COUNTRYWIDE INVESTMENT TRUST
485APOS, 1997-06-20
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A
                                                                     
                                                                        --
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                /x/
                                                                       --

         Pre-Effective Amendment No. -----

         Post-Effective Amendment No.  66
                                     -----
                                     and/or
                                                                        --
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940        /x/
                                                                       --

         Amendment No. 60
                      -----   
           (Check appropriate box or boxes.)

COUNTRYWIDE INVESTMENT TRUST           FILE NO. 2-52242 and 811-2538
- --------------------------------------------------------------------
               (Exact name of Registrant as Specified in Charter)

312 Walnut Street, 21st Floor, Cincinnati, Ohio        45202
- ---------------------------------------------------------------
(Address of Principal Executive Offices)              Zip Code

Registrant's Telephone Number, including Area Code    (513) 629-2000
                                                      --------------

Robert H. Leshner, 312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202
- ------------------------------------------------------------------------
               (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate
box)
 
/ /  immediately upon filing pursuant to paragraph(b) 
/ /  on (date) pursuant to paragraph (b) 
/ /  75 days after filing pursuant to paragraph (a)
/x/  on July 21, 1997 pursuant to paragraph (a) of Rule 485

Registrant registered an indefinite number of shares under the Securities Act of
1933  pursuant  to  Rule  24f-2  under  the  Investment  Company  Act  of  1940.
Registrant's  Rule 24f-2 Notice for the fiscal year ended September 30, 1996 was
filed with the Commission on November 27, 1996.











<PAGE>



                        CROSS REFERENCE SHEET

                          FORM N-1A

ITEM                          SECTION IN PROSPECTUS

1...........................  Cover Page
2...........................  Expense Information
3...........................  Financial Highlights, Performance Information
4...........................  Operation of the Fund; Investment
                              Objective and Policies
5...........................  Operation of the Fund
6...........................  Cover Page; Dividends and
                              Distributions; Taxes; Operation of
                              the Fund
7...........................  How to Purchase Shares; Operation
                              of the Fund; Calculation of Share
                              Price;
                              Exchange Privilege; Shareholder
                              Services; Distribution Plan;
                              
8...........................  How to Redeem Shares; Shareholder
                              Services
9...........................  None

                              SECTION IN STATEMENT OF
ITEM                          ADDITIONAL INFORMATION

10..........................  Cover Page
11..........................  Table of Contents
12..........................  The Trust
13..........................  Quality Ratings of Fixed-Income Obligations;
                              Definitions, Policies and Risk
                              Considerations; Investment
                              Limitations; Portfolio Turnover
14..........................  Trustees and Officers
15..........................  None
16..........................  The Investment Adviser and
                              Underwriter; Distribution Plan;
                              Custodian; Auditors; Transfer
                              Agent.
17..........................  Securities Transactions
18..........................  The Trust
19..........................  Calculation of Share Price; Other
                              Purchase Information; Redemption
                              in Kind
20..........................  Taxes
21..........................  The Investment Adviser and
                              Underwriter
22..........................  Historical Performance Information
23..........................  Financial Statements




<PAGE>





                                                                PROSPECTUS
                                                                _________, 1997
                          COUNTRYWIDE INVESTMENT TRUST
                          312 WALNUT STREET, 21ST FLOOR
                           CINCINNATI, OHIO 45202-4094

                                MONEY MARKET FUND

         The Money Market Fund (the "Fund"),  a separate  series of  Countrywide
Investment  Trust,  seeks high current  income,  consistent  with  liquidity and
stability  of  principal.  The  Fund  invests  primarily  in  high-quality  U.S.
dollar-denominated money market instruments.

         THE FUND'S PORTFOLIO  SECURITIES ARE VALUED ON AN AMORTIZED COST BASIS.
FUND SHARES ARE NEITHER  INSURED NOR GUARANTEED BY THE UNITED STATES  GOVERNMENT
OR ANY OTHER ENTITY. IT IS ANTICIPATED, BUT THERE IS NO ASSURANCE, THAT THE FUND
WILL MAINTAIN A STABLE NET ASSET VALUE PER SHARE OF $1.

      SHARES OF THE FUND ARE NOT DEPOSITS OR  OBLIGATIONS  OF, OR  GUARANTEED OR
ENDORSED  BY,  ANY BANK AND ARE NOT  FEDERALLY  INSURED BY THE  FEDERAL  DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY.

      Countrywide Investments, Inc. (the "Adviser") manages the Fund's 
investments and its business affairs.

      Pursuant to an Agreement and Plan of Reorganization dated __________, 
1997,  the Fund, on _________, 1997, succeeded to the assets and liabilities
of another mutual fund of the same name (the "Predecessor Fund"),  which  was 
an investment series of Trans Adviser Funds, Inc.  The investment objective,  
policies and restrictions of the Fund and the Predecessor Fund are substantially
identical and the financial data and information in this Prospectus relates to 
the Predecessor Fund.

     This Prospectus sets forth concisely the information about the Fund that 
you should know before investing.  Please retain this Prospectus for future 
reference.  A Statement of Additional Information dated ___________, 1997 has 
been filed with the Securities and Exchange Commission and is hereby 
incorporated by reference in its entirety.  A copy of the Statement of 
Additional Information can be obtained at no charge by calling one of the 
numbers listed below.
- -------------------------------------------------------------------------------

For Information or Assistance in Opening An Account, Please Call:

Nationwide (Toll-Free)............................................800-543-0407
Cincinnati........................................................513-629-2050
- -------------------------------------------------------------------------------

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


<PAGE>



EXPENSE INFORMATION
- -------------------

Shareholder Transaction Expenses
   Sales Load Imposed on Purchases                                  None
   Sales Load Imposed on Reinvested Dividends                       None
   Exchange Fee                                                     None
   Redemption Fee                                                   None*
   Check Redemption Processing Fee (per check):
          First six checks per month                                None
          Additional checks per month                              $0.25

    *       A wire transfer fee is charged by the Fund's Custodian in the
            case of redemptions made by wire.  Such fee is subject to change
            and is currently $8.  See "How to Redeem Shares."

Annual Fund Operating Expenses (as a percentage of average net assets)
   Management Fees                                                 .48%(A)
   12b-1 Fees                                                      .17%(B)
   Other Expenses                                                  .15%
                                                                   -------
   Total Fund Operating Expenses                                   .80%(C)
     After Waivers                                                 =======

(A)      The Fund may incur  12b-1  fees in an amount up to .35% of its  average
         net  assets.  Long-term  shareholders  may pay more  than the  economic
         equivalent  of the  maximum  front-end  sales  loads  permitted  by the
         National Association of Securities Dealers.

      The purpose of these tables is to assist the investor in understanding the
various  costs and expenses  that an investor in the Fund will bear  directly or
indirectly.  The percentages expressing annual fund operating expenses are based
on estimated  amounts for the current  fiscal year. THE EXAMPLE BELOW SHOULD NOT
BE CONSIDERED A  REPRESENTATION  OF PAST OR FUTURE  EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.

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

                 1 Year    3 Years     5 Years    10 Years
                  $ 8       $ 26        $44        $99



                                                          - 2 -


<PAGE>



FINANCIAL HIGHLIGHTS
- --------------------
      The following audited  financial  information for the Predecessor Fund for
the fiscal  year ended  August 31, 1996 has been  audited by KPMG Peat  Marwick
LLP,  independent  auditors, and  should  be read  in  conjunction  with  the
financial  statements.  The following  unaudited  financial  information for the
period ended February 28, 1997 should be read in conjunction  with the financial
statements.  The annual  financial  statements as of August 31, 1996 and the
independent auditors' report thereon and the semiannual financial statements as 
of February 28, 1997 appear in the Statement of Additional Information of the 
Fund, which can be obtained by shareholders at no charge by calling the Fund.

SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING FOR
THE PREDECESSOR FUND THROUGHOUT THE PERIODS

                                SIX MONTHS      YEAR      
                                  ENDED        ENDED
                                2/28/97       8/31/96(a)
                                (Unaudited)  
                                -----------  -----------  

Net Asset Value, Beginning of
  Period......................   $    1.00    $    1.00
                                 -----------  -----------
Investment Operations
  Net Investment Income
    (Loss)....................        0.03        0.05(b)
  Net Realized and Unrealized
    Gain (Loss) on
    Investments...............         --           --
                                 -----------  -----------
Total from Investment
  Operations..................         0.03        0.05
                                  -----------  -----------
Distributions from
  Net Investment Income.......       (0.03)       (0.05)
  Net Realized Gain on
    Investments...............         --           --
                                  -----------  -----------
Total Distributions...........       (0.03)       (0.05)
                                   -----------  -----------
Net Asset Value, End of
  Period......................      $    1.00    $    1.00
                                   -----------  -----------
                                   -----------  -----------
Total Return...............          5.11%(c)     4.70%
 
Ratio/Supplementary Data:
Net Assets at End of Period
  (000's omitted).............      $  97,690    $  76,363
Ratios to Average Net Assets:
  Expenses including
    reimbursement/waiver
    (c).......................           0.65%        0.65%
  Expenses excluding
    reimbursement/waiver
    (c).......................            0.82%        0.99%
  Net investment income (loss)
    including
    reimbursement/waiver
    (c).......................            4.99%        4.94%
 
(a) Commencement of operations was September 29, 1995.
 
(b) Using weighted average shares outstanding for the period.

(c) Annualized.
 
 .
 
                                       22              




                                                          - 3 -


<PAGE>



INVESTMENT OBJECTIVE AND POLICIES
- ---------------------------------
      The Fund is a series of Countrywide  Investment  Trust (the "Trust").  The
Fund seeks high current  income,  consistent  with  liquidity  and  stability of
principal.  The Fund is not intended to be a complete  investment  program,  and
there is no  assurance  that  its  investment  objective  can be  achieved.  The
investment  objective of the Fund is fundamental  and as such may not be changed
without  the  affirmative  vote of a majority of the  outstanding  shares of the
Fund. The term "majority" of the outstanding  shares means the lesser of (1) 67%
or more of the  outstanding  shares of the Fund  present  at a  meeting,  if the
holders of more than 50% of the  outstanding  shares of the Fund are  present or
represented  at such meeting or (2) more than 50% of the  outstanding  shares of
the Fund.

      The Fund  seeks to  achieve  its  investment  objective  by  investing  in
securities  determined  by the Board of  Trustees  to be of high  quality and to
present  minimal credit risks,  maturing  within  thirteen months or less with a
dollar-weighted  average portfolio maturity of 90 days or less. Unless otherwise
indicated,   all   investment   practices  and   limitations  of  the  Fund  are
nonfundamental  policies  which may be changed by the Board of Trustees  without
shareholder approval. The Fund invests in the following securities:

o     obligations of domestic financial institutions including
      certificates of deposit, bankers' acceptances and time
      deposits.

o     obligations of foreign branches of U.S. banks (Eurodollars)
      consisting of certificates of deposit, bankers' acceptances
      and time deposits.

o     obligations of the U.S. Government or any of its agencies or
      instrumentalities which may be backed by the creditworthiness
      of the issuing agency.

o     short-term corporate  obligations,  consisting of commercial paper, notes,
      and bonds, with remaining maturities of 397 days or less.

o     repurchase  agreements with member banks of the Federal Reserve System and
      primary dealers in U.S. Government securities with respect to any security
      in which the Fund is authorized to invest.

o     other short-term debt obligations of domestic issuers
      discussed in this Prospectus.

         The Fund may invest in obligations of foreign branches of
U.S. banks (Eurodollars).  Payment of interest and principal upon
these obligations may also be affected by governmental action in


                                                          - 4 -


<PAGE>



the country of domicile of the branch (generally referred to as sovereign risk).
In addition,  evidences of ownership of portfolio securities may be held outside
of the U.S. and the Fund may be subject to the risks associated with the holding
of such  property  overseas.  Various  provisions  of federal law  governing the
establishment  and  operation  of  domestic  branches  do not  apply to  foreign
branches of domestic banks. The Adviser,  subject to the overall  supervision of
the  Board  of  Trustees,   carefully   considers   these  factors  when  making
investments.  The Fund  does not limit the  amount  of its  assets  which can be
invested  in any one type of  instrument  or in any  foreign  country in which a
branch of a U.S. bank or the parent of a U.S. branch is located.  Investments in
obligations  of foreign  banks are subject to the overall  limit of 25% of total
assets which may be invested in a single industry.

         Available  cash  invested  in the Fund earns  income at  current  money
market  rates while  remaining  conveniently  liquid.  In order to provide  full
liquidity,  the Fund will seek to  maintain a stable  $1.00 share  price;  limit
portfolio  average  maturity  to 90 days or less;  buy  U.S.  dollar-denominated
securities  which  mature  in 397  days or  less;  and  buy  only  high  quality
securities  with  minimal  credit  risks.  As  required  by Rule 2a-7  under the
Investment Company Act of 1940 ("Rule 2a-7"), the Board of Trustees will monitor
the quality of the Fund's investments.

         Of  course,  a $1.00  share  price  cannot  be  guaranteed,  but  these
practices help to minimize any price  fluctuations that might result from rising
or declining interest rates. Accordingly, while the Fund invests in high quality
securities,  investors  should be aware that an  investment  is not without risk
even  if all  securities  are  paid  in  full  at  maturity.  All  money  market
instruments,  including  U.S.  Government  securities,  can change in value when
interest rates change or an issuer's creditworthiness changes.

         The Fund's  yield will  fluctuate  due to  changes in  interest  rates,
economic conditions, quality ratings and other factors beyond the control of the
Adviser.  The  portfolio  securities  held by the  Fund  are  subject  to  price
fluctuations  based upon  changes  in the level of  interest  rates,  which will
generally  result in all those  securities  changing in the same way,  i.e., all
those  securities  experiencing  appreciation  when  interest  rates decline and
depreciation when interest rates rise. In addition,  the financial  condition of
an issuer or adverse changes in general economic conditions, or both, may impair
the issuer's ability to make payments of interest and principal.

LIMITING INVESTMENT RISKS.  The Fund follows specific guidelines
in buying portfolio securities:

         The Fund will only purchase obligations that (i) are rated high quality
by two of the following four nationally recognized


                                                          - 5 -


<PAGE>



rating services:  Duff & Phelps Inc.  ("Duff"),  Fitch Investors  Service,  Inc.
("Fitch"),  Moody's Investors Service, Inc.  ("Moody's"),  and Standard & Poor's
Ratings Group  ("S&P"),  if rated by two or more  services;  (ii) are rated high
quality if rated by only one rating service; or (iii) if unrated, are determined
to be of  equivalent  quality  pursuant to  procedures  reviewed by the Board of
Trustees.  Obligations  that are not rated are not  necessarily of lower quality
than those which are rated, but may be less marketable and therefore may provide
higher yields.

         Currently, only obligations in the top two categories are considered to
be rated high quality for commercial paper. The two highest rating categories of
Duff, Fitch, Moody's and S&P are Duff 1 and Duff 2, Fitch-1 and Fitch-2, Prime-1
and Prime-2,  and A-1 and A-2,  respectively.  Under Rule 2a-7,  the Fund is not
permitted to invest more than 5% of its total assets in securities that would be
considered to be in the second highest  rating  category,  and,  subject to this
limitation,  the Fund may not  invest  more than the  greater of 1% of its total
assets or $1 million in such securities of any one issuer. The Fund may purchase
an  instrument  rated  below  highest  quality by a rating  service if two other
services have given that  instrument a highest  quality  rating  ("split  rated"
obligation),  and if the Adviser  considers  that the  instrument  is of highest
quality and presents minimal credit risks.

         For other corporate obligations,  the two highest rating categories are
AAA and AA by Duff, AAA and AA by Fitch, Aaa and Aa by Moody's and AAA and AA by
S&P.  For a more  complete  description  of these  ratings see the  Statement of
Additional Information.

         The Fund will  commit no more  than 10% of its net  assets to  illiquid
securities, including repurchase agreements maturing in more than seven days.

         In addition,  the Fund has certain  other  limitations.  As a matter of
nonfundamental  policy,  the Fund will limit the  percentage  allocation  of its
investments  so as to comply  with Rule 2a-7,  which  generally  limits to 5% of
total  assets the amount  which may be  invested  in the  securities  of any one
issuer  and to no more  than 25% of  total  assets  the  amount  which  would be
invested in a particular industry, except that the Fund may invest more than 25%
of total assets in the securities of banks.

    Currently, the Securities and Exchange Commission (the "Commission") defines
the term "bank" to include U.S. banks and their foreign branches if, in the case
of foreign  branches,  the  parent U.S. bank is unconditionally liable for such
obligations.  These  limitations  do  not  apply  to  obligations  of  the  U.S.
Government  or any of its  agencies  or  instrumentalities.  The  Fund  does not
consider utilities or companies engaged in finance

                                                          - 6 -


<PAGE>



generally to be one industry. Finance companies will be considered a part of the
industry they finance (e.g.,  GMAC-auto;  VISA-credit cards).  Utilities will be
divided according to the types of services they provide;  for example,  gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry.

         The Fund may borrow money from banks or from other lenders,  but not in
an  amount  equal to or  exceeding  33 1/3% of the  current  value of its  total
assets.

         As a matter of operating  policy,  the Fund does not intend to purchase
securities  for  investment  during  periods  when  the  sum of  temporary  bank
borrowings  entered  into to  facilitate  redemptions  exceeds  5% of its  total
assets.  This operating  policy is not  fundamental  and may be changed  without
shareholder notification.

     OTHER INVESTMENT PRACTICES

SECURITIES  LENDING.  In order to generate additional income, the Fund may, from
time to  time,  lend  its  portfolio  securities  to  broker-dealers,  banks  or
institutional  borrowers  of  securities.  While the lending of  securities  may
subject the Fund to certain risks, such as delays or the inability to regain the
securities in the event the borrower were to default on its lending agreement or
enter into  bankruptcy,  the Fund will receive at least 100%  collateral  in the
form of cash or U.S. Government securities. This collateral will be valued daily
by the Adviser and should the market  value of the loaned  securities  increase,
the borrower will furnish  additional  collateral  to the Fund.  During the time
portfolio  securities  are on loan,  the borrower pays the Fund any dividends or
interest paid on such  securities.  Loans are subject to termination by the Fund
or the  borrower  at any  time.  While  the Fund does not have the right to vote
securities on loan,  the Fund intends to terminate the loan and regain the right
to vote if that is considered important with respect to the investment. The Fund
will only  enter  into loan  arrangements  with  broker-dealers,  banks or other
institutions  which the Adviser has determined are creditworthy under guidelines
established by the Board of Trustees.

BORROWING.  The Fund may borrow money from banks  (including its custodian bank)
or from  other  lenders  to the  extent  permitted  under  applicable  law,  for
temporary  or  emergency  purposes  and to meet  redemptions  and may pledge its
assets to secure  such  borrowings.  Borrowing  for  investment  increases  both
investment opportunity and investment risk. This is the speculative factor known
as leverage. Such borrowings in no way affect the federal tax status of the Fund
or its dividends.

         The  Investment  Company Act of 1940 (the "1940 Act") requires the Fund
to maintain asset coverage of at least 300% for all such borrowings,  and should
such asset coverage at any time fall below


                                                          - 7 -


<PAGE>



300%, the Fund would be required to reduce its  borrowings  within three days to
the extent  necessary  to meet the  requirements  of the 1940 Act. To reduce its
borrowings,  the Fund might be  required  to sell  securities  at a time when it
would be disadvantageous to do so.

         In addition,  because interest on money borrowed is a Fund expense that
it would  not  otherwise  incur,  the Fund may have less net  investment  income
during  periods when its borrowings  are  substantial.  The interest paid by the
Fund on  borrowings  may be  more  or less  than  the  yield  on the  securities
purchased with borrowed funds, depending on prevailing market conditions.

WHEN-ISSUED SECURITIES. The Fund may also purchase securities on a "when-issued"
basis.  When-issued  securities are securities purchased for delivery beyond the
normal  settlement  date at a stated price and yield and thereby  involve a risk
that the yield obtained in the  transaction  will be less than that available in
the market when delivery  takes place.  The Fund will generally not pay for such
securities or start earning  interest on them until they are received.  When the
Fund agrees to purchase securities on a "when-issued"  basis, its custodian will
set  aside  cash or  liquid  portfolio  securities  equal to the  amount  of the
commitment  in a segregated  account.  Securities  purchased on a  "when-issued"
basis are  recorded  as an asset and are  subject to changes in value based upon
changes  in  the  general  level  of  interest  rates.  The  Fund  expects  that
commitments  to  purchase  "when-issued"  securities  will not exceed 25% of the
value of its total assets under normal market  conditions  and that a commitment
to purchase  "when-issued"  securities will not exceed 60 days. In the event its
commitment to purchase  "when-issued"  securities ever exceeded 25% of the value
of its assets, the Fund's liquidity and the Adviser's ability to manage it might
be  adversely  affected.  The Fund does not intend to  purchase  "when-  issued"
securities  for  speculative  purposes,  but only for the  purpose of  acquiring
portfolio securities.

VARIABLE  AND  FLOATING  RATE  SECURITIES.  The Fund may  acquire  variable  and
floating rate securities,  subject to the Fund's investment objective,  policies
and  restrictions.  A variable  rate security is one whose terms provide for the
readjustment   of  its  interest  rate  on  set  dates  and  which,   upon  such
readjustment,   can   reasonably  be  expected  to  have  a  market  value  that
approximates  its par value. A floating rate security is one whose terms provide
for the  readjustment  of its interest rate  whenever a specified  interest rate
changes  and which,  at any time,  can  reasonably  be expected to have a market
value that approximates its par value.

REPURCHASE AGREEMENTS.  The Fund may enter into repurchase  agreements.  Under a
repurchase agreement, the Fund acquires a debt instrument for a relatively short
period (usually not more than one week), subject to the obligation of the seller
to

                                                          - 8 -


<PAGE>



purchase  and the Fund to resell  such debt  instrument  at a fixed  price.  The
resale  price  is in  excess  of the  purchase  price  in  that it  reflects  an
agreed-upon  market  interest rate effective for the period of time during which
the Fund's money is invested. The Fund's repurchase agreements will at all times
be fully  collateralized  in an  amount at least  equal to 100% of the  purchase
price  including  accrued  interest  earned on the  underlying  securities.  The
instruments  held as collateral are valued daily by the Adviser and as the value
of instruments  declines,  the Fund will require additional  collateral.  If the
seller  defaults  and  the  value  of the  collateral  securing  the  repurchase
agreement declines,  the Fund may incur a loss. If such a defaulting seller were
to  become  insolvent  and  subject  to  liquidation  or  reorganization   under
applicable  bankruptcy or other laws,  disposition of the underlying  securities
could involve certain costs or delays pending court action.  Finally,  it is not
certain whether the Fund would be entitled,  as against a claim of the seller or
its  receiver,  trustee in bankruptcy  or  creditors,  to retain the  underlying
securities.  Repurchase agreements are considered by the staff of the Commission
to be loans by the Fund.

INVESTMENT  COMPANY  SECURITIES.  The Fund may invest in the securities of other
investment companies to the extent permissible under the applicable  regulations
and interpretations of the 1940 Act or an exemptive order.

ILLIQUID INVESTMENTS AND RESTRICTED SECURITIES. The Fund may invest up to 10% of
its net assets in illiquid investments  (investments that cannot be readily sold
within  seven  days),  including  restricted  securities  which  do not meet the
criteria for liquidity established by the Board of Trustees.  The Adviser, under
the supervision of the Board of Trustees, determines the liquidity of the Fund's
investments.  The absence of a trading market can make it difficult to ascertain
a market value for illiquid  investments.  Disposing of illiquid investments may
involve time-consuming negotiation and legal expenses. Restricted Securities are
securities  which cannot be sold to the public  without  registration  under the
Securities Act of 1933. Unless registered for sale, these securities can only be
sold in  privately  negotiated  transactions  or pursuant to an  exemption  from
registration.

PRIVATE PLACEMENT INVESTMENTS. The Fund may invest in commercial paper issued in
reliance on the  exemption  from  registration  afforded by Section  4(2) of the
Securities  Act of 1933.  Section  4(2)  commercial  paper is  restricted  as to
disposition under federal securities laws and is generally sold to institutional
investors who agree that they are purchasing  the paper for investment  purposes
and not with a view to public distribution.  Any resale by the purchaser must be
in an exempt  transaction.  Section 4(2) commercial  paper is normally resold to
other institutional investors through or with the assistance of the


                                                          - 9 -


<PAGE>



issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus  providing  liquidity.  The Adviser  believes that Section 4(2)  commercial
paper and possibly certain other  restricted  securities which meet the criteria
for liquidity  established  by the Trustees are quite  liquid.  The Fund intends
therefore,  to treat the  restricted  securities  which  meet the  criteria  for
liquidity established by the Trustees,  including Section 4(2) commercial paper,
as  determined  by the  Adviser,  as liquid and not  subject  to the  investment
limitation applicable to illiquid securities. In addition,  because Section 4(2)
commercial  paper is liquid,  the Fund does not intend to subject  such paper to
the limitation applicable to restricted securities.

         The ability of the Board of  Trustees to  determine  the  liquidity  of
certain restricted  securities is permitted under a position of the staff of the
Commission set forth in the adopting  release for Rule 144A under the Securities
Act of 1933 (the "Rule").  The Rule is a  nonexclusive  safe-harbor  for certain
secondary market  transactions  involving  securities subject to restrictions on
resale under  federal  securities  laws.  The Rule  provides an  exemption  from
registration  for  resales  of  otherwise  restricted  securities  to  qualified
institutional  buyers. The Rule was expected to further enhance the liquidity of
the secondary  market for  securities  eligible for resale under Rule 144A.  The
staff of the Commission  has left the question of  determining  the liquidity of
all restricted  securities to the Trustees.  The Trustees consider the following
criteria  in  determining  the  liquidity  of  certain   restricted   securities
(including  Section 4(2) commercial  paper):  the frequency of trades and quotes
for the security; the number of dealers willing to purchase or sell the security
and the number of other potential buyers;  dealer  undertakings to make a market
in the  security;  and  the  nature  of  the  security  and  the  nature  of the
marketplace  trades.  The  Trustees  have  delegated  to the  Adviser  the daily
function of determining  and  monitoring the liquidity of restricted  securities
pursuant to the above criteria and guidelines  adopted by the Board of Trustees.
The Trustees  will  continue to monitor and  periodically  review the  Adviser's
selection  of  Rule  144A  and  Section  4(2)  commercial  paper  as well as any
determinations as to its liquidity.

HOW TO PURCHASE SHARES
- ----------------------
         Your initial  investment in the Fund ordinarily must be at least $1,000
($250  for  tax-deferred  retirement  plans).  Shares  of the Fund are sold on a
continuous  basis at the net asset  value  next  determined  after  receipt of a
purchase order by the Trust.

INITIAL  INVESTMENTS  BY MAIL.  You may  open an  account  and  make an  initial
investment  in the Fund by sending a check and a completed  account  application
form to Countrywide Fund Services,  Inc. (the "Transfer Agent"),  P.O. Box 5354,
Cincinnati, Ohio

                                                          - 10 -


<PAGE>



45201-5354. Checks should be made payable to the "Money Market Fund." An account
application is included in this Prospectus.

         You will be sent within five  business days after the end of each month
a written  statement  disclosing  each purchase or redemption  effected and each
dividend or distribution credited to your account during the month. Certificates
representing shares are not ordinarily issued, but you may receive a certificate
without charge by sending a written request to the Transfer Agent.  Certificates
for fractional  shares will not be issued.  If a certificate  has been issued to
you, you will not be permitted to exchange  shares by  telephone,  or to use the
automatic  withdrawal plan as to those shares. The Trust and the Adviser reserve
the  rights to limit  the  amount  of  investments  and to refuse to sell to any
person.

         Investors should be aware that the Fund's account application  contains
provisions  in favor of the  Trust,  the  Transfer  Agent and  certain  of their
affiliates,  excluding such entities from certain liabilities (including,  among
others, losses resulting from unauthorized shareholder transactions) relating to
the various services (for example, telephone redemptions and exchanges and check
redemptions) made available to investors.

         Should an order to purchase shares be canceled  because your check does
not clear,  you will be responsible for any resulting losses or fees incurred by
the Trust or the Transfer Agent in the transaction.

         INITIAL  INVESTMENTS BY WIRE. You may also purchase  shares of the Fund
by  wire.  Please  telephone  the  Transfer  Agent  (Nationwide  call  toll-free
800-543-0407;  in  Cincinnati  call 629- 2050) for  instructions.  You should be
prepared  to give  the name in  which  the  account  is to be  established,  the
address,  telephone number and taxpayer  identification  number for the account,
and the name of the bank which will wire the money.

         You may receive a dividend on the day of your wire investment  provided
you have given notice of your intention to make such  investment to the Transfer
Agent by 12:30 p.m.,  Eastern time, on that day. Your investment will be made at
the net asset value next  determined  after your wire is received  together with
the account  information  indicated  above. If the Trust does not receive timely
and complete account information, there may be a delay in the investment of your
money and any accrual of dividends.  To make your initial wire purchase, you are
required to mail a completed  account  application to the Transfer  Agent.  Your
bank may impose a charge for sending  your wire.  There is  presently no fee for
receipt of wired  funds,  but the  Transfer  Agent  reserves the right to charge
shareholders for this service upon thirty days' prior notice to shareholders.



                                                          - 11 -


<PAGE>



         ADDITIONAL INVESTMENTS. You may purchase and add shares to your account
by mail or by bank wire.  Checks should be sent to  Countrywide  Fund  Services,
Inc., P.O. Box 5354, Cincinnati, Ohio 45201-5354.  Checks should be made payable
to the "Money Market Fund." Bank wires should be sent as outlined above. You may
also make  additional  investments at the Trust's  offices at 312 Walnut Street,
21st Floor,  Cincinnati,  Ohio 45202.  Each  additional  purchase  request  must
contain  the name of your  account  and your  account  number to  permit  proper
crediting  to your  account.  While  there is no  minimum  amount  required  for
subsequent investments, the Trust reserves the right to impose such requirement.

