TRAINER WORTHAM FUNDS, 485APOS, 2000-06-23

TRAINER WORTHAM FUNDS
485APOS, 2000-06-23

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 2000

FILE NO. 2-15037
FILE NO. 811-879
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
---------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 66 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 66 /X/

TRAINER WORTHAM FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

845 THIRD AVENUE, 6TH FLOOR
NEW YORK, NY 10022
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 759-7755
---------------------

PATRICK W. D. TURLEY, ESQ.
DECHERT PRICE & RHOADS
1775 EYE STREET, N.W.
WASHINGTON, D.C. 20006-2401
(NAME AND ADDRESS OF AGENT FOR SERVICE OF PROCESS)

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

It is proposed that this filing will become effective 75 days after filing
pursuant to paragraph (a)(2) of Rule 485 or on such earlier date as the
Commission may designate pursuant to paragraph (a)(3) of Rule 485.
---------------------
<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION
DATED JUNE , 2000

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

FROLEY, REVY CONVERTIBLE SECURITIES FUND

AUGUST 1, 2000
--------------------------------------------------------------------------------

INVESTMENT ADVISOR

FROLEY, REVY INVESTMENT COMPANY, INC.
10900 WILSHIRE BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90024

A Series of the Trainer Wortham Funds

Neither the Securities and Exchange Commission nor any other regulatory body has
approved the securities being offered by this prospectus or determined whether
this prospectus is accurate and complete. It is unlawful for anyone to make any
representation to the contrary.
<PAGE> 3

FROLEY, REVY CONVERTIBLE SECURITIES FUND

TABLE OF CONTENTS

<TABLE>
<CAPTION>
SUBJECT PAGE
------- ----
<S> <C>
Risk/Return Summary and Fund Expenses
Risk/Return Summary....................................... 1
Annual Fees and Expenses.................................. 2
Carefully review this important section for a summary
of the Fund's Investments, Risks and Fees.
Investment Objective and Strategies
Investment Objective...................................... 3
Policies and Strategies................................... 3
Prior Performance of Comparable Accounts.................. 3
Investment Risks.......................................... 4
This section contains details on the Fund's investment
strategies and risks.
Shareholder Information
Pricing of Fund Shares.................................... 4
Purchasing and Adding to Your Shares...................... 5
Selling Your Shares....................................... 5
Distribution Arrangements/Sales Charges................... 7
Exchanging Your Shares.................................... 9
Dividends, Distributions and Taxes........................ 9
Consult this section to obtain details on how shares
are valued, how to purchase, sell and exchange shares,
related charges and payments of dividends and
distributions.
Fund Management
The Investment Advisor.................................... 10
Portfolio Manager......................................... 10
The Distributor and Administrator......................... 10
Review this section for details on the people and
organizations who oversee the Fund and its investments.
</TABLE>
<PAGE> 4

RISK/RETURN SUMMARY AND FUND EXPENSES

FROLEY, REVY CONVERTIBLE SECURITIES FUND

INVESTMENT OBJECTIVE

The Fund seeks to provide total return through the combination of current income
and long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests primarily in convertible securities of companies that the
Advisor believes have above average growth rates and sound financial
characteristics. Convertible securities include corporate bonds and preferred
stocks that are convertible into common stock. At least 70% of the total assets
of the Fund will be invested in convertible securities. A majority of the Fund's
holdings of convertible securities may have credit ratings that are below
investment grade.

PRINCIPAL INVESTMENT RISKS

The Fund is subject to both market risk and interest rate risk. Therefore, the
value of the Fund's investments will fluctuate with market conditions and
changes in interest rates and the value of your investment in the Fund will also
vary. You could lose money on your investment in the Fund, or the Fund could
underperform other investments. Because the Fund may invest a majority if its
assets in high yield/ high risk securities that have credit ratings below
investment grade, the Fund is subject to the investment risks associated with
such high yield/ high risk instruments including the likelihood that changes in
economic conditions could lead to a weakened capacity of the issuers of such
securities to make principal and interest payments, which is not necessarily the
case with issuers of higher rated securities.

An investment in the Fund is not a deposit of First Republic Bank or any other
federally insured depository institution nor is it insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

WHO MAY WANT TO INVEST?

Consider investing in the Fund if you are:

- Investing for a period of time in excess of 2 to 3 years

- Looking to increase the income component of your equity investments

- Looking for a well-diversified fixed-income portfolio that provides the
potential for growth of your investment

- Willing to accept risks of price and dividend fluctuations

This Fund will not be appropriate for someone:

- Investing emergency reserves

- Seeking safety of principal

- Seeking high current income

1
<PAGE> 5

ANNUAL FEES AND EXPENSES

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

<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (load) Imposed on Purchases............ 4.00%(1) None
Maximum Deferred Sales Charge (load)........................ None 4.00%(2)
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees............................................. 0.625% 0.625%
Distribution and Service (12b-1) Fees....................... 0.25% 0.75%
Other Expenses*............................................. 0.60% 0.60%
Total Annual Fund Operating Expenses(3)..................... 1.475% 1.975%
Fee Waivers and/or Expense Reimbursements(3)................ -- --
Net Expenses(3)............................................. 1.475% 1.975%
</TABLE>

* "Other Expenses" for the Fund's initial year of operations have been
estimated.

(1) Lower sales charges are available depending upon the amount invested. See
"Distribution Arrangements."

(2) The Fund imposes a back-end sales charge (load) on Class B Shares if you
sell your shares before a certain period of time has elapsed. This is called
a Contingent Deferred Sales Charge ("CDSC"). The CDSC declines over seven
years starting with year one and ending in year eight as follows: 4%, 3%,
2.5%, 2.0%, 1.5%, 1.0%, 0.5%. After the seventh year, Class B Shares will be
automatically converted to Class A Shares.

(3) The Advisor has entered into an expense limitation agreement with respect to
the Fund for the Fund's current fiscal year pursuant to which the Advisor
has agreed to waive fees and/or reimburse expenses to the extent necessary
in order to limit the Total Annual Fund Operating Expenses of the Class A
Shares and the Class B Shares of the Fund to 1.50% and 2.00% of the Fund's
average daily net assets, respectively. The Fund has agreed to repay the
Advisor for the amounts waived and/or reimbursed by the Advisor pursuant to
this expense limitation agreement provided that such repayment does not
cause the Total Annual Fund Operating Expenses of the Class A Shares and the
Class B Shares to exceed 1.50% and 2.00%, respectively, and the repayment is
made within three years after the year in which the Advisor incurred the
expense.
--------------------------------------------------------------------------------

EXPENSE EXAMPLE

Use this table to compare fees and expenses with those of other Funds. It
illustrates the amount of fees and expenses you would pay, assuming the
following:

- $10,000 investment

- 5% annual return

- redemption at the end of each period

- no changes in the Fund's operating expenses

- reinvestment of dividends and distributions

Because this example is hypothetical and for comparison purposes only, your
actual costs will be different.

<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES FUND 1 YEAR 3 YEARS
--------------------------- ------ -------
<S> <C> <C>
Class A Shares.............................................. $-- $--
Class B Shares
Assuming Redemption....................................... $-- $--
Assuming no Redemption.................................... $-- $--
</TABLE>

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

2
<PAGE> 6

INVESTMENT OBJECTIVE AND STRATEGIES
FROLEY, REVY CONVERTIBLE SECURITIES FUND

INVESTMENT OBJECTIVE

The investment objective of the Fund is to seek total return through the
combination of current income and long-term capital appreciation.

POLICIES AND STRATEGIES

The Advisor invests primarily in convertible securities of companies that the
Advisor believes have above-average growth rates and sound financial
characteristics.

Consistent with the Fund's investment objective, the Fund:

- invests at least 70% of the value of its total assets in securities
convertible into common stocks: convertible bonds, convertible preferreds,
mandatory convertible securities, synthetic convertible securities, warrants,
and any rights to purchase common stocks

- may invest up to 30% of its net assets in: common stock, money market
instruments, non-convertible corporate or government debt securities and
foreign securities

- may invest in stock index futures

- may borrow money to meet shareholder redemptions, but not for speculative
purposes.
- may invest in other investment companies
In the event that the Advisor determines that market conditions are not suitable
for the Fund's typical investments, the Advisor may, for temporary defensive
purposes during such unusual market conditions, invest all or any portion of the
Fund's assets in money market instruments.

Portfolio Turnover. The annual rate of portfolio turnover is not expected to
exceed 100%. In general, the Advisor will not consider the rate of portfolio
turnover to be a limiting factor in determining when or whether to purchase or
sell securities in order to achieve the Fund's objective.

PRIOR PERFORMANCE OF COMPARABLE ACCOUNTS

The table below sets forth performance data relating to the historical
performance of privately managed accounts of the Advisor (the "Composite").

Each account represented in the Composite has substantially similar investment
objectives, policies, and strategies to those of the Fund. None of the accounts
in the Composite were subject to the requirements of the Investment Company Act
of 1940 or Subchapter M of the Internal Revenue Code, which, if imposed, could
have affected their performance. The performance information for the Composite
is the gross total return of the Composite, as adjusted to reflect the estimated
fees and expenses of the Class B shares of the Fund.

The investment results presented below are not those of the Fund and are not
intended to predict or suggest returns that might be experienced by the Fund or
an individual investor having an interest in the Fund. These total return
figures represent past performance and do not indicate future results, which
will vary.

TOTAL RETURN FOR THE COMPOSITE AND
THE CS FIRST BOSTON CONVERTIBLE
SECURITY INDEX

<TABLE>
<CAPTION>
COMPOSITE CSFB INDEX+
-------------- --------------
ANNUAL ANNUAL
YEAR TOTAL RETURN TOTAL RETURN
---- -------------- --------------
<S> <C> <C>
1999........... --% --%
1998........... --% --%
1997........... --% --%
1996........... --% --%
1995........... --% --%
1994........... --% --%
1993........... --% --%
1992........... --% --%
1991........... --% --%
1990........... --% --%
</TABLE>

3
<PAGE> 7

<TABLE>
<CAPTION>
TIME PERIOD AVERAGE ANNUAL AVERAGE ANNUAL
(THRU 12/31/99) TOTAL RETURN TOTAL RETURN
--------------- -------------- --------------
<S> <C> <C>
1 year --% --%
3 years........ --% --%
5 years........ --% --%
10 years....... --% --%
Since Inception
(1/1/83)....... --% --%
</TABLE>

+ The CS First Boston Convertible Security Index measures the performance of a
broad mix of convertible securities. This Index is unmanaged and does not
reflect the fees and expenses typically incurred by mutual funds. Results
include reinvested dividends.

INVESTMENT RISKS

Any investment in the Fund is subject to investment risks, including the
possible loss of the principal amount invested.

Generally, the Fund will be subject to the following risks:

- Market Risk: Market risk refers to the risk related to investments in
securities in general and the daily fluctuations in the securities markets.
The Fund's performance per share will change daily based on many factors,
including fluctuation in interest rates, the quality of the instruments in the
Fund's investment portfolio, national and international economic conditions
and general market conditions.

- Interest Rate Risk: Interest rate risk refers to the risk that the value of
the Fund's fixed-income securities can change in response to changes in
prevailing interest rates causing volatility and possible loss of value as
rates increase.

- Credit Risk: Credit risk refers to the risk related to the credit quality of
the issuer of a security held in the Fund's portfolio. The Fund could lose
money if the issuer of a security is unable to meet its financial obligations.
Because the Fund may invest a majority of its assets in high yield/high risk
securities that have credit ratings below investment grade, the Fund is
subject to the investment risks associated with such high yield/high risk
instruments including the likelihood that changes in economic conditions could
lead to a weakened capacity of the issuers of such securities to make
principal and interest payments, which is not necessarily the case with
issuers of higher rated securities.

SHAREHOLDER INFORMATION

PRICING OF FUND SHARES

HOW NAV IS CALCULATED

The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:

NAV =
Total Assets - Liabilities
------------------------------------
Number of Shares
Outstanding

The net asset value per share of the Fund is determined at the time trading
closes on the New York Stock Exchange ("NYSE") (currently 4:00 p.m., Eastern
Standard Time, Monday through Friday), except on business holidays when the NYSE
is closed. The NYSE recognizes the following holidays: New Year's Day,
President's Day, Martin Luther King, Jr. Day, Good Friday, Memorial Day, Fourth
of July, Labor Day, Thanksgiving Day, and Christmas Day. Any other holiday
recognized by the NYSE will be considered a business holiday on which the net
asset value of the Fund will not be calculated.

Your order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is accepted by the Fund plus any applicable sales
charge as noted in the section on "Distribution Arrangements/ Sales Charges".
This is what is known as the offering price.

The Fund's securities are generally valued at current market prices. If market
quotations are not available, prices will be based on fair value as determined
by the Fund's Trustees.

4
<PAGE> 8

PURCHASING AND ADDING TO YOUR SHARES

You may purchase the Fund through the Distributor or through investment
representatives, who may charge additional fees and may require higher minimum
investments or impose other limitations on buying and selling shares. If you
purchase shares through an investment representative, that party is responsible
for transmitting orders by close of business and may have an earlier cut-off
time for purchase and sale requests. Consult your investment representative for
specific information.

The minimum initial investment in the Fund is $10,000. Subsequent investments
must be at least $1,000. Provident Distributors, Inc. (the "Distributor") acts
as Distributor of the Fund's shares. Shares of the Fund are offered continuously
for purchase at the net asset value per share of the Fund next determined after
a purchase order is received plus any applicable sales charge. Investors may
purchase shares of the Fund by check or wire, as described below.

All purchases must be in U.S. dollars. A fee will be charged for any checks that
do not clear. Third-party checks are not accepted.

The Fund or the Advisor may waive its minimum purchase requirement, or the
Distributor may reject a purchase order, if it is deemed to be in the best
interest of the Fund and its shareholders.

Shares of the Fund may also be purchased by means of "in-kind" securities
transactions pursuant to which securities, rather than cash, may be accepted as
payment for Fund shares if prior approval is received from the Distributor.
Securities used to purchase Fund shares must be appropriate investments for the
Fund, consistent with its investment objective, policies and limitations, and
must have readily available market valuations. The securities will be valued in
accordance with the Fund's policy for calculating net asset value, determined as
of the close of business on the day on which the securities are received in
salable form. A shareholder or prospective shareholder should contact the
Distributor or the Advisor at (800) 544-1559 in order to receive the necessary
approval to engage in such a transaction. Affiliated persons of the Fund may not
purchase shares in this manner in the absence of SEC approval.

INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT

BY REGULAR MAIL

Initial Investment:

1. Carefully read and complete the application.

2. Make check, certified check or money order payable to "Froley, Revy
Convertible Securities Fund."

3. Mail to: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box
61503, King of Prussia, Pennsylvania, 19406.

Subsequent Investment:

1. Subsequent investments should be made by check payable to the Fund and mailed
to: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box 61767,
King of Prussia, Pennsylvania 19406

BY WIRE TRANSFER

NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.

For initial investment: Before wiring funds, you should call 1-800-441-6580 to
receive an account number. Follow the instructions below after receiving your
account number.

For initial and subsequent investments: Instruct your bank to wire transfer your
investment to:
Boston Safe Deposit & Trust
Routing Number: ABA #011001234
Account #000159
Name of the Fund
Shareholder Account #

Mail a completed account application to PFPC at the above address.

SELLING YOUR SHARES

You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund. Your proceeds will be reduced by
any applicable CDSC. Normally you will receive your proceeds within a week after
your request is received. See section on "General Policies on Selling Shares"
below.

5
<PAGE> 9

WITHDRAWING MONEY FROM YOUR FUND INVESTMENT

A request for a withdrawal in cash from the Fund constitutes a redemption or
sale of shares for a mutual fund shareholder.

INSTRUCTIONS FOR SELLING SHARES

BY TELEPHONE (unless you have declined telephone sales privileges)

1. Call 1-800-441-6580 with instructions as to how you wish to receive your
funds (mail, wire, electronic transfer).

BY MAIL Write a letter of instruction indicating:

- your Fund and account number

- amount you wish to redeem

- address where your check should be sent

- account owner signature(s)

Mail To: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box 61503,
King of Prussia, PA 19406

BY WIRE TRANSFER

You must indicate this option on your application.

Call 1-800-441-6580 to request a wire transfer.

If you call by 4 p.m. Eastern Standard Time, your payment will normally be wired
to your bank on the next business day.

The Fund may charge a wire transfer fee.

NOTE: YOUR FINANCIAL INSTITUTION MAY ALSO CHARGE A SEPARATE FEE.

GENERAL POLICIES ON SELLING SHARES

REDEMPTIONS IN WRITING REQUIRED

You must request redemption in writing in the following situations:

1. Redemptions from Individual Retirement Accounts ("IRAs").

2. Circumstances under which redemption requests require a signature guarantee
include, but may not be limited to, each of the following:

- Redemptions over $10,000

- Your account registration or the name(s) on your account has changed within
the last 15 days

- The check is not being mailed to the address on your account

- The check is not being made payable to the owner of the account

- The redemption proceeds are being transferred to another Fund account with a
different registration

A signature guarantee can be obtained from a financial institution, such as a
bank, broker-dealer, credit union, clearing agency, or savings association.

VERIFYING TELEPHONE REDEMPTIONS

The Fund makes every effort to ensure that telephone redemptions are only made
by authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. Given these
precautions, unless you have specifically indicated on your application that you
do not want the telephone redemption feature, you may be responsible for any
fraudulent telephone orders.

REDEMPTIONS WITHIN 10 DAYS OF INITIAL INVESTMENT

When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has cleared
(which may require up to 10 business days). You can avoid this delay by
purchasing shares with a certified check.

REFUSAL OF REDEMPTION REQUEST

Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.

REDEMPTION IN KIND

The Fund reserves the right to make payment in securities rather than cash,
known as "redemption in kind."

6
<PAGE> 10

This could occur under extraordinary circumstances, such as a very large
redemption that could affect Fund operations (a redemption of more than 1% of
the Fund's net assets). If the Fund deems it advisable for the benefit of all
shareholders, redemption in kind will consist of securities equal in market
value to your shares. When you convert these securities to cash, you will pay
brokerage charges.

CLOSING OF SMALL ACCOUNTS

If your account falls below $2,500, the Fund may ask you to increase your
balance. If it is still below $2,500 after 60 days, the Fund may close your
account and send you the proceeds at the then current NAV.

UNDELIVERABLE REDEMPTION CHECKS

For any shareholder who chooses to receive distributions in cash: If
distribution checks (1) are returned and marked as "undeliverable" or (2) remain
uncashed for six months, your account will be changed automatically so that all
future distributions are reinvested in your account. Checks that remain uncashed
for six months will be canceled and the money reinvested in the Fund.

DISTRIBUTION ARRANGEMENTS/ SALES CHARGES

This section describes the sales charges and fees you will pay as an investor in
different share classes offered by the Fund and ways to qualify for reduced
sales charges.

<TABLE>
<CAPTION>
CLASS A CLASS B
-------------- --------------
<S> <C> <C>
Sales Charge (Load) Front-end No front-end
sales charge sales charge.
(not A contingent
applicable to deferred sales
money market charge (CDSC)
funds); may be imposed
reduced sales on shares
charges redeemed
available. within seven
years after
purchase;
shares
automatically
convert to
Class A Shares
after 7 years.
Maximum
investment is
$250,000.
Distribution and Subject to Subject to
Service (12b-1) Fee annual annual
distribution distribution
and and
shareholder shareholder
servicing fees servicing fees
of up to 0.25% of up to 0.75%
of the Fund's of the Fund's
assets. assets.
Fund Expenses Lower annual Higher annual
expenses then expenses than
Class B Class A
shares. shares.
</TABLE>

CALCULATION OF SALES CHARGES

CLASS A SHARES

Class A shares are sold at their public offering price. This price includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions.

7
<PAGE> 11

The current sales charge rates are as follows:

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE
AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT
--------------- -------------- ---------------
<S> <C> <C>
Up to $49,999........ 4.00% 4.08%
$50,000 up to
$99,999............ 3.50% 3.63%
$100,000 up to
$249,999........... 3.00% 3.09%
$250,000 up to
$499,999........... 2.00% 2.04%
$500,000 up to
$999,999........... 1.00% 1.01%
$1,000,000 and
above(1)........... 0.00% 0.00%
</TABLE>

(1) There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of up to 1.00% of the
purchase price will be charged to the shareholder if shares are redeemed in
the first 18 months after purchase. This charge will be based on the lower
of your cost for the shares or their NAV at the time of redemption. There
will be no CDSC on reinvested distributions.

CLASS B SHARES

Class B shares are offered at NAV, without any up-front sales charge. Therefore,
all the money you invest is used to purchase Fund shares. However, if you sell
your Class B shares of the Fund before the seventh anniversary of purchase, you
will have to pay a contingent deferred sales charge at the time of redemption.
The CDSC will be based upon the lower of the NAV at the time of purchase or the
NAV at the time of redemption according to the schedule below. There is no CDSC
on reinvested dividends or distributions.

CLASS B SHARES

<TABLE>
<CAPTION>
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-------------------- ------------------------
<S> <C>
0-1.................... 4.00%
1-2.................... 3.00%
2-3.................... 2.50%
3-4.................... 2.00%
4-5.................... 1.50%
5-6.................... 1.00%
6-7.................... 0.50%
more than 7............ None
</TABLE>

If you sell some but not all of your Class B shares, certain shares not subject
to the CDSC (i.e., shares purchased with reinvested dividends) will be redeemed
first, followed by shares subject to the lowest CDSC (typically shares held for
the longest time).

CONVERSION FEATURE -- CLASS B SHARES

- Class B shares automatically convert to Class A shares of the Fund after seven
years from the end of the month of purchase.

- After conversion, your shares will be subject to the lower distribution and
shareholder servicing fees charged on Class A shares which will increase your
investment return compared to the Class B shares.

- You will not pay any sales charge or fees when your shares convert, nor will
the transaction be subject to any tax.

- If you purchased Class B shares of one Fund which you exchanged for Class B
shares of another Fund, your holding period will be calculated from the time
of your original purchase of Class B shares. The dollar value of Class A
shares you receive will equal the dollar value of the B shares converted.

SALES CHARGE REDUCTIONS

Reduced sales charges for Class A shares are available to shareholders with
investments of $50,000 or more. In addition, you may qualify for reduced sales
charges under the following circumstances.

- Letter of Intent. You inform the Fund in writing that you intend to purchase
enough shares over a

8
<PAGE> 12

13-month period to qualify for a reduced sales charge. You must include a
minimum of 5% of the total amount you intend to purchase with your letter of
intent.

- Rights of Accumulation. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for reduced
sales charges, your added investment will qualify for the reduced sales
charge.

SALES CHARGE WAIVERS

CLASS A SHARES

The following qualify for waivers of sales charges:

- Shares purchased through employer sponsored retirement plans.

- Shares purchased by clients with an existing investment advisory or similar
relationship with the Advisor or its affiliates.

- Shares purchased by directors, trustees, employees, and family members of the
Advisor and its affiliates and any organization that provides services to the
Funds.

REINSTATEMENT PRIVILEGE

If you have sold Class A or B shares and decide to reinvest in the Fund within a
90 day period, you will not be charged the applicable sales load on amounts up
to the value of the shares you sold. You must provide a written reinstatement
request and payment within 90 days of the date your instructions to sell were
processed.

EXCHANGING YOUR SHARES

You can exchange your shares in one Fund for shares of another Trainer Wortham
Fund. No transaction fees are charged for exchanges.

You must meet the minimum investment requirements for the Fund into which you
are exchanging.

INSTRUCTIONS FOR EXCHANGING SHARES

Exchanges may be made by calling 1-800-441-6580. Please provide the following
information:

- Your name and telephone number

- The exact name on your account and account number

- Taxpayer identification number (usually your Social Security number)

- Dollar value or number of shares to be exchanged

- The name of the Fund from which the exchange is to be made

- The name of the Fund into which the exchange is being made

Please refer to "Selling your Shares" for important information about telephone
transactions.

NOTES ON EXCHANGES

- The registration and tax identification numbers of the two accounts must be
identical.

- The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time upon a 60-day notice to shareholders.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Any income the Fund receives in the form of dividends is paid out, less
expenses, to its shareholders. Income dividends and capital gains distributions
on the Fund are usually paid annually.

Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.

An exchange of shares is considered a sale, and any related gains may be subject
to applicable taxes.

Dividends are taxable as ordinary income. Taxation on capital gains
distributions will vary with the length of time the Fund has held the security -
not how long the shareholder has been in the Fund.

Dividends are taxable in the year in which they are paid, even if they appear on
your account statement in the following year.

9
<PAGE> 13

withholding taxes. There is a penalty on certain pre-retirement distributions
from retirement accounts. Consult your tax adviser about the federal, state and
local tax consequences in your particular circumstances.

Foreign shareholders may be subject to special withholding requirements.

The Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
Fund with their certified taxpayer identification number in compliance with IRS
rules. To avoid this, make sure you provide your correct Tax Identification
Number (Social Security Number for most investors) on your account application.

FUND MANAGEMENT

THE INVESTMENT ADVISOR

Froley, Revy Investment Company, Inc. (the "Advisor"), with offices at 10900
Wilshire Boulevard, Los Angeles, California 90024, is the Fund's investment
advisor. The Advisor was founded in 1975 and currently manages in excess of $3
billion in convertible securities.

First Republic Bank owns 19.9% of the Advisor. First Republic Bank is a
commercial bank headquartered at 111 Pine Street, San Francisco, California
94111, which is engaged in a general banking business and provides private
banking services. First Republic Bank has offices in California, Nevada and New
York City and has approximately $3.6 billion in assets as of December 31, 1999.

Pursuant to an Investment Advisory Agreement with the Trust on behalf of the
Fund, the Advisor receives an annual fee, accrued daily and paid monthly, of
0.625% of the Fund's average daily net assets.

Subject to the general supervision of the Board of Trustees, and in accordance
with the Fund's investment objectives, policies, and restrictions, the Advisor
manages the Fund's investment portfolios, makes decisions with respect to and
places orders for all purchases and sales of the portfolio securities.

PORTFOLIO MANAGER

The portfolio manager for the Fund is Andrea Revy O'Connell, CFA, CIC. Ms.
O'Connell is Senior Portfolio Manager, President and Chief Executive Officer of
Froley, Revy Investment Company, Inc. and Southwest Asset Management Company.
She joined the Advisor in 1986 as a Financial Analyst and was made Vice
President and Director of Research in 1990. She became a Principal in 1994 and
was appointed to her current position in May, 2000.

Ms. O'Connell received her Chartered Financial Analyst designation in September
1992 and her Chartered Investment Counselor designation in December 1995. She is
a member of the Association for Investment Management and Research, the Los
Angeles Society of Financial Analysts and the Los Angeles Association of
Investment Women. Ms. O'Connell holds a BA from the University of California at
Los Angeles.

The Statement of Additional Information has more detailed information about the
Advisor.

THE DISTRIBUTOR AND ADMINISTRATOR

Provident Distributors, Inc. is the Fund's distributor and PFPC is the Fund's
administrator. Provident Distributors, Inc. and PFPC are located at 3200 Horizon
Drive, King of Prussia, PA 19406.

10
<PAGE> 14

For more information about the Fund, the following documents are available free
upon request:

ANNUAL/SEMI-ANNUAL REPORTS:

The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI):

The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.

YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING THE FUND AT:

TRAINER WORTHAM FUNDS
C/O PFPC
3200 HORIZON DRIVE
KING OF PRUSSIA, PA 19406-0903
TELEPHONE: 1-888-257-4450
You can review the Fund's reports and the SAI at the Public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:

- For a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009 or by calling 1-202-942-8090, or by
electronic request by e-mailing the SEC at the following address:
[email protected]; or

- Free from the Commission's Website at http://www.sec.gov.

Investment Company Act file no. 811-879.

