BURNHAM FUND INC, 485BPOS, 1999-04-30

BURNHAM FUND INC
485BPOS, 1999-04-30

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As filed with the Securities and Exchange Commission on April 30, 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. 68 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]

AMENDMENT NO. 30 [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)
___X___ on May 3, 1999 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)
_______ on pursuant to paragraph (a)(2) of Rule 485

This Post-Effective Amendment No. 68 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(b) 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 3, 1999

Prospectus

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

Burnham Dow 30'sm' 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 does not
approve or disapprove these shares or say whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone
to inform you otherwise.

[LOGO]
Burnham
INVESTORS TRUST

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 main 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

INVESTMENT ADVISER........................................................24

II YOUR ACCOUNT .............................................................25

Instructions and information on investing in the funds

PURCHASE AND REDEMPTION

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

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

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

HOW TO EXCHANGE AND REDEEM SHARES ........................................30

TRANSACTION POLICIES .....................................................31

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

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

DOW JONES DISCLOSURE......................................................34

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

Fund performance data

WHERE TO GET MORE INFORMATION

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

Burnham
Dow 30'sm' 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 MAIN STRATEGIES
- --------------------------------------------------------------------------------

The fund's goal is capital appreciation.

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

Securities such as DIAMONDS'sm', 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 invests approximately half of its assets passively and half actively.
Both halves may invest in DJIA stocks or DJIA equivalents, the passive half
invests in these in proportions that approximately match the composition of the
DJIA. In managing the active half of its remaining assets, 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-to-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. Dow Jones does not sponsor,
endorse, sell or promote the fund. Dow Jones does not make any representation
regarding the advisability of investing in the fund.

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.

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 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 Fees
fees paid directly from your investment

Maximum redemption fee 1.00%
charged only on shares you sell after owning

Annual Fund Operating Expenses
expenses that are deducted from fund assets

Management fees 0.60%
Distribution (12b-1) fees 0.25%
Other expenses (1)(2) 0.97%

Total Annual Fund Operating Expenses(1) 1.82%

(1) The adviser has agreed to cap the annual fund's
operating expenses, although it may change or drop the
cap at any time. With the cap, actual expenses are projected to be:

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

Net annual fund operating expenses 1.20%
(2) Based on estimated amounts for the current fiscal year.
</TABLE>

Example

This example shows what you could pay in expenses over time. To help you compare
this fund's expenses with those of other funds, the example 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 Fees

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 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 MAIN STRATEGIES
- --------------------------------------------------------------------------------

The fund seeks capital appreciation, mainly long-term. Income is generally
of lesser importance meaning that it is a secondary goal.

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 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 a downturn in the stock market, and particularly
in stocks of large-capitalization companies. The fund's investments in debt
securities will generally fall in value when interest rates rise.

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.

The fund's management strategy or securities selection methods could prove
less successful than anticipated.

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.

This fund considers a stock to be a large-capitalization stock if its total
market capitalization (the value of all of its outstanding shares) is $8.5
billion or more.

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.

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 for
each share class and the life of class for Class B shares 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>
Class B
For the following periods ending 12/31/98 1 year 5 years 10 years inception*
<S> <C> <C> <C> <C>
Class A shares 15.98 15.77 13.30 --

Class B shares 17.16 16.07 N/A 15.06%

S & P 500 Index 28.58 24.05 19.20 23.25%

Lehman Gov/Corp Bond Index 9.47 7.30 9.33 6.92%
</TABLE>
The S&P 500 Index includes the common stocks of 500 large
U.S. companies. The Lehman Brothers Government/Corporate Bond Index includes
U.S. government and corporate bonds. Both are unmanaged.

*Class B shares commenced operations on 10/18/93; their performance is compared
to index figures that begin on 11/1/93.

