit each Fund, the applicable class and the shareholders of
each class, and have accordingly approved the Plan by votes cast in person at a
meeting called for the purpose of voting on the Plan; and

NOW, THEREFORE, in consideration of the foregoing, the Trust hereby adopts
the Plan in accordance with Rule 12b-1 under the Act on the following terms and
conditions:

1. (a). The Trust shall pay to the Distributor, as the principal
distributor of the Shares, a distribution fee at the rate of up to .25% per
annum of the average daily net asset value of the Class A Shares of each Fund.
The fee shall be calculated and accrued daily and paid monthly or at such other
intervals as the Board shall determine.

(b). The Trust shall pay to the Distributor, as the principal
distributor of the Shares, a distribution fee at the rate of up to .75% per
annum of the average daily net asset value of the Class B Shares of each Fund
and a service fee at a rate of up to .25% per annum of the average daily net
asset value of the Class B Shares of each Fund. Each fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Board shall
determine.

2. The amounts set forth in paragraph 1 of the Plan shall be paid for the
Distributor's services and expenses as the principal distributor of each Fund's
Class A Shares and Class B Shares and shall be used by the Distributor to
furnish, or cause or encourage others to furnish, services and incentives in
connection with the promotion, offering and sale of each Fund's Class A and
Class B Shares, and where suitable and appropriate, the retention of each Fund's
Class A and Class B Shares by the respective Fund's shareholders, and in
connection therewith may be spent by the Distributor, in its discretion, on,
among other things, compensation to and expenses (including overhead and
telephone expenses) of account executives or other employees of the Distributor
or of other broker-dealers who engage in or support the distribution of each
Fund's Class A and Class B Shares; printing of prospectuses and reports for
other than existing shareholders; advertising; preparation, printing and
distribution of sales literature; and allowances to other broker-dealers.

3. The Plan shall not take effect as to a class of Shares of a Fund until
it has been approved by (a) a vote of at least "a majority of the outstanding
voting securities" (as defined in the Act) of that class of Shares of that Fund,
and (b) a majority vote of both (i) the Board, and (ii) the Qualified Trustees,
cast in person at a meeting called for the purpose of voting on the Plan.

4. The Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually by a
majority of both (i) the Board, and (ii) the Qualified Trustees, cast in person
at a meeting called for the purpose of voting thereon.

5. In each year that the Plan remains in effect, any person authorized to
direct the disposition of monies paid or payable by the Trust pursuant to the
Plan or any related agreement shall prepare and furnish to the Board, and the
Board shall review, at least quarterly, written reports, complying with the
requirements of Rule 12b-1 under the Act, of the amounts expended under the Plan
and the purposes for which such expenditures were made.

6. The Plan may be terminated as a class of Shares of a Fund at any time
by a majority vote of the Qualified Trustees or by a "vote of a majority of the
outstanding voting securities" (as defined in the Act) of that class of Shares
of that Fund.

-91-

7. The Plan may not be amended in order to increase materially the amount
of distribution expenses provided for in paragraph 1 above unless such amendment
is approved by the shareholders in the manner provided in subparagraph 3(a)
above, and no material amendment to the Plan shall be made unless approved by
the Board and the Qualified Trustees in the manner provided in subparagraph 3(b)
above.

8. While the Plan shall be in effect, the selection and nomination of
trustees of the Trust who are not "interested persons" (as defined in the Act)
of the Trust shall be committed to the discretion of the trustees then in office
who are not "interested persons" of the Trust.

9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not less
than six years from the date of this Plan, or the agreements or such reports, as
the case may be, the first two years in an easily accessible place.

Dated: April 26, 1995, as amended __________________, .

Burnham Investors Trust

By:__________________________
Name:
Title:

Burnham Securities Inc.

By:__________________________
Name:
Title:

-92-

<PAGE>

BURNHAM INVESTORS TRUST
on behalf of

Burnham Dow 30 Focused Fund
(the "Fund")

RULE 12B-1 DISTRIBUTION PLAN

WHEREAS, the Trust is authorized to issue shares of beneficial interest
with a par value per share as set forth in the Agreement and Declaration of
Trust ("Shares");

WHEREAS, Burnham Securities Inc. (the "Distributor") serves as the
principal distributor of the Shares pursuant to the Distribution Contract
between the Trust and the Distributor dated September 7, 1989 and amended as of
________, 1998, which Distribution Contract, as amended, has been duly approved
by the Board, in accordance with the requirements of the Act (the "Distribution
Contract");