11
<PAGE> 15

FROLEY, REVY CONVERTIBLE SECURITIES FUND

TRUSTEES:

Robert H. Breslin, Jr.
David P. Como
Raymond Eisenberg
Todd L. Eisenberg
David Elias
Robert S. Lazar
Martin S. Levine
Timothy J. O'Hara
James F. Twaddell

For additional information about the
Trainer Wortham Funds call:

888.257.4450

TRAINER WORTHAM FUNDS

845 Third Avenue/6th Floor, New York, New York 10022
888.257.4450 - Fax: 415.288.1401
TRAINER WORTHAM FUNDS

PROSPECTUS
August 1, 2000
---------------------------------------------------------
---------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED THE SECURITIES BEING OFFERED BY THIS
PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE AND
COMPLETE. IT IS UNLAWFUL FOR ANYONE TO MAKE ANY REPRESENTATION TO
THE CONTRARY.
---------------------------------------------------------
---------------------------------------------------------

888.257.4450
<PAGE> 16

SUBJECT TO COMPLETION
DATED JUNE , 2000

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

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND

AUGUST 1, 2000
--------------------------------------------------------------------------------

INVESTMENT ADVISOR
FROLEY, REVY INVESTMENT COMPANY, INC.
10900 WILSHIRE BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90024

A Series of the Trainer Wortham Funds

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND

TABLE OF CONTENTS

<TABLE>
<CAPTION>
SUBJECT PAGE
------- ----
<S> <C>
Risk/Return Summary and Fund Expenses
Risk/Return Summary....................................... 1
Annual Fees and Expenses.................................. 2
Carefully review this important section for a summary
of the Fund's Investments, Risks and Fees
Investment Objective and Strategies
Investment Objective...................................... 3
Policies and Strategies................................... 3
Prior Performance of Comparable Accounts.................. 3
Investment Risks.......................................... 4
This section contains details on the Fund's Investment
Strategies and Risks
Shareholder Information
Pricing of Fund Shares.................................... 4
Purchasing and Adding to Your Shares...................... 5
Selling Your Shares....................................... 5
Distribution Arrangements/Sales Charges................... 7
Exchanging Your Shares.................................... 9
Dividends, Distributions and Taxes........................ 9
Consult this section to obtain details on how shares
are valued, how to purchase, sell and exchange shares,
related charges and payments of dividends and
distributions
Fund Management
The Investment Advisor.................................... 10
Portfolio Manager......................................... 10
The Distributor and Administrator......................... 10
Review this section for details on the people and
organizations who oversee the Fund and its investments.
</TABLE>
<PAGE> 18

RISK/RETURN SUMMARY AND FUND EXPENSES

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND

INVESTMENT OBJECTIVE

The Fund seeks to provide a high total return through the combination of current
income and long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests primarily in investment grade convertible securities of
companies that the Advisor believes have above average growth rates and sound
financial characteristics. Convertible securities include corporate bonds and
preferred stocks that are convertible into common stock. Predominantly all of
the total assets will be invested in convertible securities, although the Fund
may temporarily hold common stocks upon the conversion of a bond or preferred
security. At least 80% of the portfolio's holdings of convertible securities
will have credit ratings that are investment-grade by at least one service.

PRINCIPAL INVESTMENT RISKS

WHO MAY WANT TO INVEST?

Consider investing in the Fund if you are:

- Investing for a period of time in excess of 2 to 3 years

- Looking to increase the income component of your equity investments

- Looking for a well-diversified fixed-income portfolio that provides the
potential for growth of your investment

- Willing to accept risks of price and dividend fluctuations

This Fund will not be appropriate for someone:

- Investing emergency reserves

- Seeking safety of principal

- Seeking high current income

1
<PAGE> 19

ANNUAL FEES AND EXPENSES

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

<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (load) Imposed on Purchases............ 3.00%(1) None
Maximum Deferred Sales Charge (load)........................ None 4.00%(2)
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees............................................. 0.50% 0.50%
Distribution and Service (12b-1) Fees....................... 0.25% 0.75%
Other Expenses*............................................. 0.75% 0.75%
---- ----
Total Annual Fund Operating Expenses(3)..................... 1.50% 2.00%
==== ====
Fee Waivers and/or Expense Reimbursements(3)................ -- --
---- ----
Net Expenses(3)............................................. 1.50% 2.00%
==== ====
</TABLE>

* "Other Expenses" for the Fund's initial year of operations have been
estimated.

(1) Lower sales charges are available depending upon the amount invested. See
"Distribution Arrangements."

(2) The Fund imposes a back-end sales charge (load) on Class B Shares if you
sell your shares before a certain period of time has elapsed. This is called
a Contingent Deferred Sales Charge ("CDSC"). The CDSC declines over seven
years starting with year one and ending in year seven as follows: 4%, 3%,
2.5%, 2.0%, 1.5%, 1.0%, 0.5%. After the seventh year, Class B Shares will be
automatically converted to Class A Shares.

EXPENSE EXAMPLE

Use this table to compare fees and expenses with those of other Funds. It
illustrates the amount of fees and expenses you would pay, assuming the
following:

- $10,000 investment

- 5% annual return

- redemption at the end of each period

- no changes in the Fund's operating expenses

- reinvestment of dividends and distributions

Because this example is hypothetical and for comparison purposes only, your
actual costs will be different.

<TABLE>
<CAPTION>
INVESTMENT GRADE CONVERTIBLE SECURITIES FUND 1 YEAR 3 YEARS
-------------------------------------------- ------ -------
<S> <C> <C>
Class A Shares.............................................. $-- $--
Class B Shares
Assuming Redemption......................................... $-- $--
Assuming no Redemption...................................... $-- $--
</TABLE>

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

2
<PAGE> 20

INVESTMENT OBJECTIVE AND STRATEGIES

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND

INVESTMENT OBJECTIVE

The investment objective of the Fund is to seek total return through the
combination of current income and long-term capital appreciation.

POLICIES AND STRATEGIES

The Advisor invests primarily in investment grade convertible securities of
companies that the Advisor believes have above-average growth rates and sound
financial characteristics.

Consistent with the Fund's investment objective, the Fund:

- generally invests substantially all of the value of its total assets in
securities convertible into common stocks: convertible bonds, convertible
preferreds, mandatory convertible securities, synthetic convertible
securities, warrants, and any rights to purchase common stocks

- may invest up to 30% of its net assets in: money market instruments,
non-convertible corporate or government debt securities

- may temporarily hold common stock received upon the conversion of a
convertible security

- may invest in stock index futures

- may borrow money to meet shareholder redemptions, but not for speculative
purposes.

- may invest in other investment companies

In the event that the Advisor determines that market conditions are not suitable
for the Fund's typical investments, the Advisor may, for temporary defensive
purposes during such unusual market conditions, invest all or any portion of the
Fund's assets in money market instruments.

PRIOR PERFORMANCE OF COMPARABLE ACCOUNTS

The table below sets forth performance data relating to the historical
performance of privately managed accounts of the Advisor (the "Composite").

TOTAL RETURN FOR THE COMPOSITE AND
THE MERRILL LYNCH INVESTMENT GRADE
CONVERTIBLE SECURITY INDEX

<TABLE>
<CAPTION>
ML INVESTMENT GRADE
COMPOSITE CONVERTIBLE INDEX+
------------------- -------------------
YEAR ANNUAL TOTAL RETURN ANNUAL TOTAL RETURN
---- ------------------- -------------------
<S> <C> <C>
1999................. --% --%
1998................. --% --%
1997................. --% --%
1996................. --% --%
1995................. --% --%
1994................. --% --%
1993................. --% --%
1992................. --% --%
1991................. --% --%
</TABLE>

3
<PAGE> 21

<TABLE>
<CAPTION>
TIME PERIOD AVERAGE ANNUAL AVERAGE ANNUAL
(THRU 12/31/99) TOTAL RETURN TOTAL RETURN
--------------- -------------- --------------
<S> <C> <C>
1 year............... --% --%
3 years.............. --% --%
5 years.............. --% --%
Since Inception
(1/1/91) --% --%
</TABLE>

+ The Merrill Lynch Investment Grade Convertible Index measures the performance
of a broad mix of investment grade convertible securities. This Index is
unmanaged and does not reflect the fees and expenses typically incurred by
mutual funds. Results include reinvested dividends.

INVESTMENT RISKS

Any investment in the Fund is subject to investment risks, including the
possible loss of the principal amount invested.

Generally, the Fund will be subject to the following risks:

- Credit Risk: Credit risk refers to the risk related to the credit quality of
the issuer of a security held in the Fund's portfolio. The Fund could lose
money if the issuer of a security is unable to meet its financial obligations.
Because the Fund may invest a portion of its assets in high yield/high risk
securities that have credit ratings below investment grade, the Fund is
subject to the investment risks associated with such high yield/high risk
instruments including the likelihood that changes in economic conditions could
lead to a weakened capacity of the issuers of such securities to make
principal and interest payments, which is not necessarily the case with
issuers of higher rated securities.

SHAREHOLDER INFORMATION

PRICING OF FUND SHARES

HOW NAV IS CALCULATED

The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:

NAV =
Total Assets - Liabilities
------------------------------------
Number of Shares
Outstanding

The Fund's securities are generally valued at current market prices. If market
quotations are not available, prices will be based on fair value as determined
by the Fund's Trustees.

4
<PAGE> 22

PURCHASING AND ADDING TO YOUR SHARES

The minimum initial investment in the Fund is $100,000. Subsequent investments
must be at least $10,000. Provident Distributors, Inc. (the "Distributor") acts
as Distributor of the Fund's shares. Shares of the Fund are offered continuously
for purchase at the net asset value per share of the Fund next determined after
a purchase order is received plus any applicable sales charge. Investors may
purchase shares of the Fund by check or wire, as described below.

All purchases must be in U.S. dollars. A fee will be charged for any checks that
do not clear. Third-party checks are not accepted.

The Fund or the Advisor may waive its minimum purchase requirement, or the
Distributor may reject a purchase order, if it is deemed to be in the best
interest of the Fund and its shareholders.

INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT

BY REGULAR MAIL

Initial Investment:

1. Carefully read and complete the application.

2. Make check, certified check or money order payable to "Froley, Revy
Investment Grade Convertible Securities Fund."

3. Mail to: TRAINER WORTHAM FUNDS,
c/o PFPC, 211 South Gulph Road, P.O. Box 61503, King of Prussia,
Pennsylvania, 19406.

Subsequent Investment:

1. Subsequent investments should be made by check payable to the Fund and mailed
to: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box 61767,
King of Prussia, Pennsylvania 19406

BY WIRE TRANSFER

NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.

For initial investment: Before wiring funds, you should call 1-800-441-6580 to
receive an account number. Follow the instructions below after receiving your
account number.

Mail a completed account application to PFPC at the above address.

SELLING YOUR SHARES

5
<PAGE> 23

WITHDRAWING MONEY FROM YOUR FUND INVESTMENT

A request for a withdrawal in cash from the Fund constitutes a redemption or
sale of shares for a mutual fund shareholder.

INSTRUCTIONS FOR SELLING SHARES

BY TELEPHONE (unless you have declined telephone sales privileges)

1. Call 1-800-441-6580 with instructions as to how you wish to receive your
funds (mail, wire, electronic transfer).

BY MAIL Write a letter of instruction indicating:

- your Fund and account number

- amount you wish to redeem

- address where your check should be sent

- account owner signature(s)

Mail To: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box 61503,
King of Prussia, PA 19406

BY WIRE TRANSFER You must indicate this option on your application.

The Fund may charge a wire transfer fee.

NOTE: YOUR FINANCIAL INSTITUTION MAY ALSO CHARGE A SEPARATE FEE.

Call 1-800-441-6580 to request a wire transfer. If you call by 4 p.m. Eastern
Standard Time, your payment will normally be wired to your bank on the next
business day.

GENERAL POLICIES ON SELLING SHARES

REDEMPTIONS IN WRITING REQUIRED

You must request redemption in writing in the following situations:

1. Redemptions from Individual Retirement Accounts ("IRAs").

2. Circumstances under which redemption requests require a signature guarantee
include, but may not be limited to, each of the following:

- Redemptions over $10,000

- Your account registration or the name(s) on your account has changed within
the last 15 days

- The check is not being mailed to the address on your account

- The check is not being made payable to the owner of the account

- The redemption proceeds are being transferred to another Fund account with a
different registration

A signature guarantee can be obtained from a financial institution, such as a
bank, broker-dealer, credit union, clearing agency, or savings association.

VERIFYING TELEPHONE REDEMPTIONS

REDEMPTIONS WITHIN 10 DAYS OF INITIAL INVESTMENT

REFUSAL OF REDEMPTION REQUEST

Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.

REDEMPTION IN KIND

net assets). If the Fund deems it advisable for the benefit of all shareholders,
redemption in kind will consist of securities equal in market value to your
shares. When you convert these securities to cash, you will pay brokerage
charges.

CLOSING OF SMALL ACCOUNTS

If your account falls below $75,000, the Fund may ask you to increase your
balance. If it is still below $75,000 after 60 days, the Fund may close your
account and send you the proceeds at the then current NAV.

UNDELIVERABLE REDEMPTION CHECKS

DISTRIBUTION ARRANGEMENTS/SALES CHARGES

This section describes the sales charges and fees you will pay as an investor in
different share classes offered by the Fund and ways to qualify for reduced
sales charges.

CALCULATION OF SALES CHARGES
CLASS A SHARES

7
<PAGE> 25

The current sales charge rates are as follows:

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE
AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT
--------------- -------------- ---------------
<S> <C> <C>
$100,000 up to $249,999 3.00% 3.09%
$250,000 up to $499,999 2.00% 2.04%
$500,000 up to $999,999 1.00% 1.01%
$1,000,000 and above(1) 0.00% 0.00%
</TABLE>

CLASS B SHARES

CONVERSION FEATURE -- CLASS B SHARES

- Class B shares automatically convert to Class A shares of the Fund after seven
years from the end of the month of purchase.

- You will not pay any sales charge or fees when your shares convert, nor will
the transaction be subject to any tax.

SALES CHARGE REDUCTIONS

Reduced sales charges for Class A shares are available to shareholders with
investments of $250,000 or more. In addition, you may qualify for reduced sales
charges under the following circumstances.

- Letter of Intent. You inform the Fund in writing that you intend to purchase
enough shares over a 13-month period to qualify for a reduced sales charge.
You must include a minimum of 5% of the total amount you intend to purchase
with your letter of intent.

- Shares purchased by clients with an existing investment advisory or similar
relationship with the Advisor or its affiliates.