10 BURNHAM INVESTORS TRUST

Understanding Shareholder Fees

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

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- -------------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Fees
fees paid directly from your investment
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
expenses that are deducted from fund assets

Management fees 0.60% 0.60%
Distribution (12b-1) fees 0.25% 1.00%
Other Expenses (1) 0.51% 0.81%
- -------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(1) 1.36% 2.41%

(1) The adviser has agreed to cap the annual fund's
operating expenses, although it may change or drop
the cap at any time. With the cap, actual expenses
are projected to be:
Management fees 0.60% 0.60%
Distribution (12b-1) fees 0.25% 1.00%
Other expenses 0.45% 0.70%
-----------------------------------------------------------------------------------
Net Annual Fund Operating Expenses 1.30% 2.30%

</TABLE>

Example

This example shows what you could pay in expenses over time. To help you compare
the fund's expenses with those of other funds, the example 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. The 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 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 MAIN STRATEGIES
- --------------------------------------------------------------------------------

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's manager uses a combination of growth and value
strategies. The manager 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

The manager 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

Although the fund may invest in companies of any size, it typically focuses on
those with assets of $8 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.

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 currency 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.

14 BURNHAM INVESTORS TRUST

Understanding Shareholder Fees

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 and registration fees.

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

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- --------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Fees
fees paid directly from your investment

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
expenses that are deducted from fund assets

Management fees 0.75 0.75
Distribution (12b-1) fees 0.25 1.00
Other expenses(1)(2) 1.02% 2.27%
- -------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(1) 2.02% 4.02%

(1) The adviser has agreed to cap the annual fund's
operating expenses, although it may change or drop
the cap at any time. With the cap, actual expenses are
projected to be:

Management fees 0.75% 0.75%
Distribution (12b-1) fees 0.25% 1.00%
Other expenses 0.60% 0.55%
- --------------------------------------------------------------------------------
Net Annual Fund Operating Expenses 1.60% 2.30%
(2) Based on estimated amounts for the current fiscal year.
</TABLE>

Example

This example show what you could pay in expenses over time. To help you compare
this fund's expenses with those of other funds, the example 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 its 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 MAIN STRATEGIES

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

The fund seeks capital appreciation.

The fund pursues its goal by investing at least 80% assets in stocks of U.S. and
foreign companies with market capitalizations of $1.3 billion or less. These
stocks may trade on exchanges or over-the-counter (OTC).

How the fund selects securities

In managing the fund's portfolio, the manager 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
favor 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 manager 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 $1.3
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 emphasizes small capitalization companies, investors should expect greater
volatility than in a fund that invests in medium or 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.

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

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

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 $1.3 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.

18 SMALL CAP VALUE FUND

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

Fee Table

<TABLE>
<CAPTION>
Class A Class B
- --------------------------------------------------------------------------------
<S> <C> <C>
Shareholder Fees
fees paid directly from your investment
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
expenses are deducted from fund assets

Management fees 1.00% 1.00%
Distribution 12b-1 fees 0.25% 1.00%
Other expenses(1)(2) 0.84% 2.11%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(1) 2.09% 4.11%

(1) The adviser has agreed to cap the annual fund's
operating expenses, although it may change or drop
the cap at any time. With the cap, actual expenses are
projected to be:

Management fees 1.00% 1.00%
Distribution (12b-1) fees 0.25% 1.00%
Other expenses 0.35% 0.30%

Net Annual Fund Operating Expenses 1.60% 2.30%
(2) Based on estimated amounts for the current fiscal year.
</TABLE>

Example

$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>

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

Understanding Shareholder Fees

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 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 MAIN STRATEGIES

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

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
funds' credit criteria, guidelines and objectives. 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 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.

BANKERS' ACCEPTANCES

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

COMMERCIAL PAPER COMPANIES

Unsecured notes that companies 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.