WHEREAS, the Board as a whole, and the trustees who are not interested
persons of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 plan provided for herein
(the "Plan") or any agreements related to the Plan (the "Qualified Trustees"),
have determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination of whether the
Plan should be implemented, in the exercise of reasonable business judgment and
in light of their fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit the Fund and the shareholders, and have accordingly
approved the Plan by votes cast in person at a meeting called for the purpose of
voting on the Plan; and

NOW, THEREFORE, in consideration of the foregoing, the Trust hereby adopts
the Plan in accordance with Rule 12b-1 under the Act on the following terms and
conditions:

1. The Trust shall pay to the Distributor, as the principal distributor of
the Shares, a distribution and service fee at the rate of up to .25% per annum
of the average daily net asset value of the Shares of the Fund. The fee shall be
calculated and accrued daily and paid monthly or at such other intervals as the
Board shall determine.

2. The amounts set forth in paragraph 1 of the Plan shall be paid for the
Distributor's services and expenses as the principal distributor of the Fund's
Shares and shall be used by the Distributor to furnish, or cause or encourage
others to furnish, services and incentives in connection with the promotion,
offering and sale of the Fund's Shares, and where suitable and appropriate, the
retention of the Fund's Shares by the Fund's shareholders, and in connection
therewith may be spent by the Distributor, in its discretion, on, among other
things, compensation

to and expenses (including overhead and telephone expenses) of account
executives or other employees of the Distributor or of other broker-dealers who
engage in or support the distribution of the Fund's Shares; printing of
prospectuses and reports for other than existing shareholders; advertising;
preparation, printing and distribution of sales literature; and allowances to
other broker-dealers.

3. The Plan shall not take effect until it has been approved by (a) a vote
of at least "a majority of the outstanding voting securities" (as defined in the
Act) of the Fund, and (b) a majority vote of both (i) the Board, and (ii) the
Qualified Trustees, cast in person at a meeting called for the purpose of voting
on the Plan.

6. The Plan may be terminated at any time by a majority vote of the
Qualified Trustees or by a "vote of a majority of the outstanding voting
securities" (as defined in the Act) of the Fund.

Dated: ______________, 1999.

-94-

Burnham Investors Trust
on behalf of Burnham Dow 30 Focused Fund

By:__________________________
Name:
Title:

Burnham Securities Inc.

By:__________________________
Name:
Title:

-95-

<PAGE>

BURNHAM INVESTORS TRUST (THE "TRUST*)

Burnham Fund
Burnham Financial Services Fund
Burnham Small Cap Value Fund
(the "Funds")

Multiple Class Distribution Plan
Pursuant to Rule 18f-3
Under the Investment Company Act of 1940

1. The Plan. This Multiple Class Distribution Plan (the "Plan") is the written
plan of the Funds contemplated by Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"). This Plan sets forth the expense allocations
for and distinguishing features of the Class A and Class B shares of each Fund.

2. General. Each Fund reserves the right to increase, decrease or waive any
front-end sales load or contingent deferred sales charge ("CDSC") imposed on any
existing or future classes of shares within the ranges permissible under
applicable rules of the Securities and Exchange Commission (the "Commission"),
including Rule 18f-3 and Rule 6c-10, and of the National Association of
Securities Dealers, Inc., each as amended or adopted from time to time.

3. Attributes of Classes. Except as otherwise provided herein, each class of
shares issued by any Fund will be entitled to distributions, if any, calculated
in the same manner and at the same time as each other class of that Fund. For
purposes of this calculation, expenses will be allocated to each class of a Fund
at the same time as to all other classes of that Fund. Each share of each Fund
will represent an equal pro rata interest in the Fund, regardless of class, and
will have identical voting, dividend, liquidation and other rights, except for:

a. the amount and type of fees permitted by the Funds' different
Rule 12b-1 distribution plans ("Plan Payments");

b. voting rights on matters concerning the Rule 12b-1 plan;

c. any expenses that (1) are incurred on behalf of a class in a
different amount or at a different rate from the amount or rate at
which the expenses are incurred on behalf of one or more other
classes and (2) the Board determines should be allocated or charged
on a class basis ("Class Expenses") will be allocated on the basis
of the amount incurred on behalf of each class. Class Expenses
currently include:

i. Plan Payments and

ii. transfer agency fees attributable to a specific class;

d. the names of the classes;

e. the different exchange privileges of the various classes of shares;
and

f. any conversion feature for a class.