8
<PAGE> 26

SALES CHARGE WAIVERS

CLASS A SHARES

The following qualify for waivers of sales charges:

- Shares purchased through employer sponsored retirement plans.

- Shares purchased by clients with an existing investment advisory or similar
relationship with the Advisor or its affiliates.

- Shares purchased by directors, trustees, employees, and family members of the
Advisor and its affiliates and any organization that provides services to the
Funds.

REINSTATEMENT PRIVILEGE

EXCHANGING YOUR SHARES

You can exchange your shares in one Fund for shares of another Trainer Wortham
Fund. No transaction fees are charged for exchanges.

You must meet the minimum investment requirements for the Fund into which you
are exchanging.

INSTRUCTIONS FOR EXCHANGING SHARES

Exchanges may be made by calling 1-800-441-6580. Please provide the following
information:

- Your name and telephone number

- The exact name on your account and account number

- Taxpayer identification number (usually your Social Security number)

- Dollar value or number of shares to be exchanged

- The name of the Fund from which the exchange is to be made

- The name of the Fund into which the exchange is being made

Please refer to "Selling your Shares" for important information about telephone
transactions.

NOTES ON EXCHANGES

- The registration and tax identification numbers of the two accounts must be
identical.

- The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time upon a 60-day notice to shareholders.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Any income the Fund receives in the form of dividends is paid out, less
expenses, to its shareholders. Income dividends and capital gains distributions
on the Fund are usually paid annually.

Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.

An exchange of shares is considered a sale, and any related gains may be subject
to applicable taxes.

Dividends are taxable as ordinary income. Taxation on capital gains
distributions will vary with the length of time the Fund has held the
security -- not how long the shareholder has been in the Fund.

Dividends are taxable in the year in which they are paid, even if they appear on
your account statement in the following year.

You will be notified in January of each year about the federal tax status of
distributions made by the Fund. Depending on your state of residence,
distributions also may be subject to state and local taxes, including
withholding taxes. There is a penalty on certain pre-retirement distributions
from retirement accounts. Consult your tax adviser about the federal, state and
local tax consequences in your particular circumstances.

Foreign shareholders may be subject to special withholding requirements.

The Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid

9
<PAGE> 27

to shareholders who have not provided the Fund with their certified taxpayer
identification number in compliance with IRS rules. To avoid this, make sure you
provide your correct Tax Identification Number (Social Security Number for most
investors) on your account application.

FUND MANAGEMENT

THE INVESTMENT ADVISOR

Pursuant to an Investment Advisory Agreement with the Trust on behalf of the
Fund, the Advisor receives an annual fee, accrued daily and paid monthly, of
0.50% of the Fund's average daily net assets.

PORTFOLIO MANAGER

The portfolio manager for the Fund is Ravi Malik, CFA. Mr. Malik is a Senior
Portfolio Manager and Managing Director of the Advisor, having joined the firm
in 1994. His prior experience was with Jefferies & Co. as a research analyst.

Mr. Malik holds a BA in Mathematics and Economics from Punjab University in
Chandigarh, India and an MBA from the Anderson School of Management at the
University of California at Los Angeles. Mr. Malik is a member of the Los
Angeles Society of Financial Analysts and the Association for Investment
Management and Research. Mr. Malik received his CFA designation in 1997.

The Statement of Additional Information has more detailed information about the
Advisor.

THE DISTRIBUTOR AND ADMINISTRATOR

Provident Distributors, Inc. is the Fund's distributor and PFPC is the Fund's
administrator. Provident Distributors, Inc. and PFPC are located at 3200 Horizon
Drive, King of Prussia, PA 19406.

10
<PAGE> 28

For more information about the Fund, the following documents are available free
upon request:

ANNUAL/SEMI-ANNUAL REPORTS:

STATEMENT OF ADDITIONAL INFORMATION (SAI):

The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.

YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION
AND DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING THE FUND AT:

TRAINER WORTHAM FUNDS
C/O PFPC
3200 HORIZON DRIVE
KING OF PRUSSIA, PA 19406-0903
TELEPHONE: 1-888-257-445

You can review the Fund's reports and the SAI at the Public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:

- Free from the Commission's Website at http://www.sec.gov.

Investment Company Act file no. 811-879.

11
<PAGE> 29

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND

TRUSTEES:

Robert H. Breslin, Jr.
David P. Como
Raymond Eisenberg
Todd L. Eisenberg
David Elias
Robert S. Lazar
Martin S. Levine
Timothy J. O'Hara
James F. Twaddell

For additional information about the
Trainer Wortham Funds call:

888.257.4450

TRAINER WORTHAM FUNDS

845 Third Avenue/6th Floor, New York, New York 10022
888.257.4450 - Fax: 415.288.1401
TRAINER WORTHAM FUNDS

888.257.4450
<PAGE> 30

SUBJECT TO COMPLETION
DATED JUNE , 2000

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

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

AUGUST 1, 2000
--------------------------------------------------------------------------------

INVESTMENT ADVISOR
FROLEY, REVY INVESTMENT COMPANY, INC.
10900 WILSHIRE BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90024

A Series of the Trainer Wortham Funds

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

TABLE OF CONTENTS

<TABLE>
<CAPTION>
SUBJECT PAGE
------- ----
<S> <C>
Risk/Return Summary and Fund Expenses
Risk/Return Summary....................................... 1
Annual Fees and Expenses.................................. 2
Carefully review this important section for a summary
of the Fund's investments, risks and fees.
Investment Objective And Strategies
Investment Objective...................................... 3
Policies and Strategies................................... 3
Prior Performance of Comparable Accounts.................. 3
Investment Risks.......................................... 3
This section contains details on the Fund's investment
strategies and risks.
Shareholder Information
Pricing of Fund Shares.................................... 3
Purchasing and Adding to Your Shares...................... 4
Selling Your Shares....................................... 5
Exchanging Your Shares.................................... 6
Dividends, Distributions and Taxes........................ 6
Consult this section to obtain details on how shares
are valued, how to purchase, sell and exchange shares,
related charges and payments of dividends and
distributions.
Fund Management
The Investment Advisor.................................... 7
Portfolio Manager......................................... 7
The Distributor and Administrator......................... 7
Review this section for details on the people and
organizations who oversee the Fund and its investments.
</TABLE>
<PAGE> 32

RISK/RETURN SUMMARY AND FUND EXPENSES

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

INVESTMENT OBJECTIVE

The Fund seeks to provide total return through the combination of current income
and long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Fund invests primarily in investment grade convertible debt securities of
companies that the Advisor believes have above average growth rates and sound
financial characteristics. Predominantly all of the total assets of the Fund
will be invested in convertible debt securities although the Fund may
temporarily hold common stocks upon the conversion of a bond or other security.
All of the Fund's holdings of convertible securities will have credit ratings
that are rated investment grade by at least two ratings services.

PRINCIPAL INVESTMENT RISKS

WHO MAY WANT TO INVEST?

Consider investing in the Fund if you are:

- Investing for a period of time in excess of 2 to 3 years

- Looking to increase the income component of your equity investments

- Looking for a well-diversified fixed-income portfolio that provides the
potential for growth of your investment

- Willing to accept risks of price and dividend fluctuations

This Fund will not be appropriate for someone:

- Investing emergency reserves

- Seeking safety of principal

- Seeking high current income

1
<PAGE> 33

ANNUAL FEES AND EXPENSES

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

<TABLE>
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (load) Imposed on Purchases............ None
Maximum Deferred Charge (load).............................. None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees............................................. 0.38%
Distribution and Service (12b-1) Fees....................... None
Other Expenses*............................................. 0.10%
Total Annual Fund Operating Expenses........................ 0.48%
</TABLE>

* "Other Expenses" for the Fund's initial year of operations have been
estimated.
--------------------------------------------------------------------------------

EXPENSE EXAMPLE

Use this table to compare fees and expenses with those of other Funds. It
illustrates the amount of fees and expenses you would pay, assuming the
following:

- $10,000 investment

- 5% annual return

- redemption at the end of each period

- no changes in the Fund's operating expenses

- reinvestment of dividends and distributions

Because this example is hypothetical and for comparison purposes only, your
actual costs will be different.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------- -------
<S> <C> <C>
....................................... $ $
</TABLE>

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

2
<PAGE> 34

INVESTMENT OBJECTIVE AND STRATEGIES
FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

INVESTMENT OBJECTIVE

The investment objective of the Fund is to seek total return through the
combination of current income and long-term capital appreciation.

POLICIES AND STRATEGIES

The Advisor invests primarily in investment grade convertible debt securities of
companies that the Advisor believes have above-average growth rates and sound
financial characteristics.

Consistent with the Fund's investment objective, the Fund:

- invests predominantly all of its total assets in investment grade debt
securities convertible into common stocks consisting of convertible bonds and
synthetic convertible securities

- may temporarily hold common stock received upon the conversion of a
convertible security

INVESTMENT RISKS

Any investment in the Fund is subject to investment risks, including the
possible loss of the principal amount invested.

Generally, the Fund will be subject to the following risks:

SHAREHOLDER INFORMATION

PRICING OF FUND SHARES

HOW NAV IS CALCULATED

The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:

NAV =
Total Assets - Liabilities
------------------------------------
Number of Shares
Outstanding

3
<PAGE> 35

by the NYSE will be considered a business holiday on which the net asset value
of the Fund will not be calculated.

Your order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is accepted by the Fund. This is what is known as
the offering price.

The Fund's securities are generally valued at current market prices. If market
quotations are not available, prices will be based on fair value as determined
by the Fund's Trustees.

PURCHASING AND ADDING TO YOUR SHARES

The minimum initial investment in the Fund is $10,000,000. Subsequent
investments must be at least $100,000. Provident Distributors, Inc. (the
"Distributor") acts as Distributor of the Fund's shares. Shares of the Fund are
offered continuously for purchase at the net asset value per share of the Fund
next determined after a purchase order is received plus any applicable sales
charge. Investors may purchase shares of the Fund by check or wire, as described
below.

All purchases must be in U.S. dollars. A fee will be charged for any checks that
do not clear. Third-party checks are not accepted.

The Fund or the Advisor may waive its minimum purchase requirement, or the
Distributor may reject a purchase order, if it is deemed to be in the best
interest of the Fund and its shareholders.

INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT

BY REGULAR MAIL

Initial Investment:

1. Carefully read and complete the application.

2. Make check, certified check or money order payable to "Froley, Revy
Investment Grade Convertible Bond Fund."

3. Mail to: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box
61503, King of Prussia, Pennsylvania, 19406.

Subsequent Investment:

1. Subsequent investments should be made by check payable to the Fund and mailed
to: TRAINER WORTHAM FUNDS c/o PFPC, 211 South Gulph Road, P.O. Box 61767,
King of Prussia, Pennsylvania 19406

BY WIRE TRANSFER

NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.

For initial investment: Before wiring funds, you should call 1-800-441-6580 to
receive an account number. Follow the instructions below after receiving your
account number.

For initial and subsequent investments: Instruct your bank to wire transfer your
investment to:

Boston Safe Deposit & Trust
Routing Number: ABA #011001234
Account #000159
Name of the Fund
Shareholder Account #

4
<PAGE> 36

Mail a completed account application to PFPC at the above address.

SELLING YOUR SHARES

You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund. Normally you will receive your
proceeds within a week after your request is received. See section on "General
Policies on Selling Shares" below.

WITHDRAWING MONEY FROM YOUR FUND INVESTMENT

A request for a withdrawal in cash from the Fund constitutes a redemption or
sale of shares for a mutual fund shareholder.

INSTRUCTIONS FOR SELLING SHARES

BY TELEPHONE (unless you have declined telephone sales privileges)

1. Call 1-800-441-6580 with instructions as to how you wish to receive your
funds (mail, wire, electronic transfer).

BY MAIL Write a letter of instruction indicating:

- your Fund and account number

- amount you wish to redeem

- address where your check should be sent

- account owner signature(s)

Mail to: TRAINER WORTHAM FUNDS, c/o PFPC, 211 South Gulph Road, P.O. Box 61503,
King of Prussia, PA 19406

BY WIRE TRANSFER You must indicate this option on your application.

The Fund may charge a wire transfer fee.

Call 1-800-441-6580 to request a wire transfer.

If you call by 4 p.m. Eastern Standard Time, your payment will normally be wired
to your bank on the next business day.

NOTE: YOUR FINANCIAL INSTITUTION MAY ALSO CHARGE A SEPARATE FEE.

GENERAL POLICIES ON SELLING SHARES

REDEMPTIONS IN WRITING REQUIRED

You must request redemption in writing in the following situations:

1. Redemptions from Individual Retirement Accounts ("IRAs").

2. Circumstances under which redemption requests require a signature guarantee
include, but may not be limited to, each of the following:

- Redemptions over $10,000

- Your account registration or the name(s) on your account has changed within
the last 15 days

- The check is not being mailed to the address on your account

- The check is not being made payable to the owner of the account

- The redemption proceeds are being transferred to another Fund account with a
different registration

A signature guarantee can be obtained from a financial institution, such as a
bank, broker-dealer, credit union, clearing agency, or savings association.

VERIFYING TELEPHONE REDEMPTIONS

REDEMPTIONS WITHIN 10 DAYS OF INITIAL INVESTMENT

5
<PAGE> 37

REFUSAL OF REDEMPTION REQUEST

Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.

REDEMPTION IN KIND

The Fund reserves the right to make payment in securities rather than cash,
known as "redemption in kind." This could occur under extraordinary
circumstances, such as a very large redemption that could affect Fund operations
(a redemption of more than 1% of the Fund's net assets). If the Fund deems it
advisable for the benefit of all shareholders, redemption in kind will consist
of securities equal in market value to your shares. When you convert these
securities to cash, you will pay brokerage charges.

UNDELIVERABLE REDEMPTION CHECKS

EXCHANGING YOUR SHARES

You can exchange your shares in one Fund for shares of another Trainer Wortham
Fund. No transaction fees are charged for exchanges.

You must meet the minimum investment requirements for the Fund into which you
are exchanging.

INSTRUCTIONS FOR EXCHANGING SHARES

Exchanges may be made by calling 1-800-441-6580. Please provide the following
information:

- Your name and telephone number

- The exact name on your account and account number

- Taxpayer identification number (usually your Social Security number)

- Dollar value or number of shares to be exchanged

- The name of the Fund from which the exchange is to be made

- The name of the Fund into which the exchange is being made

Please refer to "Selling your Shares" for important information about telephone
transactions.