         CASH SWEEP  PROGRAM.  Cash  accumulations  in accounts  with  financial
institutions  may be  automatically  invested  in shares of the Fund at the next
determined net asset value on a day selected by the institution or its customer,
or when the  account  balance  reaches  a  predetermined  dollar  amount  (e.g.,
$5,000).

         Participating  institutions are responsible for prompt  transmission of
orders relating to the program.  Institutions  participating in this program may
charge their  customers  fees for services  relating to the program  which would
reduce the  customers'  yield from an  investment in the Fund.  This  Prospectus
should,  therefore, be read together with any agreement between the customer and
the  participating  institution with regard to the services  provided,  the fees
charged for these services and any restrictions and limitations imposed.

SHAREHOLDER SERVICES
- ----------------------
         Contact the Transfer Agent (Nationwide call toll-free 800-543-0407;  in
Cincinnati  call  629-2050) for  additional  information  about the  shareholder
services described below.

         Automatic Withdrawal Plan
         --------------------------
         If the shares in your account have a value of at least $5,000,  you may
elect to  receive,  or may  designate  another  person to  receive,  monthly  or
quarterly  payments in a specified amount of not less than $50 each. There is no
charge for this service.

         Tax-Deferred Retirement Plans
         -----------------------------
         Shares of the Fund are available  for purchase in  connection  with the
following tax-deferred retirement plans:

         --       Keogh Plans for self-employed individuals



                                                          - 12 -


<PAGE>



         --       Individual retirement account (IRA) plans for
                  individuals and their non-employed spouses

         --       Qualified pension and profit-sharing plans for
                  employees, including those profit-sharing plans with a
                  401(k) provision

         --       403(b)(7)  custodial  accounts for  employees of public school
                  systems,    hospitals,    colleges   and   other    non-profit
                  organizations  meeting  certain  requirements  of the Internal
                  Revenue Code

         Direct Deposit Plans
         --------------------
         Shares  of the Fund  may be  purchased  through  direct  deposit  plans
offered by certain  employers  and  government  agencies.  These plans  enable a
shareholder  to have all or a portion of his or her  payroll or social  security
checks transferred automatically to purchase shares of the Fund.

         Automatic Investment Plan
         -------------------------
         You may make automatic monthly  investments in the Fund from your bank,
savings and loan or other depository  institution  account.  The minimum initial
and subsequent  investments  must be $50 under the plan. The Transfer Agent pays
the costs associated with these transfers,  but reserves the right,  upon thirty
days'  written  notice,  to make  reasonable  charges  for  this  service.  Your
depository institution may impose its own charge for debiting your account which
would reduce your return from an investment in the Fund.

HOW TO REDEEM SHARES
- ---------------------
         You may  redeem  shares  of the Fund on each day that the Trust is open
for  business.  You will  receive the net asset value per share next  determined
after receipt by the Transfer Agent of a proper  redemption  request in the form
described  below.  Payment is normally  made within  three  business  days after
tender in such form,  provided that payment in redemption of shares purchased by
check will be effected only after the check has been  collected,  which may take
up to fifteen days from the purchase  date.  To  eliminate  this delay,  you may
purchase shares of the Fund by certified check or wire.

     A contingent  deferred  sales load may be imposed on a redemption of shares
of the Fund if such shares had  previously  been acquired in connection  with an
exchange from another fund of Countrywide Investments which imposes a contingent
deferred sales load, as described in the Prospectus of such other fund.


                                                          - 13 -


<PAGE>




         BY TELEPHONE.  You may redeem shares by telephone. The proceeds will be
sent by mail to the address designated on your account or wired directly to your
existing  account in any commercial  bank or brokerage firm in the United States
as designated  on your  application.  To redeem by telephone,  call the Transfer
Agent (Nationwide call toll-free 800-543-0407; in Cincinnati call 629-2050). The
redemption proceeds will normally be sent by mail or by wire within one business
day (but not later than three  business  days) after  receipt of your  telephone
instructions.  Any  redemption  requests by telephone must be received in proper
form prior to 12:30 p.m., Eastern time, on any business day in order for payment
by wire to be made that day. IRA accounts are not redeemable by telephone.

         The telephone  redemption  privilege is automatically  available to all
shareholders.  You may  change  the bank or  brokerage  account  which  you have
designated  under this  procedure at any time by writing to the  Transfer  Agent
with your signature guaranteed by any eligible guarantor institution  (including
banks, brokers and dealers, municipal securities brokers and dealers, government
securities brokers and dealers,  credit unions,  national securities  exchanges,
registered securities associations,  clearing agencies and savings associations)
or by completing a supplemental telephone redemption authorization form. Contact
the Transfer Agent to obtain this form.  Further  documentation will be required
to change the designated account if shares are held by a corporation,  fiduciary
or other organization.

         Neither the Trust, the Transfer Agent, nor their respective  affiliates
will be liable for complying with telephone instructions they reasonably believe
to be  genuine  or for any  loss,  damage,  cost or  expense  in  acting on such
telephone instructions. The affected shareholders will bear the risk of any such
loss.  The  Trust  or the  Transfer  Agent,  or  both,  will  employ  reasonable
procedures to determine that telephone  instructions  are genuine.  If the Trust
and/or the Transfer Agent do not employ such procedures,  they may be liable for
losses due to  unauthorized  or fraudulent  instructions.  These  procedures may
include,  among  others,  requiring  forms of personal  identification  prior to
acting  upon  telephone  instructions,  providing  written  confirmation  of the
transactions and/or tape recording telephone instructions.

         BY MAIL.  You may  redeem  any  number of shares  from your  account by
sending a written  request to the  Transfer  Agent.  The request  must state the
number of shares or the dollar  amount to be redeemed and your  account  number.
The request must be signed  exactly as your name appears on the Trust's  account
records. If the shares to be redeemed have a value of $25,000 or more, your


                                                          - 14 -


<PAGE>



signature must be guaranteed by any of the eligible guarantor institutions 
outlined above.

         Written  redemption  requests  may also  direct  that the  proceeds  be
deposited  directly in the bank account or brokerage account  designated on your
account application for telephone redemptions. Proceeds of redemptions requested
by mail are mailed within three business days following  receipt of instructions
in proper form.

         BY CHECK.  You may establish a special checking account with
the Fund for the purpose of redeeming shares by check.  Checks
may be made payable to anyone for any amount, but checks may not
be certified.

         When a check is presented to the  Custodian  for payment,  the Transfer
Agent, as your agent,  will cause the Fund to redeem a sufficient number of full
and fractional  shares in your account to cover the amount of the check.  Checks
will be  processed  at the net asset value on the day the check is  presented to
the Custodian for payment.

         If the amount of a check is greater  than the value of the shares  held
in your account,  the check will be returned.  A check representing a redemption
request will take precedence over any other redemption  instructions issued by a
shareholder.

         As long as no more  than six check  redemptions  are  effected  in your
account  in any  month,  there  will  be no  charge  for  the  check  redemption
privilege.  However, after six check redemptions are effected in your account in
a month,  the  Transfer  Agent will  charge you $.25 for each  additional  check
redemption  effected that month.  The Transfer  Agent charges  shareholders  its
costs for each stop payment and each check returned for  insufficient  funds. In
addition,  the Transfer Agent reserves the right to make  additional  charges to
recover the costs of providing the check redemption service. All charges will be
deducted from your account by  redemption  of shares in your account.  The check
redemption  procedure  may be suspended or  terminated  at any time upon written
notice by the Trust or the Transfer Agent.

          Shares of the Fund for which  certificates have been issued may not be
redeemed by check.  Shareholders  who invest in the Fund through a cash sweep or
similar  program  with  a  financial   institution  are  not  eligible  for  the
checkwriting privilege.

         ADDITIONAL REDEMPTION INFORMATION.  If your instructions request a 
redemption by wire, you will be charged an $8 processing fee by the Fund's 
Custodian.  The Trust reserves the right, upon thirty days' written notice, 
to change the processing


                                                          - 15 -


<PAGE>



fee. All charges will be deducted  from your account by  redemption of shares in
your  account.  Your  bank or  brokerage  firm  may also  impose  a  charge  for
processing  the wire.  In the event that wire transfer of funds is impossible or
impractical,  the  redemption  proceeds  will be sent by mail to the  designated
account.

         Redemption  requests may direct that the proceeds be deposited directly
in your account with a commercial  bank or other  depository  institution via an
Automated Clearing House (ACH) transaction. There is currently no charge for ACH
transactions.  Contact  the  Transfer  Agent  for  more  information  about  ACH
transactions.

         If a  certificate  for shares was issued,  it must be  delivered to the
Transfer Agent duly endorsed or accompanied by a duly endorsed stock power, with
the signature guaranteed by any of the eligible guarantor  institutions outlined
above.

         At  the  discretion  of the  Trust  or the  Transfer  Agent,  corporate
investors  and other  associations  may be  required  to furnish an  appropriate
certification authorizing redemptions to ensure proper authorization.  The Trust
reserves the right to require you to close your account if at any time the value
of your shares is less than $1,000 (based on actual amounts  invested  including
any sales load paid, unaffected by market fluctuations),  or $250 in the case of
tax-deferred  retirement  plans,  or such other minimum  amount as the Trust may
determine from time to time. After  notification to you of the Trust's intention
to close your  account,  you will be given  thirty days to increase the value of
your account to the minimum amount.

         The Trust  reserves the right to suspend the right of  redemption or to
postpone  the date of payment for more than three  business  days under  unusual
circumstances as determined by the Securities and Exchange Commission.

EXCHANGE PRIVILEGE
- ------------------
         Shares of the Fund and of any other fund of Countrywide Investments may
be exchanged  for each other.  A sales load will be imposed equal to the excess,
if any, of the sales load rate  applicable to the shares being acquired over the
sales load rate, if any, previously paid on the shares being exchanged.

         The  following  are the  funds  of  Countrywide  Investments  currently
offered to the public.  Funds which may be subject to a front-end or  contingent
deferred sales load are indicated by an asterisk.



                                                          - 16 -


<PAGE>



Countrywide Tax-Free Trust         Countrywide Strategic Trust
 Tax-Free Money Fund               *U.S. Government Securities Fund
 Ohio Tax-Free Money Fund          *Equity Fund
 California Tax-Free Money Fund    *Utility Fund
 Florida Tax-Free Money Fund       *Aggressive Growth Fund
*Tax-Free Intermediate Term        *Growth/Value Fund
   Fund
*Ohio Insured Tax-Free Fund
*Kentucky Tax-Free Fund             Countrywide Investment Trust
                                    Short Term Government Income Fund
                                    Institutional Government Income Fund
                                    Money Market Fund
                                   *Intermediate Bond Fund
                                   *Intermediate Term Government Income
                                          Fund
                                   *Adjustable Rate U.S. Government
                                          Securities Fund
                                   *Global Bond Fund

         You may  request  an  exchange  by  sending  a written  request  to the
Transfer  Agent.  The request must be signed exactly as your name appears on the
Trust's account  records.  Exchanges may also be requested by telephone.  If you
are unable to execute your transaction by telephone (for example during times of
unusual  market  activity)  consider  requesting  your  exchange  by  mail or by
visiting the Trust's offices at 312 Walnut Street, 21st Floor, Cincinnati,  Ohio
45202.  An exchange will be effected at the next  determined net asset value (or
offering price,  if sales load is applicable)  after receipt of a request by the
Transfer Agent.

         Exchanges may only be made for shares of funds then offered for sale in
your state of  residence  and are  subject  to the  applicable  minimum  initial
investment requirements. The exchange privilege may be modified or terminated by
the Board of Trustees  upon 60 days' prior notice to  shareholders.  An exchange
results in a sale of fund  shares,  which may cause you to  recognize  a capital
gain or loss. Before making an exchange,  contact the Transfer Agent to obtain a
current  prospectus  for any of the other funds of Countrywide  Investments  and
more information about exchanges among Countrywide Investments.

DIVIDENDS AND DISTRIBUTIONS
- ---------------------------
         All of the net investment  income of the Fund is declared as a dividend
to  shareholders  of record on each  business day of the Trust and paid monthly.
The Fund expects to distribute any net realized long-term capital gains at least
once each year.  Management  will  determine  the timing  and  frequency  of the
distributions of any net realized short-term capital gains.

         Distributions are paid according to one of the following options:


                                                          - 17 -


<PAGE>




         Share Option -      income distributions and capital gains
                             distributions reinvested in additional
                             shares.

         Income Option -     income distributions and short-term capital
                             gains distributions paid in cash; long-term
                             capital gains distributions reinvested in
                             additional shares.

         Cash Option -       income  distributions and capital
                             gains distributions paid in cash.

You should indicate your choice of option on your  application.  If no option is
specified on your application, distributions will automatically be reinvested in
additional  shares.  All  distributions  will be based on the net asset value in
effect on the payable date.

         If you select the Income Option or the Cash Option and the U.S.  Postal
Service  cannot  deliver your checks or if your checks  remain  uncashed for six
months, your dividends may be reinvested in your account at the then-current net
asset value and your account will be converted to the Share Option.

TAXES
- -----
         The Fund  intends to qualify for the special tax  treatment  afforded a
"regulated  investment  company" under Subchapter M of the Internal Revenue Code
so that it does not pay federal taxes on income and capital gains distributed to
shareholders.

         The Fund intends to distribute  substantially all of its net investment
income and any net realized capital gains to its shareholders.  Distributions of
net investment income as well as from net realized  short-term capital gains, if
any,  are  taxable as ordinary  income.  Since the Fund's  investment  income is
derived from interest rather than dividends, no portion of such distributions is
eligible  for  the  dividends  received  deduction  available  to  corporations.
Distributions of net realized  long-term  capital gains are taxable as long-term
capital gains regardless of how long you have held your Fund shares.

         The Fund will  mail to its  shareholders  a  statement  indicating  the
amount and federal income tax status of all distributions  made during the year.
In addition to federal taxes,  shareholders  of the Fund may be subject to state
and local taxes on distributions. The tax consequences described in this section
apply  whether  distributions  are  taken in cash or  reinvested  in  additional
shares.





                                                          - 18 -


<PAGE>



OPERATION OF THE FUND
- ----------------------
         The Fund is a diversified  series of Countrywide  Investment  Trust, an
open-end  management  investment  company organized as a Massachusetts  business
trust on  December  7,  1980.  The Board of  Trustees  supervises  the  business
activities  of the Trust.  Like other mutual funds,  the Trust  retains  various
organizations to perform specialized services for the Fund.

         The Trust retains  Countrywide  Investments,  Inc.,  312 Walnut Street,
Cincinnati, Ohio 45202 (the "Adviser"), to manage the Fund's investments and its
business  affairs.  The Adviser was organized in 1974 and is also the investment
adviser to six other series of the Trust,  seven series of Countrywide  Tax-Free
Trust and five series of Countrywide Strategic Trust. The Adviser is an indirect
wholly-owned subsidiary of Countrywide Credit Industries, Inc., a New York Stock
Exchange  listed  company  principally  engaged in the  business of  residential
mortgage  lending.  The Fund pays the  Adviser a fee equal to the annual rate of
 .5% of the average value of its daily net assets up to $50 million; .45% of such
assets from $50 million to $150 million; .4% of such assets from $150 million to
$250 million; and .375% of such assets in excess of $250 million.

         The Fund is  responsible  for the  payment of all  operating  expenses,
including fees and expenses in connection with membership in investment  company
organizations,  brokerage fees and commissions,  legal,  auditing and accounting
expenses,  expenses of  registering  shares under  federal and state  securities
laws,   expenses   related  to  the  distribution  of  the  Fund's  shares  (see
"Distribution Plan"),  insurance expenses,  taxes or governmental fees, fees and
expenses of the  custodian,  transfer  agent and accounting and pricing agent of
the Fund,  fees and  expenses  of members of the Board of  Trustees  who are not
interested  persons  of the  Trust,  the  cost  of  preparing  and  distributing
prospectuses,  statements, reports and other documents to shareholders, expenses
of shareholders'  meetings and proxy  solicitations,  and such  extraordinary or
non-recurring  expenses as may arise, including litigation to which the Fund may
be a party and indemnification of the Trust's officers and Trustees with respect
thereto.

         The Trust has retained Countrywide Fund Services,  Inc., P.O. Box 5354,
Cincinnati,  Ohio (the "Transfer Agent"), an indirect wholly-owned subsidiary of
Countrywide  Credit  Industries,  Inc., to serve as the Fund's  transfer  agent,
dividend paying agent and shareholder service agent.

         The Transfer Agent also provides accounting and pricing services to the
Fund. The Transfer  Agent  receives a monthly fee from the Fund for  calculating
daily net asset value per share and


                                                          - 19 -


<PAGE>



maintaining such books and records as are necessary to enable it
to perform its duties.

         In  addition,  the Transfer  Agent has been  retained by the Adviser to
assist the Adviser in  providing  administrative  services to the Fund.  In this
capacity,  the Transfer Agent supplies executive,  administrative and regulatory
services,  supervises  the  preparation  of tax  returns,  and  coordinates  the
preparation  of reports to  shareholders  and  reports to and  filings  with the
Securities and Exchange Commission and state securities authorities. The Adviser
(not the Fund) pays the Transfer Agent a fee for these  administrative  services
equal to the annual  rate of .1% of the  average  value of the Fund's  daily net
assets.

         The Adviser serves as principal  underwriter for the Fund and, as such,
is the exclusive  agent for the  distribution  of shares of the Fund.  Angelo M.
Mozilo,  Chairman  and a  director  of the  Adviser,  is a Trustee of the Trust.
Robert H. Leshner,  President and a director of the Adviser,  is President and a
Trustee  of the Trust.  Robert G.  Dorsey,  Treasurer  of the  Adviser,  is Vice
President of the Trust.  John F. Splain,  Secretary  and General  Counsel of the
Adviser, is Secretary of the Trust.

         Consistent with the Rules of Fair Practice of the National  Association
of  Securities  Dealers,  Inc.,  and subject to its  objective  of seeking  best
execution of portfolio transactions, the Adviser may give consideration to sales
of shares of the Fund as a factor in the  selection  of brokers  and  dealers to
execute portfolio  transactions of the Fund.  Subject to the requirements of the
Investment  Company Act of 1940 and procedures adopted by the Board of Trustees,
the Fund may execute portfolio transactions through any broker or dealer and pay
brokerage  commissions  to a broker  (i)  which is an  affiliated  person of the
Trust,  or (ii)  which  is an  affiliated  person  of such  person,  or (iii) an
affiliated person of which is an affiliated person of the Trust or the Adviser.

         Shares of the Fund have equal voting rights and liquidation rights. The
Fund shall vote  separately on matters  submitted to a vote of the  shareholders
except in matters  where a vote of all series of the Trust in the  aggregate  is
required by the  Investment  Company Act of 1940 or otherwise.  When matters are
submitted to shareholders  for a vote, each  shareholder is entitled to one vote
for each full share owned and fractional votes for fractional  shares owned. The
Trust does not normally hold annual meetings of shareholders. The Trustees shall
promptly  call and give notice of a meeting of  shareholders  for the purpose of
voting  upon the removal of any Trustee  when  requested  to do so in writing by
shareholders  holding 10% or more of the Trust's  outstanding  shares. The Trust
will comply with


                                                          - 20 -


<PAGE>



the provisions of Section 16(c) of the  Investment  Company Act of 1940 in order
to facilitate communications among shareholders.

DISTRIBUTION PLAN
- -----------------
     Pursuant to Rule 12b-1 under the  Investment  Company Act of 1940, the Fund
has  adopted  a plan of  distribution  (the  "Plan")  under  which  the Fund may
directly  incur  or  reimburse  the  Adviser  for  certain  distribution-related
expenses, including payments to securities dealers and others who are engaged in
the sale of shares of the Fund and who may be advising  investors  regarding the
purchase,  sale or retention of Fund shares;  expenses of maintaining  personnel
who  engage in or  support  distribution  of shares  or who  render  shareholder
support  services  not  otherwise  provided by the Transfer  Agent;  expenses of
formulating and  implementing  marketing and promotional  activities,  including
direct  mail  promotions  and mass media  advertising;  expenses  of  preparing,
printing and  distributing  sales  literature and prospectuses and statements of
additional   information   and  reports  for  recipients   other  than  existing
shareholders of the Fund;  expenses of obtaining such information,  analyses and
reports with respect to marketing and  promotional  activities as the Trust may,
from  time to time,  deem  advisable;  and any  other  expenses  related  to the
distribution of the Fund's shares.

         The annual  limitation for payment of expenses  pursuant to the Plan is
 .35% of the Fund's average daily net assets.  Unreimbursed expenditures will not
be carried over from year to year.  In the event the Plan is  terminated  by the
Fund in  accordance  with its terms,  the Fund will not be  required to make any
payments  for  expenses  incurred  by  the  Adviser  after  the  date  the  Plan
terminates.

         Pursuant to the Plan, the Fund may also make payments to banks or other
financial   institutions  that  provide  shareholder   services  and  administer
shareholder  accounts.  The  Glass-Steagall Act prohibits banks from engaging in
the business of underwriting,  selling or distributing securities.  Although the
scope of this  prohibition  under the  Glass-Steagall  Act has not been  clearly
defined by the courts or  appropriate  regulatory  agencies,  management  of the
Trust  believes  that the Glass-  Steagall  Act should not  preclude a bank from
providing such services. However, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and financial
institutions  may be required to register as dealers pursuant to state law. If a
bank were  prohibited from continuing to perform all or a part of such services,
management of the Trust  believes that there would be no material  impact on the
Fund or its  shareholders.  Banks may charge their  customers  fees for offering
these services to the extent permitted by


                                                          - 21 -


<PAGE>



applicable regulatory authorities,  and the overall return to those shareholders
availing   themselves  of  the  bank  services  will  be  lower  than  to  those
shareholders  who do not.  The Fund may from  time to time  purchase  securities
issued by banks which provide such services;  however, in selecting  investments
for the Fund, no preference will be shown for such securities.

CALCULATION OF SHARE PRICE
- --------------------------
         On each day that the Trust is open for  business,  the share price (net
asset value) of the Fund's  shares is determined as of 12:30 p.m. and 4:00 p.m.,
Eastern  time.  The Trust is open for  business  on each day the New York  Stock
Exchange  is open for  business  and on any other day when  there is  sufficient
trading in the Fund's  investments  that its net asset value might be materially
affected.  The net asset value per share of the Fund is  calculated  by dividing
the sum of the  value  of the  securities  held by the Fund  plus  cash or other
assets minus all liabilities (including estimated accrued expenses) by the total
number of shares outstanding of the Fund, rounded to the nearest cent.

         The Fund's portfolio  securities are valued on an amortized cost basis.
In connection  with the use of the amortized cost method of valuation,  the Fund
maintains  a  dollar-weighted  average  portfolio  maturity  of 90 days or less,
purchases  only United States  dollar-denominated  securities  having  remaining
maturities of thirteen months or less and invests only in securities  determined
by the Board of Trustees  to meet the Fund's  quality  standards  and to present
minimal credit risks. Other assets of the Fund are valued at their fair value as
determined  in good faith in accordance  with  consistently  applied  procedures
established by and under the general supervision of the Board of Trustees. It is
anticipated,  but  there is no  assurance,  that the use of the  amortized  cost
method of  valuation  will  enable the Fund to maintain a stable net asset value
per share of $1.

PERFORMANCE INFORMATION
- ------------------------
         From time to time,  the Fund may  advertise  its  "current  yield"  and
"effective  yield." Both yield figures are based on historical  earnings and are
not intended to indicate  future  performance.  The "current  yield" of the Fund
refers to the income  generated  by an  investment  in the Fund over a seven-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 week is  assumed  to be  generated  each week over a 52-week  period and is
shown as a percentage of the  investment.  The  "effective  yield" is calculated
similarly but, when  annualized,  the income earned by an investment in the Fund
is assumed to be reinvested.  The "effective yield" will be slightly higher than
the  "current  yield"  because  of  the  compounding   effect  of  this  assumed
reinvestment.



                                                          - 22 -


<PAGE>



         From time to time, the Fund may advertise its  performance  rankings as
published by recognized  independent  mutual fund  statistical  services such as
Lipper  Analytical  Services,  Inc.  ("Lipper"),  or by  publications of general
interest  such as  Forbes,  Money,  The  Wall  Street  Journal,  Business  Week,
Barron's,  Fortune or Morningstar  Mutual Fund Values. The Fund may also compare
its  performance to that of other selected  mutual funds,  averages of the other
mutual funds within their  categories  as  determined  by Lipper,  or recognized
indicators.  In  connection  with a  ranking,  the Fund may  provide  additional
information,  such as the  particular  category  of funds to which  the  ranking
relates,  the  number of funds in the  category,  the  criteria  upon  which the
ranking is based,  and the effect of fee waivers and/or expense  reimbursements,
if any.



                                                          - 23 -


<PAGE>



COUNTRYWIDE INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
Nationwide:  (Toll-Free) 800-543-8721
Cincinnati:  513-629-2000

BOARD OF TRUSTEES
Donald L. Bogdon, M.D.
John R. Delfino
H. Jerome Lerner
Robert H. Leshner
Angelo R. Mozilo
Oscar P. Robertson
John F. Seymour, Jr.
Sebastiano Sterpa

INVESTMENT ADVISER
COUNTRYWIDE INVESTMENTS, INC.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094

TRANSFER AGENT
COUNTRYWIDE FUND SERVICES, INC.
P.O. Box 5354
Cincinnati, Ohio  45201-5354

Shareholder Service
Nationwide:  (Toll-Free) 800-543-0407
Cincinnati:  513-629-2050

Rate Line
Nationwide: (Toll-Free) 800-852-3809
Cincinnati:  513-579-0999


                                                          - 24 -


<PAGE>



                                TABLE OF CONTENTS
Expense Information. . . . . . . . . . . . . . . . . . . . .
Financial Highlights . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies. . . . . . . . . . . . . .
How to Purchase Shares . . . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . . . . . . . .
Exchange Privilege . . . . . . . . . . . . . . . . . . . . .
Dividends and Distributions. . . . . . . . . . . . . . . . .
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operation of the Fund . . . . . . . . . . . . . . . . . . .
Distribution Plan . . . . . . . . . . . . . . . . . . . . .
Calculation of Share Price . . . . . . . . . . . . . . . . .
Performance Information. . . . . . . . . . . . . . . . . . .
- -----------------------------------------------------------------

         No person has been  authorized to give any  information  or to make any
representations,  other than those contained in this  Prospectus,  in connection
with the  offering  contained  in this  Prospectus,  and if given or made,  such
information or  representations  must not be relied upon as being  authorized by
the Trust.  This  Prospectus  does not  constitute an offer by the Trust to sell
shares in any State to any person to whom it is  unlawful  for the Trust to make
such offer in such State.



                                                          - 25 -


<PAGE>


                                                          PROSPECTUS
                                                          __________, 1997


                          Countrywide Investment Trust
                          312 Walnut Street, 21st Floor
                           Cincinnati, Ohio 45202-4094

                             INTERMEDIATE BOND FUND

         The  Intermediate  Bond  Fund  (the  "Fund"),   a  separate  series  of
Countrywide Investment Trust, seeks to provide as high a level of current income
as is  consistent  with  the  preservation  of  capital.  The  Fund  invests  in
marketable    corporate   debt   securities,    U.S.   Government    securities,
mortgage-related  securities,  other  asset-backed  securities and cash or money
market instruments.

     THE  FUND  IS  A  NON-DIVERSIFIED  SERIES  AND  MAY  INVEST  A  SIGNIFICANT
PERCENTAGE  OF ITS ASSETS IN A SINGLE  ISSUER.  THEREFORE,  AN INVESTMENT IN THE
FUND MAY BE RISKIER THAN AN INVESTMENT IN OTHER TYPES OF MUTUAL FUNDS.

         SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED  BY,  ANY BANK AND ARE NOT  FEDERALLY  INSURED BY THE  FEDERAL  DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

         Countrywide Investments, Inc. (the "Adviser") manages the Fund's
investments and its business affairs.

         Pursuant to an Agreement and Plan of Reorganization dated _________,
1997, the Fund, on _________, 1997, succeeded to the assets and liabilities of 
another mutual fund of the same name (the "Predecessor  Fund"),  which was an 
investment series of Trans Adviser Funds, Inc. The investment objective, 
policies and restrictions of the Fund and the Predecessor Fund are substantially
identical  and the financial data and  information in this Prospectus relates 
to the  Predecessor Fund.

        This Prospectus sets forth concisely the information about the Fund
that you should know before investing.  Please retain this Prospectus for future
reference.  A Statement of Additional  Information  dated _______, 1997 has been
filed with the Securities and Exchange Commission and is hereby incorporated  by
reference in its entirety. A copy of the Statement of Additional Information can
be obtained at no charge by calling one of the numbers listed below.

- -------------------------------------------------------------------------------
For Information or Assistance in Opening an Account, Please Call:

Nationwide (Toll-Free) . . . . . . . . . . . . . .  800-543-0407
Cincinnati   . . . . . . . . . . . . . . . . . . .  513-629-2050
- -------------------------------------------------------------------------------

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






<PAGE>




EXPENSE INFORMATION
- -------------------
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price). .  . . . . . .     1%
Maximum Contingent Deferred Sales Load
(as a percentage of original purchase price). . . .     None*
Sales Load Imposed on Reinvested Dividends. . . . .     None
Exchange Fee. . . . . . . . . . . . . . . . . . . .     None
Redemption Fee. . . . . . . . . . . . . . . . . . .     None**
Check Redemption Processing Fee (per check):
  First Six Checks per Month . . . . . . . . . .  .     None
  Additional Checks per Month. . . . . . . . . .  .     $0.25

*        Purchases at net asset value of amounts totaling $1 million or more may
         be subject to a contingent  deferred sales load of .75% if a redemption
         occurred  within 12 months of purchase and a commission was paid by the
         Adviser to a participating unaffiliated dealer.
**       A wire transfer fee is charged by the Fund's Custodian in the case of
         redemptions made by wire.  Such fee is subject to change and is
         currently $8.  See "How to Redeem Shares."