22 BURNHAM FUND

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

Fee Table

<TABLE>
<S> <C>
Shareholder Fees NONE
fees paid directly from your investment
Annual Fund Operating Expenses
expenses that are deducted from fund assets
Management fees 0.45%
Distribution (12b-1) fee NONE
Other expenses(1)(2) 0.52%

Total Annual Fund Operating Expenses(1) 0.97%
- --------------------------------------------------------------------------------
(1) The adviser has agreed to cap the annual fund's operating
expenses, although it may change or drop the cap at any time.
With the cap, actual expenses are projected to be:

Management fees .45%
Distribution (12b-1) fees NONE
Other expenses(1) .43%

Net Annual Fund Operating Expenses .88%
(2) Based on estimated amounts for the current fiscal year.
</TABLE>

Example

$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 fund operating expenses of these funds are
capped (see table below), which may reduce the
adviser's fee. These agreements are temporary and may
be changed or dropped any time. With the cap, actual
expenses are projected to be:

<TABLE>
<CAPTION>
Fund Net Annual Fund Operating Expenses
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. The adviser has taken
steps to ensure that its systems are or will be Y2K-compliant, and has also
obtained assurances from its partners and vendors that they are taking similar
steps. However, it is impossible to know in advance how any Y2K problems may
affect the funds' operations (including their ability to calculate share prices
and process redemptions) or how it may affect the performance of portfolio
investments or securities markets in general.

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.
In this section, you will find a chart that provides a broad overview of the
various options available, followed by more detailed information. It is
important to read the entire section so that you will understand all of the
factors--including tax liability, sales charges, and transaction volume--
that should influence your investment decisions.

BURNHAM INVESTORS TRUST 25

<PAGE>

<PAGE>
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

*These minimums do 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>

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

After 8 years, Class B shares automatically convert to Class A.

Why Two Share Classes?

By offering two share classes, a fund 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>
Less than 1 year 1.00%
1-2 years 0.50%
</TABLE>

YOUR ACCOUNT 27

<PAGE>

Sales charge waivers

Under certain conditions, the following investors can buy Class A shares without
a sales charge:

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
$250,000

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

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 Class A shares of a fund, the sales charge rate on
additional purchases can be based on your total Class A 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 as 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 foreign markets and U.S.
markets are open at different times, there may be times when the value of a
fund's securities changes on days when you can't buy or sell fund shares. There
may also be cases when the fund uses fair-value prices for foreign securities,
which may be different from the values used by other funds.

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 below.

Open an IRA 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.

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

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

Dealer Contact your dealer to set up your new account, purchase fund shares and make
subsequent investments. Purchase orders received by your dealer and are forwarded by
the dealer to the transfer agent 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
- --------------------------------------------------------------------------------

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. Certificates are available to shareholders of Burnham Fund
Class A and Class B shares only. The only way to redeem share certificates
is by sending them to the transfer agent. If you lose a certificate, you
will be charged a fee to replace it.

Certificates are not available to the remaining portfolios of the trust.

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 be held responsible for any
losses caused by unauthorized telephone orders.

Checkwriting for Burnham Money Market Fund

You must have a Burnham Money Market Fund account before adding this service.
Call your Shareholder servicing agent at 1-800-462-2392 to request a Shareholder
Services application to add the Checkwriting feature.

Individual checks must be for $250 or more. You may not close a Burnham Money
Market Fund by writing a check.

Third Party Checks

Third party checks which are payable to an existing shareholder of Burnham
Investors Trust, who is a natural person (not a corporation or partnership)
and endorsed over to Burnham Investors Trust or State Street Bank and Trust
Company will not be accepted.

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 without advance notice to shareholders

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 the
SEC

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

Regular investing and 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 losses 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 below.
Please be sure to specify:

the fund

account number

the dollar value or number of shares you wish to sell

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. You may be charged a fee for this.
Professional

Systematic If you have a share balance of at least $5,000, you may
Withdrawal Plans elect to have monthly, quarterly or annual payments of a
specified amount ($50 minimum) sent to you or someone you
designate. The funds do not charge for this service. See
"Systematic Withdrawal Plan" information on page 30.

By Federal Funds Confirm with Burnham Investors Trust 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 before making an exchange. 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.

<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 customer of the financial institution.

A notary public cannot provide a signature guarantee.

You will need a signature guarantee on a written request to redeem 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 sales 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.

Exchange privilege

Exchange of shares have the same tax 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 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.

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 Privilege

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.