NOTES ON EXCHANGES

- The registration and tax identification numbers of the two accounts must be
identical.

- The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time upon a 60-day notice to shareholders.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Any income the Fund receives in the form of dividends is paid out, less
expenses, to its shareholders. Income dividends and capital gains distributions
on the Fund are usually paid annually.

Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.

An exchange of shares is considered a sale, and any related gains may be subject
to applicable taxes.

Dividends are taxable as ordinary income. Taxation on capital gains
distributions will vary with the length of time the Fund has held the security -
not how long the shareholder has been in the Fund.

Dividends are taxable in the year in which they are paid, even if they appear on
your account statement in the following year.

Foreign shareholders may be subject to special withholding requirements.
6
<PAGE> 38

FUND MANAGEMENT

THE INVESTMENT ADVISOR

Pursuant to an Investment Advisory Agreement with the Trust on behalf of the
Fund, the Advisor receives an annual fee, accrued daily and paid monthly, of
0.38% of the Fund's average daily net assets up to $100,000,000, 0.34% of the
next $100,000,000 in net assets and 0.30% of net assets in excess of
$200,000,000.

PORTFOLIO MANAGER

The Statement of Additional Information has more detailed information about the
Advisor.

THE DISTRIBUTOR AND ADMINISTRATOR

Provident Distributors, Inc. is the Fund's distributor and PFPC is the Fund's
administrator. Provident Distributors, Inc. and PFPC are located at 3200 Horizon
Drive, King of Prussia, PA 19406.

7
<PAGE> 39

For more information about the Fund, the following documents are available free
upon request:

ANNUAL/SEMI-ANNUAL REPORTS:

STATEMENT OF ADDITIONAL INFORMATION (SAI):

The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.

YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING THE FUND AT:

TRAINER WORTHAM FUNDS
C/O PFPC
3200 HORIZON DRIVE
KING OF PRUSSIA, PA 19406-0903
TELEPHONE: 1-888-257-4450

You can review the Fund's reports and the SAI at the Public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:

- Free from the Commission's Website at http://www.sec.gov.

Investment Company Act file no. 811-879.

8
<PAGE> 40

FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

TRUSTEES:

Robert H. Breslin, Jr.
David P. Como
Raymond Eisenberg
Todd L. Eisenberg
David Elias
Robert S. Lazar
Martin S. Levine
Timothy J. O'Hara
James F. Twaddell

For additional information about the
Trainer Wortham Funds call:

888.257.4450

TRAINER WORTHAM FUNDS

845 Third Avenue/6th Floor, New York, New York 10022
888.257.4450 - Fax: 415.288.1401
TRAINER WORTHAM FUNDS

888.257.4450
<PAGE> 41

STATEMENT OF ADDITIONAL INFORMATION

AUGUST 1, 2000

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

FROLEY, REVY CONVERTIBLE SECURITIES FUND
FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND
FROLEY, REVY INVESTMENT GRADE CONVERTIBLE BOND FUND

Series of the Trainer Wortham Funds

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

This Statement of Additional Information relates to the following
three separate investment series of the Trainer Wortham Funds (the "Trust"):
Froley, Revy Convertible Securities Fund (the "Convertible Securities Fund");
Froley, Revy Investment Grade Convertible Securities Fund (the "Investment
Grade Convertible Securities Fund"); and Froley, Revy Investment Grade
Convertible Bond Fund (the "Investment Grade Convertible Bond Fund")
(collectively, the "Fund(s)"). Information concerning each Fund is provided in
separate Prospectuses. This Statement of Additional Information is not a
Prospectus, but should be read in conjunction with the current Prospectus for
each Fund. Much of the information contained herein expands upon subjects
discussed in each Prospectus. No investment in shares should be made without
first reading the applicable Prospectus. A copy of each Fund's Prospectus may
be obtained without charge by writing to the Trust, at 845 Third Avenue, 6th
Floor, New York, NY 10022 or by calling 888-257-4450.

Each Fund's Annual Report to Shareholders is a separate document
that will be incorporated by reference into this Statement of Additional
Information. The Funds' Annual and Semi-Annual Reports to Shareholders will
also be available without charge by calling 888-257-4450.

AUGUST 1, 2000

<PAGE> 42

TABLE OF CONTENTS

THE TRUST.....................................................................3

INFORMATION ON PERMITTED INVESTMENTS..........................................3

CONVERTIBLE SECURITIES.....................................................3
DEPOSITORY RECEIPTS........................................................4
HIGH-YIELD/HIGH-RISK AND UNRATED SECURITIES................................4
U.S. TREASURY SECURITIES...................................................4
U.S.GOVERNMENT SECURITIES..................................................4
ILLIQUID SECURITIES........................................................5
OPTIONS....................................................................5
REPURCHASE AGREEMENTS......................................................5
MONEY MARKET INSTRUMENTS...................................................6
FOREIGN SECURITIES.........................................................6
STOCK INDEX FUTURES........................................................6
SHARES OF INVESTMENT COMPANIES.............................................7
LOANS OF PORTFOLIO SECURITIES..............................................7
BORROWING..................................................................7
PORTFOLIO TURNOVER.........................................................7

INVESTMENT LIMITATIONS OF THE FUNDS...........................................8

MANAGEMENT OF THE TRUST.......................................................9

TRUSTEES AND OFFICERS OF THE TRUST.........................................9

PRINCIPAL HOLDERS OF SECURITIES..............................................12

INVESTMENT ADVISORY AND OTHER SERVICES.......................................12

THE INVESTMENT ADVISOR....................................................12

THE DISTRIBUTOR AND THE DISTRIBUTION SERVICES PLANS..........................13

THE ADMINISTRATOR.........................................................14
TRANSFER AGENT AND FUND ACCOUNTANT........................................14
THE CUSTODIANS............................................................15
INDEPENDENT AUDITORS......................................................15
BROKERAGE COMMISSIONS.....................................................15

NET ASSET VALUE..............................................................15

TAXES........................................................................16

PERFORMANCE INFORMATION......................................................17

CALCULATION OF TOTAL RETURN...............................................17

SHARES OF BENEFICIAL INTEREST................................................19

DESCRIPTION OF SHARES.....................................................19
SHAREHOLDER MEETINGS......................................................19

FINANCIAL STATEMENTS.........................................................19

-2-
<PAGE> 43

THE TRUST
---------

TRAINER WORTHAM FUNDS (the "Trust") is an open-end management
investment company established as a Delaware business trust under a Declaration
of Trust dated January 17, 1995 which issues its shares of beneficial interest
in separate series. Each series of shares relates to a separate portfolio of
assets. This Statement of Additional Information relates to the following three
separate investment series of the Trust: Froley, Revy Convertible Securities
Fund; Froley, Revy Investment Grade Convertible Securities Fund and Froley, Revy
Investment Grade Convertible Bond Fund. Each of the Funds is classified as
diversified, meaning that, with respect to 75% of its total assets, it will not
invest more than 5% of its assets in the securities of any single issuer (other
than securities issued by the U.S. Government or its agencies or
instrumentalities).

Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus of each Fund.
Capitalized terms not defined herein are defined in each Prospectus. No
investment in shares of a Fund should be made without first reading the
Prospectus.

INFORMATION ON PERMITTED INVESTMENTS
------------------------------------

CONVERTIBLE SECURITIES
----------------------

Convertible securities are securities such as rights, bonds, notes and
preferred stocks which are convertible into or exchangeable for common stocks.
Convertible securities have characteristics similar to both fixed income and
equity securities. Because of the conversion feature, the market value of
convertible securities tends to move together with the market value of the
underlying common stock. As a result, a Fund's selection of convertible
securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuer, and any call provisions.

The Funds may invest in mandatory convertible securities. These
securities are typically of or near investment grade quality and are designed to
pay holders a higher dividend than would otherwise be received as a common stock
holder. These securities also carry a mandatory conversion feature that requires
the company to convert the instrument into common stock at a specific future
date.

The Funds may invest in zero coupon and OID (Original Issue Discount)
bonds. These convertible securities either do not pay a coupon or pay an
extremely small coupon payment. These instruments are sold at a discount to par
value and are typically putable back to the issuer at an escalating price in the
future.

The Funds may invest in synthetic convertible securities. These
securities have characteristics similar to a generic convertible bond, but
typically have a high investment grade rating. Their bond rating is generally
high because the instruments are backed by the credit of a major financial
institution. A synthetic security is generally created specifically for an
investor or group of investors that want exposure to a company or sector, but
require dividend income. In

-3-
<PAGE> 44

exchange for providing exposure to a specific company or sector, the synthetic
instrument is typically sold above fair value and there is reduced liquidity in
the secondary market if the issue size is small.

DEPOSITORY RECEIPTS
-------------------

The Funds may invest in American Depository Receipts ("ADRs"), Global
Depository Receipts ("GDRs") and European Depository Receipts ("EDRs"). ADRs are
securities, typically issued by a U.S. financial institution (a "depository"),
that evidence ownership interests in a security or a pool of securities issued
by a foreign issuer and deposited with the depository. GDRs and EDRs are
securities that represent ownership interests in a security or pool of
securities issued by a foreign or U.S. corporation. Depository receipts may be
available through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the security underlying the receipt and
the depository, whereas an unsponsored facility is established by the depository
without participation by the issuer of the underlying security. The depository
of an unsponsored facility is frequently under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through, to the holders of the receipts, voting rights with respect to
the deposited securities. The depository of unsponsored depository receipts may
provide less information to receipt holders. Investments in depository receipts
do not eliminate the risks in investing in foreign issuers. The market value of
depository receipts is dependent on the market value of the underlying
securities, and fluctuations in the relative value of the currencies in which
the depositorv receipts and the underlying securities are quoted.

HIGH-YIELD/HIGH-RISK AND UNRATED SECURITIES
-------------------------------------------

The Convertible Securities Fund and the Investment Grade
Convertible Securities Fund may each invest in securities that are rated below
investment grade (i.e., securities rated BB or lower by Standard & Poor's
Ratings Services ("Standard & Poor's") or Ba or lower by Moody's Investors
Service, Inc. ("Moody's")). (The Investment Grade Convertible Bond Fund may not
invest in these instruments). Lower-rated securities involve a higher degree of
credit risk, which is the risk that the issuer will not make interest or
principal payments when due. In the event of an unanticipated default, a Fund
would experience a reduction in its income, and could expect a decline in the
market value of the securities so affected.

Investments in high-yield/high risk securities involve a high
degree of financial and market risks that can result in substantial or, at
times, even total losses. High-yield securities are more vulnerable to real or
perceived economic changes, political changes or adverse developments specific
to the issuer. Issuers of such securities may have substantial capital needs and
may become involved in bankruptcy or reorganization proceedings. Among the
problems involved in investments in such issuers is the fact that it may be
difficult to obtain information about the condition of such issuers.

Although the Funds generally will purchase securities for
which the Advisor expects an active market to be maintained,
high-yield/high-risk securities may be less actively traded than other
securities and it may be difficult to dispose of substantial holdings of such
securities at prevailing market prices.

-4-
<PAGE> 45

The value of lower quality securities generally is more
dependent on the ability of the issuer to meet interest and principal payments
than is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.

Each Fund may invest in unrated debt securities. Unrated debt,
while not necessarily of lower quality than rated securities, may not have as
broad a market. Unrated debt securities will be treated as investments in
high-yield investments by each Fund unless the Advisor deems such securities to
be the equivalent of investment grade securities.

U.S. TREASURY SECURITIES
------------------------

Each Fund may invest in U.S. Treasury securities, including Treasury
bills, Treasury notes and Treasury bonds that differ in their interest rates,
maturities and times of issuance. Treasury bills have initial maturities of one
year or less; Treasury notes have initial maturities of one to ten years; and
Treasury bonds generally have initial maturities of greater than ten years.

U.S. GOVERNMENT SECURITIES
--------------------------

In addition to U.S. Treasury securities, each Fund may invest in U. S.
Government securities, including securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities, for example,
Government National Mortgage Association pass-through certificates, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those issued by the Federal National Mortgage Association, by right of the
issuer to borrow from the Treasury. Others, such as those issued by the Federal
National Mortgage Association, by discretionary authority of the U.S. Government
to purchase certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear fixed, floating
or variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While the
U.S. Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will always do
so, since it is not so obligated by law.

ILLIQUID SECURITIES
-------------------

Each Fund may invest up to 15% of the value of its net assets in
securities that are illiquid because of restrictions on transferability or other
reasons. Repurchase agreements with deemed maturities in excess of seven days
are subject to this 15% limit. A Fund may be unable to dispose of its holdings
in illiquid securities at acceptable prices and may have to dispose of such
securities over extended periods of time. A Fund may purchase securities that
are sold in transactions between qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933, and these securities are subject to
certain legal or contractual restrictions on transfer that restrict their
liquidity. Securities which are freely tradeable under Rule 144A may be treated
as liquid if the Trustees of the Trust are satisfied that there is sufficient
trading activity and

-5-
<PAGE> 46

reliable price information. The Trustees have authorized the Advisor to make
liquidity determinations with respect to such securities pursuant to procedures
approved and adopted by the Board.

OPTIONS
-------

An option is an instrument that gives the holder of the contract the
right, but not the obligation, to buy or sell a predetermined number of specific
securities (i.e. common stocks or bonds) at a stated price within the expiration
period, which is generally less than 12 months. If the right is not exercised
after a specific period, the option expires. Both put and call options may be
used by the Funds.

REPURCHASE AGREEMENTS
---------------------

Securities held by each of the Funds may be subject to repurchase
agreements. Under the terms of a repurchase agreement, a Fund would acquire
securities from member banks of the Federal Reserve System and registered
broker-dealers which the Advisor deems creditworthy under guidelines approved by
the Trust's Board of Trustees, subject to the seller's agreement to repurchase
such securities at a mutually agreed-upon date and price. The repurchase price
would generally equal the price paid by the Fund plus interest negotiated on the
basis of current short-term rates, which may be more or less than the rate on
the underlying portfolio securities. The seller under a repurchase agreement
will be required to maintain at all times the value of collateral held pursuant
to the agreement at not less than 102% the repurchase price (including accrued
interest). If the seller were to default on its repurchase obligation or become
insolvent, the Fund would suffer a loss to the extent that the proceeds from a
sale of the underlying portfolio securities were less than the repurchase price
under the agreement, or to the extent that the disposition of such securities by
the Fund were delayed pending court action. Securities subject to repurchase
agreements will be held by the Trust's Custodian or another qualified custodian
or in the Federal Reserve/Treasury book-entry system. Repurchase agreements are
considered to be loans by a Fund under the 1940 Act.