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


Management Fees After Waivers                                         .25%(A)
12b-1 Fees                                                            .00%(B)
Other Expenses                                                        .70%
                                                                      -------
Total Fund Operating Expenses After Waivers                           .95%(C)
                                                                      =======
(A) Absent waivers, management fees would be .50%.
(B) The Fund may incur  12b-1  fees in an amount up to .35% of its  average
    net  assets.  Long-term  shareholders  may pay more  than the  economic
    equivalent  of the  maximum  front-end  sales  loads  permitted  by the
    National Association of Securities Dealers.
(C) Absent waivers of management  fees,  total operating  expenses would be
    1.20%.  The Fund will, until at least August ____, 1999, waive fees and
    reimburse  expenses to the extent  necessary  to limit total  operating
    expenses to .95% of the Fund's average net assets.



                                                              - 2 -


<PAGE>



         The purpose of this table is to assist the  investor  in  understanding
the various  costs and expenses  that an investor in the Fund will bear directly
or indirectly.  The percentages  expressing  annual fund operating  expenses are
based on estimated amounts for the current fiscal year. THE EXAMPLE BELOW SHOULD
NOT BE  CONSIDERED  A  REPRESENTATION  OF PAST OR  FUTURE  EXPENSES  AND  ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

Example
You would pay the following expenses on a $1,000 investment,  assuming (1) 5%
annual return and (2) redemption at the end of each time period:
                                       1 Year        $ 20
                                       3 Years       $ 40
                                       5 Years       $ 62
                                      10 Years       $125




                                                              - 3 -


<PAGE>



FINANCIAL HIGHLIGHTS
- --------------------
         The following  audited  financial  information for the Predecessor Fund
for the fiscal year ended August 31, 1996 has been audited by KPMG Peat Marwick
LLP,  independent  auditors, and  should  be read  in  conjunction  with  the
financial  statements.  The following  unaudited  financial  information for the
period ended February 28, 1997 should be read in conjunction  with the financial
statements.  The annual  financial  statements as of August 31, 1996 and the
independent auditors' report thereon and the semiannual financial statements as
of February 28, 1997 appear in the Statement of Additional Information of the 
Fund,  which can be obtained by shareholders at no charge by calling the Fund.

SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING FOR THE PREDECESSOR 
FUND THROUGHOUT THE PERIODS
                               SIX MONTHS       YEAR
                                 ENDED         ENDED
                                2/28/97      8/31/96(a)   
                              (Unaudited)   
                              -----------    -----------  

Net Asset Value, Beginning of
  Period......................   $   9.75    $   10.00
                                 -----------  -----------
Investment Operations
  Net Investment Income
    (Loss)....................        0.31       0.57(c)
  Net Realized and Unrealized
    Gain (Loss) on
    Investments...............        0.11        (0.25)
                                 -----------  -----------
Total from Investment
  Operations..................        0.42         0.32
                                  -----------  -----------
Distributions from
  Net Investment Income.......       (0.31)       (0.57)
  Net Realized Gain on
    Investments...............          --           --
                                  -----------  -----------
Total Distributions...........      (0.31)       (0.57)
                                  -----------  -----------
Net Asset Value, End of
  Period......................     $  9.86    $    9.75
                                -----------  -----------
                                -----------  -----------
 
Total Return(b)............       8.79%(d)     3.23%
 
Ratio/Supplementary Data:
Net Assets at End of Period
  (000's omitted).............   $  16,028    $  13,357
Ratios to Average Net Assets:
  Expenses including
    reimbursement/waiver
    (d).......................        0.85%        0.68%
  Expenses excluding
    reimbursement/waiver
    (d).......................        1.65%        2.04%
  Net investment income (loss)
    including
    reimbursement/waiver
    (d).......................         6.22%       6.31%

Portfolio Turnover Rate.......        26.77%       12.38%


 
(a) Date of commencement of operations was October 3, 1995.
 
(b) Total return calculation does not include sales charges.
 
(c) Using weighted average shares outstanding for the period.

(d) Annualized.
 




                                                              - 4 -


<PAGE>



INVESTMENT OBJECTIVE AND POLICIES
- ---------------------------------
         The Fund is a series of Countrywide Investment Trust (the "Trust"). The
Fund seeks to provide as high a level of current  income as is  consistent  with
the preservation of capital. The Fund invests substantially all of its assets in
marketable    corporate   debt   securities,    U.S.   Government    securities,
mortgage-related  securities,  other  asset-backed  securities and cash or money
market instruments. Normally, at least 65% of the Fund's assets will be invested
in bonds (debt securities of the types listed below).

         The Fund is not intended to be a complete investment program, and there
is no  assurance  that its  investment  objective  can be  achieved.  The Fund's
investment  objective is fundamental  and as such may not be changed without the
affirmative  vote of a majority of the outstanding  shares of the Fund. The term
"majority" of the outstanding  shares means the lesser of (1) 67% or more of the
outstanding shares of the Fund present at a meeting, if the holders of more than
50% of the  outstanding  shares of the Fund are present or  represented  at such
meeting  or (2) more than 50% of the  outstanding  shares  of the  Fund.  Unless
otherwise  indicated,  all investment  practices and limitations of the Fund are
nonfundamental  policies  which may be changed by the Board of Trustees  without
shareholder approval.

         Under  normal  circumstances,  at least 60% of the Fund's  total assets
will be  invested,  measured  at the  time  of any  purchase,  in the  following
categories of securities:

         o        marketable corporate debt securities, such as
                  bonds, rated at the time of purchase within the
                  three highest investment grade ratings (A or
                  better) assigned by Moody's Investors Service,
                  Inc. ("Moody's") or Standard & Pool's Ratings
                  Group ("SJP") (all ratings discussed below refer
                  to those assigned by these two rating agencies)
                  or, if not rated by either of these rating
                  agencies, determined by the Adviser as being of
                  investment quality equivalent to securities rated
                  A or better;

         o        U.S. Government securities including (1) direct
                  obligations of the U.S. Treasury (such as Treasury
                  bills, notes and bonds), (2) obligations
                  guaranteed as to principal and interest by the
                  U.S. Treasury such as Government National Mortgage
                  Association certificates (described below) and
                  Federal Housing Administration debentures, and (3)
                  securities issued by U.S. Government
                  instrumentalities and certain federal agencies
                  that are neither direct obligations of, nor
                  guaranteed by, the U.S. Treasury;



                                                              - 5 -


<PAGE>



         o        mortgage-related securities rated A or better, or
                  unrated securities that are determined to be of
                  equivalent quality of (1) governmental issuers,
                  including Government National Mortgage Association
                  certificates, which are securities representing
                  part ownership of a pool of mortgage loans on
                  which timely payment of interest and principal is
                  guaranteed by the U.S. Government, and securities
                  issued and guaranteed as to the payment of
                  interest and principal by the Federal National
                  Mortgage Association or the Federal Home Loan
                  Mortgage Corporation (but not backed by the U.S.
                  Government); (2) private issuers, including
                  mortgage pass-through certificates or mortgage-
                  backed bonds; and (3) the governmental issuers
                  mentioned above or private issuers, including
                  collateralized mortgage obligations and real
                  estate mortgage investment conduits which are
                  issued in portions or tranches with varying
                  maturities and characteristics; some tranches may
                  only receive the interest paid on the underlying
                  mortgages (IOs) and others may only receive the
                  principal payments (POs); the values of IOs and
                  POs are extremely sensitive to interest rate
                  fluctuations and prepayment rates, and IOs are
                  also subject to the risk of early prepayment of
                  the underlying mortgages which will substantially
                  reduce or eliminate interest payments (see the
                  Statement of Additional Information for more about
                  these securities);

         o        other asset-backed securities rated A or better or
                  unrated securities that are determined by the
                  Adviser to be of equivalent quality (unrelated to
                  mortgage loans) such as securities whose assets
                  consist of a pool of motor vehicle retail
                  installment sales contracts and security interests
                  in the vehicles securing the contracts or a pool
                  of credit card loan receivables (see the Statement
                  of Additional Information for more about these
                  securities); and

         o        cash or money market instruments, including
                  commercial bank obligations (certificates of
                  deposit, which are interest-bearing time deposits;
                  bankers' acceptances, which are time drafts on a
                  commercial bank where the bank accepts an
                  irrevocable obligation to pay at maturity and
                  demand or time deposits) and commercial paper
                  (short-term notes with maturities of up to nine
                  months issued by corporations or government
                  bodies).



                                                              - 6 -


<PAGE>



         The  remaining  40% of the  Fund's  assets,  measured  at the  time  of
purchase, may be invested in debt securities rated below A or unrated securities
that are determined to be of equivalent quality,  including marketable corporate
debt securities,  mortgage-related securities and other asset-backed securities.
Securities  rated  within  the  fourth  highest  category  (BBB,  Baa)  may have
speculative  characteristics  and display a weakened ability to pay interest and
repay principal  under adverse  economic  conditions or changing  circumstances.
However,  securities rated lower than Baa or BBB or unrated  securities that are
determined to be of equivalent quality (commonly known as "junk" or "high-yield,
high-risk"  bonds) will represent less than 20% of the Fund's net assets and are
subject to independent  investment analysis by the Adviser before purchase.  The
Fund may from time to time invest in  fixed-income  securities  of  corporations
outside the U.S. or  governmental  entities,  and the Fund may  purchase or sell
various  currencies on either a spot or forward  basis in connection  with these
investments.

         MATURITY.   The  maturity   composition  of  the  Fund's  portfolio  of
fixed-income  securities  will be adjusted in response to market  conditions and
expectations.  There are no  restrictions  on the  maturity  composition  of the
portfolio,  although it is  anticipated  that the Fund normally will be invested
substantially  in  intermediate-term  (3 to 10 years to maturity)  and long-term
(over 10 years  to  maturity)  securities  and  have a  dollar-weighted  average
portfolio maturity between 3 and 10 years.

         LOAN PARTICIPANTS. The Fund may invest, subject to an overall 10% limit
on loans, in loan participations, typically made by a syndicate of banks to U.S.
and non-U.S.  corporate or governmental borrowers for a variety or purposes. The
underlying  loans may be secured or  unsecured,  and will vary in term and legal
structure. When purchasing such instruments the Fund may assume the credit risks
associated with the original bank lender as well as the credit risks  associated
with the borrower.  Investments in loan  participations  present the possibility
that the Fund could be held liable as a co- lender under emerging legal theories
of lender liability.  In addition, if the loan is foreclosed,  the Fund could be
part owner of any collateral, and could bear the costs and liabilities of owning
and disposing of the collateral.  Loan participations are generally not rated by
major rating  agencies and may not be protected by the  securities  laws.  Also,
loan  participations  are generally  considered to be illiquid and are therefore
subject to the Fund's overall 15% limitation on illiquid securities.

         The market value of  investments  available to the Fund,  and therefore
the Fund's yield and net asset value,  will fluctuate due to changes in interest
rates, economic conditions, quality ratings and other factors beyond the control
of the  Adviser.  Mortgage-related  securities  and other  debt  securities  are
subject to price fluctuations based upon changes in the level of interest rates,
which will  generally  result in all those  securities  changing in price in the
same way, i.e., all those securities experiencing appreciation when


                                                              - 7 -


<PAGE>



interest rates decline and  depreciation  when interest rates rise. In addition,
the  prepayment  experience of the mortgages  underlying  mortgage-related  U.S.
Government  obligations may affect the value of, and the return on an investment
in, such securities.

OTHER INVESTMENT PRACTICES

SECURITIES  LENDING.  In order to generate additional income, the Fund may, from
time to  time,  lend  its  portfolio  securities  to  broker-dealers,  banks  or
institutional  borrowers  of  securities.  While the lending of  securities  may
subject the Fund to certain risks, such as delays or the inability to regain the
securities in the event the borrower were to default on its lending agreement or
enter into  bankruptcy,  the Fund will receive at least 100%  collateral  in the
form of cash or U.S. Government securities. This collateral will be valued daily
by the Adviser and should the market  value of the loaned  securities  increase,
the borrower will furnish  additional  collateral  to the Fund.  During the time
portfolio  securities  are on loan,  the borrower pays the Fund any dividends or
interest paid on such  securities.  Loans are subject to termination by the Fund
or the  borrower  at any  time.  While  the Fund does not have the right to vote
securities on loan,  the Fund intends to terminate the loan and regain the right
to vote if that is considered important with respect to the investment. The Fund
will only  enter  into loan  arrangements  with  broker-dealers,  banks or other
institutions  which the Adviser has determined are creditworthy under guidelines
established by the Board of Trustees.

BORROWING.  The Fund may borrow money from banks  (including its custodian bank)
or from  other  lenders  to the  extent  permitted  under  applicable  law,  for
temporary  or  emergency  purposes  and to meet  redemptions  and may pledge its
assets to secure  such  borrowings.  Borrowing  for  investment  increases  both
investment opportunity and investment risk. This is the speculative factor known
as leverage. Such borrowings in no way affect the federal tax status of the Fund
or its dividends.

         The  Investment  Company Act of 1940 (the "1940 Act") requires the Fund
to maintain asset coverage of at least 300% for all such borrowings,  and should
such asset  coverage at any time fall below 300%,  the Fund would be required to
reduce its  borrowings  within  three days to the extent  necessary  to meet the
requirements  of the 1940  Act.  To reduce  its  borrowings,  the Fund  might be
required to sell securities at a time when it would be disadvantageous to do so.

         In addition,  because interest on money borrowed is a Fund expense that
it would  not  otherwise  incur,  the Fund may have less net  investment  income
during  periods when its borrowings  are  substantial.  The interest paid by the
Fund on  borrowings  may be  more  or less  than  the  yield  on the  securities
purchased with borrowed funds, depending on prevailing market conditions.


                                                              - 8 -


<PAGE>





WHEN-ISSUED SECURITIES. The Fund may also purchase securities on a "when-issued"
basis.  When-issued  securities are securities purchased for delivery beyond the
normal  settlement  date at a stated price and yield and thereby  involve a risk
that the yield obtained in the  transaction  will be less than that available in
the market when delivery  takes place.  The Fund will generally not pay for such
securities or start earning  interest on them until they are received.  When the
Fund agrees to purchase securities on a "when-issued"  basis, its custodian will
set  aside  cash or  liquid  portfolio  securities  equal to the  amount  of the
commitment  in a segregated  account.  Securities  purchased on a  "when-issued"
basis are  recorded  as an asset and are  subject to changes in value based upon
changes  in  the  general  level  of  interest  rates.  The  Fund  expects  that
commitments  to  purchase  "when-issued"  securities  will not exceed 25% of the
value of its total assets under normal market  conditions  and that a commitment
to purchase  "when-issued"  securities will not exceed 60 days. In the event its
commitment to purchase  "when-issued"  securities ever exceeded 25% of the value
of its assets, the Fund's liquidity and the Adviser's ability to manage it might
be  adversely  affected.  The Fund does not intend to  purchase  "when-  issued"
securities  for  speculative  purposes,  but only for the  purpose of  acquiring
portfolio securities.

VARIABLE  AND  FLOATING  RATE  SECURITIES.  The Fund may  acquire  variable  and
floating rate securities,  subject to the Fund's investment objective,  policies
and  restrictions.  A variable  rate security is one whose terms provide for the
readjustment   of  its  interest  rate  on  set  dates  and  which,   upon  such
readjustment,   can   reasonably  be  expected  to  have  a  market  value  that
approximates  its par value. A floating rate security is one whose terms provide
for the  readjustment  of its interest rate  whenever a specified  interest rate
changes  and which,  at any time,  can  reasonably  be expected to have a market
value that approximates its par value.

REPURCHASE AGREEMENTS.  The Fund may enter into repurchase  agreements.  Under a
repurchase agreement, the Fund acquires a debt instrument for a relatively short
period (usually not more than one week), subject to the obligation of the seller
to purchase and the Fund to resell such debt  instrument  at a fixed price.  The
resale  price  is in  excess  of the  purchase  price  in  that it  reflects  an
agreed-upon  market  interest rate effective for the period of time during which
the Fund's money is invested. The Fund's repurchase agreements will at all times
be fully  collateralized  in an  amount at least  equal to 100% of the  purchase
price  including  accrued  interest  earned on the  underlying  securities.  The
instruments  held as collateral are valued daily by the Adviser and as the value
of instruments


                                                              - 9 -


<PAGE>



declines,  the Fund will require additional  collateral.  If the seller defaults
and the value of the collateral securing the repurchase agreement declines,  the
Fund may incur a loss. If such a defaulting  seller were to become insolvent and
subject to liquidation or  reorganization  under applicable  bankruptcy or other
laws,  disposition of the underlying  securities  could involve certain costs or
delays pending court action.  Finally,  it is not certain whether the Fund would
be  entitled,  as  against a claim of the  seller or its  receiver,  trustee  in
bankruptcy  or  creditors,  to  retain  the  underlying  securities.  Repurchase
agreements  are  considered  by the staff of the  Commission  to be loans by the
Fund.

LOWER-RATED  SECURITIES.  The Fund may  invest up to 30% of its assets in higher
yielding (and,  therefore,  higher risk), lower rated  fixed-income  securities,
including  debt  securities,  convertible  securities  and preferred  stocks and
unrated fixed-income securities.  Lower rated fixed-income securities,  commonly
referred to as "junk bonds", are considered speculative and involve greater risk
of default or price changes due to changes in the issuer's creditworthiness than
higher  rated   fixed-in-come   securities.   See  "Risk   Factors-Lower   Rated
Fixed-Income Securities" below for a discussion of certain risks.

Differing yields on fixed-income  securities of the same maturity are a function
of several factors,  including the relative  financial  strength of the issuers.
Higher yields are generally available from securities in the lower categories of
recognized  rating agencies,  i.e. Ba or lower by Moody's or BB or lower by S&P.
The Fund may invest in any  security  which is rated by Moody's or by S&P, or in
any unrated  security  which the  Adviser  determines  is of  suitable  quality.
Securities in the rating  categories  below Baa as determined by Moody's and BBB
as  determined by S&P are  considered  to be of poor standing and  predominantly
speculative.  The  rating  services  descriptions  of these  rating  categories,
including the speculative characteristics of the lower categories, are set forth
in the Statement of Additional Information.

Securities  ratings  are based  largely  on the  issuer's  historical  financial
information and the rating agencies'  investment analysis at the time of rating.
Consequently,  the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better or
worse than the  rating  would  indicate.  Although  the  Adviser  will  consider
security ratings when making  investment  decisions in the high yield market, it
will perform its own  investment  analysis and will not rely  principally on the
ratings assigned by the rating services.  The Adviser's  analysis  generally may
include, among other things, consideration of the


                                                              - 10 -


<PAGE>



issuer's  experience and managerial  strength,  changing  financial  conditions,
borrowing  requirements or debt maturity  schedules,  and its  responsiveness to
changes in business  conditions and interest rates.  It also considers  relative
values based on  anticipated  cash flow,  interest or dividend  coverage,  asset
coverage and earnings prospects.

SHORT-TERM OBLIGATIONS.  There may be times when, in the opinion of the Adviser,
adverse market conditions  exist,  including any period during which it believes
that the return on certain money market type instruments would be more favorable
than that obtainable through the Fund's normal investment programs. Accordingly,
for  temporary  defensive  purposes,  the Fund may hold up to 100% of its  total
assets in cash  and/or  short-term  obligations.  To the extent  that the Fund's
assets are so invested,  they will not be invested so as to meet its  investment
objective. The instruments may include high grade liquid debt securities such as
variable amount master demand notes, commercial paper,  certificates of deposit,
bankers' acceptances, repurchase agreements which mature in less than seven days
and obligations  issued or guaranteed by the U.S.  Government,  its agencies and
instrumentalities.  Bankers'  acceptances are instruments of United States banks
which are drafts or bills of exchange  "accepted"  by a bank or trust company as
an obligation to pay on maturity.

ZERO COUPON  BONDS.  The Fund is  permitted to purchase  zero coupon  securities
("zero  coupon  bonds").  Zero coupon bonds are purchased at a discount from the
face amount because the buyer receives only the right to receive a fixed payment
on a certain  date in the  future and does not  receive  any  periodic  interest
payments.  The effect of owning  instruments  which do not make current interest
payments is that a fixed yield is earned not only on the original investment but
also, in effect,  on all discount  accretion during the life of the obligations.
This implicit  reinvestment  of earnings at the same rate eliminates the risk of
being unable to reinvest  distributions at a rate as high as the implicit yields
on the zero coupon bond, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future.  For this reason,  zero coupon bonds are
subject to substantially  greater price fluctuations  during periods of changing
market  interest  rates  than  are  comparable  securities  which  pay  interest
currently,  which  fluctuation  increases  the longer  the  period to  maturity.
Although  zero coupon  bonds to not pay  interest to holders  prior to maturity,
federal  income tax law  requires  the Fund to  recognize  as interest  income a
portion  of the  bond's  discount  each  year  and  this  income  must  then  be
distributed to  shareholders  along with other income earned by the Fund. To the
extent that any shareholder in the Fund elect to receive their dividends in cash
rather than reinvest such


                                                              - 11 -


<PAGE>



dividends in additional shares, cash to make these distributions will have to be
provided  from the assets of the Fund or other sources such as proceeds of sales
of Fund shares and/or sale of portfolio securities. In such cases, the Fund will
not be able to purchase additional income-producing securities with cash used to
make such  distributions  and its current  income may ultimately be reduced as a
result.

RECEIPTS.  The Fund may also purchase  separately  traded interest and principal
component parts of such obligations  that are  transferable  through the Federal
book entry system,  known as Separately Traded Registered Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping  ("CUBES").  These
instruments  are  issued  by  banks  and  brokerage  firms  and are  created  by
depositing  Treasury  notes  and  Treasury  bonds  into a special  account  at a
custodian bank; the custodian holds the interest and principal  payments for the
benefit of the registered owner of the  certificates or receipts.  The custodian
arranges for the issuance of the certificates or receipts  evidencing  ownership
and maintains the register. Receipts include Treasury Receipts ("TRs"), Treasury
Investment  Growth  Receipts  ("TIGRs") and  Certificates of Accrual on Treasury
Securities ("CATS").  STRIPS, CUBES, TRs, TIGRs and CATS are sold as zero coupon
securities,  which  means  that  they are  sold at a  substantial  discount  and
redeemed at face value at their  maturity date without  interim cash payments of
interest or principal. This discount is amortized over the life of the security,
and such amortization will constitute the income earned on the security for both
accounting and tax purposes.  Because of these features, these securities may be
subject to greater interest rate volatility than  interest-paying  U.S. Treasury
obligations.  The Fund will limit its  investment in such  instruments to 20% of
its net assets.

INVESTMENT  COMPANY  SECURITIES.  The Fund may invest in the securities of other
investment companies to the extent permissible under the applicable  regulations
and interpretations of the 1940 Act or an exemptive order.

ILLIQUID INVESTMENTS AND RESTRICTED SECURITIES. The Fund may invest up to 15% of
its net assets in illiquid investments  (investments that cannot be readily sold
within  seven  days),  including  restricted  securities  which  do not meet the
criteria for liquidity established by the Board of Trustees.  The Adviser, under
the supervision of the Board of Trustees, determines the liquidity of the Fund's
investments.  The absence of a trading market can make it difficult to ascertain
a market value for illiquid  investments.  Disposing of illiquid investments may
involve time-consuming negotiation and legal expenses. Restricted Securities are
securities which cannot be sold to the


                                                              - 12 -


<PAGE>



public without  registration under the Securities Act of 1933. Unless registered
for sale, these securities can only be sold in privately negotiated transactions
or pursuant to an exemption from registration.

RISK FACTORS

LOWER RATED  FIXED-INCOME  SECURITIES.  Lower  quality  fixed-income  securities
generally  produce a higher  current  yield than do  fixed-income  securities of
higher  ratings.   However,   these   fixed-income   securities  are  considered
speculative  because  they involve  greater  price  volatility  and risk than do
higher rated fixed-income securities and yields on these fixed-income securities
will tend to fluctuate over time.  Although the market value of all fixed-income
securities  varies as a result of changes in  prevailing  interest  rates (e.g.,
when interest  rates rise,  the market value of  fixed-income  securities can be
expected to  decline),  values of lower rated  fixed-income  securities  tend to
react differently than the values of higher rated fixed-income  securities.  The
prices of lower rated  fixed-income  securities are less sensitive to changes in
interest  rates than higher rated  fixed-income  securities.  Conversely,  lower
rated  fixed-income  securities  also  involve a greater  risk of default by the
issuer in the payment of principal and income and are more sensitive to economic
downturns  and  recessions  than  higher  rated  fixed-income  securities.   The
financial  stress  resulting  from an  economic  downturn  could  have a greater
negative effect on the ability of issuers of lower rated fixed-income securities
to service their  principal and interest  payments,  to meet projected  business
goals and to obtain additional  financing than on more creditworthy  issuers. In
the event of an  issuer's  default in payment of  principal  or interest on such
securities,  or any other fixed-income  securities in the Fund's portfolio,  the
net asset value of the Fund will be negatively affected. Moreover, as the market
for  lower  rated  fixed-income  securities  is a  relatively  new one,  a sever
economic  downturn  might  increase  the number of defaults,  thereby  adversely
affecting the value of all outstanding lower rated  fixed-income  securities and
disrupting the market for such securities.  Fixed-income securities purchased by
the Fund as part of an initial  underwriting  present an additional  risk due to
their  lack of market  history.  These  risks are  exacerbated  with  respect to
fixed-income  securities  rated Caa or lower by  Moody's or CCC or lower by S&P.
Unrated fixed-income securities generally carry the same risks as do lower rated
fixed-income securities.

Lower rated fixed-income  securities are typically traded among a smaller number
of broker-dealers  rather than in a broad secondary market.  Purchasers of lower
rated fixed-income securities tend to be institutions,  rather than individuals,
a factor that


                                                              - 13 -


<PAGE>



further limits the secondary  market.  To the extent that no established  retail
secondary market exists, many lower rated fixed-income  securities may not be as
liquid as Treasury and investment  grade bonds.  The ability of the Fund to sell
lower rated  fixed-income  securities  will be adversely  affected to the extent
that such securities are thinky traded or illiquid. Moreover, the ability of the
Fund to value lower rated fixed-income  securities  becomes more difficult,  and
judgment plays a greater role in valuation, as there is less reliable, objective
data  available  with  respect  to such  securities  that are  thinly  traded or
illiquid.

Because  investors may perceive that there are greater risks associated with the
lower rated  fixed-income  securities  of the type in which the Fund may invest,
the yields and prices of such  securities  may tend to fluctuate more than those
for  fixed-income  securities  with a higher  rating.  Changes in  perception of
issuer's creditworthiness tend to occur more frequently and in a more pronounced
manner in the lower quality segments of the fixed-income  securities market than
do changes in higher quality  segments of the  fixed-income  securities  market,
resulting in greater yield and price volatility. The speculative characteristics
of  lower  rated  fixed-income  securities  are set  forth in the  Statement  of
Additional Information.

The  Adviser  believes  that  the  risks of  investing  in such  high  yielding,
fixed-income securities may be minimized through careful analysis of prospective
issuers.  Although  the opinion of ratings  services  such as Moody's and S&P is
considered in selecting  portfolio  securities,  they evaluate the safety of the
principal  and the  interest  payments of the  security,  not their market value
risk.  Additionally,  credit  rating  agencies may  experience  slight delays in
updating ratings to reflect current events.  The Adviser relies,  primarily,  on
its own credit analysis. This may suggest,  however, that the achievement of the
Fund's  investment  objective  is more  dependent on the  Adviser's  proprietary
credit analysis,  than is otherwise the case for a fund that invests exclusively
in higher quality fixed-income securities.

Once the rating of a portfolio security or the quality determination ascribed by
the  Adviser to an  unrated,  fixed-income  security  has been  downgraded,  the
Adviser will consider all circumstances  deemed relevant in determining  whether
to  continue  to hold the  security,  but in no event will the Fund  retain such
securities  if it would  cause  the Fund to have 20% or more of the value of its
net assets invested in fixed-income  securities  rated lower than Baa by Moody's
or BBB by S&P,  or if  unrated,  are judged by the  Adviser to be of  comparable
quality.



                                                              - 14 -


<PAGE>



The  Fund  may  also  invest  in  unrated   fixed-income   securities.   Unrated
fixed-income  securities  are  not  necessarily  of  lower  quality  than  rated
fixed-income securities, but they may not be attractive to as many buyers.

There is no minimum rating standard for the Fund's investments in the high yield
market;  therefore,  the Fund may at times invest in fixed-income securities not
currently  paying  interest  or  in  default.  The  Fund  will  invest  in  such
fixed-income securities where the Adviser perceives a substantial opportunity to
realize the Fund's  objective based on its analysis of the underlying  financial
condition of the issuer. It is not,  however,  the current intention of the Fund
to make such investments.

These  limitations and the policies  discussed in this Prospectus are considered
and applied by the Adviser at the time of purchase of an investment; the sale of
securities  by the Fund is not required in the event of a  subsequent  change in
circumstances.

HOW TO PURCHASE SHARES
- ----------------------
         Your initial  investment in the Fund ordinarily must be at least $1,000
($250 for tax-deferred  retirement  plans).  You may purchase  additional shares
through the Open Account Program  described  below.  You may open an account and
make an initial  investment  through securities dealers having a sales agreement
with the Trust's  principal  underwriter,  Countrywide  Investments,  Inc.  (the
"Adviser"). You may also make a direct initial investment by sending a check and
a completed  account  application form to Countrywide  Fund Services,  Inc. (the
"Transfer Agent"), P.O. Box 5354, Cincinnati, Ohio 45201-5354.  Checks should be
made payable to the "Intermediate Bond Fund." An account application is included
in this Prospectus.