Systematic Withdrawal Plan

A systematic withdrawal plan (SWP) is available for shareholders who maintain a
share balance of at least $5,000 in fund shares, who wish to receive a specific
amount of cash in amounts not less than $50 either monthly, quarterly, or
annually. You may subscribe to this service by contacting your account
executive, or by contacting the Distributor at (800) 874-FUND for a Shareholder
Services form.

The fund's transfer agent will redeem a sufficient number of your shares, held
in book-entry form, at the net asset value (for Class A shares) or less the
appropriate CDSC (for Class B shares) at the close of business of the NYSE on
or about the 20th day of each payment month. A check will be mailed to you,
no later than three business days following the date the shares are redeemed.

32 BURNHAM INVESTORS TRUST

<PAGE>

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

Each fund pays dividend and distributions as described in the table below.

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 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 meet 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.

DOW JONES DISCLOSURE FOR BURNHAM DOW 30 FOCUSED FUND

"Dow Jones," "Dow Jones Industrial Average'sm'" and "DJIA'sm'" and "Dow 30'sm'"
are service marks of Dow Jones & Company, Inc. Dow Jones has no relationship to
Burnham Dow 30'sm' Focused Fund or its distributor, other than the licensing of
the Dow Jones Industrial Average (DJIA) and its service marks to the distributor
to use in connection with the fund.

DOW JONES DOES NOT:

Sponsor, sell or promote the fund.

Recommend that any person invest in the fund or any other securities.

Have any responsibility or liability for or make any decisions about the
timing, amount or pricing of fund share offerings or redemptions.

Have any responsibility or liability for the administration, management or
marketing of the fund.

Consider the needs of the fund or its shareholders in determining, composing
or calculating the DJIA or have any obligation to do so.

- --------------------------------------------------------------------------------
DOW JONES WILL NOT HAVE ANY LIABILITY IN CONNECTION WITH THE FUND. SPECIFICALLY,

Dow Jones does not make any warrants, express or implied, and Dow Jones
disclaims any warranty about:

The results to be obtained by the fund, its shareholders or any other
person in connection with the use of the DJIA and the data included in the
DJIA;

The accuracy or completeness of the DJIA and its data;

The merchantability and the fitness for a particular purpose or use of the
DJIA and its data;

Dow Jones will have no liability for any errors, omissions or interruptions
in the DJIA or its data;

Under no circumstances will Dow Jones be liable for any lost profits or
indirect, punitive, special or consequential damages or losses, even if
Dow Jones knows that they might occur.

The licensing agreement between the fund's distributor and Dow Jones is solely
for their benefit and not for the benefit of the fund, its shareholders or any
other third parties.

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

Backup withholding

When you fill out your application form, be sure to provide your Social Security
number or taxpayer ID number. Otherwise, the IRS will require each 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 net expenses
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) For the year ended December 31, 1998, the investment adviser reimbursed
Class A and Class B shares for expenses in excess of the expense
limitation. 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'sm' FOCUSED FUND

BURNHAM FUND

BURNHAM FINANCIAL SERVICES FUND

BURNHAM SMALL CAP VALUE FUND

BURNHAM MONEY MARKET FUND

May 3, 1999

This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Funds' prospectus dated May 3, 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 20, 1998. The
Trust is the surviving entity of the reorganization of The Burnham Fund, Inc.
(the "Corporation"), a Maryland corporation, effected April 30, 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 may 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 equal to 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

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(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 (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 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
guarantor. 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. Once you have a signature
guarantee on file with the Fund, redemption requests for $25,000 or less
(whether written or telephonic) which are payable to the registered owner to the
legal address of record, do not require an additional signature guarantee at the
time of redemption.