MONEY MARKET INSTRUMENTS
------------------------

Each Fund may invest in money market instruments and debt securities,
including bank obligations and commercial paper, which are at least comparable
in quality to the Fund's other investments. Bank obligations may include
bankers' acceptances, negotiable certificates of deposit and non-negotiable time
deposits earning a specified return, issued for a definite period of time by a
U.S. bank that is a member of the Federal Reserve System or is insured by the
Federal Deposit Insurance Corporation, or by a savings and loan association or
savings bank that is insured by the Federal Deposit Insurance Corporation. Bank
obligations also include U.S. dollar-denominated obligations of foreign branches
of U.S. banks or of U.S. branches of foreign banks, all of the same type as
domestic bank obligations. Investments in bank obligations are limited to the
obligations of financial institutions having more than $1 billion in total
assets at the time of purchase. Investments by a Fund in non-negotiable time
deposits are limited to no more than 5% of its total assets at the time of
purchase.

-6-
<PAGE> 47

FOREIGN SECURITIES
------------------

Each Fund may invest in U.S. dollar denominated obligations of foreign
corporations. Investing in securities issued by foreign corporations involves
considerations and possible risks not typically associated with investing in
obligations issued by domestic corporations. Less information may be available
about foreign companies than about domestic companies, and foreign companies
generally are not subject to the same uniform accounting, auditing and financial
reporting standards or to other regulatory practices and requirements comparable
to those applicable to domestic companies.

The risks associated with investing in foreign securities are often
heightened by investments in developing or emerging markets. Investments in
emerging or developing markets involve exposure to economic structures that are
generally less diverse and mature and to political systems which can be expected
to have less stability, than those of more developed countries. Moreover, the
economies of individual emerging market countries may differ favorably or
unfavorably from the U.S. economy in such respects as the rate of growth in
gross domestic product, the rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.

STOCK INDEX FUTURES
-------------------

Each Fund may invest in stock index futures, which are contracts for
the purchase or sale for future delivery of contracts based on certain financial
indices, including equity indices. Typically a Fund will enter into a stock
index futures contract as a temporary substitute for actual stock purchases in
order to reduce transaction costs while gaining exposure to a specific market
segment.

The purchasing of stock index futures entails certain risks including
the risk that a Fund's overall performance could be adversely affected if the
Advisor's investment judgment in purchasing such an instrument proves incorrect
and the value decreases. Futures prices are affected by many factors such as
current and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until the expiration of the
contract.

SHARES OF INVESTMENT COMPANIES
------------------------------

Each of the Funds may invest in the shares of other investment
companies to the extent permitted under the 1940 Act. The return on a Fund's
investments in investment companies will be reduced by the operating expenses,
including investment advisory and administrative fees, of such companies.

LOANS OF PORTFOLIO SECURITIES
-----------------------------

Each Fund is authorized to make loans of its portfolio securities to
broker-dealers or to other institutional investors up to 33-1/3% of its net
assets. The borrower must maintain with the Fund's custodian collateral
consisting of cash, cash equivalents or U.S. Government securities equal to at
least 100% of the value of the borrowed securities, plus any accrued interest.
The Fund will receive any interest paid on the loaned securities and a fee or a
portion of the interest

-7-
<PAGE> 48

earned on the collateral. The risks in lending portfolio securities, as with
other extensions of secured credit, consist of possible delay in receiving
additional collateral or in the recovery of the securities, or possible loss of
rights in the collateral should the borrower fail financially. The lender also
may bear the risk of capital loss on investment of the cash collateral, which
must be returned in full to the borrower when the loan is terminated. Loans will
be made only to firms deemed by the Advisor to be of good standing.

BORROWING
---------

Each Fund may borrow from banks up to 33-1/3% of the value of its total
assets for temporary or emergency purposes and enter into reverse repurchase
agreements. If the income and gains on securities purchased with the proceeds of
borrowings or reverse repurchase agreements exceed the cost of such borrowings
or agreements, the Fund's earnings or net asset value will increase faster than
otherwise would be the case; conversely, if the income and gains fail to exceed
the cost, earnings or net asset value would decline faster than otherwise would
be the case. If the 300% asset coverage required by the 1940 Act should decline
as a result of market fluctuation or other reasons, the Fund may be required to
sell some of its portfolio securities within three days to reduce the borrowings
and restore the 300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time.

PORTFOLIO TURNOVER
------------------

It is anticipated that the annual portfolio turnover rate of each Fund
will not exceed 100%. The portfolio turnover rate is calculated by dividing the
lesser of sales or purchases of long-term portfolio securities by the Fund's
average month-end long-term investments. High portfolio turnover involves
correspondingly greater transaction costs in the form of dealer spreads or
brokerage commissions and other costs that a Fund will bear directly, and may
result in the realization of net capital gains, which are generally taxable
whether or not distributed to shareholders.

INVESTMENT LIMITATIONS OF THE FUNDS
-----------------------------------

The Funds have adopted the following restrictions with respect to their
investment policies. These restrictions are fundamental policies, and may not be
changed as to a Fund unless authorized by the vote of a majority of the
outstanding shares of the Fund, as that term is defined herein under the section
entitled "GENERAL INFORMATION" below.

(a) UNDERWRITING OF SECURITIES: The Funds will not engage in
the underwriting of securities of other issuers.

(b) DIVERSIFICATION: The Funds have adopted the policy
prohibiting them from, as to 75% of each Fund's total
assets, investing more than 5% of its total assets in
the securities of any one issuer (other than securities
issued by the Government or its agencies or
instrumentalities).

(c) INDUSTRY CONCENTRATIONS: The Funds may not purchase the
securities of issuers conducting their principal
business activities in the same industry, other than
obligations issued or guaranteed by the U.S.

-8-
<PAGE> 49

Government, its agencies or instrumentalities if
immediately after such purchase the value of a Fund's
investments in such industry would exceed 25% of the
value of the total assets of the Fund.

(d) PURCHASE AND SALE OF REAL ESTATE: The Funds will not
engage in the purchase and sale of interests in real
estate except that the Funds may engage in the purchase
and sale of marketable securities which may represent
indirect interests in real estate.

(e) PURCHASE AND SALE OF COMMODITIES OR COMMODITY CONTRACTS:
The Funds will not engage in the purchase and sale of
commodities or commodity contracts.

(f) MAKING OF LOANS TO OTHER PERSONS: The Funds will not
make loans to any person or company, except that the
Funds may purchase a portion of an issue of publicly
distributed bonds, debentures or other debt securities
and except further that the Funds may enter into
repurchase agreements.

(g) BORROWING OF MONEY: From time to time, the Funds may
borrow money. All such borrowings shall be exclusively
from banks. The purpose of such borrowings shall be both
for temporary use and to provide funds for the purchase
of additional investments whenever the Board of Trustees
of the Trust shall deem it desirable. In connection with
any such borrowing, a Fund shall issue promissory notes
or other evidences of indebtedness and shall, when
required, pledge, assign or otherwise encumber its
assets, provided, however, (i) that immediately after
such borrowing it shall have an asset coverage of at
least 300% for all its borrowing and (ii) that in the
event such asset coverage shall at any time fall below
300% it shall, within three days thereafter (not
including Sundays and holidays) or such longer periods
as the U.S. Securities and Exchange Commission (the
"SEC") may prescribe by rules and regulations, reduce
the amount of its borrowings to an extent that the asset
coverage of the borrowings shall be at least 300%.

MANAGEMENT OF THE TRUST
-----------------------

TRUSTEES AND OFFICERS OF THE TRUST
----------------------------------

Under Delaware law, the business and affairs of the Trust are managed
under the direction of the Board of Trustees. There are currently nine Trustees,
seven of whom are not "interested persons" of the Trust within the meaning of
that term under the Act. The Trustees, in turn, elect the officers of the Trust
to supervise actively its day-to-day operations.

-9-
<PAGE> 50

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
NAME, AGE POSITION(S) HELD PRINCIPAL OCCUPATION
& ADDRESS WITH TRUST PAST FIVE YEARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James F. Twaddell (61) Chairman of the Board; Trustee since Investment banker at Schneider
c/o Schneider Securities, Inc. 1979 Securities, Inc., Providence, Rhode
2 Charles Street Island, since June 1995; prior to
Providence, RI 02904 June 1995, Chairman of the Board,
Director and Registered
Representative of Barclay
Investment, Inc.
------------------------------------------------------------------------------------------------------------------
Robert H. Breslin, Jr. (72) Trustee since 1979; Member of Audit Partner in the law firm of Breslin &
107 Forge Road Committee Sweeney,Warwick, RI. since 1970
E. Greenwich, RI 02818

------------------------------------------------------------------------------------------------------------------
David P. Como(1) (54) Trustee since 1984; President Managing Director, Trainer Wortham &
111 Pine Street Co., Inc. since 1969
3rd Floor
San Francisco, CA 94111

------------------------------------------------------------------------------------------------------------------
Raymond Eisenberg (77) Trustee since 1960; Chairman of the President of Raymond Eisenberg &
488 County Street Audit Committee Associates, PC Accountants and
New Bedford, MA 02740 Auditors Bedford, MA since 1980.

------------------------------------------------------------------------------------------------------------------
David Elias(1) (55) Trustee since 1991 President and Chief Investment
500 Essjay Road Officer of Elias Asset Management,
Suite 220 Buffalo, NY since 1978.
Williamsville, NY 14221

------------------------------------------------------------------------------------------------------------------
Robert S. Lazar (56) Trustee since 1976; Member of the Retired in 1992, formerly an
P.O. Box 4158 Audit Committee Engineer, Newport, RI; Director
Middletown, RI 02842-0011 Newport Fedral Savings Bank,
Newport, RI.

------------------------------------------------------------------------------------------------------------------
Martin S. Levine (47) Trustee since 1994; Member of the Controller and Chief Financial
c/o John P. Picone, Inc. Audit Committee Officer of John P. Picone, Inc., Co
31 Garden Lane Engineers, Lawrence, NY, since 1984.
Lawrence, NY 11559
------------------------------------------------------------------------------------------------------------------
</TABLE>

-10-
<PAGE> 51

------------------------------------------------------------------------------------------------------------------
Todd Eisenberg (40) Trustee since July 1999 Managing Partner for Petitti,
488 Pleasant Street Eisenberg & Gamache, P.C. since 1982
New Bedford, MA 02740

------------------------------------------------------------------------------------------------------------------
John D. Knox (41) Vice President Fixed Income Portfolio Manager of
845 Third Avenue Trainer Wortham since 1994.
6th Floor
New York, NY 10022

------------------------------------------------------------------------------------------------------------------
Robert Vile (43) Vice President Equity Portfolio Manager of Trainer
845 Third Avenue Wortham Funds since 1999.
6th Floor
New York, NY 10022

------------------------------------------------------------------------------------------------------------------
Joanne Pietrini Smith (36) Chief Administrative Officer Chief Administrative Officer of
845 Third Avenue Trainer Wortham & Company, Inc. Vice
6th Floor President and Chief Investment
New York, NY 10022 Officer of First Republic Bank

------------------------------------------------------------------------------------------------------------------
Kelly O'Neill (31) Secretary Compliance Administrator PFPC, Inc.

------------------------------------------------------------------------------------------------------------------
Brian O'Neill (32) Treasurer Director of Financial Reporting
PFPC, Inc.
------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) "Interested person" within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940. Mr. Como is an "interested person" by
reason of his affiliation with the Advisor and as a result of being an
Officer of the Trust. Mr. Elias may be regarded as an "interested
person" by reason of a material business relationship with Trainer
Wortham.

The Audit Committee of the Board of Trustees of the Trust was
established to consider such matters as the selection of the independent
certified public accountant for the Trust, review of the auditor's report on
accounting procedures and internal controls, and other issues referred to the
Committee by the full Board.

The following table sets forth information regarding the total
compensation paid by the Trust to its Trustees for their services as Trustees
during the fiscal year ended June 30, 2000.

-11-
<PAGE> 52

COMPENSATION TABLE:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
NAME, AGE AGGREGATE COMPENSATION FROM TRUST TOTAL COMPENSATION FROM TRUST AND
& ADDRESS FUND COMPLEX

----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James F. Twaddell, $_____ $_____
Chairman
----------------------------------------------------------------------------------------------------------------------
Robert H. Breslin, Jr., $_____ $_____
Trustee, Member of Audit
Committee

----------------------------------------------------------------------------------------------------------------------
David P. Como(l), $ 0 $ 0
Trustee

----------------------------------------------------------------------------------------------------------------------
Raymond Eisenberg, $______ $______
Trustee, Chairman of the
Audit Committee

----------------------------------------------------------------------------------------------------------------------
David Elias(l), $ 0 $ 0
Trustee

----------------------------------------------------------------------------------------------------------------------
Robert S. Lazar, $______ $______
Trustee, Member of Audit
Committee

----------------------------------------------------------------------------------------------------------------------
Martin S. Levine, $______ $______
Trustee, Member of Audit
Committee

----------------------------------------------------------------------------------------------------------------------
Timothy J. O'Hara, $______ $______
Trustee, Member of Audit
Committee

----------------------------------------------------------------------------------------------------------------------
Todd Eisenberg $ 0 $ 0
Trustee, Member of Audit
Committee
</TABLE>

As of June 30, 2000, the compensation for disinterested Trustees
included a fee of $500 per meeting of the Board of Trustees attended and an
annual retainer of $3,000. In addition, the Trustees were reimbursed for
expenses incurred in connection with their attendance at meetings of the Board
of Trustees. Members of the Audit Committee also receive fees for meetings
attended. However, no Officer of the Trust receives any compensation directly
from the Trust for performing the duties of their offices. The Advisor, of which
Mr. Como is an officer and/or

-12-
<PAGE> 53

trustee, receives fees from the Trust for acting as its Investment Advisor. (See
the section entitled "INVESTMENT ADVISOR.")