         The Trust mails you  confirmations  of all purchases or  redemptions of
Fund shares. Certificates representing shares are not ordinarily issued, but you
may receive a  certificate  without  charge by sending a written  request to the
Transfer  Agent.  Certificates  for fractional  shares will not be issued.  If a
certificate  has been issued to you, you will not be permitted to redeem  shares
by check,  to redeem or exchange  shares by  telephone  or to use the  automatic
withdrawal plan as to those shares. The Trust and the Adviser reserve the rights
to limit the amount of investments and to refuse to sell to any person.

         Investors should be aware that the Fund's account application  contains
provisions  in favor of the  Trust,  the  Transfer  Agent and  certain  of their
affiliates,  excluding such entities from certain liabilities (including,  among
others, losses resulting from unauthorized shareholder transactions)


                                                              - 15 -


<PAGE>



relating  to the  various  services  (for  example,  telephone  redemptions  and
exchanges and check redemptions) made available to investors.

         Should an order to purchase shares be canceled  because your check does
not clear,  you will be responsible for any resulting losses or fees incurred by
the Trust or the Transfer Agent in the transaction.

OPEN ACCOUNT PROGRAM.  Please direct inquiries concerning the services described
in this section to the Transfer Agent at the address or numbers listed below.
     
    After an initial investment,  all investors are considered participants
in the Open Account  Program.  The Open Account  Program  helps  investors  make
purchases of shares of the Fund over a period of years and permits the automatic
reinvestment  of dividends and  distributions  of the Fund in additional  shares
without a sales load.

         Under the Open Account Program, you may purchase and add shares to your
account at any time either through your securities  dealer or by sending a check
to Countrywide Fund Services, Inc., P.O. Box 5354, Cincinnati,  Ohio 45201-5354.
The check should be made payable to the "Intermediate Bond Fund."

         Under the Open Account  Program,  you may also  purchase  shares of the
Fund  by bank  wire.  Please  telephone  the  Transfer  Agent  (Nationwide  call
toll-free  800-543-0407;  in Cincinnati call 629- 2050) for  instructions.  Your
bank may impose a charge for sending  your wire.  There is  presently no fee for
receipt of wired  funds,  but the  Transfer  Agent  reserves the right to charge
shareholders for this service upon thirty days' prior notice to shareholders.

         Each additional  purchase request must contain the name of your account
and your account number to permit proper crediting to your account.  While there
is no minimum amount required for subsequent investments, the Trust reserves the
right to impose such  requirement.  All purchases under the Open Account Program
are made at the  public  offering  price  next  determined  after  receipt  of a
purchase order by the Trust. If a broker-dealer received concessions for selling
shares of the Fund to a current shareholder, such broker-dealer will receive the
concessions  described  above with  respect  to  additional  investments  by the
shareholder.

          Shares  of the  Fund  are sold on a  continuous  basis  at the  public
offering price next determined after receipt of a purchase order by the Trust.
Purchase orders received by dealers prior to


                                                              - 16 -


<PAGE>



4:00 p.m.,  Eastern time, on any business day and  transmitted to the Adviser by
5:00 p.m.,  Eastern time,  that day are confirmed at the public  offering  price
determined  as of the close of the  regular  session  of trading on the New York
Stock  Exchange  on that day.  It is the  responsibility  of dealers to transmit
properly  completed  orders so that they will be received by the Adviser by 5:00
p.m.,  Eastern  time.  Dealers may charge a fee for effecting  purchase  orders.
Direct  purchase  orders  received by the Transfer  Agent by 4:00 p.m.,  Eastern
time,  are confirmed at that day's public  offering  price.  Direct  investments
received  by the  Transfer  Agent  after 4:00  p.m.,  Eastern  time,  and orders
received from dealers after 5:00 p.m., Eastern time, are confirmed at the public
offering price next determined on the following business day.

         The public  offering  price of shares is the next  determined net asset
value per share plus a sales load as shown in the following table.
                                                      Dealer
                                                      Reallowance
                              Sales Load as % of:     as % of
                                   Public    Net      Public
                                   Offering  Amount   Offering
Amount of Investment               Price     Invested Price

Less than $500,000                  1.00%      1.01%      1.00%
$500,000 but less than $1,000,000    .75%       .76%       .75%
$1,000,000 or more                   None*     None*

*    There is no  front-end  sales load on purchases of $1 million or more but a
     contingent  deferred  sales load of .75% may apply if a commission was paid
     by the Adviser to a  participating  unaffiliated  dealer and the shares are
     redeemed within twelve months from the date of purchase.

     Under  certain  circumstances,  the  Adviser may  increase or decrease  the
reallowance to dealers. Dealers engaged in the sale of shares of the Fund may be
deemed to be underwriters  under the Securities Act of 1933. The Adviser retains
the entire sales load on all direct  initial  investments in the Fund and on all
investments in accounts with no designated dealer of record.

         For initial  purchases of $1,000,000 or more and  subsequent  purchases
further increasing the size of the account, a dealer's commission of .75% of the
purchase amount may be paid by the Adviser to participating unaffiliated dealers
through whom such purchases are effected.  In determining a dealer's eligibility
for such  commission,  purchases  of shares of the Fund may be  aggregated  with
concurrent  purchases  of  shares  of other  funds of  Countrywide  Investments.
Dealers should contact the Adviser  concerning the applicability and calculation
of the dealer's commission in the case of combined  purchases.  An exchange from
other funds of Countrywide Investments will not qualify for


                                                              - 17 -


<PAGE>



payment of the dealer's  commission,  unless such exchange is from a Countrywide
fund with assets as to which a dealer's  commission  or similar  payment has not
been  previously  paid.  Redemptions of shares may result in the imposition of a
contingent  deferred  sales load if the  dealer's  commission  described in this
paragraph  was  paid  in  connection  with  the  purchase  of such  shares.  See
"Contingent Deferred Sales Load for Certain Purchases of Shares" below.

         REDUCED SALES LOAD. A "purchaser"  (defined below) may use the Right of
Accumulation  to  combine  the cost or current  net asset  value  (whichever  is
higher) of his existing shares of the load funds distributed by the Adviser with
the amount of his current  purchases  in order to take  advantage of the reduced
sales  loads  set  forth in the  table  above.  Purchases  made in any load fund
distributed  by the Adviser  pursuant to a Letter of Intent may also be eligible
for the reduced sales loads.  The minimum initial  investment  under a Letter of
Intent is  $10,000.  The load funds  currently  distributed  by the  Adviser are
listed in the Exchange Privilege section of this Prospectus. Shareholders should
contact the Transfer Agent for information  about the Right of Accumulation  and
Letter of Intent.

         PURCHASES  AT NET ASSET VALUE.  You may purchase  shares of the Fund at
net asset value when the payment for your  investment  represents  the  proceeds
from the  redemption  of shares of any other  mutual  fund which has a front-end
sales load and is not  distributed by the Adviser.  Your investment will qualify
for this  provision  if the  purchase  price of the  shares  of the  other  fund
included  a sales  load  and the  redemption  occurred  within  one  year of the
purchase  of such  shares and no more than sixty days prior to your  purchase of
shares of the Fund.  To make a  purchase  at net asset  value  pursuant  to this
provision,  you  must  submit  photocopies  of  the  confirmations  (or  similar
evidence)  showing the purchase and redemption of shares of the other fund. Your
payment may be made with the redemption  check  representing the proceeds of the
shares  redeemed,  endorsed  to the order of the  "Intermediate  Bond Fund." The
redemption of shares of the other fund is, for federal  income tax  purposes,  a
sale on which you may realize a gain or loss.  These  provisions may be modified
or  terminated  at any time.  Contact  your  securities  dealer or the Trust for
further information.

         Banks,  bank trust  departments and savings and loan  associations,  in
their fiduciary capacity or for their own accounts,  may also purchase shares of
the Fund at net asset value. To the extent permitted by regulatory  authorities,
a bank  trust  department  may  charge  fees to  clients  for whose  account  it
purchases  shares at net asset value.  Federal and state credit  unions may also
purchase shares at net asset value.


                                                              - 18 -


<PAGE>




         In addition,  shares of the Fund may be purchased at net asset value by
broker-dealers who have a sales agreement with the Adviser, and their registered
personnel and  employees,  including  members of the immediate  families of such
registered personnel and employees.

         Clients of investment advisers and financial planners may also purchase
shares of the Fund at net asset value if their  investment  adviser or financial
planner  has made  arrangements  to permit  them to do so with the Trust and the
Adviser.  The investment  adviser or financial  planner must notify the Transfer
Agent that an investment qualifies as a purchase at net asset value.

         Trustees,  directors,  officers and employees of the Trust, the Adviser
or the  Transfer  Agent,  including  members  of the  immediate  family  of such
individuals, may also purchase shares of the Fund at net asset value.

         CONTINGENT  DEFERRED  SALES LOAD FOR  CERTAIN  PURCHASES  OF SHARES.  A
contingent  deferred sales load is imposed upon certain redemptions of shares of
the Fund (or shares  into which such  shares were  exchanged)  purchased  at net
asset value in amounts  totaling $1 million or more, if the dealer's  commission
described  above was paid by the  Adviser  and the  shares are  redeemed  within
twelve months from the date of purchase. The contingent deferred sales load will
be paid to the  Adviser  and will be equal to .75% of the  lesser of (1) the net
asset value at the time of purchase of the shares being  redeemed or (2) the net
asset value of such shares at the time of redemption. In determining whether the
contingent deferred sales load is payable, it is assumed that shares not subject
to the contingent  deferred sales load are the first redeemed  followed by other
shares held for the longest period of time.  The contingent  deferred sales load
will not be imposed  upon shares  representing  reinvested  dividends or capital
gains  distributions,  or upon amounts  representing  share  appreciation.  If a
purchase  of shares is  subject  to the  contingent  deferred  sales  load,  the
investor will be so notified on the confirmation for such purchase.

         Redemptions of such shares of the Fund held for at least 12 months will
not be subject to the  contingent  deferred  sales load and an  exchange of such
shares  into  another  fund  of  Countrywide  Investments  is not  treated  as a
redemption and will not trigger the imposition of the contingent  deferred sales
load at the time of such exchange.  A fund will "tack" the period for which such
shares being  exchanged were held onto the holding period of the acquired shares
for purposes of determining if a contingent deferred sales load is applicable in
the event that the acquired shares are redeemed following the exchange; however,
the period


                                                              - 19 -


<PAGE>



of time that the  redemption  proceeds of such shares are held in a money market
fund  will not  count  toward  the  holding  period  for  determining  whether a
contingent deferred sales load is applicable. See "Exchange Privilege."

         The contingent  deferred sales load is currently waived for any partial
or complete redemption following death or disability (as defined in the Internal
Revenue Code of 1986) of a shareholder  (including  one who owns the shares with
his or her spouse as a joint tenant with rights of survivorship) from an account
in  which  the   deceased  or  disabled  is  named.   The  Adviser  may  require
documentation  prior to  waiver of the  charge,  including  death  certificates,
physicians' certificates, etc.

         ADDITIONAL  INFORMATION.  For purposes of  determining  the  applicable
sales load and for  purposes  of the Letter of Intent and Right of  Accumulation
privileges,  a purchaser  includes an individual,  his spouse and their children
under  the age of 21,  purchasing  shares  for his or their  own  account;  or a
trustee or other  fiduciary  purchasing  shares for a single  fiduciary  account
although  more  than one  beneficiary  is  involved;  or  employees  of a common
employer, provided that economies of scale are realized through remittances from
a single source and quarterly  confirmation of such  purchases;  or an organized
group, provided that the purchases are made through a central administration, or
a single  dealer,  or by other means which  result in economy of sales effort or
expense.  Contact  the  Transfer  Agent for  additional  information  concerning
purchases at net asset value or at reduced sales loads.

SHAREHOLDER SERVICES
- --------------------
         Contact the Transfer Agent (Nationwide call toll-free 800- 543-0407; in
Cincinnati  call  629-2050) for  additional  information  about the  shareholder
services described below.

         Automatic Withdrawal Plan
         -------------------------
         If the shares in your account have a value of at least $5,000,  you may
elect to  receive,  or may  designate  another  person to  receive,  monthly  or
quarterly  payments in a specified amount of not less than $50 each. There is no
charge for this service.  Purchases of  additional  shares of the Fund while the
plan is in effect are  generally  undesirable  because a sales load is  incurred
whenever purchases are made.



                                                              - 20 -


<PAGE>



     Tax-Deferred Retirement Plans
     ------------------------------
         Shares of the Fund are available  for purchase in  connection  with the
following tax-deferred retirement plans:

         --       Keogh Plans for self-employed individuals

         --       Individual retirement account (IRA) plans for
                  individuals and their non-employed spouses

         --       Qualified pension and profit-sharing plans for
                  employees, including those profit-sharing plans with a
                  401(k) provision

         --       403(b)(7)  custodial  accounts for  employees of public school
                  systems,    hospitals,    colleges   and   other    non-profit
                  organizations  meeting  certain  requirements  of the Internal
                  Revenue Code

         Direct Deposit Plans
         --------------------
         Shares  of the Fund  may be  purchased  through  direct  deposit  plans
offered by certain  employers  and  government  agencies.  These plans  enable a
shareholder  to have all or a portion of his or her  payroll or social  security
checks transferred automatically to purchase shares of the Fund.

         Automatic Investment Plan
         --------------------------
         You may make automatic monthly  investments in the Fund from your bank,
savings and loan or other depository  institution  account.  The minimum initial
and subsequent  investments  must be $50 under the plan. The Transfer Agent pays
the costs associated with these transfers,  but reserves the right,  upon thirty
days'  written  notice,  to make  reasonable  charges  for  this  service.  Your
depository institution may impose its own charge for debiting your account which
would reduce your return from an investment in the Fund.

         Reinvestment Privilege
         ----------------------
         If you have redeemed  shares of the Fund,  you may reinvest all or part
of the proceeds without any additional sales load. This  reinvestment must occur
within  ninety days of the  redemption  and the  privilege may only be exercised
once per year.

HOW TO REDEEM SHARES
- --------------------
         You may  redeem  shares  of the Fund on each day that the Trust is open
for  business.  You will  receive the net asset value per share next  determined
after receipt by the Transfer Agent of a


                                                              - 21 -


<PAGE>



proper  redemption  request in the form  described  below,  less any  applicable
contingent  deferred sales load.  Payment is normally made within three business
days after tender in such form,  provided  that payment in  redemption of shares
purchased  by check will be  effected  only after the check has been  collected,
which may take up to fifteen days from the  purchase  date.  To  eliminate  this
delay, you may purchase shares of the Fund by certified check or wire.

         A contingent deferred sales load may apply to a redemption of certain
shares of the Fund purchased at net asset value. See "How to Purchase Shares."

         BY TELEPHONE.  You may redeem shares by telephone. The proceeds will be
sent by mail to the address designated on your account or wired directly to your
existing  account in any commercial  bank or brokerage firm in the United States
as designated  on your  application.  To redeem by telephone,  call the Transfer
Agent (Nationwide call toll-free 800-543-0407; in Cincinnati call 629-2050). The
redemption  proceeds  from your  account  will be sent by mail or by wire within
three business days after receipt of your telephone  instructions.  IRA accounts
are not redeemable by telephone.

         The telephone  redemption  privilege is automatically  available to all
shareholders.  You may  change  the bank or  brokerage  account  which  you have
designated  under this  procedure at any time by writing to the  Transfer  Agent
with your signature guaranteed by any eligible guarantor institution  (including
banks, brokers and dealers, municipal securities brokers and dealers, government
securities brokers and dealers,  credit unions,  national securities  exchanges,
registered securities associations,  clearing agencies and savings associations)
or by completing a supplemental telephone redemption authorization form. Contact
the Transfer Agent to obtain this form.  Further  documentation will be required
to change the designated account if shares are held by a corporation,  fiduciary
or other organization.

         Neither the Trust, the Transfer Agent, nor their respective  affiliates
will be liable for complying with telephone instructions they reasonably believe
to be  genuine  or for any  loss,  damage,  cost or  expense  in  acting on such
telephone instructions. The affected shareholders will bear the risk of any such
loss.  The  Trust  or the  Transfer  Agent,  or  both,  will  employ  reasonable
procedures to determine that telephone  instructions  are genuine.  If the Trust
and/or the Transfer Agent do not employ such procedures,  they may be liable for
losses due to  unauthorized  or fraudulent  instructions.  These  procedures may
include,  among  others,  requiring  forms of personal  identification  prior to
acting  upon  telephone  instructions,  providing  written  confirmation  of the
transactions and/or tape recording telephone instructions.


                                                              - 22 -


<PAGE>




         BY MAIL.  You may  redeem  any  number of shares  from your  account by
sending a written  request to the  Transfer  Agent.  The request  must state the
number of shares or the dollar  amount to be redeemed and your  account  number.
The request must be signed  exactly as your name appears on the Trust's  account
records.  If the shares to be  redeemed  have a value of  $25,000 or more,  your
signature  must be  guaranteed  by any of the  eligible  guarantor  institutions
outlined above.

         Written  redemption  requests  may also  direct  that the  proceeds  be
deposited  directly in the bank account or brokerage account  designated on your
account application for telephone redemptions. Proceeds of redemptions requested
by mail are mailed within three business days following  receipt of instructions
in proper form.

         BY CHECK.  You may establish a special checking account with
the Fund for the purpose of redeeming shares by check.  Checks
may be made payable to anyone for any amount, but checks may not
be certified.

         When a check is presented to the  Custodian  for payment,  the Transfer
Agent, as your agent,  will cause the Fund to redeem a sufficient number of full
and fractional  shares in your account to cover the amount of the check.  Checks
will be  processed  at the net asset value on the day the check is  presented to
the Custodian for payment.

         If the amount of a check is greater  than the value of the shares  held
in your  account,  the check  will be  returned.  Shareholders  should  consider
potential  fluctuations in the net asset value of the Fund's shares when writing
checks. A check  representing a redemption request will take precedence over any
other redemption instructions issued by a shareholder.

         As long as no more  than six check  redemptions  are  effected  in your
account  in any  month,  there  will  be no  charge  for  the  check  redemption
privilege.  However, after six check redemptions are effected in your account in
a month,  the  Transfer  Agent will  charge you $.25 for each  additional  check
redemption  effected that month.  The Transfer  Agent charges  shareholders  its
costs for each stop payment and each check returned for  insufficient  funds. In
addition,  the Transfer Agent reserves the right to make  additional  charges to
recover the costs of providing the check redemption service. All charges will be
deducted from your account by  redemption  of shares in your account.  The check
redemption  procedure  may be suspended or  terminated  at any time upon written
notice by the Trust or the Transfer Agent.




                                                              - 23 -


<PAGE>



         Shareholders  should be aware  that  writing a check (a  redemption  of
shares) is a taxable event.  Shares for which  certificates have been issued may
not be redeemed by check.

         THROUGH  BROKER-DEALERS.  You may also redeem  shares by placing a wire
redemption   request  through  a  securities  broker  or  dealer.   Unaffiliated
broker-dealers  may impose a fee on the shareholder  for this service.  You will
receive the net asset value per share next determined after receipt by the Trust
or its  agent of your  wire  redemption  request.  It is the  responsibility  of
broker-dealers to properly transmit wire redemption orders.

         ADDITIONAL  REDEMPTION  INFORMATION.  If your  instructions  request  a
redemption  by wire,  you will be  charged  an $8  processing  fee by the Fund's
Custodian.  The Trust reserves the right,  upon thirty days' written notice,  to
change the  processing  fee. All charges  will be deducted  from your account by
redemption  of shares in your  account.  Your  bank or  brokerage  firm may also
impose a charge for  processing  the wire.  In the event that wire  transfer  of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.

         Redemption  requests may direct that the proceeds be deposited directly
in your account with a commercial  bank or other  depository  institution via an
Automated Clearing House (ACH) transaction. There is currently no charge for ACH
transactions.  Contact  the  Transfer  Agent  for  more  information  about  ACH
transactions.

         If a  certificate  for  shares  of the  Fund  was  issued,  it  must be
delivered to the Transfer Agent, or the dealer in the case of a wire redemption,
duly endorsed or accompanied by a duly endorsed stock power,  with the signature
guaranteed by any of the eligible guarantor institutions outlined above.

         At  the  discretion  of the  Trust  or the  Transfer  Agent,  corporate
investors  and other  associations  may be  required  to furnish an  appropriate
certification authorizing redemptions to ensure proper authorization.  The Trust
reserves the right to require you to close your account if at any time the value
of your shares is less than $1,000 (based on actual amounts  invested  including
any sales load paid, unaffected by market fluctuations),  or $250 in the case of
tax-deferred  retirement  plans,  or such other minimum  amount as the Trust may
determine from time to time. After  notification to you of the Trust's intention
to close your  account,  you will be given  thirty days to increase the value of
your account to the minimum amount.




                                                              - 24 -


<PAGE>



         The Trust  reserves the right to suspend the right of  redemption or to
postpone  the date of payment for more than three  business  days under  unusual
circumstances as determined by the Securities and Exchange Commission.

EXCHANGE PRIVILEGE
- ------------------
         Shares of the Fund and of any other fund of Countrywide Investments may
be exchanged for each other.

         Shares of the Fund which are not subject to a contingent deferred sales
load may be exchanged for Class A shares of any other fund and for shares of any
other fund which offers only one class of shares  (provided  such shares are not
subject to a contingent deferred sales load). A sales load will be imposed equal
to the excess,  if any, of the sales load rate  applicable  to the shares  being
acquired over the sales load rate, if any,  previously  paid on the shares being
exchanged.

          Shares of the Fund subject to a contingent  deferred sales load may be
exchanged, on the basis of relative net asset value per share, for shares of any
other fund which imposes a contingent  deferred sales load and for shares of any
fund which is a money  market  fund. A fund will "tack" the period for which the
shares being  exchanged were held onto the holding period of the acquired shares
for purposes of determining if a contingent deferred sales load is applicable in
the event that the acquired  shares are redeemed  following  the  exchange.  The
period of time that shares are held in a money market fund will not count toward
the holding period for determining  whether a contingent  deferred sales load is
applicable.

         The  following  are the  funds  of  Countrywide  Investments  currently
offered to the public.  Funds which may be subject to a front-end or  contingent
deferred sales load are indicated by an asterisk.

 Countrywide Tax-Free Trust              Countrywide Strategic Trust
- ---------------------------              ---------------------------
 Tax-Free Money Fund                      *U.S. Government Securities Fund
 Ohio Tax-Free Money Fund                 *Equity Fund
 California Tax-Free Money Fund           *Utility Fund
 Florida Tax-Free Money Fund              *Aggressive Growth Fund
*Tax-Free Intermediate Term Fund          *Growth/Value Fund
*Ohio Insured Tax-Free Fund
*Kentucky Tax-Free Fund







                                                              - 25 -


<PAGE>



                                  Countrywide Investment Trust
                                  -----------------------------
                                  Short Term Government Income Fund
                                  Institutional Government Income Fund
                                  Money Market Fund
                                 *Intermediate Bond Fund
                                 *Intermediate Term Government Income
                                       Fund
                                 *Adjustable Rate U.S. Government
                                       Securities Fund
                                 *Global Bond Fund

         You may  request  an  exchange  by  sending  a written  request  to the
Transfer  Agent.  The request must be signed exactly as your name appears on the
Trust's account  records.  Exchanges may also be requested by telephone.  If you
are unable to execute your transaction by telephone (for example during times of
unusual  market  activity)  consider  requesting  your  exchange  by  mail or by
visiting the Trust's offices at 312 Walnut Street, 21st Floor, Cincinnati,  Ohio
45202.  An exchange will be effected at the next  determined net asset value (or
offering price,  if sales load is applicable)  after receipt of a request by the
Transfer Agent.

         Exchanges may only be made for shares of funds then offered for sale in
your state of  residence  and are  subject  to the  applicable  minimum  initial
investment requirements. The exchange privilege may be modified or terminated by
the Board of Trustees  upon 60 days' prior notice to  shareholders.  An exchange
results in a sale of fund  shares,  which may cause you to  recognize  a capital
gain or loss. Before making an exchange,  contact the Transfer Agent to obtain a
current  prospectus  for any of the other funds of Countrywide  Investments  and
more information about exchanges among Countrywide Investments.

DIVIDENDS AND DISTRIBUTIONS
- ----------------------------
         All of the net investment  income of the Fund is declared as a dividend
to  shareholders  of record on each  business day of the Trust and paid monthly.
The Fund expects to distribute any net realized long-term capital gains at least
once each year.  Management  will  determine  the timing  and  frequency  of the
distributions  of any net realized  short-term  capital gains. The Fund will, at
the time dividends are paid,  designate as tax-exempt the same percentage of the
distribution as the actual tax-exempt income earned during the period covered by
the distribution  bore to total income earned during the period;  the percentage
of  the  distribution   which  is  tax-exempt  may  vary  from  distribution  to
distribution.

         Distributions are paid according to one of the following options:


                                                              - 26 -


<PAGE>




         Share Option  - income distributions and capital gains
                         distributions reinvested in additional
                         shares.

         Income Option - income distributions and short-term capital 
                         gains distributions paid in cash; long-term
                         capital gains distributions reinvested in
                         additional shares.

         Cash Option  -  income distributions and capital gains
                         distributions paid in cash.

         You should  indicate your choice of option on your  application.  If no
option is specified on your  application,  distributions  will  automatically be
reinvested  in additional  shares.  All  distributions  will be based on the net
asset value in effect on the payable date.

         If you select the Income Option or the Cash Option and the U.S.  Postal
Service  cannot  deliver your checks or if your checks  remain  uncashed for six
months, your dividends may be reinvested in your account at the then-current net
asset value and your account will be converted to the Share Option.

         An  investor  who has  received in cash any  dividend or capital  gains
distribution from the Fund may return the distribution within thirty days of the
distribution  date to the Transfer Agent for reinvestment at the net asset value
next  determined  after its return.  The  investor or his dealer must notify the
Transfer  Agent  that a  distribution  is  being  reinvested  pursuant  to  this
provision.

TAXES
- -----
         The Fund has  qualified  in all prior  years and intends to continue to
qualify for the special tax treatment afforded a "regulated  investment company"
under  Subchapter M of the Internal Revenue Code so that it does not pay federal
taxes on income and capital gains distributed to shareholders.

         The Fund intends to distribute  substantially all of its net investment
income and any net realized capital gains to its shareholders.  Distributions of
net investment income as well as from net realized  short-term capital gains, if
any,  are  taxable as ordinary  income.  Since the Fund's  investment  income is
derived from interest rather than dividends, no portion of such distributions is
eligible  for  the  dividends  received  deduction  available  to  corporations.
Distributions of net realized  long-term  capital gains are taxable as long-term
capital gains regardless of how long you have held your Fund shares. Redemptions
and  exchanges of shares of the Fund are taxable  events on which a  shareholder
may realize a gain or loss.



                                                              - 27 -


<PAGE>



         The Fund will mail to each of its  shareholders a statement  indicating
the amount and federal  income tax status of all  distributions  made during the
year. In addition to federal taxes,  shareholders  of the Fund may be subject to
state and local taxes on  distributions.  Shareholders  should consult their tax
advisors about the tax effect of distributions and withdrawals from the Fund and
the use of the Automatic  Withdrawal  Plan and the Exchange  Privilege.  The tax
consequences  described in this section apply whether distributions are taken in
cash or reinvested in additional shares.

OPERATION OF THE FUND
- ----------------------
         The Fund is a non-diversified  series of Countrywide  Investment Trust,
an open-end management investment company organized as a Massachusetts  business
trust on  December  7,  1980.  The Board of  Trustees  supervises  the  business
activities  of the Trust.  Like other mutual funds,  the Trust  retains  various
organizations to perform specialized services for the Fund.

         The Trust retains  Countrywide  Investments,  Inc.,  312 Walnut Street,
Cincinnati, Ohio 45202 (the "Adviser"), to manage the Fund's investments and its
business  affairs.  The Adviser was organized in 1974 and is also the investment
adviser to six other series of the Trust, seven series of Countrywide Investment
Trust and five series of Countrywide Strategic Trust. The Adviser is an indirect
wholly-owned subsidiary of Countrywide Credit Industries, Inc., a New York Stock
Exchange  listed  company  principally  engaged in the  business of  residential
mortgage  lending.  The Fund pays the  Adviser a fee equal to the annual rate of
 .5% of the average value of its daily net assets up to $50 million; .45% of such
assets from $50 million to $150 million; .4% of such assets from $150 million to
$250 million; and .375% of such assets in excess of $250 million.

         John  J.  Goetz,  the  Chief  Investment  Officer  of the  Adviser,  is
primarily responsible for managing the portfolio of the Fund. Mr. Goetz has been
employed by the Adviser in various  capacities  since 1981 and has been managing
the Fund's portfolio since August 1997.

         The Fund is  responsible  for the  payment of all  operating  expenses,
including fees and expenses in connection with membership in investment  company
organizations,  brokerage fees and commissions,  legal,  auditing and accounting
expenses,  expenses of  registering  shares under  federal and state  securities
laws,   expenses   related  to  the  distribution  of  the  Fund's  shares  (see
"Distribution Plan"),  insurance expenses,  taxes or governmental fees, fees and
expenses of the  custodian,  transfer  agent and accounting and pricing agent of
the Fund, fees and


                                                              - 28 -


<PAGE>



expenses of members of the Board of Trustees who are not  interested  persons of
the Trust,  the cost of preparing  and  distributing  prospectuses,  statements,
reports and other documents to shareholders,  expenses of shareholders' meetings
and proxy solicitations, and such extraordinary or non-recurring expenses as may
arise, including litigation to which the Fund may be a party and indemnification
of the Trust's officers and Trustees with respect thereto.

         The Trust has retained Countrywide Fund Services,  Inc., P.O. Box 5354,
Cincinnati,  Ohio (the "Transfer Agent"), an indirect wholly-owned subsidiary of
Countrywide  Credit  Industries,  Inc., to serve as the Fund's  transfer  agent,
dividend paying agent and shareholder service agent.