4. Class A Shares. Class A shares of each Fund will be offered subject to a
front-end sales load of up to 5.00% of the public offering price and a Rule
12b-1 distribution fee equal to 0.25% annually of the average daily net asset
value of Class A shares. Purchases aggregating $1,000,000 or more or by
employer-sponsored retirement plans with at least 200 eligible employees will be
subject to a CDSC of 1.00% if redeemed within the first 12 months and * of 1.00%
if redeemed during the next 12 months, of the lesser of (a) the net asset value
of the shares at the time of purchase or (b) their net asset value at the time
of redemption. The front-end sales load will decline with the amount invested as
follows:

<TABLE>
<CAPTION>
For amounts: Sales load rate
------------ ---------------
<S> <C>
less than $50,000 5.00%

at least $50,000 but less than $100,000 4.50%

at least $100,000 but less than $250,000 4.00%

at least $250,000 but less than $500,000 3.00%

at least $500,000 but less than $1,000,000 2.00%
</TABLE>

Each Fund currently will not assess a sales load for purchases by the exempt
persons described in the Fund's prospectus or statement of additional
information.

5. Class B Shares. Class B shares will be offered without imposition of a
front-end sales load, but will be subject to a CDSC that declines over time for
shares held less than six years. The CDSC will be assessed as follows:

<TABLE>
<CAPTION>
For shares: CDSC rate
----------- ---------
<S> <C>
held less than one year 5.00%

held at least one year but less than two years 4.00%

held at least two years but less than four years 3.00%

held at least four years but less than five years 2.00%

held at least five years but less than six years 1.00%
</TABLE>

<TABLE>
<S> <C>
held six years or more 0.00%
</TABLE>

Class B shares of the Funds attributable to Class B shares of The Burnham Fund,
Inc. purchased before April 28, 1995 ("existing Class B shares") are not subject
to a CDSC. Class B shares will pay a Class B Rule 12b-1 distribution fee equal
to 0.75% annually of the average daily net asset value of the Class B shares and
will pay a service fee equal to 0.25% annually of the average daily net asset
value of Class B shares. The maximum investment amount for Class B shares will
be $250,000.

6. Class A and Class B CDSC Exemptions and Waivers. No CDSC will be imposed on
redemptions of Class A or Class B shares in the following instances:

a. shares or amounts representing increases in the value of an account
above the net cost of the investment due to increases in the net
asset value per share;

b. shares acquired through reinvestment of income dividends or capital
gains distributions;

c. Class A share purchases in the amount of $1 million or more or by
employer-sponsored retirement plans with at least 200 eligible
employees, held for more than 24 months; and

d. Class B shares held for more than six years from the end of the
calendar month in which the purchase order was accepted.

The CDSC will not apply to Class A shares purchased at net asset value as
described above and will be waived for redemptions of Class A or Class B shares
in connection with:

i. distributions to participants or beneficiaries of plans
qualified under Section 401(a) of the Internal Revenue Code
(the "Code") or from custodial accounts under Code Section
403(b)(7), individual retirement accounts under Code Section
408(a), deferred compensation plans under Code Section 457 and
other employee benefit plans,

ii. redemptions of Class B shares under an automatic withdrawal
plan if the annual withdrawal does not exceed 10% of the
opening value of the account, and

iii. following the death or disability of a shareholder.

-104-

The Board may determine to discontinue any waiver of the CDSC in
compliance with Rule 18f-3, Rule 6c-10 and other applicable rules of the
Commission.

7. Conversion Feature. Class B shares will convert automatically to Class A
shares of the same Fund at the relative net asset values of each class. Each
conversion will occur on the first business day of the month after the period
specified in the prospectus (currently the eighth anniversary of the purchase of
Class B shares).

All Class B shares in a shareholder's Fund account that were acquired
through the reinvestment of dividends and other distributions paid on Class B
shares will be considered to be held in a separate sub-account. Each time any
Class B shares in the shareholder's Fund account (other than those in the
sub-account) convert to Class A shares, a pro rata portion of the Class B shares
then held in the sub-account also will convert to Class A shares based on the
ratio that the shareholder's Class B shares converting to Class A shares bears
to the shareholder's total Class B shares not acquired through dividends and
distributions.

For purposes of calculating the period required for converting existing
Class B shares to Class A shares, existing Class B shares will be deemed to have
been acquired as if the current CDSC schedule were in effect on the date these
shares originally were purchased.

8. Net Asset Value. All expenses incurred by each Fund will continue to be
allocated among the various classes of shares based upon the net assets of the
Fund attributable to each class, except that shares of a particular class will
continue to bear the Class Expenses incurred by such class.