PRINCIPAL HOLDERS OF SECURITIES
-------------------------------

Persons or organizations owning 25% or more of the outstanding shares of a Fund
may be presumed to "control" (as that term is defined in the 1940 Act) a Fund.
As a result, these persons or organizations could have the ability to approve or
reject those matters submitted to the shareholders of such Fund for their
approval.

INVESTMENT ADVISORY AND OTHER SERVICES
--------------------------------------

THE INVESTMENT ADVISOR
----------------------

The Advisor is registered as an investment advisor under the Investment
Advisors Act of 1940, as amended, and supervises approximately $3.1 billion in
investment accounts. First Republic Bank owns 19.9% of the Advisor. First
Republic Bank is a commercial bank headquartered at 111 Pine Street, San
Francisco, California 94111, which is engaged in a general banking business and
provides private banking services. First Republic Bank has offices in
California, Nevada and New York City and as of December 31, 1999 had
approximately $3.6 billion in assets.

Each Fund's Investment Advisory Agreement provides that, subject to the
general supervision of the Trust's Board of Trustees and in accordance with each
Fund's investment objectives, policies, and restrictions, the Advisor will
manage the Funds' investment portfolio, make decisions with respect to and place
orders for all purchases and sales of the portfolio securities. Pursuant to the
Investment Advisory Agreements, the Advisor is not liable for any mistake of
judgment, mistake of law, or other loss to a Fund in connection with its
performance under the Investment Advisory Agreements except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
its services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties, or by
reason of its reckless disregard of its obligations under the Investment
Advisory Agreements.

Pursuant to individual Investment Advisory Agreements, with respect to
Froley, Revy Convertible Securities Fund, the Advisor receives an annual
investment advisory fee, accrued daily and paid monthly, of 0.625% of the Fund's
average daily net assets; and with respect to Froley, Revy Investment Grade
Convertible Securities Fund, the Advisor receives an annual investment advisory
fee, accrued daily and paid monthly, of 0.50% of the Fund's average daily net
assets and with respect to Froley, Revy Investment Grade Convertible Bond Fund,
the Advisor receives an annual investment advisory fee, accrued daily and paid
monthly, of 0.38% of the Fund's first $100,000,000 of net assets, 0.34% of the
Fund's next $100,000,000 in net assets and 0.30% of net assets in excess of
$200,000,000. From time to time, the Advisor may waive receipt of its fees
and/or voluntarily assume certain Fund expenses, which would have the effect of
lowering a Fund's expense ratio and increasing yield to investors at the time
such amounts are waived or assumed, as the case may be.

-13-
<PAGE> 54

THE DISTRIBUTOR AND THE DISTRIBUTION SERVICES PLANS
---------------------------------------------------

Provident Distributors, Inc. ("Provident"), serves as the Trust's
Distributor pursuant to an Underwriting Agreement (the "Underwriting
Agreement"). The Underwriting Agreement may be renewed for successive one-year
periods provided that each continuance is specifically approved by (1) the vote
of a majority of the Trust's outstanding voting shares or by the Board of
Trustees and (2) the vote of a majority of the Board of Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the Underwriting Agreement.

The Convertible Securities Fund and the Investment Grade Convertible
Securities Fund have each adopted Distribution Services Plans (the "Plans")
pursuant to Rule 12b-1 under the Investment Company Act of 1940 with respect to
each class of shares offered by the Funds in order to pay for activities
primarily intended to result in the sale of a Fund's shares. Pursuant to the
Plan for Class A Shares, the Class A Shares pay a 12b-1 fee of up to 0.25% of
the average daily net assets of the applicable Fund's assets attributable to
Class A Shares, and up to 0.25% of these fees may be used for distribution
purposes and up to 0.25% of these fees may be used for activities or expenses
related to account maintenance or personal service to existing shareholders.
Pursuant to the Plan for Class B Shares, the Class B Shares pay a 12b-1 fee of
up to 0.75% of the average daily net assets of the applicable Fund's net assets
attributable to Class B Shares, and up to 0.75% of these fees may be used for
distribution purposes and up to 0.25% may be used for activities or expenses
related to account maintenance or personal service to existing shareholders. The
Plans may be renewed annually for successive one year periods provided that each
continuance is specifically approved by (1) the vote of a majority of the Fund's
outstanding voting shares or by the Board of Trustees and (2) the vote of a
majority of the Board of Trustees who are not "interested persons" of the Funds
and who have no direct or indirect financial interest in the Plans.

THE ADMINISTRATOR
-----------------

PFPC, Inc. ("PFPC") 3200 Horizon Drive, P.O. Box 61503, King of
Prussia, Pennsylvania 19406-0903, serves as the Trust's Administrator pursuant
to an Administration Agreement (the "Administration Agreement"). Pursuant to the
Administration Agreement, PFPC receives an annual fee, accrued daily and paid
monthly, of 0.15% on the first $50 million of the average daily net assets of
the Trust, 0.10% on the next $50 million of the average daily net assets of the
Trust; and 0.05% on average daily net assets of the Trust over $100 million,
subject to a minimum fee of $72,000 for the Trust. Minimum fees are $48,000 per
year for the first Series, and $12,000 for each additional Series or class. The
Trust pays the fees and out-of-pocket costs of PFPC.

The services PFPC provides to the Trust include: the coordination and
monitoring of any third parties furnishing services to the Trust; providing the
necessary office space, equipment and personnel to perform administrative and
clerical functions for the Trust; preparing, filing and distributing proxy
materials, periodic reports to shareholders, organization of Board meetings,
registration statements and other documents; and responding to shareholder
inquiries.

-14-
<PAGE> 55

TRANSFER AGENT AND FUND ACCOUNTANT
----------------------------------

PFPC serves as the Trust's Transfer Agent, Dividend Disbursing Agent
and Redemption Agent pursuant to a Transfer Agent Services Agreement and also
serves as the Trust's Accounting Services Agent pursuant to an Accounting
Services Agreement (the "Accounting and Transfer Agent Services Agreements").
The Accounting and Transfer Agent Services Agreements will continue in effect
from year to year, provided such continuance is specifically approved at least
annually by the Board of Trustees or by a vote of a majority of the outstanding
shares of the Trust (as defined under the section entitled "GENERAL INFORMATION"
in the Prospectus), and a majority of the Board of Trustees who are not
interested persons (as defined in the Act) of any party to the respective
Agreements, by votes cast in person at a meeting called for such purpose.

The Accounting and Transfer Agent Services Agreements provide generally
that PFPC shall be indemnified against liabilities to the Trust in connection
with matters relating to the Accounting and Transfer Agent Services Agreements
except those arising out of willful misfeasance, bad faith or gross negligence
on the part of PFPC in the performance of its duties or from reckless disregard
of its obligations and duties thereunder.

The Trust pays PFPC an annual fee of $15.00 per shareholder account
(subject to a minimum monthly fee of $ $2,250) for its services as Transfer
Agent, Dividend Disbursing Agent and Redemption Agent. For accounting services,
PFPC receives from the Trust an annual fee, payable monthly, of $24,000 on the
first $10 million of average daily net assets; .0004%. on the next $40 million
of average daily net assets; .0003% of the next $50 million of average daily net
assets; and .0001% of average daily net assets in excess of $100 million.

THE CUSTODIANS
--------------

PFPC Trust Company, 400 Bellevue Parkway, Wilmington, Delaware 19808,
serves as the Custodian for each of the Convertible Securities Fund and the
Investment Grade Convertible Securities Fund pursuant to a Custody Agreement.
The Chase Manhattan Bank, MetroTech Center, Brooklyn, New York 11245 serves as
the Custodian for the Investment Grade Convertible Bond Fund pursuant to a
Custody Agreement. In each case the Custodian holds or arranges for the holding
of all portfolio securities and other assets of each of the respective Funds.

INDEPENDENT AUDITORS
--------------------

Briggs, Bunting and Dougherty, LLP, 2121 Two Logan Square, 18th & Arch
Streets, Philadelphia, PA 19103-4901 have been selected as the independent
accountants for the Funds and will provide audit and tax services. The books of
the Funds will be audited at least once each year by Briggs, Bunting and
Dougherty, LLP.

BROKERAGE COMMISSIONS
---------------------

It is the policy of each Fund to secure the execution of orders on its
portfolio transactions in an effective manner at the most favorable price.
Pursuant to its agreement with each Fund, the Advisor determines, subject to the
general supervision of the Board of Trustees and in

-15-
<PAGE> 56

accordance with each Fund's investment objectives, policies and restrictions,
which securities are to be purchased and sold and which brokers are to be
eligible to execute its portfolio transaction. It is not the policy of the Funds
to deal solely with one broker, but it is each Fund's intention to place
portfolio transactions with those brokers which provide the most favorable
combination of price, execution and services to the Trust. Research services are
a factor in selection of brokers, but payment in excess of brokerage commissions
charged by other brokers is not made in recognition of research services. The
reasonableness of brokerage commissions is evaluated by comparison to fees
charged by other brokers where the execution and services are comparable.

NET ASSET VALUE
---------------

As indicated in the Prospectus, the net asset value of each Fund is
determined and the shares of each Fund are priced as of the earlier of 4:00
p.m., Eastern Time, or the close of regular trading on the New York Stock
Exchange (the "Exchange"), on each Business Day. A "Business Day" is any day the
Exchange is open for regular business. Currently the Exchange is closed in
observance of the following holidays: New Year's Day, Martin Luther King, Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas Day.

Valuations of securities purchased by the Funds are supplied by
independent pricing services used by PFPC, as administrator, which have been
approved by the Trustees of the Trust. Equity securities which are listed or
admitted to trading on a national securities exchange or other market trading
system which reports actual transaction prices on a contemporaneous basis will
be valued at the last sales price on the exchange on which the security is
principally traded. Equity securities for which there is no sale on that day and
equity securities traded only in the over-the-counter market will be valued at
their closing bid prices obtained from one or more dealers making markets for
such securities or, if market quotations are not readily available, at their
fair value as determined in good faith by the Board of Trustees.

Valuations of fixed and variable income securities ("debt securities")
are based upon a consideration of yields or prices of obligations of comparable
quality, coupon, maturity and type, indications as to value from recognized
dealers, and general market conditions. The pricing services may use electronic
data processing techniques and/or a computerized matrix system to determine
valuations. Debt securities for which market quotations are readily available
are valued based upon those quotations.

The procedures used by the pricing service are reviewed by the officers
of the Trust under the general supervision of the Trustees. The Trustees may
deviate from the valuation provided by the pricing service whenever, in their
judgment, such valuation is not indicative of the fair value of the debt
security. In such instances the debt security will be valued at fair value as
determined in good faith by or under the direction of the Trustees.

TAXES
-----

Each Fund intends to qualify annually to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As such,

-16-
<PAGE> 57

the Funds will not be subject to Federal income tax, or to any excise tax, to
the extent its earnings are distributed as provided in the Code and by
satisfying certain other requirements relating to the sources of their income
and diversification of their assets.

Distributions paid by a Fund from capital gains, whether received in
cash or in additional shares, are taxable to investors as capital gains,
regardless of the length of time an investor has owned shares in the Fund. If
purchases of shares in a Fund are made shortly before the record date for a
capital gains distribution or a dividend, a portion of the investment will be
returned as a taxable distribution.

Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
tax purposes as if paid by a Fund and received by the shareholder on December 31
of the calendar year in which they are declared.

A sale or redemption of shares of a Fund is a taxable event and may
result in a capital gain or loss to shareholders subject to tax. The Fund is
required to withhold 31% of taxable dividends, capital gains distributions, and
redemptions paid to shareholders that have not complied with IRS taxpayer
identification regulations. You may avoid this withholding requirement by
certifying on your account registration form your proper taxpayer identification
number and by certifying that you are not subject to backup withholding.

The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisors concerning the
Federal, state, local or foreign tax consequences of an investment in the Fund.

PERFORMANCE INFORMATION
-----------------------

From time to time, performance information regarding a Fund, such as
total return, may be quoted in advertisements or in communications to
shareholders. These performance quotations represent a Fund's past performance,
and should not be considered as representative of future results. A Fund's total
return may be calculated on an average annual and/or aggregate basis for various
periods (which will be stated in all advertisements). Average annual total
return reflects the average percentage change per year in the value of an
investment in the Fund. Aggregate total return reflects the total percentage
change over the stated period. In calculating total return, the assumption is
made that dividends and capital gain distributions made by the Fund during the
period are reinvested in additional shares.

From time to time, a Fund may advertise its yield and "tax-equivalent"
yield. A Fund's yields are calculated according to methods that are standardized
for all mutual funds. Because yield calculation methods differ from the methods
used for other purposes, a Fund's yield may not equal its distribution rate, the
income paid to a shareholder's account, or the income reported in the Fund's
financial statements. The yield of a Fund refers to the income generated by an
investment in the Fund over a 30-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that period is assumed to be generated each
30 days over a 365-day period and is shown as a percentage of the investment.
The Fund may also advertise together with its yield a

-17-
<PAGE> 58

tax-equivalent yield which reflects the yield which would be required of a
taxable investment at a stated income tax rate in order to equal the Fund's
yield.

A Fund's investment results will vary from time to time depending upon
market conditions, the composition of the Fund's portfolio, and operating
expenses of the Fund, so that any investment results reported by a Fund should
not be considered representative of what an investment in the Fund may earn in
any future period. These factors and possible differences in calculation methods
should be considered when comparing a Fund's investment results with those
published for other investment companies, other investment vehicles and
unmanaged indices. The comparison of a Fund to an alternative investment should
be made with consideration of differences in features and expected performance.
The Funds may also be mentioned in newspapers, magazines, or other media from
time to time. The Funds assume no responsibility for the accuracy of such data.
Each Fund's results also should be considered relative to the risks associated
with the Fund's investment objective and policies.

The principal value of an investment in a Fund will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.

CALCULATION OF TOTAL RETURN
---------------------------

Funds compute their average annual total return by determining the
average annual compounded rate of return during specified periods that equate
the initial amount invested to the ending redeemable value of such investment.
This is done by dividing the ending redeemable value of a hypothetical $1,000
initial payment by $1,000 and raising the quotient to a power equal to one
divided by the number of years (or fractional portion thereof) covered by the
computation and subtracting one from the result. This calculation can be
expressed as follows:

ERV = P(l + T)n

Where: ERV = ending redeemable value at the end of the period covered by
the computation of a hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms of
years.
T = average annual total return.