         The Transfer Agent also provides accounting and pricing services to the
Fund. The Transfer  Agent  receives a monthly fee from the Fund for  calculating
daily net asset  value per share and  maintaining  such books and records as are
necessary to enable it to perform its duties.

         In  addition,  the Transfer  Agent has been  retained by the Adviser to
assist the Adviser in  providing  administrative  services to the Fund.  In this
capacity,  the Transfer Agent supplies executive,  administrative and regulatory
services,  supervises  the  preparation  of tax  returns,  and  coordinates  the
preparation  of reports to  shareholders  and  reports to and  filings  with the
Securities and Exchange Commission and state securities authorities. The Adviser
(not the Fund) pays the Transfer Agent a fee for these  administrative  services
equal to the annual  rate of .1% of the  average  value of the Fund's  daily net
assets.

         The Adviser serves as principal  underwriter for the Fund and, as such,
is the exclusive  agent for the  distribution  of shares of the Fund.  Angelo M.
Mozilo,  Chairman  and a  director  of the  Adviser,  is a Trustee of the Trust.
Robert H. Leshner,  President and a director of the Adviser,  is President and a
Trustee  of the Trust.  Robert G.  Dorsey,  Treasurer  of the  Adviser,  is Vice
President of the Trust.  John F. Splain,  Secretary  and General  Counsel of the
Adviser, is Secretary of the Trust.

         Consistent with the Rules of Fair Practice of the National  Association
of  Securities  Dealers,  Inc.,  and subject to its  objective  of seeking  best
execution of portfolio transactions, the Adviser may give consideration to sales
of shares of the Fund as a factor in the  selection  of brokers  and  dealers to
execute portfolio  transactions of the Fund.  Subject to the requirements of the
Investment  Company Act of 1940 and procedures adopted by the Board of Trustees,
the Fund may execute portfolio


                                                              - 29 -


<PAGE>



transactions  through any broker or dealer and pay  brokerage  commissions  to a
broker  (i) which is an  affiliated  person of the  Trust,  or (ii)  which is an
affiliated  person of such person,  or (iii) an affiliated person of which is an
affiliated person of the Trust or the Adviser.

         Shares of the Fund have equal voting rights and liquidation rights. The
Fund shall vote  separately on matters  submitted to a vote of the  shareholders
except in matters  where a vote of all series of the Trust in the  aggregate  is
required by the  Investment  Company Act of 1940 or otherwise.  When matters are
submitted to shareholders  for a vote, each  shareholder is entitled to one vote
for each full share owned and fractional votes for fractional  shares owned. The
Trust does not normally hold annual meetings of shareholders. The Trustees shall
promptly  call and give notice of a meeting of  shareholders  for the purpose of
voting  upon the removal of any Trustee  when  requested  to do so in writing by
shareholders  holding 10% or more of the Trust's  outstanding  shares. The Trust
will comply with the provisions of Section 16(c) of the  Investment  Company Act
of 1940 in order to facilitate communications among shareholders.

DISTRIBUTION PLAN
- ------------------
     Pursuant to Rule 12b-1 under the  Investment  Company Act of 1940, the Fund
has  adopted  a plan of  distribution  (the  "Plan")  under  which  the Fund may
directly  incur  or  reimburse  the  Adviser  for  certain  distribution-related
expenses, including payments to securities dealers and others who are engaged in
the sale of shares of the Fund and who may be advising  investors  regarding the
purchase,  sale or retention of Fund shares;  expenses of maintaining  personnel
who  engage in or  support  distribution  of shares  or who  render  shareholder
support  services  not  otherwise  provided by the Transfer  Agent;  expenses of
formulating and  implementing  marketing and promotional  activities,  including
direct  mail  promotions  and mass media  advertising;  expenses  of  preparing,
printing and  distributing  sales  literature and prospectuses and statements of
additional   information   and  reports  for  recipients   other  than  existing
shareholders of the Fund;  expenses of obtaining such information,  analyses and
reports with respect to marketing and  promotional  activities as the Trust may,
from  time to time,  deem  advisable;  and any  other  expenses  related  to the
distribution of the Fund's shares.

         The annual  limitation for payment of expenses  pursuant to the Plan is
 .35% of the Fund's average daily net assets.  Unreimbursed expenditures will not
be carried over from year to year.  In the event the Plan is  terminated  by the
Fund in  accordance  with its terms,  the Fund will not be  required to make any
payments  for  expenses  incurred  by  the  Adviser  after  the  date  the  Plan
terminates.


                                                              - 30 -


<PAGE>




    Pursuant  to the  Plan,  the Fund may also make  payments  to banks or other
financial   institutions  that  provide  shareholder   services  and  administer
shareholder  accounts.  The  Glass-Steagall Act prohibits banks from engaging in
the business of underwriting,  selling or distributing securities.  Although the
scope of this  prohibition  under the  Glass-Steagall  Act has not been  clearly
defined by the courts or  appropriate  regulatory  agencies,  management  of the
Trust  believes  that the Glass-  Steagall  Act should not  preclude a bank from
providing such services. However, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and financial
institutions  may be required to register as dealers pursuant to state law. If a
bank were  prohibited from continuing to perform all or a part of such services,
management of the Trust  believes that there would be no material  impact on the
Fund or its  shareholders.  Banks may charge their  customers  fees for offering
these services to the extent permitted by applicable regulatory authorities, and
the  overall  return  to  those  shareholders  availing  themselves  of the bank
services will be lower than to those  shareholders who do not. The Fund may from
time to time purchase  securities  issued by banks which provide such  services;
however, in selecting  investments for the Fund, no preference will be shown for
such securities.

         The National  Association of Securities  Dealers,  in its Rules of Fair
Practice,  places certain  limitations  on  asset-based  sales charges of mutual
funds.  These Rules require  fund-level  accounting in which all sales charges -
front-end  load,  12b-1 fees or  contingent  deferred  load -  terminate  when a
percentage of gross sales is reached.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE
- ----------------------------------------------------
         On each day that the Trust is open for  business,  the public  offering
price (net asset  value plus  applicable  sales load) of A shares of the Fund is
determined  as of the close of the  regular  session  of trading on the New York
Stock  Exchange,  currently  4:00  p.m.,  Eastern  time.  The  Trust is open for
business on each day the New York Stock Exchange is open for business and on any
other day when there is sufficient  trading in the Fund's  investments  that its
net asset value might be materially  affected.  The net asset value per share of
the Fund is calculated by dividing the sum of the value of the  securities  held
by the Fund plus cash or other assets minus all liabilities (including estimated
accrued expenses) by the total number of shares outstanding of the Fund, rounded
to the nearest cent.

         The Fund's portfolio securities for which market quotations are readily
available  are valued at their most  recent bid prices as  obtained  from one or
more of the major market makers for such


                                                              - 31 -


<PAGE>



securities.  Securities  (and other assets) for which market  quotations are not
readily  available are valued at their fair value as determined in good faith in
accordance with  consistently  applied  procedures  established by and under the
general  supervision of the Board of Trustees.  The net asset value per share of
the Fund will fluctuate with the value of the securities it holds.

PERFORMANCE INFORMATION
- -----------------------
         From time to time,  the Fund may  advertise  its "average  annual total
return."  The Fund may also  advertise  "yield."  Both yield and average  annual
total return  figures are based on  historical  earnings and are not intended to
indicate future performance.

         The  "average  annual  total  return" of the Fund refers to the average
annual  compounded rates of return over the most recent 1, 5 and 10 year periods
or, where the Fund has not been in operation  for such period,  over the life of
the Fund (which periods will be stated in the  advertisement)  that would equate
an initial  amount  invested at the  beginning of a stated  period to the ending
redeemable  value of the  investment.  The  calculation of "average annual total
return"  assumes the  reinvestment  of all dividends and  distributions  and the
deduction of the current  maximum  sales load from the initial  investment.  The
Fund may also advertise total return (a  "nonstandardized  quotation")  which is
calculated  differently  from "average  annual total return." A  nonstandardized
quotation  of  total  return  may be a  cumulative  return  which  measures  the
percentage  change in the value of an account between the beginning and end of a
period, assuming no activity in the account other than reinvestment of dividends
and capital gains distributions. A nonstandardized quotation of total return may
also indicate average annual  compounded rates of return over periods other than
those specified for "average annual total return." These nonstandardized returns
do not include the effect of the applicable sales load which, if included, would
reduce total return. A nonstandardized  quotation of total return will always be
accompanied by the Fund's "average annual total return" as described above.

         The  "yield" of the Fund is computed  by  dividing  the net  investment
income per share earned during a thirty-day  (or one month) period stated in the
advertisement  by the maximum public offering price per share on the last day of
the period (using the average number of shares  entitled to receive  dividends).
The yield formula assumes that net investment income is earned and reinvested at
a constant rate and annualized at the end of a six-month period.



                                                              - 32 -


<PAGE>



         From time to time, the Fund may advertise its  performance  rankings as
published by recognized  independent  mutual fund  statistical  services such as
Lipper  Analytical  Services,  Inc.  ("Lipper"),  or by  publications of general
interest  such as  Forbes,  Money,  The  Wall  Street  Journal,  Business  Week,
Barron's,  Fortune or Morningstar  Mutual Fund Values. The Fund may also compare
its  performance to that of other selected  mutual funds,  averages of the other
mutual  funds  within  its  category  as  determined  by Lipper,  or  recognized
indicators.  In  connection  with a  ranking,  the Fund may  provide  additional
information,  such as the  particular  category  of funds to which  the  ranking
relates,  the  number of funds in the  category,  the  criteria  upon  which the
ranking is based,  and the effect of fee waivers and/or expense  reimbursements,
if any.  The  Fund  may  also  present  its  performance  and  other  investment
characteristics,  such as volatility or a temporary defense posture, in light of
the Adviser's view of current or past market conditions or historical trends.

         Further  information  about the Fund's  performance is contained in the
Trust's  annual  report  which can be obtained by  shareholders  at no charge by
calling the Transfer Agent Nationwide call toll-free 800-543-0407; in Cincinnati
call  629-2050)  or by writing to the Trust at the  address on the front of this
Prospectus.





                                                              - 33 -


<PAGE>



COUNTRYWIDE INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio  45202-4094
Nationwide: (Toll-Free) 800-543-8721
Cincinnati: 513-629-2000

BOARD OF TRUSTEES
Donald L.Bogdon, M.D.
John R. Delfino
H. Jerome Lerner
Robert H. Leshner
Angelo R. Mozilo
Oscar P. Robertson
John F. Seymour, Jr.
Sebastiano Sterpa

INVESTMENT ADVISER
COUNTRYWIDE INVESTMENTS, INC.
312 Walnut Street, 21st Floor
Cincinnati, Ohio  45202-4094

TRANSFER AGENT
COUNTRYWIDE FUND SERVICES, INC.
P.O. Box 5354
Cincinnati, Ohio  45201-5354

Shareholder Service
Nationwide: (Toll-Free) 800-543-0407
Cincinnati: 513-629-2050

Rate Line
Nationwide: (Toll-Free) 800-852-3809
Cincinnati: 513-579-0999












                                                              - 34 -


<PAGE>


TABLE OF CONTENTS

Expense Information................................................
Financial Highlights...............................................
Investment Objective and Policies..................................
How to Purchase Shares.............................................
Shareholder Services...............................................
How to Redeem Shares...............................................
Exchange Privilege.................................................
Dividends and Distributions........................................
Taxes..............................................................
Operation of the Fund..............................................
Distribution Plan . . . ...........................................
Calculation of Share Price and Public Offering Price...............
Performance Information............................................


         No person has been  authorized to give any  information  or to make any
representations,  other than those contained in this  Prospectus,  in connection
with the  offering  contained  in this  Prospectus,  and if given or made,  such
information or  representations  must not be relied upon as being  authorized by
the Trust.  This  Prospectus  does not  constitute an offer by the Trust to sell
shares in any State to any person to whom it is  unlawful  for the Trust to make
such offer in such State.



























                                                              - 35 -


<PAGE>


                          COUNTRYWIDE INVESTMENT TRUST


                       STATEMENT OF ADDITIONAL INFORMATION


                           ___________________ , 1997

                                Money Market Fund
                             Intermediate Bond Fund


         This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of the applicable Fund of Countrywide
Investment Trust dated __________,  1997.  A copy of a Fund's Prospectus can be 
obtained by writing the Trust at 312 Walnut  Street,  21st Floor,  Cincinnati, 
Ohio  45202-4094, or by calling the Trust nationwide toll-free 800-543-0407, in
Cincinnati 629-2050.































<PAGE>




                       STATEMENT OF ADDITIONAL INFORMATION

                          Countrywide Investment Trust
                          312 Walnut Street, 21st Floor
                           Cincinnati, Ohio 45202-4094

                                TABLE OF CONTENTS
                                                                        PAGE

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

QUALITY RATINGS OF FIXED-INCOME OBLIGATIONS................................... 4

DEFINITIONS, POLICIES AND RISK CONSIDERATIONS ................................ 8

INVESTMENT LIMITATIONS........................................................14

TRUSTEES AND OFFICERS.........................................................16

THE INVESTMENT ADVISER AND UNDERWRITER........................................19

DISTRIBUTION PLAN . . . . . ..................................................20

SECURITIES TRANSACTIONS.......................................................22

PORTFOLIO TURNOVER............................................................24

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE..........................24

OTHER PURCHASE INFORMATION....................................................26

TAXES.........................................................................27

REDEMPTION IN KIND............................................................28

HISTORICAL PERFORMANCE INFORMATION............................................29

CUSTODIAN.....................................................................31

AUDITORS......................................................................31

TRANSFER AGENT. ..............................................................32

FINANCIAL STATEMENTS..........................................................34




<PAGE>



THE TRUST
- ---------
         Countrywide Investment Trust (the "Trust"), formerly Midwest Trust, was
organized  as a  Massachusetts  business  trust on December  7, 1980.  The Trust
currently  offers six series of shares to investors:  the Short Term  Government
Income Fund (formerly the Short Term Government  Fund),  the  Intermediate  Term
Government  Income Fund (formerly the  Intermediate  Term Government  Fund), the
Institutional  Government  Income Fund  (formerly the  Institutional  Government
Fund),  the Adjustable  Rate U.S.  Government  Securities  Fund, the Global Bond
Fund, the Money Market Fund and the  Intermediate  Bond Fund.  This Statement of
Additional  Information  provides  information relating to the Money Market Fund
and the  Intermediate  Bond  Fund  (referred  to  individually  as a "Fund"  and
collectively as the "Funds").  Information relating to the Short Term Government
Income Fund, the  Intermediate  Term Government  Income Fund, the  Institutional
Government Income Fund, the Adjustable Rate U.S. Government  Securities Fund and
the  Global  Bond  Fund is  contained  in a  separate  Statement  of  Additional
Information. Each Fund has its own investment objective and policies.

         Each share of a Fund represents an equal proportionate  interest in the
assets and liabilities belonging to that Fund with each other share of that Fund
and is entitled to such dividends and  distributions out of the income belonging
to the Fund as are declared by the Trustees.  The shares do not have  cumulative
voting rights or any preemptive or conversion  rights, and the Trustees have the
authority  from time to time to divide or combine the shares of either Fund into
a greater or lesser  number of shares of that Fund so long as the  proportionate
beneficial  interest  in the  assets  belonging  to that Fund and the  rights of
shares of any other Fund are in no way affected. In case of any liquidation of a
Fund,  the  holders of shares of the Fund being  liquidated  will be entitled to
receive as a class a  distribution  out of the assets,  net of the  liabilities,
belonging to that Fund.  Expenses  attributable to either Fund are borne by that
Fund. Any general expenses of the Trust not readily identifiable as belonging to
a particular  Fund are  allocated  by or under the  direction of the Trustees in
such manner as the Trustees determine to be fair and equitable.  Generally,  the
Trustees allocate such expenses on the basis of relative net assets or number of
shareholders.  No shareholder is liable to further calls or to assessment by the
Trust without his express consent.

         Under Massachusetts law, under certain circumstances, shareholders of a
Massachusetts  business  trust could be deemed to have the same type of personal
liability for the  obligations  of the Trust as does a partner of a partnership.
However,  numerous investment  companies registered under the Investment Company
Act of 1940 have been formed as  Massachusetts  business trusts and the Trust is
not aware of an instance where such result has occurred.

                                                     - 3 -

<PAGE>



In addition,  the Trust Agreement  disclaims  shareholder  liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement,  obligation or instrument  entered into or executed by the Trust
or the Trustees.  The Trust Agreement also provides for the  indemnification out
of the Trust  property  for all  losses and  expenses  of any  shareholder  held
personally liable for the obligations of the Trust.  Moreover,  it provides that
the Trust will,  upon request,  assume the defense of any claim made against any
shareholder  for any act or  obligation  of the Trust and satisfy  any  judgment
thereon.  As a result,  and  particularly  because the Trust  assets are readily
marketable and ordinarily substantially exceed liabilities,  management believes
that the risk of shareholder liability is slight and limited to circumstances in
which the Trust  itself  would be  unable  to meet its  obligations.  Management
believes that, in view of the above, the risk of personal liability is remote.

QUALITY RATINGS OF FIXED-INCOME OBLIGATIONS
- -------------------------------------------
CORPORATE BONDS.

MOODY'S INVESTORS SERVICE, INC. PROVIDES THE FOLLOWING DESCRIPTIONS OF ITS 
CORPORATE BOND RATINGS:

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

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

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

     Baa -"Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly  protected nor poorly secured.  Interest  payments
and principal security appear

                                                     - 4 -

<PAGE>



adequate for the present but certain  protective  elements may be lacking or may
be characteristically  unreliable over any great length of time. Such bonds lack
outstanding   investment   characteristics   and  in   fact   have   speculative
characteristics as well."

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

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

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

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

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

STANDARD & POOR'S  RATINGS  GROUP  PROVIDES THE  FOLLOWING  DESCRIPTIONS  OF ITS
CORPORATE BOND RATINGS:

         AAA - "Debt  rated AAA has the  highest  rating  assigned by Standard &
Poor's to a debt  obligation.  Capacity to pay interest  and repay  principal is
extremely strong."

         AA - "Debt rated AA has a very  strong  capacity  to pay  interest  and
repay principal and differs from the highest rated issues only in small degree."

         A -  "Debt  rated A has  strong  capacity  to pay  interest  and  repay
principal  although it is somewhat more  susceptible  to the adverse  effects of
changes in  circumstances  and  economic  conditions  than debt in higher  rated
categories."

     BBB - "Debt  rated BBB is  regarded  as  having  adequate  capacity  to pay
interest and repay principal.  Whereas it normally exhibits adequate  protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories."

                                                     - 5 -

<PAGE>




     BB - "Debt rated BB has less near-term  vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse  business,   financial  or  economic  conditions  which  could  lead  to
inadequate  capacity to meet timely  interest  and  principal  payments.  The BB
rating  category  is also  used for debt  subordinated  to  senior  debt that is
assigned an actual or implied BBB rating."

    B - "Debt rated B has a greater  vulnerability  to default but currently has
the  capacity  to meet  interest  payments  and  principal  repayments.  Adverse
business,  financial  or  economic  conditions  will likely  impair  capacity or
willingness to pay interest and repay  principal.  The B rating category is also
used for debt  subordinated to senior debt that is assigned an actual or implied
BB or BB- rating."

     CCC - "Debt rated CCC has a currently identifiable vulnerability to default
and is dependent upon favorable  business,  financial or economic  conditions to
meet timely  payment of interest  and  repayment of  principal.  In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay  interest or repay  principal.  The CCC rating  category is also
used for debt  subordinated to senior debt that is assigned an actual or implied
B or B- rating."

     CC - "The rating CC is  typically  applied to debt  subordinated  to senior
debt that is assigned an actual or implied CCC rating."

     C - "The rating C is typically  applied to debt subordinated to senior debt
which is assigned  an actual or implied  CCC- debt  rating.  The C rating may be
used to cover a situation  where a  bankruptcy  has been filed but debt  service
payments are continued."

     CI - "The  rating CI is reserved  for income  bonds on which no interest is
being paid."

     D - "Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired,  unless S&P believes that such payments
will be made during such grace  period.  The D rating also will be used upon the
filing of a bankruptcy petition and debt service payments are jeopardized.

DUFF AND PHELPS INC. PROVIDES THE FOLLOWING DESCRIPTIONS OF ITS CORPORATE BOND 
RATINGS:

     AAA - "Highest credit quality. The risk factors are negligible,  being only
slightly more than for risk-free U.S.
Treasury debt."

                                                     - 6 -

<PAGE>




     AA+, AA, AA- - "High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic conditions."

     A+, A, A- -  "Protection  factors are average but adequate.  However,  risk
factors are more variable and greater in periods of economic stress."

FITCH INVESTORS SERVICE, INC. PROVIDES THE FOLLOWING DESCRIPTIONS OF ITS 
CORPORATE BOND RATINGS:

     AAA - "Rated bonds are  considered  to be  investment  grade and are of the
highest quality.  The obligor has an  extraordinary  ability to pay interest and
principal, which is unlikely to be affected by foreseeable events."

     AA -  "Rated  bonds  are  considered  to be  investment  grade  and of high
quality.  The obligor's ability to pay interest and repay principal,  while very
strong, is somewhat less than for AAA rated securities or more subject to change
over the term of the issue."

CORPORATE NOTES.

MOODY'S INVESTORS SERVICE, INC. PROVIDES THE FOLLOWING DESCRIPTIONS OF ITS 
CORPORATE NOTE RATINGS:

MIG-1             "Notes  which  are rated  MIG-1  are  judged to be of the best
                  quality.  There is present  strong  protection by  established
                  cash  flows,   superior   liquidity  support  or  demonstrated
                  broad-based access to the market for refinancing."

MIG-2             "Notes which are rated MIG-2 are judged to be of high
                  quality.  Margins of protection are ample although not
                  so large as in the preceding group."

STANDARD & POOR'S  RATINGS  GROUP  PROVIDES THE  FOLLOWING  DESCRIPTIONS  OF ITS
CORPORATE NOTE RATINGS:

SP-1              "Debt  rated SP-1 has very  strong or strong  capacity  to pay
                  principal  and  interest.  Those issues  determined to possess
                  overwhelming safety  characteristics  will be given a plus (+)
                  designation."

SP-2              "Debt rated SP-2 has satisfactory capacity to pay
                  principal and interest."

COMMERCIAL PAPER.

DESCRIPTION OF COMMERCIAL PAPER RATINGS OF MOODY'S INVESTORS SERVICE, INC.:


                                                     - 7 -

<PAGE>



Prime-1           "Superior capacity for repayment of short-term
                  promissory obligations."

Prime-2           "Strong capacity for repayment of short-term promissory
                  obligations."

Prime-3           "Acceptable ability for repayment of short-term
                  promissory obligations."

DESCRIPTION OF COMMERCIAL PAPER RATINGS OF STANDARD & POOR'S
RATINGS GROUP:

 A-1              "This designation indicates that the degree of safety
                  regarding timely payment is very strong."

 A-2              "Capacity for timely payment on issues with this
                  designation is strong.  However, the relative degree of
                  safety is not as overwhelming as for issues designated
                  A-1."

 A-3              "Issues carrying this  designation have adequate  capacity for
                  timely  payment.  They are,  however,  more  vulnerable to the
                  adverse effects of changes in  circumstances  than obligations
                  carrying the higher designations."

DESCRIPTION OF COMMERICAL PAPER RATINGS OF DUFF & PHELPS, INC.:

DUFF-1 - "Very high certainty of timely payment.  Liquidity
factors are excellent and supported by strong fundamental
protection factors.  Risk factors are minor."

DUFF-2 - "Good  certainty  of timely  payment.  Liquidity  factors  and  company
fundamentals are sound.  Although ongoing internal funds needs may enlarge total
financing  requirements,  access to capital  markets is good.  Risk  factors are
small."

DEFINITIONS, POLICIES AND RISK CONSIDERATIONS
- ---------------------------------------------
         A more  detailed  discussion  of some of the terms used and  investment
policies described in the Prospectuses (see "Investment Objective and Policies")
appears below:

     VARIABLE  RATE DEMAND  INSTRUMENTS.  The Funds may purchase  variable  rate
demand  instruments.  Variable  rate  demand  instruments  that the  Funds  will
purchase are  variable  amount  master  demand notes that provide for a periodic
adjustment in the interest rate paid on the  instrument and permit the holder to
demand  payment  of the  unpaid  principal  balance  plus  accrued  interest  at
specified  intervals  upon a specific  number of days'  notice  either  from the
issuer  upon a  specified  number of days'  notice  either from the issuer or by
drawing on a bank letter of

                                                     - 8 -

<PAGE>



credit,  a guarantee,  insurance or other credit facility issued with respect to
such instrument.

     The  variable  rate  demand  instruments  in which the Funds may invest are
payable on not more than thirty  calendar  days'  notice  either on demand or at
specified  intervals not exceeding  thirteen months  depending upon the terms of
the  instrument.  The terms of the  instruments  provide that interest rates are
adjustable  at intervals  ranging from daily to up to thirteen  months and their
adjustments  are  based  upon  the  prime  rate of a bank or  other  appropriate
interest rate  adjustment  index as provided in the respective  instruments.  In
order to minimize  credit  risks,  the Adviser will decide which  variable  rate
demand instruments it will purchase in accordance with procedures  prescribed by
the  Board of  Trustees.  Each  Fund  may only  purchase  variable  rate  demand
instruments  which have received a short-term rating meeting that Fund's quality
standards from an NRSRO or unrated variable rate demand  instruments  determined
by  the  Adviser,  under  the  direction  of the  Board  of  Trustees,  to be of
comparable  quality.  If such an  instrument  does  not  have a  demand  feature
exercisable  by a Fund in the event of default in the  payment of  principal  or
interest on the underlying securities,  then the Fund will also require that the
instrument  have a rating as long-term  debt in on of the top two  categories by
any NRSRO.  The  Adviser  may  determine,  under the  direction  of the Board of
Trustees, that an unrated variable rate demand instrument meets a Fund's quality
criteria  if it is backed by a letter of credit or  guarantee  or  insurance  or
other  credit  facility  that meets the quality  criteria for the Fund or on the
basis of a credit evaluation of the underlying obligor. If an instrument is ever
deemed to not meet a Fund's quality standards,  such Fund either will sell it in
the market or exercise the demand feature as soon as practicable.

     The Money  Market  Fund will not invest more than 10% of its net assets and
the  Intermediate  Bond Fund will not invest  more than 15% of its net assets in
variable  rate  demand  instruments  as to which it cannot  exercise  the demand
feature on not more than seven days' notice if the Board of Trustees  determines
that there is no secondary market available for these  obligations and all other
illiquid securities.  The Funds intend to exercise the demand repurchase feature
only (1) upon a default under the terms of the bond documents,  (2) as needed to
provide  liquidity to a Fund in order to make redemptions of its shares,  or (3)
to maintain the quality standards of a Fund's investment portfolio.

     While the value of the  underlying  variable  rate demand  instruments  may
change with changes in interest rates generally, the variable rate nature of the
underlying  variable rate demand instruments should minimize changes in value of
the  instruments.  Accordingly,  as interest  rates  decrease or  increase,  the
potential for capital depreciation is less than would be the case

                                                     - 9 -

<PAGE>



with a portfolio of fixed income  securities.  Each Fund may hold  variable rate
demand instrument on which stated minimum or maximum rates, or maximum rates set
by state law limit the degree to which  interest  on such  variable  rate demand
instruments  may  fluctuate;  to the extent it does,  increases  or decreases in
value may be  somewhat  greater  than  would be the case  without  such  limits.
Because the adjustment of interest rates on the variable rate demand instruments
is made in relation to movements of the applicable banks' "prime rate," or other
interest rate  adjustment  index,  the variable rate demand  instruments are not
comparable to long-term fixed rate  securities.  Accordingly,  interest rates on
the variable rate demand  instruments may be higher or lower than current market
rates for fixed rate  obligations  or  obligations  of  comparable  quality with
similar maturities.

     WHEN-ISSUED  SECURITIES.  The Funds will only make  commitments to purchase
securities on a when-issued  basis with the intention of actually  acquiring the
securities.  In addition,  the Funds may purchase  securities  on a  when-issued
basis only if delivery and payment for the securities takes place within 60 days
after the date of the transaction.  In connection with these  investments,  each
Fund will direct its Custodian to place cash,  U.S.  Government  obligations  or
other liquid  high-grade debt  obligations in a segregated  account in an amount
sufficient to make payment for the securities to be purchased. When a segregated
account is  maintained  because a Fund  purchases  securities  on a  when-issued
basis,  the assets  deposited in the segregated  account will be valued daily at
market for the purpose of  determining  the  adequacy of the  securities  in the
account.  If the market value of such  securities  declines,  additional cash or
securities  will be placed in the  account  on a daily  basis so that the market
value of the account will equal the amount of a Fund's  commitments  to purchase
securities  on a  when-issued  basis.  To the extent  funds are in a  segregated
account,  they will not be available for new investment or to meet  redemptions.
Securities  purchased on a when-issued basis and the securities held in a Fund's
portfolio are subject to changes in market value based upon changes in the level
of  interest  rates  (which  will  generally  result in all of those  securities
changing  in value in the same  way,  i.e.,  all those  securities  experiencing
appreciation  when interest rates decline and  depreciation  when interest rates
rise).  Therefore,  if in  order  to  achieve  higher  returns,  a Fund  remains
substantially  fully invested at the same time that it has purchased  securities
on a when-issued basis, there will be a possibility that the market value of the
Fund's assets will experience greater fluctuation. The purchase of securities on
a  when-issued  basis may involve a risk of loss if the seller  fails to deliver
after the value of the securities has risen.