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
gain on redemption of shares, this gain is taxable for federal income
tax purposes even if all of such proceeds are reinvested. If a shareholder
incurs a loss on a redemption and reinvests the proceeds in the same 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 the closing 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 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 or a substantially identical investment 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, Form W-8BEN or
other withholding certificate 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 (38) 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 27, 1999, the Trustees and officers, as a group, owned 4% 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 DIRECTORS*
- ----------------------------------------------------------------------------------------
<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 million 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 3, 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 0.45%
- ------------------------------------------------------------------------------------------------------------------------------
Reich & Tang Asset Management LP Money Market Fund Less than $100 million 0.15%
$100 million but less than $150 million 0.10%
$150 million or more 0.05%
- ------------------------------------------------------------------------------------------------------------------------------
</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 in 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>
- -----------------------------------------------------------------------------------------------
MARKETING AND PRINTING AND UNDERWRITER BROKER-DEALER SALES
ADVERTISING MAILING OF COMPENSATION COMPENSATION PERSONNEL
PROSPECTUSES COMPENSATION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
147,538 20,265 15,188 121,460 10,003
</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 27, 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
32.0%
- --------------------------------------------------------------------------------
Donaldson, Lufkin Jenrette
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-2052
64.3%
- --------------------------------------------------------------------------------
</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 by reference to
the Annual Report as filed with the Securities and Exchange Commission
February 26, 1999 (accession #000095-0117-99-000588).

<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 FOCUSED 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. 68

PART C

OTHER INFORMATION

ITEM 23. EXHIBITS.

(a) Agreement and Declaration of Trust, dated August 20, 1998.(2)

(b) By-Laws dated August 20, 1998, as amended on August 27, 1998.(2)

(d)(1) Investment Advisory Agreement between the Registrant and Burnham
Asset Management Corporation.(2)

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

(d)(3) 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.(2)

(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.(2)

(i) Opinion and consent of counsel.(2)

(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 26, 1999 (accession #0000950117-99-000388)

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.(2)

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

(n) Financial Data Schedule.*

(o) Rule 18f-3 Multiple Class Plan.(2)

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

* Filed herewith

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

(2) Incorporated by reference to post-effective amendment no. 67
(File Nos. 2-17266 and 811-994) (filed February 18, 1999).

<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. certifies that it meets all of the
requirements for effectiveness of this registration statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this post-
effective amendment no. 68 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 30th day of April, 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. 68 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 Trustee April 30, 1999
---------------------------
I.W. Burnham, II

/s/ Jon M. Bunham* President, Chief April 30, 1999
--------------------------- Executive Officer and
Jon M. Burnham Trustee

/s/ Michael E. Barna Chief Financial Officer April 30, 1999
---------------------------
Michael E. Barna

/s/ Claire B. Benenson* Trustee April 30, 1999
---------------------------
Claire B. Benenson

/s/ Alvin P. Gutman* Trustee April 30, 1999
---------------------------
Alvin P. Gutman

/s/ William W. Karatz* Trustee April 30, 1999
---------------------------
William W. Karatz

/s/ John C. McDonald* Trustee April 30, 1999
---------------------------
John C. McDonald

/s/ Donald B. Romans* Trustee April 30, 1999
---------------------------
Donald B. Romans

/s/ Robert F. Shapiro* Trustee April 30, 1999
---------------------------
Robert F. Shapiro

/s/ Robert M. Shavick* Trustee April 30, 1999
--------------------------
Robert M. Shavick

/s/ David H. Solms* Trustee April 30, 1999
--------------------------
David H. Solms

/s/ Robert S. Weinberg* Trustee April 30, 1999
--------------------------
Robert S. Weinberg
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert J. Wilbur* Trustee April 30, 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>
(d)(3) Investment Subadvisory Agreement.

(g)(2) Letter Agreement with Investors Fiduciary Trust Company.

(h)(2) Letter Agreement with State Street Bank and Trust Company.

(j) Consent of independent accountants.