The Funds compute their aggregate total return by determining the
aggregate compounded rate of return during a specified period that likewise
equate the initial amount invested to the ending redeemable value of such
investment. The formula for calculating aggregate total return is as follows:

Aggregate Total Return = [(ERV)-1]
------
P

-18-
<PAGE> 59

The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete redemption
of the hypothetical investment and the deduction of all nonrecurring charges at
the end of the period covered by the computations.

A Fund may also quote its yield in advertisements and investor
communications. The yield computation is determined by dividing the net
investment income per share earned during a recent 30-day (or one month) period
by the maximum offering price per share on the last day of that period and
annualizing the resulting figure, according to the following formula:

YIELD = 2 [(a-b+l) 6-1]
-----
cd

Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of the
period.

Since performance will fluctuate, performance data for the Funds should
not be used to compare an investment in a Fund's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed upon or guaranteed fixed yield for a stated period of time. Shareholders
should remember that performance is generally a function of the kind and quality
of the instruments held in a portfolio, portfolio maturity, operating expenses
and market conditions.

SHARES OF BENEFICIAL INTEREST
-----------------------------

DESCRIPTION OF SHARES
---------------------

The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 per share. Shares of a Fund
represent equal proportionate interests in the assets of that Fund only and have
identical voting, dividend, redemption, liquidation and other rights. All shares
issued are fully paid and non-assessable, and shareholders have no preemptive or
other right to subscribe to any additional shares.

SHAREHOLDER MEETINGS
--------------------

The Board of Trustees does not intend to hold annual meetings of
shareholders of the Funds. Subject to certain conditions, shareholders of the
Funds may seek to communicate with other shareholders to request a shareholder's
meeting to vote upon the removal of a Trustee or Trustees.

FINANCIAL STATEMENTS
--------------------

The audited financial statements and notes thereto for each Fund, when
available, will be included in this Statement of Additional Information.

-19-
<PAGE> 60
PART C

OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Agreement and Declaration of Trust dated October 18, 1994,
last amended July 25, 1996 - - Incorporated herein by
reference to Exhibit No. 1(a) to Post-Effective Amendment No.
56 to Registration Statement No. 2-15037 filed electronically
September 30, 1996.

(b) By-Laws dated October 18, 1994, last amended July 25, 1996 - -
Incorporated herein by reference to Exhibit 2(a) to
Post-Effective Amendment No. 56 Registration Statement No.
2-15037 filed electronically September 30, 1996.

(d)(i) Investment Advisory Agreement for Froley, Revy Convertible
Securities Fund between Registrant and Froley, Revy Investment
Company, Inc. - to be filed by amendment.

(ii) Investment Advisory Agreement for Froley, Revy Investment
Grade Convertible Securities Fund between Registrant and
Froley, Revy Investment Company, Inc., - to be filed by
amendment.

(iii) Investment Advisory Agreement for Froley, Revy Investment
Grade Convertible Bond Fund between Registrant and Froley,
Revy Investment Company, Inc. - to be filed by amendment.

(e) Underwriting Agreement between Registrant and Provident
Distributors, Inc. - to be filed by amendment.

(f) None

(g)(i) Custody Agreement with UMB Bank, N.A. - - dated October 18,
1994 - - Incorporated herein by reference to Exhibit No. 8(a)
to Post-Effective Amendment No. 56 to Registration Statement
No. 2-15037 filed electronically September 30, 1996.

(ii) Amendment dated July 25, 1996 to Custody Agreement, - -
Incorporated herein by reference to Exhibit No. 8(b) to
Post-Effective Amendment No. 56 to Registration Statement No.
2-15037 filed electronically September 30, 1996.

(h)(i) Administration Agreement dated July 25, 1996 - - Incorporated
herein by reference to Exhibit No. 9(a) to Post-Effective
Amendment No. 56 to Registration Statement No. 2-15037 filed
electronically September 30, 1996.

(ii) Amendment to Administration Agreement, dated April 28, 1998 -
- Incorporated herein by reference to Exhibit No. 9(a)(i) to
Post-Effective Amendment No. 59 to Registration Statement No.
2-15037 filed electronically October 30, 1998.

(iii) Accounting Services Agreement, dated July 25, 1996 --
Incorporated herein by reference to Exhibit No. 9(b) to
Post-Effective Amendment No. 56 to Registration Statement No.
2-15037 filed electronically September 30, 1996.

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(iv) Amendment to Accounting Services Agreement dated April 28,
1998 - Incorporated herein by reference to Exhibit No. 9(b)(i)
to Post-Effective Amendment No. 59 to Registration Statement
No. 2-15037 filed electronically October 30, 1998.

(v) Transfer Agent Services Agreement dated July 25, 1996 - -
Incorporated herein by reference to Exhibit No. 9(c) to
Post-Effective Amendment No. 56 to Registration Statement No.
2-15037 filed electronically September 30, 1996.

(vi) Amendment to Transfer Agent Services Agreement dated April 28,
1998 - Incorporated herein by reference to Exhibit No. 9(c)(i)
to Post-Effective Amendment No. 59 to Registration Statement
No. 2-15037 filed electronically October 30, 1998.

(i) Not Applicable.

(j) Not Applicable.

(k) Not Applicable.

(l) None.

(m)(i) Distribution Services Plan for Class A shares - to be filed by
amendment.

(ii) Distribution Services Plan for Class B Shares - to be filed by
amendment.

(n) Not applicable.

(o) Rule 18f-3 Plan - to be filed by amendment.

(p) Codes of Ethics - to be filed by amendment.

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

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

None.

ITEM 25. INDEMNIFICATION

Article VII, Section 2 of the Registrant's Agreement and Declaration of
Trust provides as follows: The Trustees shall not be responsible or liable in
any event for any neglect or wrong-doing of any officer, agent, employee,
Manager or Principal Underwriter of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee, and, subject to the
provisions of the Bylaws, the Trust out of its assets may indemnify and hold
harmless each and every trustee and officer of the Trust from and against any
and all claims, demands, costs, losses, expenses, and damages whatsoever arising
out of or related to such Trustee's performance of his or her duties as a
Trustee or officer of the Trust; provided that nothing herein contained shall
indemnify, hold harmless or protect any Trustee or officer from or against any
liability to the Trust or any Shareholder to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.

Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust of the Trustees or any of them in

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<PAGE> 62

connection with the Trust shall be conclusively deemed to have been issued,
executed or done only in or with respect to their or his or her capacity as
Trustees or Trustee, and such Trustees or Trustee shall not be personally liable
thereon.

Article Sixty of the By-Laws of the Trust provide that any trustee and
officer shall be indemnified against reasonable costs and expenses incurred in
connection with any proceeding to which he or she is made a party by reason of
his being nor having been a trustee or officer of the Trust, except in relation
to any action, suit or proceeding in which he or she is adjudged liable because
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. In the absence of an adjudication
which expressly absolves a trustee or officer of liability for such willful
misfeasance, etc., a written opinion of independent counsel is required prior to
payment of indemnification.

Indemnification of the Trust's investment advisor, distributor,
custodian, administrator, transfer agent, divided disbursing and redemption
agent and accounting services agent is provided for, respectively, in Section 8
of the Investment Advisory Agreement (Exhibit 5(a)); Section 8 of the
Underwriting Agreement (Exhibit 6(a)), Section 18 of the Custodian Agreement
(Exhibit 8), Section 25 of the Administration Agreement (Exhibit 9(a)) Section
8(d) of the Administration Agreement (Exhibit 9(c)), and Section 23 of the
Accounting Services Agreement (Exhibit 9(c)).

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

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The business and other connections of the officers and directors of
Froley, Revy Investment Company, Inc. are set forth in the Form ADV of Froley,
Revy Investment Company, Inc., as currently on file with U.S. Securities and
Exchange Commission, which is incorporated by reference herein.

ITEM 27. PRINCIPAL UNDERWRITER

(a) Provident Distributors, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies as of June 1, 2000:

International Dollar Reserve Fund I, Ltd.
Provident Institutional Funds Trust
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.

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<PAGE> 63

Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc.
GAMNA Series Funds, Inc.
WT Mutual Fund
Kalmar Pooled Investment Trust
The RBB Fund, Inc.
Robertson Stephens Investment Trust
HT Insight Funds, Inc.
Harris Insight Funds Trust
Hilliard-Lyons Government Fund, Inc.
Hilliard-Lyons Growth Fund, Inc.
Hilliard-Lyons Research Trust
Warburg Pincus Trust
ABN AMRO Funds
Alleghany Funds
BT Insurance Funds Trust
First Choice Funds Trust
Forward Funds, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Growth Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Taxable Fixed Income Series Fund, Inc.
IBJ Funds Trust
Light Index Funds, Inc.
LKCM Funds
Matthews International Funds
McM Funds
Metropolitan West Funds
New Covenant Funds
Panorama Trust
Smith Breeden Series Fund
Smith Breeden Trust
Stratton Growth Fund, Inc.
Stratton Monthly Dividend REIT Shares, Inc.
The Stratton Funds, Inc.
The Galaxy Fund
The Galaxy VIP Fund
Galaxy Fund II
The Govett Funds, Inc.
Trainer, Wortham Funds
Undiscovered Managers Funds
Wilshire Target Funds, Inc.
Weiss, Peck & Greer Funds Trust
Weiss, Peck & Greer International Fund
WPG Growth and Income Fund
WPG Growth Fund

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<PAGE> 64

WPG Tudor Fund
RWB/WPG U.S. Large Stock Fund
Tomorrow Funds Retirement Trust

The Black Rock Funds, Inc. (Distributed by BlackRock Distributors, Inc.
a wholly owned subsidiary of Provident Distributors, Inc.)

Northern Funds Trust and Northern Institutional Funds Trust
(Distributed by Northern Funds Distributors, LLC. a wholly owned
subsidiary of Provident Distributors, Inc.)

The Offit Investment Fund, Inc. (Distributed by Offit Funds
Distributor, Inc. a wholly owned subsidiary of Provident Distributors,
Inc.)

The Offit Variable Insurance Fund, Inc. (Distributed by Offit Funds
Distributor, Inc. a wholly owned subsidiary of Provident Distributors,
Inc.)

Provident Distributors, Inc. is registered with the Securities and
Exchange Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. Provident Distributors, Inc. is located at
3200 Horizon Drive, King of Prussia, PA 19406-0903.

(b) The information required by this Item 27 with respect to each director of
the underwriter is incorporated by reference to the Form BD filed by the
Distributor with the Commission pursuant to the Securities Exchange Act of 1934,
as amended under the File Number indicated:

Provident Distributors, Inc. SEC File No. 8-46564

The following is a list of the executive officers, directors and partners of
Provident Distributors, Inc.:

President and Treasurer Philip H. Rinnander
Secretary and Sole Director Jane Haegele
Vice President Jason A. Greim
Vice President Barbara A. Rice
Vice President Jennifer K. Rinnander
Vice President and Compliance Officer Lisa M. Buono

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

(1) Froley, Revy Investment Company, Inc., 10900 Wilshire Blvd.,
Suite 900, Los Angeles, CA 90024 (records relating to its
functions as Investment Advisor).

(2) PFPC Trust Company, 400 Bellevue Parkway, Wilmington, DE
19808 (records relating to its functions as Custodian for
the Convertible Securities Fund and the Investment Grade
Convertible Securities Fund).

(3) The Chase Manhattan Bank, MetroTech Center, Brooklyn, NY 11245
(records relating to its functions as Custodian for the
Investment Grade Convertible Bond Fund).

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<PAGE> 65

(4) PFPC, P.O. Box 61503, King of Prussia, PA 19406-0903 (records
relating to its functions as Transfer Agent, Dividend
Disbursing and Redemption Agent, and Accounting Services
Agent).

(5) Dechert Price & Rhoads, 1775 Eye Street, N.W., Washington, DC
20006 (Articles of Association, By-Laws and Minute Books).

(6) PFPC and Provident Distributors, Inc., P.O. Box 61503, King of
Prussia, PA 19406-0903 (Administrative records and those
records relating to functions as Distributor.)

ITEM 29. MANAGEMENT SERVICES

None.

ITEM 30. UNDERTAKINGS

None.

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<PAGE> 66

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 66 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in King of Prussia,
PA, on June 23, 2000.

TRAINER WORTHAM FUNDS

By: /s/ DAVID P. COMO
---------------------------
David P. Como*
PRESIDENT

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

SIGNATURE TITLE DATE

<S> <C> <C>
/s/ JAMES F. TWADDELL Chairman of the Board and Trustee June 23, 2000
----------------------------------
James F. Twaddell*

/s/ DAVID P. COMO Trustee and President June 23, 2000
---------------------------------- (Principal Executive Officer)
David P. Como*

/s/ ROBERT S. LAZAR Trustee June 23, 2000
----------------------------------
Robert S. Lazar*

/s/ DAVID ELIAS Trustee June 23, 2000
----------------------------------
David Elias*

/s/ RAYMOND EISENBERG Trustee June 23, 2000
----------------------------------
Raymond Eisenberg*

/s/ ROBERT H. BRESLIN, JR. Trustee June 23, 2000
----------------------------------
Robert H. Breslin, Jr.*

/s/ TIMOTHY J. O'HARA Trustee June 23, 2000
----------------------------------
Timothy J. O'Hara*

/s/ TODD EISENBERG Trustee June 23, 2000
----------------------------------
Todd Eisenberg*
</TABLE>

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<PAGE> 67

<TABLE>

<S> <C> <C>
/s/ MARTIN S. LEVINE Trustee June 23, 2000
----------------------------------
Martin S. Levine*

/s/ BRIAN J. O'NEILL Treasurer (Principal Financial and June 23, 2000
---------------------------------- Accounting Officer)
Brian J. O'Neill*

*By: /s/ Kelly O'Neill
----------------------------------
Kelly O'Neill
As ATTORNEY-IN-FACT
</TABLE>

* Pursuant to power of attorney filed with Post-Effective Amendment No. 62 (No.
2-15037) on August 5, 1999 and incorporated by reference herein.

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