         When the time comes for a Fund to make payment for securities purchased
on a when-issued  basis,  the Fund will do so by using then available cash flow,
by sale of the securities held

                                                     - 10 -

<PAGE>



in the segregated account, by sale of other securities or, although it would not
normally expect to do so, by directing the sale of the securities purchased on a
when-issued basis themselves (which may have a market value greater or less than
the Fund's payment  obligation).  Although a Fund will only make  commitments to
purchase  securities  on a  when-issued  basis with the  intention  of  actually
acquiring  the  securities,  the  Funds may sell  these  securities  before  the
settlement  date  if it is  deemed  advisable  by the  Adviser  as a  matter  of
investment strategy.

         REPURCHASE AGREEMENTS.  Repurchase agreements are transactions by which
a Fund purchases a security and  simultaneously  commits to resell that security
to the seller at an agreed upon time and price,  thereby  determining  the yield
during the term of the agreement.  In the event of a bankruptcy or other default
of the seller of a repurchase agreement,  a Fund could experience both delays in
liquidating the underlying security and losses. To minimize these possibilities,
each Fund intends to enter into  repurchase  agreements only with its Custodian,
with banks having  assets in excess of $10 billion and with  broker-dealers  who
are recognized as primary dealers in U.S. Government  obligations by the Federal
Reserve  Bank of New  York.  Collateral  for  repurchase  agreements  is held in
safekeeping in the customer-only  account of the Funds' Custodian at the Federal
Reserve Bank.  The Money Market Fund will not enter into a repurchase  agreement
not terminable  within seven days if, as a result thereof,  more than 10% of the
value of its net assets would be invested in such  securities and other illiquid
securities.  The  Intermediate  Bond  Fund  will  not  enter  into a  repurchase
agreement not terminable  within seven days if, as a result  thereof,  more than
15% of the value of its net assets  would be  invested  in such  securities  and
other illiquid securities.

         Although the securities  subject to a repurchase  agreement  might bear
maturities exceeding one year, settlement for the repurchase would never be more
than one year after the Fund's  acquisition of the securities and normally would
be within a shorter  period of time.  The resale  price will be in excess of the
purchase  price,  reflecting an agreed upon market rate effective for the period
of time the Fund's  money will be  invested in the  securities,  and will not be
related to the coupon rate of the purchased security.  At the time a Fund enters
into a repurchase  agreement,  the value of the underlying  security,  including
accrued  interest,  will equal or exceed the value of the repurchase  agreement,
and in the case of a  repurchase  agreement  exceeding  one day, the seller will
agree that the value of the underlying  security,  including  accrued  interest,
will at all times  equal or exceed the value of the  repurchase  agreement.  The
collateral securing the seller's obligation must be of a credit quality at least
equal to a Fund's investment criteria for portfolio  securities and will be held
by the Custodian or in the Federal Reserve Book Entry System.



                                                     - 11 -

<PAGE>



     For purposes of the Investment Company Act of 1940, a repurchase  agreement
is deemed  to be a loan  from a Fund to the  seller  subject  to the  repurchase
agreement  and is  therefore  subject  to  that  Fund's  investment  restriction
applicable  to  loans.  It is not  clear  whether  a court  would  consider  the
securities  purchased by a Fund subject to a repurchase agreement as being owned
by that Fund or as being collateral for a loan by the Fund to the seller. In the
event of the  commencement of bankruptcy or insolvency  proceedings with respect
to the  seller of the  securities  before  repurchase  of the  security  under a
repurchase  agreement,  a Fund may encounter  delay and incur costs before being
able to sell the  security.  Delays may  involve  loss of interest or decline in
price of the security.  If a court characterized the transaction as a loan and a
Fund has not  perfected a security  interest in the  security,  that Fund may be
required  to return the  security  to the  seller's  estate and be treated as an
unsecured creditor of the seller. As an unsecured  creditor,  a Fund would be at
the risk of losing  some or all of the  principal  and  income  involved  in the
transaction.  As with any unsecured  debt  obligation  purchased for a Fund, the
Adviser  seeks to minimize the risk of loss  through  repurchase  agreements  by
analyzing the  creditworthiness of the obligor, in this case, the seller.  Apart
from the risk of bankruptcy or  insolvency  proceedings,  there is also the risk
that the seller may fail to repurchase  the  security,  in which case a Fund may
incur a loss if the proceeds to that Fund of the sale of the security to a third
party are less than the repurchase  price.  However,  if the market value of the
securities subject to the repurchase  agreement becomes less than the repurchase
price  (including  interest),  the Fund  involved  will direct the seller of the
security  to  deliver  additional  securities  so that the  market  value of all
securities  subject  to the  repurchase  agreement  will  equal  or  exceed  the
repurchase  price. It is possible that a Fund will be unsuccessful in seeking to
enforce the seller's contractual obligation to deliver additional securities.

         LOANS OF  PORTFOLIO  SECURITIES.  Each  Fund  may  lend  its  portfolio
securities  subject  to  the  restrictions  stated  in  its  Prospectus.   Under
applicable  regulatory  requirements  (which are  subject to  change),  the loan
collateral  must,  on each  business day, at least equal the value of the loaned
securities.  To be acceptable as  collateral,  letters of credit must obligate a
bank to pay  amounts  demanded  by a Fund if the  demand  meets the terms of the
letter.  Such terms and the issuing bank must be  satisfactory  to the Fund. The
Funds  receive  amounts  equal to the  interest  on loaned  securities  and also
receive one or more of (a) negotiated loan fees, (b) interest on securities used
as collateral, or (c) interest on short-term debt securities purchased with such
collateral;  either type of interest may be shared with the borrower.  The Funds
may also pay fees to placing  brokers as well as  custodian  and  administrative
fees in connection with loans. Fees may only be paid to a placing broker

                                                     - 12 -

<PAGE>



provided that the Trustees  determine that the fee paid to the placing broker is
reasonable and based solely upon services rendered, that the Trustees separately
consider  the  propriety  of any fee  shared  by the  placing  broker  with  the
borrower,  and  that the fees are not  used to  compensate  the  Adviser  or any
affiliated  person of the Trust or an affiliated  person of the Adviser or other
affiliated  person.  The terms of the Funds'  loans must meet  applicable  tests
under  the  Internal  Revenue  Code and  permit  the Funds to  reacquire  loaned
securities on five days' notice or in time to vote on any important matter.

         BANK DEBT  INSTRUMENTS.  Bank debt  instruments  in which the Funds may
invest  consist  of  certificates  of  deposit,  bankers'  acceptances  and time
deposits  issued by national banks and state banks,  trust  companies and mutual
savings banks, or of banks or institutions  the accounts of which are insured by
the  Federal  Deposit  Insurance  Corporation  or the  Federal  Savings and Loan
Insurance  Corporation.  Certificates  of deposit  are  negotiable  certificates
evidencing the  indebtedness  of a commercial bank to repay funds deposited with
it for a definite  period of time  (usually from fourteen days to one year) at a
stated or variable interest rate.  Bankers'  acceptances are credit  instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. Time deposits are
non-negotiable  deposits  maintained  in a banking  institution  for a specified
period of time at a stated interest rate.  Investments in time deposits maturing
in more than seven days will be subject to each Fund's  restrictions on illiquid
investments  (see  "Investment  Limitations").  The  Funds  may also  invest  in
certificates  of  deposit,  bankers'  acceptances  and time  deposits  issued by
foreign  branches  of national  banks.  Eurodollar  certificates  of deposit are
negotiable  U.S.  dollar  denominated  certificates of deposit issued by foreign
branches of major U.S.  commercial banks.  Eurodollar  bankers'  acceptances are
U.S. dollar denominated bankers'  acceptances  "accepted" by foreign branches of
major U.S. commercial banks.  Investments in the obligations of foreign branches
of U.S.  commercial  banks may be  subject to special  risks,  including  future
political and economic developments,  imposition of withholding taxes on income,
establishment  of exchange  controls or other  restrictions,  less  governmental
supervision and the lack of uniform accounting, auditing and financial reporting
standards that might affect an investment adversely.

         COMMERCIAL PAPER.  Commercial paper consists of short-term, (usually 
from one to two hundred seventy days) unsecured promissory notes issued by U.S.
corporations in order to finance their current operations.  Certain notes may 
have floating or variable rates.  Variable and floating rate notes with a demand
notice period exceeding seven days will be subject to each Fund's

                                                     - 13 -

<PAGE>



restrictions on illiquid investments (see "Investment  Limitations")  unless, in
the judgment of the Adviser,  subject to the direction of the Board of Trustees,
such note is liquid.

     RESTRICTED  SECURITIES.  Restricted  securities  generally  can be  sold in
privately  negotiated  transactions,  pursuant to an exemption from registration
under the  Securities  Act of 1933, or in a registered  public  offering.  Where
registration  is  required,  a Fund may be  obligated  to pay all or part of the
registration  expense and a  considerable  period may elapse between the time it
decides to seek  registraion  and the time the Fund may be  permitted  to sell a
security under an effective  registration  statement.  If, during such a period,
adverse market conditions were to develop,  a Fund might obtain a less favorable
price  than  prevailed  when it  decided  to seek  registration  of the  shares.
However,  in general,  the Funds  anticipate  holding  restricted  securities to
maturity or selling them in an exempt transaction.

         MAJORITY.  As used in the Prospectuses and this Statement of Additional
Information,  the term "majority" of the outstanding  shares of the Trust (or of
either  Fund) means the lesser of (1) 67% or more of the  outstanding  shares of
the Trust (or the applicable Fund) present at a meeting,  if the holders of more
than 50% of the  outstanding  shares of the Trust (or the  applicable  Fund) are
present or represented  at such meeting or (2) more than 50% of the  outstanding
shares of the Trust (or the applicable Fund).

INVESTMENT LIMITATIONS
- ----------------------
         The  Trust  has  adopted  certain  fundamental  investment  limitations
designed to reduce the risk of an investment in the Funds. These limitations may
not be changed  without the  affirmative  vote of a majority of the  outstanding
shares of a Fund.

         THE FUNDAMENTAL LIMITATIONS APPLICABLE TO EACH FUND ARE:

         1. Borrowing Money. Each Fund will not borrow money,  except (a) from a
bank,  provided that immediately after such borrowing there is asset coverage of
300% for all  borrowings  of the Fund;  or (b) from a bank or other  persons for
temporary purposes only, provided that, when made, such temporary borrowings are
in an amount not  exceeding 5% of the Fund's total  assets.  Each Fund also will
not make any  borrowing  which  would  cause  outstanding  borrowings  to exceed
one-third of the value of its total assets.

         2.  Underwriting.  Each Fund will not act as underwriter of
securities issued by other persons,  either directly or through a majority owned
subsidiary.  This limitation is not applicable to the extent that, in connection
with the disposition of its
                                                     - 14 -

<PAGE>



portfolio securities (including restricted securities),  a Fund may be deemed an
underwriter under certain federal securities laws.

         3.  Real Estate.  Each Fund will not purchase, hold or deal
in real estate.

         4.  Concentration.  The Fund will not invest more than 25% of its total
assets in the  securities  of  issuers  in any  particular  industry;  provided,
however,  that there is no limitation with respect to investments in obligations
issued  or  guaranteed  by the  United  States  Government  or its  agencies  or
instrumentalities or repurchase agreements with respect thereto.

         5.  Commodities.  Each Fund will not purchase hold or deal
in commodities and will not invest in oil, gas or other mineral
explorative or development programs.

         6.  Loans.  Each Fund  will not make  loans to other  persons  if, as a
result,  more than  one-third  of the value of the Fund's  total assets would be
subject to such loans.  This  limitation does not apply to (a) the purchase of a
portion of an issue of debt  securities in accordance  with a Fund's  investment
objective, policies and limitations or (b) engaging in repurchase transactions.

     7.  Options.  Each Fund will not engage in the purchase or
sale of put or call options.

     8.  Senior Securities.  Each Fund will not issue or sell any
senior security as defined by the Investment Company Act of 1940
except insofar as any borrowing that the Funds may engage in may
be deemed to be an issuance of a senior security.

         THE FOLLOWING  INVESTMENT  LIMITATIONS OF THE FUNDS ARE  NONFUNDAMENTAL
AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL.

         1. Illiquid  Investments.  Each Fund will not purchase  securities  for
which  there are legal or  contractual  restrictions  on resale or enter  into a
repurchase  agreement  maturing in more than seven days if, as a result thereof,
more than 15% of the value of the Intermediate  Bond Fund's net assets or 10% of
the value of the Money  Market  Fund's  net  assets  would be  invested  in such
securities.

         2. Other Investment  Companies.  Each Fund will not invest more than 5%
of its total assets in the  securities  of any  investment  company and will not
invest  more than 10% of the value of its total  assets in  securities  of other
investment companies.




                                                     - 15 -

<PAGE>



         3.  Margin Purchases.  Each Fund will not purchase
securities or evidences of interest thereon on "margin."  This
limitation is not applicable to short-term credit obtained by the
Fund for the clearance of purchases and sales or redemption of
securities.

         4.  Short Sales.  Each Fund will not make short sales of
securities, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short.

     As a diversified series of the Trust, the Money Market Fund has adopted the
following additional investment limitation, which may not be changed without the
affirmative  vote of a majority of the outstanding  shares of the Fund. The Fund
will not  purchase  the  securities  of any issuer if such  purchase at the time
thereof would cause more than 5% of the value of its total assets to be invested
in the  securities of such issuer (the  foregoing  limitation  does not apply to
investments in government securities as defined in the Investment Company Act of
1940).

         With  respect  to the  percentages  adopted  by the  Trust  as  maximum
limitations on a Fund's investment  policies and  restrictions,  an excess above
the fixed  percentage  (except for the  percentage  limitations  relative to the
borrowing of money) will not be a violation of the policy or restriction  unless
the excess results immediately and directly from the acquisition of any security
or the action taken.

TRUSTEES AND OFFICERS
- ---------------------
         The following is a list of the Trustees and  executive  officers of the
Trust  and  their  aggregate  compensation  from  the  Trust  and the  funds  of
Countrywide Investments (consisting of the Trust, Countrywide Tax-Free Trust and
Countrywide  Strategic Trust) for the fiscal year ended September 30, 1996. Each
Trustee who is an "interested person" of the Trust, as defined by the Investment
Company Act of 1940, is indicated by an asterisk. Each of the Trustees is also a
Trustee of Countrywide Tax-Free Trust and Countrywide Strategic Trust.
                                                                     AGGREGATE
                                                                    COMPENSATION
                                                                       FROM
                                                      COMPENSATION  COUNTRYWIDE
NAME                         AGE  POSITION HELD        FROM TRUST    INVESTMENTS
 Donald L. Bodgon, MD         66      Trustee            $   0           $    0
 John R. Delfino              63      Trustee                0                0
+H. Jerome Lerner             58      Trustee            2,849            8,100
*Robert H. Leshner            57      President/Trustee      0                0
*Angelo R. Mozilo             58      Chairman/Trustee       0                0
+Oscar P. Robertson           57      Trustee            2,549            6,600
 John F. Seymour, Jr.         59      Trustee                0                0
+Sebastiano Sterpa            67      Trustee                0                0
 Robert G. Dorsey             40      Vice President         0                0
 John F. Splain               40      Secretary              0                0
 Mark J. Seger                35      Treasurer              0                0

                                                     - 16 -

<PAGE>




  *      Mr. Leshner and Mr. Mozilo, as officers and directors of
         Countrywide Investments, Inc., are each an "interested
         person" of the Trust within the meaning of Section 2(a)(19)
         of the Investment Company Act of 1940.

  +  Member of Audit Committee

         The principal occupations of the Trustees and executive officers of the
Trust during the past five years are set forth below:

         DONALD L. BOGDON,  M.D.,  435 Arden Avenue,  Glendale,  California is a
physician with Hematology Oncology  Consultants and a Director of Verdugo VNA (a
hospice  facility).  Until 1996 he was President of Western  Hematology/Oncology
and until 1993 he was Chairman of the Board of Glendale Memorial Hospital.

         JOHN R. DELFINO, 2029 Century Park East, Los Angeles,
California is President of Concorde  Capital  Corporation (an investment  firm).
Until 1993 he was a director of Cypress  Financial  and Chairman of Rancho Santa
Margarita, mortgage banking firms.

         H. JEROME LERNER, 7149 Knoll Road,  Cincinnati,  Ohio is a principal of
HJL  Enterprises and is Chairman of Crane  Electronics,  Inc., a manufacturer of
electronic connectors.

         ROBERT H. LESHNER, 312 Walnut Street, Cincinnati, Ohio is
President  and a director  of  Countrywide  Investments,  Inc.  (the  investment
adviser  and  principal  underwriter  of the  Trust) and  Countrywide  Financial
Services,   Inc.  (a  financial  services  company  and  parent  of  Countrywide
Investments,  Inc. and Countrywide Fund Services, Inc.). He is Vice Chairman and
a director of Countrywide Fund Services,  Inc. (a registered transfer agent) and
President and a Trustee of Countrywide Tax- Free Trust and Countrywide Strategic
Trust, registered investment companies.

         ANGELO R. MOZILO, 4500 Park Granada Road, Calabasas, California is Vice
Chairman and Executive Vice President of Countrywide Credit Industries,  Inc. (a
holding  company).  He  is  a  director  of  Countrywide  Home  Loans,  Inc.  (a
residential   mortgage  lender),   CTC  Foreclosure   Services   Corporation  (a
foreclosure trustee) and LandSafe,  Inc. (the parent company of fifteen LandSafe
entities which provide property  appraisals,  credit reporting  services,  title
insurance and/or closing services for residential mortgages),  each a subsidiary
of  Countrywide  Credit  Industries,  Inc.  He is  Chairman  and a  director  of
Countrywide Financial Services, Inc., Countrywide Investments, Inc., Countrywide
Fund Services,  Inc.,  Countrywide Servicing Exchange (a loan servicing broker),
Countrywide  Capital Markets,  Inc.,  (parent company of Countrywide  Securities
Corporation and

                                                     - 17 -

<PAGE>



Countrywide  Servicing  Exchange)  and  various  LandSafe  subsidiaries  and  is
Chairman and Chief Executive  Officer of Countrywide  Securities  Corporation (a
registered  broker-dealer),  each a subsidiary of Countrywide Credit Industries,
Inc. He is Chairman and a Trustee of Countrywide  Tax-Free Trust and Countrywide
Strategic  Trust.  He is also Vice  Chairman of CWM Mortgage  Holdings,  Inc. (a
publicly-held real estate investment trust).

         OSCAR P. ROBERTSON,  4293 Muhlhauser Road, Fairfield, Ohio is President
of  Orchem  Corp.,  a  chemical  specialties   distributor,   and  Orpack  Stone
Corporation, a corrugated box manufacturer.

         JOHN F. SEYMOUR, JR., 46-393 Blackhawk Drive, Indian Wells,  California
is Chief Executive Officer of the Southern California Housing Development Agency
and a consultant for Orange Coast Title Co. (a title insurance  company).  He is
also a director of Irvine Apartment Communities (a real estate investment trust)
and Inco Homes (a home builder).  Until 1994 he was a director of the California
Housing Finance Agency.

         SEBASTIANO STERPA, 200 West Glenoaks Boulevard, Glendale, California is
Chairman of Sterpa  Realty,  Inc. and Chairman and a director of the  California
Housing Finance Agency.  He is also a director of Real Estate Business  Services
and a director of the SunAmerica Mutual Funds.

     ROBERT G. DORSEY,  312 Walnut  Street,  Cincinnati,  Ohio is President  and
Treasurer of  Countrywide  Fund  Services,  Inc.,  Vice  President - Finance and
Treasurer of Countrywide  Financial Services,  Inc. and Treasurer of Countrywide
Investments,  Inc. He is also Vice  President of Countrywide  Investment  Trust,
Countrywide Strategic Trust, Brundage,  Story and Rose Investment Trust, Markman
MultiFund Trust, PRAGMA Investment Trust,  Maplewood  Investment Trust, a series
company,  The Thermo  Opportunity  Fund,  Inc.,  Capital Square Funds,  The Dean
Family of Funds and The New York  State  Opportunity  Funds and  Assistant  Vice
President of Williamsburg  Investment Trust,  Schwartz Investment Trust, Fremont
Mutual Funds,  Inc., The Tuscarora  Investment Trust, The Gannett Welsh & Kotler
Funds  and  Interactive  Investments,  all of which  are  registered  investment
companies.

         JOHN F. SPLAIN, 312 Walnut Street, Cincinnati, Ohio is
Secretary and General Counsel of Countrywide  Investments,  Inc. and Countrywide
Financial  Services,  Inc. and Vice President,  Secretary and General Counsel of
Countrywide  Fund Services,  Inc. He is also  Secretary of Countrywide  Tax-Free
Trust,  Countrywide Strategic Trust, Brundage,  Story and Rose Investment Trust,
Williamsburg Investment Trust, Markman MultiFund Trust, The Tuscarora Investment
Trust,  PRAGMA Investment Trust,  Maplewood  Investment Trust, a series company,
and The Thermo  Opportunity  Fund,  Inc.  and  Assistant  Secretary  of Schwartz
Investment Trust, Fremont Mutual Funds, Inc., Capitol Square Funds, The Gannett
                                                     - 18 -

<PAGE>



Welsh & Kotler Funds, Interactive Investments, The Dean Family of Funds and
the New York State Opportunity Fund, all of which are registered investment 
companies.

         MARK J. SEGER,  C.P.A.,  312 Walnut  Street,  Cincinnati,  Ohio is Vice
President and Fund  Controller of  Countrywide  Fund  Services,  Inc. He is also
Treasurer of Countrywide Tax-Free Trust,  Countrywide Strategic Trust, Brundage,
Story  and  Rose  Investment  Trust,   Williamsburg  Investment  Trust,  Markman
MultiFund Trust, PRAGMA Investment Trust,  Maplewood  Investment Trust, a series
company,  The Thermo  Opportunity  Fund,  Inc.,  Capitol Square Funds,  The Dean
Family of Funds and the New York State Opportunity Fund,  Assistant Treasurer of
Schwartz  Investment Trust, The Tuscarora  Investment Trust, The Gannett Welsh &
Kotler Funds and  Interactive  Investments  and  Assistant  Secretary of Fremont
Mutual Funds, Inc.

         Each  Trustee,  except  for  Messrs.  Leshner  and  Mozilo,  receives a
quarterly  retainer  of  $1,500  and a fee of  $1,500  for  each  Board  meeting
attended.  Such fees are split  equally  among the Trust,  Countrywide  Tax-Free
Trust and Countrywide Strategic
Trust.

THE INVESTMENT ADVISER AND UNDERWRITER
- --------------------------------------
         Countrywide Investments, Inc. (the "Adviser") is the Funds'
investment  manager.  The  Adviser  is a  subsidiary  of  Countrywide  Financial
Services,  Inc.,  which  is a  wholly-owned  subsidiary  of  Countrywide  Credit
Industries,  Inc., a New York Stock Exchange listed company  principally engaged
in the business of residential mortgage lending.  Messrs. Mozilo and Leshner may
be deemed to be  affiliates  of the  Adviser  by  reason  of their  position  as
Chairman  and  President,  respectively,  of the  Adviser.  Messrs.  Mozilo  and
Leshner,  by reason of such  affiliation,  may  directly or  indirectly  receive
benefits from the advisory fees paid to the Adviser.

         Under the terms of the investment advisory agreements between the Trust
and the Adviser,  the Adviser is  responsible  for the  management of the Funds'
investments.  Each Fund pays the Adviser a fee  computed  and accrued  daily and
paid  monthly  at an annual  rate of .5% of its  average  daily net assets up to
$50,000,000,  .45% of such assets from $50,000,000 to $150,000,000,  .4% of such
assets from  $150,000,000 to $250,000,000  and .375% of such assets in excess of
$250,000,000.

         The Funds are responsible  for the payment of all expenses  incurred in
connection with the  organization,  registration of shares and operations of the
Funds, including such extraordinary or non-recurring expenses as may arise, such
as  litigation  to  which  the  Trust  may be a  party.  The  Funds  may have an
obligation to indemnify the Trust's officers and Trustees with respect to

                                                     - 19 -

<PAGE>



such litigation,  except in instances of willful  misfeasance,  bad faith, gross
negligence  or  reckless   disregard  by  such  officers  and  Trustees  in  the
performance  of  their  duties.  The  Adviser  bears  promotional   expenses  in
connection  with the  distribution  of the Funds' shares to the extent that such
expenses  are not  assumed by the Funds under  their plan of  distribution  (see
below). The compensation and expenses of any officer, Trustee or employee of the
Trust who is an officer,  director,  employee or  stockholder of the Adviser are
paid by the Adviser.

         By their terms, the Funds'  investment  advisory  agreements  remain in
force  until  February  28,  1999 and from year to year  thereafter,  subject to
annual  approval by (a) the Board of Trustees or (b) a vote of the majority of a
Fund's outstanding voting securities;  provided that in either event continuance
is also approved by a majority of the Trustees who are not interested persons of
the  Trust,  by a vote cast in person at a meeting  called  for the  purpose  of
voting  such  approval.   The  Funds'  investment  advisory  agreements  may  be
terminated at any time, on sixty days'  written  notice,  without the payment of
any  penalty,  by the Board of  Trustees,  by a vote of the majority of a Fund's
outstanding  voting  securities,  or by the  Adviser.  The  investment  advisory
agreements automatically terminate in the event of their assignment,  as defined
by the Investment Company Act of 1940 and the rules thereunder.

         The  Adviser is also the  principal  underwriter  of the Funds and,  as
such, the exclusive agent for  distribution of shares of the Funds.  The Adviser
is obligated to sell the shares on a best  efforts  basis only against  purchase
orders  for the  shares.  Shares  of the Funds are  offered  to the  public on a
continuous basis.

         The Adviser currently allows  concessions to dealers who sell shares of
the  Intermediate  Bond Fund.  The Adviser  retains the entire sales load on all
direct initial  investments in the Fund and on all  investments in accounts with
no designated dealer of record.

         The Funds may compensate dealers, including the Adviser and
its affiliates, based on the average balance of all accounts in
the Funds for which the dealer is designated as the party
responsible for the account.  See "Distribution Plan below."

DISTRIBUTION PLAN
- -----------------
          As  stated  in the  Prospectus,  the  Funds  have  adopted  a plan  of
distribution  (the "Plan")  pursuant to Rule 12b-1 under the Investment  Company
Act of  1940  which  permits  each  Fund  to pay for  expenses  incurred  in the
distribution  and promotion of the Funds' shares,  including but not limited to,
the printing of prospectuses, statements of additional information and reports

                                                     - 20 -

<PAGE>



used for sales purposes, advertisements, expenses of preparation and printing of
sales   literature,   promotion,   marketing  and  sales  expenses,   and  other
distribution-related   expenses,   including  any  distribution   fees  paid  to
securities  dealers or other firms who have executed a  distribution  or service
agreement  with  the  Adviser.   The  Plan  expressly   limits  payment  of  the
distribution  expenses  listed  above in any fiscal year to a maximum of .35% of
the average  daily net assets of each Fund.  Unreimbursed  expenses  will not be
carried over from year to year.

     Agreements   implementing  the  Plan  (the  "Implementation   Agreements"),
including agreements with dealers wherein such dealers agree for a fee to act as
agents for the sale of the Funds' shares,  are in writing and have been approved
by the Board of  Trustees.  All payments  made  pursuant to the Plan are made in
accordance with written agreements.

     The  continuance  of the Plan  and the  Implementation  Agreements  must be
specifically  approved  at  least  annually  by a vote of the  Trust's  Board of
Trustees  and by a vote of the Trustees  who are not  interested  persons of the
Trust and have no  direct  or  indirect  financial  interest  in the Plan or any
Implementation  Agreement (the  "Independent  Trustees") at a meeting called for
the purpose of voting on such  continuance.  The Plan may be  terminated  at any
time by a vote of a majority  of the  Independent  Trustees  or by a vote of the
holders of a majority of the outstanding shares of a Fund. In the event the Plan
is  terminated  in  accordance  with its terms,  the  affected  Fund will not be
required to make any  payments for  expenses  incurred by the Adviser  after the
termination date. Each Implementation  Agreement terminates automatically in the
event  of its  assignment  and  may be  terminated  at any  time  by a vote of a
majority of the  Independent  Trustees or by a vote of the holders of a majority
of the outstanding  shares of a Fund on not more than 60 days' written notice to
any other party to the Implementation  Agreement. The Plan may not be amended to
increase materially the amount to be spent for distribution  without shareholder
approval.  All material amendments to the Plan must be approved by a vote of the
Trust's Board of Trustees and by a vote of the Independent Trustees.

         In  approving  the Plan,  the Trustees  determined,  in the exercise of
their business judgment and in light of their fiduciary duties as Trustees, that
there is a reasonable  likelihood that the Plan will benefit the Funds and their
shareholders.  The Board of Trustees  believes  that  expenditure  of the Funds'
assets for  distribution  expenses under the Plan should assist in the growth of
the Funds which will benefit the Funds and their shareholders  through increased
economies  of  scale,   greater   investment   flexibility,   greater  portfolio
diversification and less chance of disruption of planned investment  strategies.
The Plan will be renewed only if the Trustees make a similar

                                                     - 21 -

<PAGE>



determination  for each subsequent  year of the Plan.  There can be no assurance
that the benefits  anticipated  from the  expenditure  of the Funds'  assets for
distribution will be realized. While the Plan is in effect, all amounts spent by
the Funds pursuant to the Plan and the purposes for which such expenditures were
made must be reported  quarterly  to the Board of Trustees  for its review.  The
selection and nomination of those Trustees who are not interested persons of the
Trust are committed to the discretion of the  Independent  Trustees  during such
period.

         Angelo R. Mozilo and Robert H. Leshner,  as  interested  persons of the
Trust,  may be deemed to have a financial  interest in the operation of the Plan
and the Implementation Agreements.

SECURITIES TRANSACTIONS
- -----------------------
         Decisions to buy and sell  securities  for the Funds and the placing of
the Funds'  securities  transactions  and negotiation of commission  rates where
applicable  are made by the  Adviser  and are  subject to review by the Board of
Trustees of the Trust.  In the purchase and sale of  portfolio  securities,  the
Adviser seeks best execution for the Funds,  taking into account such factors as
price  (including the applicable  brokerage  commission or dealer  spread),  the
execution capability,  financial responsibility and responsiveness of the broker
or dealer and the  brokerage  and  research  services  provided by the broker or
dealer.  The Adviser  generally seeks favorable prices and commission rates that
are reasonable in relation to the benefits received.