9. Allocations. Advisory fees, administration fees, custody fees and other
expenses related to the management of a Fund's assets ("Fund Expenses") will be
allocated to all shares of that Fund by net asset value, regardless of class.
Plan Payments will be allocated to and borne by only the class to which the
particular plan applies. Class Expenses will be allocated to and borne by only
the class or classes determined by the Board in accordance with paragraph 3(c)
hereof. Any fee waivers and expense reimbursements or limitations will be
effected in accordance with positions taken by the Internal Revenue Service,
which currently, among other things, does not permit an investment adviser (1)
to waive or reimburse Class Expenses or (2) to waive or reimburse Fund Expenses
to a different extent for different classes.

Dated: May 3, 1999

-105-

<PAGE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BURNHAM FUND ANNUAL REPORT DATED DECEMBER 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT
</LEGEND>
<CIK> 0000030126
<NAME> THE BURNHAM FUND INC.
<SERIES>
<NUMBER> 001
<NAME> CLASS A SHARES
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> $ 92,543,126
<INVESTMENTS-AT-VALUE> $159,844,649
<RECEIVABLES> 326,070
<ASSETS-OTHER> 1,277
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 160,171,996
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 432,439
<TOTAL-LIABILITIES> 432,439
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 84,021,092
<SHARES-COMMON-STOCK> 4,567,585
<SHARES-COMMON-PRIOR> 4,541,504
<ACCUMULATED-NII-CURRENT> 181,652
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,208,292
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 67,328,521
<NET-ASSETS> 159,739,557
<DIVIDEND-INCOME> 2,218,914
<INTEREST-INCOME> 869,988
<OTHER-INCOME> 0
<EXPENSES-NET> 1,946,485
<NET-INVESTMENT-INCOME> 1,142,417
<REALIZED-GAINS-CURRENT> 7,996,908
<APPREC-INCREASE-CURRENT> 20,353,244
<NET-CHANGE-FROM-OPS> 29,492,569
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,482,009)
<DISTRIBUTIONS-OF-GAINS> (7,404,378)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 118,079
<NUMBER-OF-SHARES-REDEEMED> (364,848)
<SHARES-REINVESTED> 272,850
<NET-CHANGE-IN-ASSETS> 21,588,325
<ACCUMULATED-NII-PRIOR> 593,535
<ACCUMULATED-GAINS-PRIOR> 7,637,835
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 905,674
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,978,732
<AVERAGE-NET-ASSETS> 143,289,874
<PER-SHARE-NAV-BEGIN> 30.04
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 5.97
<PER-SHARE-DIVIDEND> (0.32)
<PER-SHARE-DISTRIBUTIONS> (1.63)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 34.31
<EXPENSE-RATIO> 1.3
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BURNHAM FUND ANNUAL REPORT DATED DECEMBER 31, 1998
AMD IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000030126
<NAME> THE BURNHAM FUND INC.
<SERIES>
<NUMBER> 002
<NAME> CLASS B SHARES
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> $92,543,126
<INVESTMENTS-AT-VALUE> $159,844,649
<RECEIVABLES> 326,070
<ASSETS-OTHER> 1,277
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 160,171,996
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 432,439
<TOTAL-LIABILITIES> 432,439
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 84,021,092
<SHARES-COMMON-STOCK> 68,383
<SHARES-COMMON-PRIOR> 52,413
<ACCUMULATED-NII-CURRENT> 181,652
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,208,292
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 67,328,521
<NET-ASSETS> 159,739,557
<DIVIDEND-INCOME> 2,218,914
<INTEREST-INCOME> 869,988
<OTHER-INCOME> 0
<EXPENSES-NET> 1,946,485
<NET-INVESTMENT-INCOME> 1,142,417
<REALIZED-GAINS-CURRENT> 7,996,908
<APPREC-INCREASE-CURRENT> 20,353,244
<NET-CHANGE-FROM-OPS> 29,492,569
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,373)
<DISTRIBUTIONS-OF-GAINS> (85,434)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,771
<NUMBER-OF-SHARES-REDEEMED> (848)
<SHARES-REINVESTED> 3,047
<NET-CHANGE-IN-ASSETS> 21,588,325
<ACCUMULATED-NII-PRIOR> 593,535
<ACCUMULATED-GAINS-PRIOR> 7,637,835
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 905,674
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,978,732
<AVERAGE-NET-ASSETS> 2,040,582
<PER-SHARE-NAV-BEGIN> 30.75
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 6.12
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (1.63)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 35.21
<EXPENSE-RATIO> 2.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>