(n) Financial Data Schedule.
</TABLE>

STATEMENT OF DIFFERENCES
------------------------

Characters normally expressed as superscript shall be preceded by...... 'pp'
The section symbol shall be expressed as............................... 'SS'
The service mark symbol shall be expressed as.......................... 'sm'

<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

Subadvisory 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 "subadviser") to provide the adviser and the fund with the advice and
services set forth below, and the subadviser 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
subadviser 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 subadviser as follows:

1. Delivery of Documents. The trust has furnished the subadviser 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 subadviser as the
investment subadviser to the fund and approving this
subadvisory 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 subadviser 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 subadviser will use its best efforts to
provide to the fund continuing and suitable investment advice with
respect to investments. Subject always to the provisions of the
trust's declaration of trust and by-laws and the Investment Company
Act of 1940, as amended (the "1940 Act"), and to the investment
objective, policies and restrictions (including, without limitation,
the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") for qualification as a registered
investment company) of the fund, as each of the same shall be from
time to time in effect as set forth in the fund's prospectus and
statement of additional information, or any investment guidelines or
other instructions received in writing from the adviser and subject,
further, to such policies and instructions as the board of trustees
may from time to time establish and deliver to the subadviser. In
the performance of the subadviser's duties hereunder, subject
always to the provisions contained in the documents delivered to
the subadviser pursuant to Section 1 above, as from time to time
amended or supplemented, the subadviser 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 subadviser, provided that in
connection with the placing of such orders and the selection of
such brokers or dealers the subadviser 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 subadviser's performance of the foregoing
services;

(7) subject to the supervision of the adviser, maintain and preserve
the records required by the 1940 Act to be maintained by the
subadviser (the subadviser 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 subadviser's fee hereunder.
Calculations of the subadviser's fee will be based on average net
asset values as provided by the adviser.

6. Other Activities of the Subadviser and Its Affiliates. Nothing
herein contained will prevent the subadviser 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 subadviser and its
affiliates may engage in providing portfolio management services and
advice to other investment advisory clients of the subadviser 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 subadviser nor any of its directors, officers or employees will
act as principal or agent or receive any commission. The subadviser
will not knowingly recommend that the fund purchase, sell or retain
securities of any issuer in which the subadviser has a financial
interest without obtaining prior approval of the adviser prior to
the execution of any such transaction. The subadviser will provide
quarterly compliance reports to a designated representative of the
adviser reporting any violation of the subadviser code of ethics.

8. No Partnership or Joint Venture. The trust, the fund, the adviser
and the subadviser 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 Subadviser. The subadviser 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 July 31, 2000 and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually in accordance with the requirements of
the 1940 Act as now in effect or as amended, subject, however, to
such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation, order or interpretive position.
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 in accordance with the requirements of the 1940 Act as
now in effect or as amended, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission by any
rule, regulation, order or interpretive position.

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: /s/ Jon M. Burnham
------------------------------

Its: President and CEO
-----------------------------

-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: /s/ Michael E. Barna
-------------------------------
Its: E.V.P. AND C.F.O.
------------------------------

REICH & TANG ASSET MANAGEMENT, L.P.

By: /s/ Richard DeSanctis
------------------------------
Its: Chief Financial Officer
______________________________

-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>

April 30, 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 30, 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
December 1, 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>

Counsellors at Law

60 State Street, Boston, Massachusetts 02109
617-526-6000 fax 617-526-5000

April 28, 1999

The Burnham Fund Inc.
1325 Avenue of the Americas, 26th Floor
New York, NY 10019

Re: Post-Effective Amendment No. 68 to Registration Statement
(the "Amendment") (File Nos. 002-172226 and 811-00994)

Ladies and Gentlemen:

As counsel to The Burnham Fund Inc. (the "Fund") and Burnham Investors
Trust, the successor to the Fund's registration statement upon effectiveness of
the above referenced Amendment, we have reviewed the Amendment to the Fund's
registration statement on Form N-1A for filing with the Securities and Exchange
Commission. We hereby represent, pursuant to Rule 485(b) under the Securities
Act of 1933, as amended, that the Amendment does not in our view contain
disclosure that would make it ineligible to become effective pursuant to Rule
485(b).

We hereby consent to your filing this letter with the Securities and
Exchange Commission as part of or together with the Amendment. Except as
provided in this paragraph, this letter may not be relied upon by, or filed
with, any other parties or for any other purpose.

Very truly yours,

/s/ Hale and Dorr LLP

Hale and Dorr LLP

Washington, D.C. Boston, MA London, UK*

HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BRORBOK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 68 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.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

New York, New York
April 30, 1999

<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>