         Generally, the Funds attempt to deal directly with the dealers who make
a market in the  securities  involved  unless  better  prices and  execution are
available  elsewhere.  Such  dealers  usually  act as  principals  for their own
account.  On  occasion,  portfolio  securities  for the Funds  may be  purchased
directly  from the issuer.  Because the  portfolio  securities  of the Funds are
generally  traded on a net  basis and  transactions  in such  securities  do not
normally  involve  brokerage  commissions,  the  cost  of  portfolio  securities
transactions  of the Funds  will  consist  primarily  of  dealer or  underwriter
spreads.

         The  Adviser is  specifically  authorized  to select  brokers  who also
provide  brokerage and research services to the Funds and/or other accounts over
which the Adviser  exercises  investment  discretion  and to pay such  brokers a
commission  in excess of the  commission  another  broker  would charge if it is
determined  in good faith that the  commission  is reasonable in relation to the
value of the brokerage and research services provided.  The determination may be
viewed  in  terms  of  a  particular   transaction  or  the  Adviser's   overall
responsibilities  with  respect  to the  Funds  and to  accounts  over  which it
exercises investment discretion.


                                                     - 22 -

<PAGE>



         Research services include securities and economic analyses,  reports on
issuers'  financial  conditions and future business  prospects,  newsletters and
opinions  relating to interest trends,  general advice on the relative merits of
possible  investment  securities  for the Funds  and  statistical  services  and
information  with respect to the  availability  of  securities  or purchasers or
sellers of securities.  Although this information is useful to the Funds and the
Adviser,  it is not  possible to place a dollar value on it.  Research  services
furnished by brokers through whom the Funds effect  securities  transactions may
be used  by the  Adviser  in  servicing  all of its  accounts  and not all  such
services may be used in connection with the Funds.

         The Funds have no  obligation  to deal with any broker or dealer in the
execution of securities transactions.  However, the Adviser and other affiliates
of the  Trust or the  Adviser  may  effect  securities  transactions  which  are
executed   on  a  national   securities   exchange   or   transactions   in  the
over-the-counter  market conducted on an agency basis.  Neither Fund will effect
any brokerage  transactions in its portfolio securities with the Adviser if such
transactions   would   be   unfair   or   unreasonable   to  its   shareholders.
Over-the-counter  transactions  will be placed either  directly  with  principal
market makers or with  broker-dealers.  Although the Funds do not anticipate any
ongoing  arrangements  with other  brokerage  firms,  brokerage  business may be
transacted  from  time to  time  with  other  firms.  Neither  the  Adviser  nor
affiliates  of the  Trust  or the  Adviser  will  receive  reciprocal  brokerage
business  as a result of the  brokerage  business  transacted  by the Funds with
other brokers.

CODE OF ETHICS.  The Trust and the  Adviser  have each  adopted a Code of Ethics
under Rule 17j-1 of the Investment  Company Act of 1940. The Code  significantly
restricts the personal investing activities of all employees of the Adviser and,
as described below, imposes additional, more onerous, restrictions on investment
personnel of the Adviser.  The Code  requires  that all employees of the Adviser
preclear any personal securities  investment (with limited  exceptions,  such as
U.S.  Government  obligations).  The  preclearance  requirement  and  associated
procedures  are designed to identify any  substantive  prohibition or limitation
applicable to the proposed investment.  In addition, no employee may purchase or
sell any security which at the time is being  purchased or sold (as the case may
be), or to the  knowledge  of the employee is being  considered  for purchase or
sale,  by either Fund.  The  substantive  restrictions  applicable to investment
personnel of the Adviser include a ban on acquiring any securities in an initial
public  offering  and a  prohibition  from  profiting on  short-term  trading in
securities.  Furthermore, the Code provides for trading "blackout periods" which
prohibit  trading by  investment  personnel  of the  Adviser  within  periods of
trading by the Funds in the same (or equivalent) security.


                                                     - 23 -

<PAGE>



PORTFOLIO TURNOVER
- ------------------
         The  Adviser  intends  to hold the  portfolio  securities  of the Money
Market Fund to maturity and to limit portfolio  turnover to the extent possible.
Nevertheless,  changes  in the  Fund's  portfolio  will  be made  promptly  when
determined to be advisable by reason of developments not foreseen at the time of
the original investment decision, and usually without reference to the length of
time a security has been held.

         The Intermediate  Bond Fund does not intend to purchase  securities for
short-term trading;  however, a security may be sold in anticipation of a market
decline,  or  purchased  in  anticipation  of a  market  rise  and  later  sold.
Securities will be purchased and sold in response to the Adviser's evaluation of
an issuer's  ability to meet its debt  obligations in the future. A security may
be sold and another  purchased when, in the opinion of the Adviser,  a favorable
yield spread exists between specific issues or different market sectors.

         A Fund's  portfolio  turnover rate is calculated by dividing the lesser
of purchases or sales of portfolio securities for the fiscal year by the monthly
average of the value of the  portfolio  securities  owned by the Fund during the
fiscal year. High portfolio turnover involves  correspondingly greater brokerage
commissions  and other  transaction  costs,  which will be borne directly by the
Funds. A 100% turnover rate would occur if all of a Fund's portfolio  securities
were replaced once within a one year period.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE
- ----------------------------------------------------
         The share  price  (net asset  value) of the shares of the Money  Market
Fund is determined as of 12:30 p.m. and 4:00 p.m., Eastern time, on each day the
Trust is open for  business.  The share  price (net asset  value) and the public
offering price (net asset value plus applicable sales load) of the shares of the
Intermediate  Bond Fund are determined as of the close of the regular session of
trading on the New York Stock Exchange  (currently 4:00 p.m.,  Eastern time), on
each day the Trust is open for business. The Trust is open for business on every
day except  Saturdays,  Sundays  and the  following  holidays:  New Year's  Day,
President's  Day,  Good  Friday,  Memorial  Day,  Independence  Day,  Labor Day,
Thanksgiving  and  Christmas.  The Trust may also be open for  business on other
days in which there is  sufficient  trading in the Fund's  portfolio  securities
that its net asset value might be materially affected.  For a description of the
methods used to determine the share price,  see  "Calculation of Share Price and
Public Offering Price" in the Prospectus.




                                                     - 24 -

<PAGE>



         Pursuant to Rule 2a-7 promulgated  under the Investment  Company Act of
1940, the Money Market Fund values its portfolio securities on an amortized cost
basis.  The use of the amortized  cost method of valuation  involves  valuing an
instrument  at its cost and,  thereafter,  assuming a constant  amortization  to
maturity of any  discount or premium,  regardless  of the impact of  fluctuating
interest rates on the market value of the  instrument.  Under the amortized cost
method of valuation,  neither the amount of daily income nor the net asset value
of the  Money  Market  Fund  is  affected  by  any  unrealized  appreciation  or
depreciation  of the  portfolio.  The Board of Trustees has  determined  in good
faith that  utilization of amortized cost is appropriate and represents the fair
value of the portfolio securities of the Money Market Fund.

         Pursuant   to  Rule  2a-7,   the  Money   Market   Fund   maintains   a
dollar-weighted  average portfolio  maturity of 90 days or less,  purchases only
securities  having  remaining  maturities of thirteen months or less and invests
only in United States  dollar-denominated  securities determined by the Board of
Trustees  to be of high  quality  and to  present  minimal  credit  risks.  If a
security ceases to be an eligible security, or if the Board of Trustees believes
such security no longer presents  minimal credit risks,  the Trustees will cause
the Fund to dispose of the  security as soon as  possible.  The maturity of U.S.
Government obligations which have a variable rate of interest readjusted no less
frequently than annually will be deemed to be the period of time remaining until
the next readjustment of the interest rate.

         The Board of Trustees has established procedures designed to stabilize,
to the extent reasonably possible,  the price per share of the Money Market Fund
as  computed  for the  purpose of sales and  redemptions  at $1 per  share.  The
procedures  include  review of the  Fund's  portfolio  holdings  by the Board of
Trustees to  determine  whether the Fund's net asset value  calculated  by using
available market  quotations  deviates more than one-half of one percent from $1
per share and, if so, whether such deviation may result in material  dilution or
is otherwise unfair to existing shareholders. In the event the Board of Trustees
determines that such a deviation  exists,  it will take corrective  action as it
regards  necessary and appropriate,  including the sale of portfolio  securities
prior to  maturity  to realize  capital  gains or losses or to  shorten  average
portfolio maturities;  withholding dividends;  redemptions of shares in kind; or
establishing a net asset value per share by using available  market  quotations.
The Board of Trustees has also  established  procedures  designed to ensure that
the Money Market Fund complies with the quality requirements of Rule 2a-7.

         While the amortized cost method provides certainty in valuation, it may
result in periods  during which the value of an  instrument,  as  determined  by
amortized  cost,  is higher or lower than the price the Money  Market Fund would
receive if it sold the instrument.  During periods of declining  interest rates,
the

                                                     - 25 -

<PAGE>



daily yield on shares of the Fund may tend to be higher than a like  computation
made by a fund with identical  investments utilizing a method of valuation based
upon  market  prices and  estimates  of market  prices for all of its  portfolio
securities.  Thus, if the use of amortized  cost by the Fund resulted in a lower
aggregate  portfolio  value on a particular  day, a prospective  investor in the
Fund would be able to obtain a somewhat  higher  yield  than would  result  from
investment in a fund utilizing solely market values and existing investors would
receive less investment  income.  The converse would apply in a period of rising
interest rates.

         Portfolio  securities  held by the  Intermediate  Bond  Fund for  which
market  quotations  are readily  available  are  generally  valued at their most
recent bid prices as obtained  from one or more of the major  market  makers for
such securities.  Securities (and other assets) for which market  quotations are
not readily available are valued at their fair value as determined in good faith
in accordance with consistently applied procedures  established by and under the
general supervision of the Board of Trustees.

OTHER PURCHASE INFORMATION
- --------------------------
         The Prospectus describes generally how to purchase shares of the Funds.
Additional  information  with respect to certain types of purchases of shares of
the Intermediate Bond Fund is set forth below.

         RIGHT OF ACCUMULATION.  A "purchaser" (as defined in the Prospectus) of
the  Intermediate  Bond Fund has the right to combine  the cost or  current  net
asset  value  (whichever  is  higher) of his  existing  shares of the load funds
distributed by the Adviser with the amount of his current  purchases in order to
take  advantage  of the  reduced  sales  loads  set  forth in the  tables in the
Prospectus.  The purchaser or his dealer must notify the Transfer  Agent that an
investment  qualifies for a reduced sales load. The reduced load will be granted
upon confirmation of the purchaser's holdings by the Transfer Agent.

         LETTER OF INTENT.  The  reduced  sales loads set forth in the tables in
the  Prospectus  may also be  available  to any  "purchaser"  (as defined in the
Prospectus) of the Intermediate  Bond Fund who submits a Letter of Intent to the
Transfer  Agent.  The Letter must state an intention to invest within a thirteen
month  period in any load fund  distributed  by the Adviser a  specified  amount
which, if made at one time,  would qualify for a reduced sales load. A Letter of
Intent may be submitted  with a purchase at the beginning of the thirteen  month
period or within ninety days of the first  purchase  under the Letter of Intent.
Upon acceptance of this Letter,  the purchaser  becomes eligible for the reduced
sales load  applicable  to the level of  investment  covered  by such  Letter of
Intent as if the entire amount were invested in a single transaction.

                                                     - 26 -

<PAGE>




         The Letter of Intent is not a binding  obligation  on the  purchaser to
purchase, or the Trust to sell, the full amount indicated.  During the term of a
Letter of Intent,  shares  representing 5% of the intended purchase will be held
in escrow.  These shares will be released  upon the  completion  of the intended
investment.  If the Letter of Intent is not completed  during the thirteen month
period,  the  applicable  sales  load  will be  adjusted  by the  redemption  of
sufficient shares held in escrow,  depending upon the amount actually  purchased
during the period.  The minimum initial  investment  under a Letter of Intent is
$10,000.

         A ninety-day backdating period can be used to include earlier purchases
at the purchaser's cost (without a retroactive  downward adjustment of the sales
charge).  The  thirteen  month  period would then begin on the date of the first
purchase during the ninety-day period. No retroactive adjustment will be made if
purchases exceed the amount indicated in the Letter of Intent.  The purchaser or
his dealer  must  notify the  Transfer  Agent that an  investment  is being made
pursuant to an executed Letter of Intent.

         OTHER INFORMATION.  The Trust does not impose a front-end sales load or
imposes a reduced  sales  load in  connection  with  purchases  of shares of the
Intermediate  Bond Fund made under the  reinvestment  privilege or the purchases
described  in the  "Reduced  Sales  Load,"  "Purchases  at Net  Asset  Value" or
"Exchange  Privilege"  sections in the Prospectus because such purchases require
minimal sales effort by the Adviser.  Purchases  described in the  "Purchases at
Net Asset Value" section may be made for investment only, and the shares may not
be resold except through redemption by or on behalf of the Trust.

TAXES
- -----
         The Prospectus  describes  generally the tax treatment of distributions
by the Funds. This section of the Statement of Additional  Information  includes
additional information concerning federal taxes.

         Each Fund  intends to qualify  annually  for the special tax  treatment
afforded a "regulated  investment  company"  under  Subchapter M of the Internal
Revenue Code so that it does not pay federal  taxes on income and capital  gains
distributed to shareholders.  To so qualify a Fund must, among other things, (i)
derive at least 90% of its gross  income in each  taxable  year from  dividends,
interest,  payments  with respect to  securities  loans,  gains from the sale or
other  disposition of stock,  securities or foreign  currency,  or certain other
income  (including  but not limited to gains from  options,  futures and forward
contracts)  derived  with  respect  to  its  business  of  investing  in  stock,
securities or currencies;  (ii) derive less than 30% of its gross income in each
taxable year from the sale or other disposition of

                                                     - 27 -

<PAGE>



the following  assets held for less than three months:  (a) stock or securities,
(b) options,  futures or forward contracts not directly related to its principal
business of investing in stock or securities;  and (iii)  diversify its holdings
so that at the end of  each  quarter  of its  taxable  year  the  following  two
conditions  are met: (a) at least 50% of the value of the Fund's total assets is
represented by cash, U.S. Government  securities,  securities of other regulated
investment   companies  and  other  securities  (for  this  purpose  such  other
securities  will qualify only if the Fund's  investment is limited in respect to
any issuer to an amount not greater than 5% of the Fund's  assets and 10% of the
outstanding  voting  securities of such issuer) and (b) not more than 25% of the
value of the Fund's  assets is invested in  securities  of any one issuer (other
than U.S.  Government  securities or securities  of other  regulated  investment
companies).

         A Fund's net realized capital gains from securities  transactions  will
be  distributed  only after  reducing  such gains by the amount of any available
capital loss carryforwards.  Capital losses may be carried forward to offset any
capital gains for eight years, after which any undeducted capital loss remaining
is lost as a deduction.

     A federal  excise tax at the rate of 4% will be imposed on the  excess,  if
any,  of a Fund's  "required  distribution"  over  actual  distributions  in any
calendar  year.  Generally,  the  "required  distribution"  is 98%  of a  Fund's
ordinary  income  for  the  calendar  year  plus  98% of its net  capital  gains
recognized  during the one year period ending on October 31 of the calendar year
plus  undistributed   amounts  from  prior  years.  The  Funds  intend  to  make
distributions sufficient to avoid imposition of the excise tax.

         The Trust is  required  to  withhold  and remit to the U.S.  Treasury a
portion (31%) of dividend income on any account unless the shareholder  provides
a taxpayer  identification  number and certifies that such number is correct and
that the shareholder is not subject to backup withholding.

REDEMPTION IN KIND
- ------------------
         Under unusual circumstances, when the Board of Trustees deems it in the
best  interests of a Fund's  shareholders,  the Fund may make payment for shares
repurchased  or redeemed in whole or in part in  securities of the Fund taken at
current value.  If any such  redemption in kind is to be made, each Fund intends
to make an election  pursuant to Rule 18f-1 under the Investment  Company Act of
1940. This election will require the Funds to redeem shares solely in cash up to
the lesser of  $250,000  or 1% of the net asset value of each Fund during any 90
day period for any one  shareholder.  Should payment be made in securities,  the
redeeming

                                                     - 28 -

<PAGE>



shareholder  will generally  incur brokerage costs in converting such securities
to cash.  Portfolio securities which are issued in an in-kind redemption will be
readily marketable.

HISTORICAL PERFORMANCE INFORMATION
- ----------------------------------
         Yield  quotations on  investments in the Money Market Fund are provided
on both a current  and an  effective  (compounded)  basis.  Current  yields  are
calculated by determining the net change in the value of a hypothetical  account
for a seven  calendar day period (base  period) with a beginning  balance of one
share,  dividing by the value of the account at the beginning of the base period
to obtain the base period return, multiplying the result by (365/7) and carrying
the resulting  yield figure to the nearest  hundredth of one percent.  Effective
yields reflect daily compounding and are calculated as follows:  Effective yield
= (base  period  return + 1)365/7  -1. For  purposes of these  calculations,  no
effect is given to  realized  or  unrealized  gains or losses (the Fund does not
normally  recognize  unrealized  gains  and  losses  under  the  amortized  cost
valuation method).

         From time to time,  the  Intermediate  Bond Fund may advertise  average
annual total return.  Average annual total return quotations will be computed by
finding  the  average  annual  compounded  rates of return over 1, 5 and 10 year
periods that would equate the initial amount  invested to the ending  redeemable
value, according to the following formula:

                                P (1 + T)n = ERV
Where:
P =          a hypothetical initial payment of $1,000
T =          average annual total return
n =          number of years
ERV=         ending redeemable value of a hypothetical  $1,000 payment made at
             the  beginning of the 1, 5 and 10 year periods at the end of the 1,
             5 or 10 year periods (or fractional portion thereof)

The  calculation of average annual total return assumes the  reinvestment of all
dividends and  distributions.  The calculation also assumes the deduction of the
current maximum sales load from the initial $1,000 payment, at the times, in the
amounts,  and under the terms disclosed in the Prospectus.  If the Fund has been
in existence less than one, five or ten years, the time period since the date of
the  initial  public  offering  of shares  will be  substituted  for the periods
stated.

         The  Intermediate   Bond  Fund  may  also  advertise  total  return  (a
"nonstandardized quotation") which is calculated differently from average annual
total return.  A  nonstandardized  quotation of total return may be a cumulative
return which measures the percentage  change in the value of an account  between
the

                                                     - 29 -

<PAGE>



beginning  and end of a period,  assuming no activity in the account  other than
reinvestment of dividends and capital gains distributions. This computation does
not  include  the  effect of the  applicable  front-end  sales  load  which,  if
included, would reduce total return.

         A nonstandardized quotation may also indicate average annual compounded
rates of return without  including the effect of the applicable  front-end sales
load or over periods other than those specified for average annual total return.
A  nonstandardized  quotation of total return will always be  accompanied by the
Fund's average annual total return as described above.

         From time to time, the Intermediate  Bond Fund may advertise its yield.
A yield  quotation is based on a 30-day (or one month) period and is computed by
dividing the net  investment  income per share  earned  during the period by the
maximum offering price per share on the last day of the period, according to the
following formula:

                           Yield = 2[a-b/cd + 1)6 - 1]
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
d = the maximum offering price per share on the last day of the period

Generally, interest earned (for the purpose of "a" above) on debt obligations is
computed by reference to the yield to maturity of each  obligation held based on
the market value of the obligation  (including  actual accrued  interest) at the
close of business on the last  business day prior to the start of the 30-day (or
one month)  period for which  yield is being  calculated,  or,  with  respect to
obligations  purchased during the month, the purchase price (plus actual accrued
interest).  With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
paydowns of principal and interest,  gain or loss attributable to actual monthly
paydowns is accounted  for as an increase or decrease to interest  income during
the period and discount or premium on the remaining security is not amortized.

         To help  investors  better  evaluate how an  investment in a Fund might
satisfy  their  investment  objective,  advertisements  regarding  each Fund may
discuss various  measures of Fund  performance,  including  current  performance
ratings  and/or  rankings  appearing  in  financial  magazines,  newspapers  and
publications  which  track  mutual  fund  performance.  Advertisements  may also
compare  performance (using the calculation methods set forth in the Prospectus)
to performance as reported by other

                                                     - 30 -

<PAGE>



investments, indices and averages. When advertising current ratings or rankings,
the Funds may use the  following  publications  or indices to discuss or compare
Fund performance:

         Donoghue's  Money  Fund  Report  provides  a  comparative  analysis  of
performance for various  categories of money market funds. The Money Market Fund
may compare performance rankings with money market funds appearing in the Second
Tier category.

         Lipper Fixed Income Fund Performance Analysis measures total return and
average current yield for the mutual fund industry and ranks  individual  mutual
fund  performance  over  specified  time periods  assuming  reinvestment  of all
distributions,  exclusive  of sales  loads.  The Money  Market  Fund may provide
comparative performance information appearing in the Money Market Funds category
and the Intermediate Bond Fund may provide  comparable  performance  information
appearing in the Intermediate Investment Grade Debt Funds category.

         In assessing such comparisons of performance an investor should keep in
mind  that the  composition  of the  investments  in the  reported  indices  and
averages  is not  identical  to the Funds'  portfolios,  that the  averages  are
generally  unmanaged  and that the items  included in the  calculations  of such
averages  may not be  identical  to the formula  used by the Funds to  calculate
their  performance.  In addition,  there can be no assurance that the Funds will
continue this performance as compared to such other averages.

CUSTODIAN
- ----------
         The Fifth Third Bank, 38 Fountain Square Plaza,  Cincinnati,  Ohio, has
been retained to act as Custodian for the  investments  of each Fund.  The Fifth
Third Bank acts as each Fund's depository,  safekeeps its portfolio  securities,
collects all income and other payments with respect thereto,  disburses funds as
instructed and maintains records in connection with its duties. As compensation,
The Fifth  Third Bank  receives  from each Fund a base fee at the annual rate of
 .005% of average  net assets  (subject  to a minimum  annual fee of $1,500 and a
maximum fee of $5,000) plus transaction charges for each security transaction of
the Funds.

AUDITORS
- --------
         The firm of  Arthur  Andersen  LLP has  been  selected  as  independent
auditors for the Trust for the fiscal year ending  September  30,  1997.  Arthur
Andersen LLP, 425 Walnut Street,  Cincinnati,  Ohio, performs an annual audit of
the Trust's financial  statements and advises the Funds as to certain accounting
matters.


                                                     - 31 -

<PAGE>



TRANSFER AGENT
- --------------
         The Trust's transfer agent,  Countrywide Fund Services,  Inc.  ("CFS"),
maintains  the  records of each  shareholder's  account,  answers  shareholders'
inquiries concerning their accounts,  processes purchases and redemptions of the
Funds' shares,  acts as dividend and distribution  disbursing agent and performs
other  shareholder  service  functions.  CFS is an  affiliate  of the Adviser by
reason of common  ownership.  CFS receives for its services as transfer  agent a
fee payable  monthly at an annual rate of $25 per account  from the Money Market
Fund and $21 per account from the  Intermediate  Bond Fund,  provided,  however,
that the minimum fee is $1,000 per month for each Fund.  In addition,  the Funds
pay out-of-pocket  expenses,  including but not limited to, postage,  envelopes,
checks, drafts, forms, reports, record storage and communication lines.

         CFS also provides  accounting  and pricing  services to the Trust.  For
calculating  daily net asset  value per  share and  maintaining  such  books and
records as are  necessary to enable CFS to perform its duties,  the Money Market
Fund pays CFS a fee in accordance with the following schedule:

             Asset Size of Fund                 Monthly Fee

         $          0 - $100,000,000              $3,000
         $100,000,000 - $250,000,000              $3,500
         $250,000,000 - $400,000,000              $4,000
                       Over $400,000,000          $4,500

The  Intermediate  Bond Fund  pays CFS a fee in  accordance  with the  following
schedule:

             Asset Size of Fund                   Monthly Fee

         $          0 - $ 50,000,000                $2,750
         $ 50,000,000 - $100,000,000                $3,250
         $100,000,000 - $250,000,000                $3,750
                       Over $250,000,000            $4,250

In addition, each Fund pays all costs of external pricing services.

         CFS is  retained  by the  Adviser  to assist the  Adviser in  providing
administrative   services  to  the  Funds.   In  this  capacity,   CFS  supplies
non-investment  related  statistical  and  research  data,  internal  regulatory
compliance  services and executive and administrative  services.  CFS supervises
the preparation of tax returns, reports to shareholders of the Funds, reports to
and filings with the  Securities and Exchange  Commission  and state  securities
commissions,  and  materials  for  meetings  of the Board of  Trustees.  For the
performance of these

                                                     - 32 -

<PAGE>



administrative services, CFS receives a fee from the Adviser equal to .1% of the
average value of each Fund's daily net assets. The Adviser is solely responsible
for the payment of these  administrative fees to CFS, and CFS has agreed to seek
payment of such fees solely from the Adviser.



                                                     - 33 -

<PAGE>


FINANCIAL STATEMENTS
- --------------------
         The Predecessor  Funds' audited  financial  statements as of August 31,
1996 appear in the Trust's  annual report which is attached to this Statement of
Additional Information. The Predecessor Funds' unaudited financial statements as
of  February  28, 1997 appear in the  Trust's  semiannual  report  which is also
attached to this Statement of Additional Information.


                                                     - 34 -

<PAGE>



Growth/Value Fund                                      Shareholder Inquiries:
Aggressive Growth Fund                                  Forum Financial Corp.
Intermediate Bond Fund                                  P.O. Box 446
Kentucky Tax-Free Fund                                  Portland, Maine 04112
Money Market Fund                                       207-879-0001
                                                        800-811-8258
- - -----------------------------------------------------------------------------
                                                                October 17, 1996

 
Dear Shareholder:
 
We are  pleased to  present  the August  31,  1996  annual  report for the Trans
Adviser Funds.  This report  includes the five funds:  Growth/Value,  Aggressive
Growth, Intermediate Bond, Money Market and Kentucky Tax-Free Funds.
 
The stock market, as measured by the Standard & Poor's 500 Index, performed well
over our first fiscal year, but masked several inconsistent counter-trends.  The
technology  sector  reached  a peak  in the  final  three  months  of  1995  and
subsequently  entered into a six-month down-draft period. The good news is that,
for Growth/Value and Aggressive  Growth Funds,  this afforded us the opportunity
of building our  technology  positions  at  valuations  that were  substantially
discounted from 1995 highs. The bad news,  however,  is many of these technology
issues  either  stayed  depressed  or got even  cheaper  during  this  interval.
Happily, trends in the past three to four months are much improved and appear to
validate our decision to maintain a meaningful  presence in the  growth-oriented
technology  sector. The second observation is that smaller stock indices such as
the Russell 2000 Index and the Wilshire Small Cap Index,  significantly  trailed
the S&P 500 as well as the Dow Jones  Industrial  Average.  We take some comfort
that the  performance  of  Growth/Value  and  Aggressive  Growth was positive in
comparison to these other indices.
 
The municipal market experienced significant volatility during the Funds' fiscal
year.  First, the market  experienced a wide rate swing (120 basis points plus a
zigzag movement); second, there was much talk of a flat tax; and third, the lack
of supply,  then the tremendous  supply, and again the lack of supply within the
municipal market. Most of the year, however,  the municipal market's performance
was  better  than  that  of  the  taxable  market,  especially  on  the  shorter
maturities. For example, rates on the 30-year Government bond first fell by more
than 50 basis points,  then rose by more than 100 basis points to 6.95%,  before
finally  settling to 7.12% at the end of the period.  Intermediate  Bond,  Money
Market,  and  Kentucky  Tax-Free  Funds  performed  in line with  representative
benchmarks and are described in more detail later in this report.
 
We take great pride in the Trans Adviser Funds' first year of  operations.  In a
short period of one year,  we have grown to the $130 million  level,  confirming
our original vision that there is a broad-based appeal for funds managed locally
that employ our investment style and experience.  We are further encouraged that
the Funds will enjoy continued  growth as a broader network of investors  become
informed about our investment approach and capabilities.
 
If you have any questions or would like additional  information  about the Trans
Adviser Funds,  please call 800-811-8258.  Thank you for choosing to invest with
the Trans Adviser Funds.
 
/s/GORDON B. DAVIDSON                                   /s/THOMAS A. TRANTUM
- - ---------------------                                   --------------------
GORDON B. DAVIDSON                                      THOMAS A. TRANTUM
Chairman of the Board                                   President


<PAGE>
GROWTH/VALUE FUND           MANAGED BY: FRANK MASTRAPASQUA AND THOMAS A. TRANTUM
 
From inception of the Trans Adviser Growth/Value Equity Fund on September 29,
1995 through August 31, 1996, the Net Asset Value before any applicable sales
charges rose 11.8% compared with the S&P 500 gain of 13.9%. Including all sales
charges, the Fund rose just 6.8%. The positive but somewhat disappointing
relative performance should be viewed from the following three perspectives.
 
First, the mainstay focus of the Fund throughout the period was in the health
care, medical and drug sectors. This focus provided the Fund with good earnings
visibility, growth characteristics, and reasonable stock valuations. These three
related sectors had a combined concentration level of between 25% and 30% of the
entire portfolio throughout the period.
 
Second, excessive valuations and less confidence in underlying demand caused a
retrenchment in the technology sector during the final three months of 1995. As
we entered the opening months of 1996, your Fund managers began to accumulate
what they believed to be quality, high growth technology shares at prices that
were significantly off their high points reached in 1995. Unfortunately, the
technology recession extended not only through the spring of 1996, but lasted
well into the summer months before confidence in these issues began to return.
Within our normal three to five year investment timeframe, we remain confident
that our participation in the technology sector will prove to be "well worth the
weight." In fact, we have already witnessed the return to popularity of many
issues we purchased earlier this year.
 
Third, in the second half of the fiscal year, we have focused on building up
meaningful positions in the oil service sector, which we feel is being
stimulated by new discovery technologies, limited capacity, continuing good
demand, and recent price increases that have been holding well above levels
assumed in consensus earnings models. We also believe the oil service sector may
provide above average potential returns in the next several years while
continuing to exhibit desirable defensive characteristics.
 
In summary, core holdings in medical/health care have provided good current risk
adjusted valuation performance, while technology and, to a lesser extent, the
oil service sector have represented a bit of a drag on near term performance. In
recent months, however, the oil service sector seems to be reaching the
performance levels that we initially envisioned.
- - ----------------------------------------------------------------------------
              COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
        TRANS ADVISER GROWTH/VALUE FUND VS. STANDARD & POOR'S 500 INDEX
- - ----------------------------------------------------------------------------
    The following chart reflects a comparison of a change in value of a $10,000
investment in the Fund, including reinvested dividends and distributions, and
the performance of the Index. The Index excludes the effect of any fees or sales
charges. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 
<TABLE>
<CAPTION>
                                            TRANS ADVISER GROWTH/VALUE    STANDARD & POOR'S 500 INDEX
<S>                                        <C>                           <C>
09/29/95                                                         $9,550                        $10,000
10/31/95                                                         $9,388                         $9,964
11/30/95                                                         $9,971                        $10,401
12/31/95                                                        $10,047                        $10,602
01/31/96                                                        $10,410                        $10,963
02/29/96                                                        $10,831                        $11,065
03/31/96                                                        $10,936                        $11,171
04/30/96                                                        $11,327                        $11,335
05/31/96                                                        $11,413                        $11,626
06/30/96                                                        $11,041                        $11,671
07/31/96                                                        $10,220                        $11,156
08/31/96                                                        $10,677                        $11,391
Value on 8/31/96
Trans Advise Growth/Value Fund $10,677
Standard & Poor...s 500 Index $11,391
Average Annual Total Return
                                             Since Inception on 9/29/95
Trans Advise Growth/Value Fund                                    6.77%
Standard & Poor...s 500 Index                                    13.91%
</TABLE>
 
                                       2               TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND      MANAGED BY: FRANK MASTRAPASQUA AND THOMAS A. TRANTUM
 
From inception of the Trans Adviser Aggressive Growth Fund on September 29, 1995
through August 31, 1996, the Net Asset Value before any applicable sales charges
rose 9.5% compared with the NASDAQ Composite Index gain of 9.8%. Including all
sales charges, the Fund rose just 4.6%. A couple of factors should be noted in
this record.
 
First, while the overall sector strategy pursued in Aggressive Growth Fund was
similar to the strategy employed with the Growth/Value Fund, the technology
sector was given a greater weighting in Aggressive Fund than was the
medical/health care area. Since technology underwent a deeper-than-anticipated
market disfavor, Aggressive Fund's performance lagged that of both the market as
well as Growth/Value Fund.
 
Second, Aggressive Growth by design is composed of smaller capitalization stocks
which can elevate the Fund's growth prospects but also can raise the Fund's risk
profile. During the period, smaller stock indices, such as the Russell 2000
Index and the Wilshire Small Cap Index, significantly trailed the S&P 500. We
remain confident that over the long term (three to five years) the higher risks
can be adequately rewarded through compensatory returns.
 
- - ----------------------------------------------------------------------------
              COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
             TRANS ADVISER AGGRESSIVE GROWTH FUND VS. NASDAQ INDEX
- - ----------------------------------------------------------------------------
    The following chart reflects a comparison of a change in value of a $10,000
investment in the Fund, including reinvested dividends and distributions, and
the performance of the Index. The Index excludes the effect of any fees or sales
charges. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 
<TABLE>
<CAPTION>
                                         TRANS ADVISER AGGRESSIVE GROWTH FUND      NASDAQ INDEX
<S>                                     <C>                                      <C>
9/29/95                                                                  $9,550           $10,000
10/31/95                                                                 $9,044            $9,930
11/30/95                                                                 $9,578           $10,157
12/31/95                                                                 $9,502           $10,097
1/31/96                                                                  $9,473           $10,174
2/29/96                                                                 $10,065           $10,567
3/31/96                                                                 $10,352           $10,580
4/30/96                                                                 $11,394           $11,438
5/31/96                                                                 $11,365           $11,948
6/30/96                                                                 $10,706           $11,390
7/31/96                                                                  $9,808           $10,387
8/31/96                                                                 $10,457           $10,976
Value on 8/31/96
Trans Advise Aggressive Growth Fund                                                       $10,457
NASDAQ Index                                                            $10,976
Average Annual Total Return
                                                     Since Inception on 9/29/95
Trans Advise Aggressive Growth Fund                                                         4.57%
NASDAQ Index                                                                                9.76%
</TABLE>
 
                                       3               TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND                          MANAGED BY: MARSHALL E. COX, JR.
 
From inception of the Intermediate Bond Fund on October 3, 1995 through August
31, 1996 the Net Asset Value before any applicable sales charges rose 3.2%
compared with the Lehman Brothers Intermediate Govt./Corp. Index gain of 3.7%.
Including all sales charges, the Fund lost 1.41%. The relative performance
should be viewed from the following perspectives.
 
The Fund's fiscal year witnessed huge volatility, as measured by the 30-year
Government bond. Rates on the 30-year Government bond first fell by more than 50
basis points, and then rose by more than 100 basis points to 6.95%, before
finally recovering to 7.12% at the end of the period.
 
The Fund continues to attract assets and remains well positioned to participate
in a rallying bond market with an average duration of 4.4 years and an average
maturity of 6.45 years, as of the end of the period. The Fund's securities
currently are of very high quality, being comprised of 42% US government
securities with only 11% of the Fund's securities rated BBB. The Fund also
remains well diversified among 46 issues with consumer and commercial finance,
banking, insurance, electric, telephone, natural gas and pipeline, retail and
industrial consumer, oil, metals and chemicals all represented.
 
- - -----------------------------------------------------------------------------
              COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
     TRANS ADVISER INTERMEDIATE BOND FUND VS. LEHMAN BROTHERS INTERMEDIATE
                           GOVERNMENT/CORPORATE INDEX
- - ----------------------------------------------------------------------------
    The following chart reflects a comparison of a change in value of a $10,000
investment in the Fund, including reinvested dividends and distributions, and
the performance of the Index. The Index excludes the effect of any fees or sales
charges. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 
<TABLE>
<CAPTION>
                                          TRANS ADVISER INTERMEDIATE BOND FUND    LEHMAN INTERMEDIATE GOVT./CORP. INDEX
<S>                                      <C>                                     <C>
10/03/95                                                                 $9,550                                  $10,000
10/31/95                                                                 $9,599                                  $10,111
11/30/95                                                                 $9,701                                  $10,243
12/31/95                                                                 $9,782                                  $10,351
01/31/96                                                                 $9,873                                  $10,440
02/29/96                                                                 $9,779                                  $10,318
03/31/96                                                                 $9,756                                  $10,265
04/30/96                                                                 $9,709                                  $10,229
05/31/96                                                                 $9,725                                  $10,221
06/30/96                                                                 $9,842                                  $10,329
07/31/96                                                                 $9,865                                  $10,360
08/31/96                                                                 $9,859                                  $10,369
Value on 8/31/96
Trans Advise Intermediate Bond Fund
Lehman IntermediateGovt./Corp. Index
Average Annual Total Return
                                                     Since Inception on 10/3/95
Trans Advise Intermediate Bond Fund                                                                               -1.41%
Lehman IntermediateGovt./Corp. Index                                                                               3.69%
</TABLE>
 
                                       4               TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND                          MANAGED BY: MARSHALL E. COX, JR.
 
From inception of the Kentucky Tax-Free Fund on September 27, 1995 through
August 31, 1996 the Net Asset Value before any applicable sales charges rose
5.8% compared with the Lehman Brothers Municipal Index gain of 4.6%. Including
all sales charges, the Fund rose just 1.0%. The relative performance should be
viewed from the following perspectives.
 
The municipal market in Kentucky experienced significant volatility during the
Fund's fiscal year. First, the market experienced a wide rate swing (120 basis
points plus a zigzag movement); second, there was much talk of a flat tax; and
third, the lack of supply, then the tremendous supply, and again the lack of
supply within the municipal market. Most of the year, however, the municipal
market's performance was better than that of the taxable market, as measured by
the 30-year Government bond.
 
Also contributing to the Fund's performance was the fact that the quality of the
Fund's securities is up significantly, with 91% of the securities rated A or
better. In addition, duration has been shortened substantially to 5.5 years,
with an average maturity of 7.9 years. This selective shortening of the duration
dramatically improved the convexity of the Fund (the concept that measures
sensitivity of the market price to changes in the interest rate levels). The
result is that in an improving municipal market, the Fund may perform well
without having a substantial number of bonds called away and in a deteriorating
market, the losses can be limited because of the much shorter duration and
maturity. We feel the limited duration and better convexity, along with the very
high quality of the Fund's securities, will position this Fund more
conservatively while not sacrificing yield.
 
- - ----------------------------------------------------------------------------
              COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
        TRANS ADVISER KENTUCKY TAX-FREE FUND VS. LEHMAN MUNICIPAL INDEX
- - ----------------------------------------------------------------------------
    The following chart reflects a comparison of a change in value of a $10,000
investment in the Fund, including reinvested dividends and distributions, and
the performance of the Index. The Index excludes the effect of any fees or sales
charges. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 
<TABLE>
<CAPTION>
                                        TRANS ADVISER KENTUCKY TAX-FREE FUND    LEHMAN MUNICIPAL INDEX
<S>                                    <C>                                     <C>
9/27/95                                                                $9,550                    $10,000
10/31/95                                                               $9,800                    $10,145
11/30/95                                                               $9,986                    $10,313
12/31/95                                                              $10,109                    $10,412
1/31/96                                                               $10,175                    $10,492
2/29/96                                                               $10,101                    $10,420
3/31/96                                                                $9,979                    $10,287
4/30/96                                                                $9,963                    $10,258
5/31/96                                                                $9,962                    $10,254
6/30/96                                                                $9,944                    $10,366
7/31/96                                                               $10,109                    $10,459
8/31/96                                                               $10,104                    $10,457
Value on 8/31/96
Trans Advise Kentucky Tax-Free Fund                                   $10,104
Lehman Municipal Index                                                $10,457
Average Annual Total Return
                                                   Since Inception on 9/27/95
Trans Advise Kentucky Tax-Free Fund                                                                1.04%
Lehman Municipal Index                                                                             4.57%
</TABLE>
 
                                       5               TRANS ADVISER FUNDS, INC.
<PAGE>
GROWTH/VALUE FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
COMMON STOCK (95.2%):
AMUSEMENT & RECREATION SERVICES (3.3%):
    10,000  Harrah's Entertainment, Inc.*....  $     190,000
    10,000  Promus Hotel Corporation*........        301,250
                                               -------------
                                                     491,250
                                               -------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (1.4%):
     7,500  Autozone, Inc.*..................        204,375
                                               -------------
BUSINESS SERVICES (7.1%):
    20,000  ADT Ltd.*........................        392,500
     6,000  Oracle Corporation*..............        211,500
    10,000  SCB Computer Technology, Inc.*...        192,500
     5,000  Sun Microsystems, Inc.*..........        271,875
                                               -------------
                                                   1,068,375
                                               -------------
CHEMICALS & ALLIED PRODUCTS (7.6%):
     4,000  Bristol-Myers Squibb Company.....        351,000
     6,000  Merck & Company, Inc. ...........        393,750
     7,000  Schering-Plough Corporation......        391,125
                                               -------------
                                                   1,135,875
                                               -------------
COMMUNICATIONS (1.0%):
    10,000  Tele-Communications, Inc.*.......        148,750
                                               -------------
DEPOSITORY INSTITUTIONS (4.9%):
    10,000  Carolina First Corporation.......        188,750
    10,000  MBNA Corporation.................        303,750
    10,000  Signet Banking Corporation.......        241,250
                                               -------------
                                                     733,750
                                               -------------
EATING & DRINKING PLACES (3.5%):
     7,500  McDonald's Corporation...........        347,812
    20,000  Shoney's, Inc.*..................        182,500
                                               -------------
                                                     530,312
                                               -------------
ELECTRIC, GAS, & SANITARY SERVICES (2.9%):
    10,000  Sonat, Inc. .....................        441,250
                                               -------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT &
  COMPONENTS, EXCEPT COMPUTER EQUIPMENT (1.2%):
     5,000  Novellus Systems, Inc.*..........        188,750
                                               -------------
FOOD STORES (2.1%):
     7,500  Kroger Company*..................        317,813
                                               -------------
FOOD & KINDRED PRODUCTS (0.4%):
    15,000  Monterey Pasta Company*..........         67,500
                                               -------------
GENERAL MERCHANDISE STORES (1.8%):
     6,000  Sears, Roebuck and Company.......        264,000
                                               -------------
 
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
HEALTH SERVICES (9.6%):
    10,000  Beverly Enterprises*.............  $     102,500
     5,000  Columbia HCA Healthcare
              Corporation....................        281,875
     2,345  Healthsouth Rehabilitation
              Corporation*...................         75,919
    10,000  Living Centers of America,
              Inc.*..........................        267,500
     1,000  Quorum Health Group, Inc.*.......         25,250
    15,000  Tenet Healthcare Corporation*....        315,000
    12,000  Vencor, Inc.*....................        376,500
                                               -------------
                                                   1,444,544
                                               -------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
  EQUIPMENT (13.4%):
    10,000  Hewlett-Packard Company..........        437,500
     5,000  International Business Machines
              Corporation....................        571,875
    10,000  Lam Research Corporation*........        236,250
     5,000  Seagate Technology, Inc.*........        240,000
    15,000  Western Digital Corporation*.....        526,875
                                               -------------
                                                   2,012,500
                                               -------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS;
  PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (1.8%):
    10,000  Tech-Sym Corporation*............        277,500
                                               -------------
MISCELLANEOUS RETAIL (3.6%):
     6,000  Friedman's, Inc. Class A*........        126,000
    10,000  Melville Corporation.............        422,500
                                               -------------
                                                     548,500
                                               -------------
MOTION PICTURES (0.8%):
     2,000  The Walt Disney Company..........        114,000
                                               -------------
NONDEPOSITORY CREDIT INSTITUTIONS (3.5%):
     5,000  American Express Company.........        218,750
    10,000  Capital One Financial
              Corporation....................        301,250
                                               -------------
                                                     520,000
                                               -------------
OIL & GAS EXTRACTION (5.4%):
    10,000  Nuevo Energy Company*............        373,750
     6,500  Pride Petroleum Services, Inc.*..         93,438
     4,000  Schlumberger, Ltd. ..............        337,500
                                               -------------
                                                     804,688
                                               -------------
PHARMACEUTICAL PREPARATIONS (3.2%):
     8,000  American Home Products
              Corporation....................        474,000
                                               -------------
</TABLE>
 See notes to financial statements.     6           TRANS ADVISER FUNDS, INC.
<PAGE>
GROWTH/VALUE FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
TRANSPORTATION EQUIPMENT (1.5%):
     2,500  Boeing Company...................  $     226,250
                                               -------------
TRANSPORTATION SERVICES (1.3%):
    15,000  United Transnet, Inc.*...........        195,000
                                               -------------
TRANSPORTATION BY AIR (1.5%):
    10,000  Southwest Airlines Company.......        228,750
                                               -------------
WATER TRANSPORTATION (2.6%):
    10,000  Tidewater, Inc. .................        383,750
                                               -------------
WHOLESALE TRADE--DURABLE GOODS (8.6%):
     6,000  Arrow Electronics Inc.*..........        273,750
     4,000  Avnet, Inc. .....................        187,000
     5,000  Lockheed Martin Corporation......        420,625
    15,000  Sybron International
              Corporation-Wisconsin*.........        412,500
                                               -------------
                                                   1,293,875
                                               -------------
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
WHOLESALE TRADE--NONDURABLE GOODS (1.2%):
     5,000  Safeway, Inc.*...................  $     181,250
                                               -------------
Total Common Stock
  (cost $14,053,526).........................     14,296,607
                                               -------------
SHORT-TERM HOLDINGS (4.8%):
    16,152  1784 U.S. Treasury Money Market
              Fund...........................         16,152
   711,813  Forum Daily Assets Treasury
              Fund...........................        711,813
                                               -------------
Total Short-Term Holdings
  (cost $727,965)............................        727,965
                                               -------------
Total Investments (100.0%)
  (cost $14,781,491).........................  $  15,024,572
                                               -------------
                                               -------------
</TABLE>
 
*Non-income producing security.
 
See notes to financial statements.     7               TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
COMMON STOCK (98.9%):
AMUSEMENT & RECREATION SERVICES (3.8%):
     5,000  Harrah's Entertainment, Inc.*.....  $     95,000
     5,000  Promus Hotel Corporation*.........       150,625
                                                ------------
                                                     245,625
                                                ------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE
  STATIONS (1.9%):
    10,000  Rush Enterprises, Inc.*...........       125,000
                                                ------------
BUSINESS SERVICES (12.1%):
    10,000  ADT Ltd.*.........................       196,250
    10,000  Cerplex Group*....................        68,750
     5,000  Oracle Corporation*...............       176,250
     9,500  SCB Computer Technology, Inc.*....       182,875
     3,000  Sun Microsystems, Inc.*...........       163,125
                                                ------------
                                                     787,250
                                                ------------
CHEMICALS & ALLIED PRODUCTS (1.6%):
    10,000  NABI, Inc.*.......................       106,250
                                                ------------
COMMUNICATIONS (1.1%):
     5,000  Mobile Telecommunication Tech
              Corp*...........................        69,375
                                                ------------
DEPOSITORY INSTITUTIONS (2.9%):
    10,000  Carolina First Corporation........       188,750
                                                ------------
EATING & DRINKING PLACES (4.9%):
     6,000  Quality Dining, Inc.*.............       176,250
    16,000  Shoney's, Inc.*...................       146,000
                                                ------------
                                                     322,250
                                                ------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT &
  COMPONENTS, EXCEPT COMPUTER EQUIPMENT (2.3%):
     4,000  Novellus Systems, Inc.*...........       151,000
                                                ------------
FOOD STORES (2.3%):
     3,500  Kroger Company*...................       148,312
                                                ------------
FOOD & KINDRED PRODUCTS (0.7%):
    10,000  Monterey Pasta Company*...........        45,000
                                                ------------
GENERAL MERCHANDISE STORES (1.2%):
     2,000  Consolidated Stores
              Corporation*....................        76,000
                                                ------------
HEALTH SERVICES (11.9%):
     7,500  Living Centers of America, Inc.*..       200,625
     2,000  Quorum Health Group, Inc.*........        50,500
    10,000  Tenet Healthcare Corporation*.....       210,000
 
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
HEALTH SERVICES, CONTINUED:
    10,000  Vencor, Inc.*.....................  $    313,750
                                                ------------
                                                     774,875
                                                ------------
HOLDING & OTHER INVESTMENT OFFICES (0.5%):
     1,000  Felcor Suite Hotels, Inc. ........        30,500
                                                ------------
HOME FURNITURE, FURNISHINGS, & EQUIPMENT
  STORES (1.2%):
     5,000  Movie Gallery, Inc.*..............        76,250
                                                ------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
  EQUIPMENT (14.4%):
     4,000  Hewlett-Packard Company...........       175,000
     8,000  Lam Research Corporation*.........       189,000
    15,000  Smart Modular Technologies*.......       225,000
    10,000  Western Digital Corporation*......       351,250
                                                ------------
                                                     940,250
                                                ------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS;
  PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (2.5%):
     6,000  Tech-Sym Corporation*.............       166,500
                                                ------------
MISCELLANEOUS RETAIL (3.5%):
     6,000  Friedman's, Inc. Class A*.........       126,000
     2,500  Melville Corporation..............       105,625
                                                ------------
                                                     231,625
                                                ------------
NONDEPOSITORY CREDIT INSTITUTIONS (4.6%):
     6,000  Capital One Financial
              Corporation.....................       180,750
     5,000  Olympic Financial, Ltd.*..........       122,500
                                                ------------
                                                     303,250
                                                ------------
OIL & GAS EXTRACTION (7.9%):
     8,000  Nuevo Energy Company*.............       299,000
    15,000  Pride Petroleum Services, Inc.*...       215,625
                                                ------------
                                                     514,625
                                                ------------
TRANSPORTATION SERVICES (5.1%):
    10,000  Simon Transportation Services*....       137,500
    15,000  United Transnet, Inc.*............       195,000
                                                ------------
                                                     332,500
                                                ------------
TRANSPORTATION BY AIR (2.5%):
     5,000  Southwest Airlines Company........       114,375
     5,000  Western Pacific Airlines, Inc.*...        50,625
                                                ------------
                                                     165,000
                                                ------------
WATER TRANSPORTATION (3.5%):
     6,000  Tidewater, Inc. ..................       230,250
                                                ------------
</TABLE>
 
See notes to financial statements.     8               TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
WHOLESALE TRADE--DURABLE GOODS (2.1%):
     5,000  Sybron International
              Corporation-Wisconsin*..........  $    137,500
                                                ------------
WHOLESALE TRADE--NONDURABLE GOODS (4.4%):
     7,500  AmeriSource Health Corporation*...       285,938
                                                ------------
Total Common Stock
  (cost $6,393,306)...........................     6,453,875
                                                ------------
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
 
SHORT-TERM HOLDINGS (1.1%)
       576  1784 U.S. Treasury Money Market
              Fund............................  $        576
    72,947  Forum Daily Assets Treasury
              Fund............................        72,947
                                                ------------
Total Short-Term Holdings
  (cost $73,523)..............................        73,523
                                                ------------
Total Investments (100.0%)
  (cost $6,466,829)...........................  $  6,527,398
                                                ------------
                                                ------------
</TABLE>
 
*Non-income producing security.
 
See notes to financial statements.     9               TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (7.9%):
$    290,038  Federal Home Loan Mortgage
                Corporation, Series 1072,
                Class G, 7.00%, due
                5/15/06......................  $     289,228
     800,000  Federal Home Loan Mortgage
                Corporation, Series 1720,
                Class E, 7.50% due
                12/15/09.....................        797,647
                                               -------------
Total Collateralized Mortgage Obligations
  (cost $1,118,738)..........................      1,086,875
                                               -------------
FIXED RATE BONDS--CORPORATE (55.4%):
     686,000  Alabama Power Company, 8.30%,
                due 7/1/22...................        684,720
     400,000  Anheuser-Busch Companies,
                7.00%, due 9/1/05............        388,401
     178,000  Anheuser-Busch Companies,
                8.75%, due 12/1/99...........        187,100
     169,000  Associates Corporation of North
                America, 6.00%, due
                3/15/00......................        164,005
     250,000  B.P. America, 6.50%, due
                12/15/99.....................        245,774
      50,000  Berkley W.R. Corporation,
                9.875%, due 5/15/08..........         57,698
     190,000  The Chase Manhattan
                Corporation, 8.00%, due
                5/15/04......................        191,230
     115,000  Citicorp, 10.75%, due
                12/15/15.....................        118,364
     146,000  Citicorp, 10.50%, due 2/1/16...        149,355
     140,000  Commonwealth Edison Company,
                9.50%, due 5/1/16............        146,775
     160,000  Florida Power & Light Company,
                8.00%, due 8/25/22...........        156,388
     100,000  Ford Motor Credit Company,
                5.83%, due 6/29/98...........         98,648
     160,000  Ford Motor Credit Company,
                7.50%, due 1/15/03...........        161,039
     160,000  GTE of Southeast Corporation,
                8.00%, due 12/1/01...........        160,812
 
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE BONDS--CORPORATE, CONTINUED:
$    130,000  General Electric Capital
                Corporation, 6.66%, due
                5/1/18.......................  $     128,744
      69,000  Georgia Power Company First
                Mortgage Bonds, 7.95%, due
                2/1/23.......................         67,860
     250,000  Greyhound Financial
                Corporation, 7.82%, due
                1/27/03......................        253,009
     250,000  IBM Credit Corporation, 6.20%,
                due 3/19/01..................        239,773
     300,000  Inco, Ltd., 9.60%, due
                6/15/22......................        317,897
     120,000  Jersey Central Power & Light
                Company, 9.20%, due 7/1/21...        128,346
      46,000  Kaiser Permanente, 9.55%, due
                7/15/05......................         52,472
      56,000  Kraft, Inc., 8.50%, due
                2/15/17......................         56,264
     200,000  Michigan Bell Telephone
                Company, 6.375%, due
                2/1/05.......................        188,882
     175,000  Pacific Gas & Electric Company,
                6.625%, due 6/1/00...........        170,867
     439,000  Pennsylvania Power & Light
                Company, 9.25%, due
                10/1/19......................        468,786
     120,000  Public Service Electric & Gas
                Company, 8.75%, due
                11/1/21......................        128,669
     165,000  Questar Pipeline, 9.375%, due
                6/1/21.......................        180,413
      70,000  Rohm & Haas Company, 9.80%, due
                4/15/20......................         83,520
      50,000  Sara Lee Corporation, 8.75%,
                due 5/15/16..................         51,814
     675,000  Shopko Stores, 9.25%, due
                3/15/22......................        693,309
     200,000  Southern California Edison,
                7.375%, due 12/15/03.........        203,407
      85,000  Southwestern Public Service
                Company, 8.20%, due
                12/1/22......................         86,728
</TABLE>
 
See notes to financial statements.     10              TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE BONDS--CORPORATE, CONTINUED:
$    199,000  TJX Companies, Inc., 9.50%, due
                5/2/16.......................  $     206,408
      68,000  U.S. Leasing International,
                6.625%, due 5/15/03..........         65,228
     130,000  Union Electric Company, 8.00%,
                due 12/15/22.................        128,740
     500,000  Union Oil of California
                Corporation, 6.70%, due
                10/15/07.....................        463,422
     250,000  Washington Gas Light Company,
                6.50%, due 1/14/97...........        250,778
      65,000  Wisconsin Electric Power,
                7.75%, due 1/15/23...........         63,377
                                               -------------
Total Fixed Rate Bonds--Corporate
  (cost $7,817,554)..........................      7,589,022
                                               -------------
FIXED RATE NOTES--AGENCY (7.1%):
     500,000  Federal Home Loan Bank, 6.62%,
                due 12/6/00..................        487,668
     150,000  Federal National Mortgage
                Association, 6.17%, due
                12/2/03......................        141,364
     265,000  Tennessee Valley Authority,
                6.875%, due 1/15/02..........        261,356
      50,000  Tennessee Valley Authority,
                6.875%, due 8/1/02...........         49,128
      30,000  Tennessee Valley Authority,
                8.05%, due 7/15/24...........         29,261
                                               -------------
Total Fixed Rate Notes--Agency
  (cost $998,362)............................        968,777
                                               -------------
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
 
REPURCHASE AGREEMENTS (15.3%):
$  2,101,575  The First Boston Corporation,
                5.30%, due 9/3/96, to be
                repurchased at 2,102,813
                (collateralized by
                $16,050,000 Federal National
                Mortgage Association, pool
                #339017, 6.092%, due
                12/1/35).....................  $   2,101,575
                                               -------------
Total Repurchase Agreements
  (cost $2,101,575)..........................      2,101,575
                                               -------------
TREASURY NOTES (14.2%):
   2,000,000  U.S. Treasury Notes, 6.50%, due
                8/15/05......................      1,943,750
                                               -------------
Total Treasury Notes
  (cost $1,986,601)..........................      1,943,750
                                               -------------
SHORT-TERM HOLDINGS (0.1%):
       5,006  1784 U.S. Treasury Money Market
                Fund.........................          5,006
                                               -------------
Total Short-Term Holdings
  (cost $5,006)..............................          5,006
                                               -------------
Total Investments (100.0%)
  (cost $14,027,836).........................  $  13,695,005
                                               -------------
                                               -------------
</TABLE>
 
See notes to financial statements.     11              TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
- - -------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
MUNICIPAL BONDS (100.0%):
AIRPORT REVENUE (5.0%):
$    750,000  Kenton County, KY, Airport
                Revenue Bonds, MBIA insured,
                5.75%, due
                3/1/13.......................  $     733,125
      50,000  Lexington-Fayette Urban County
                Airport Corporation, KY,
                First Mortgage Revenue Bonds,
                7.75%, due 4/1/08............         53,937
                                               -------------
                                                     787,062
                                               -------------
ECONOMIC DEVELOPMENT REVENUE (15.3%):
     100,000  Covington, KY, Municipal
                Properties Corporation
                Revenue Bonds, Series A,
                8.25%, due 8/1/10,
                prerefunded 8/1/98 at 103....        109,875
     490,000  Jefferson County, KY, Capital
                Projects Corporation Revenue
                Bonds, Series A, 5.65%, due
                8/15/03......................        508,987
     100,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #26 Second
                Series, 7.10%, due 12/1/97...        103,500
     110,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #27, 7.10%,
                due 5/1/06, prerefunded
                11/1/96
                at 102.......................        112,773
      50,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #27, 7.10%,
                due 5/1/08, prerefunded
                11/1/96
                at 102.......................         51,260
     100,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #30 Fifth
                Series, 7.00%, due 12/1/96...        100,792
 
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
ECONOMIC DEVELOPMENT REVENUE, CONTINUED:
$     70,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #32 Third
                Series, 6.50%, due 12/1/99...  $      73,762
      65,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #51, escrowed
                to maturity, 6.00%, due
                8/1/97.......................         66,159
     455,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #51, escrowed
                to maturity, 6.30%, due
                8/1/01.......................        482,869
     100,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #52, 6.50%,
                due 8/1/11, prerefunded
                8/1/01 at 102................        109,125
     425,000  Kentucky State Turnpike
                Authority, Economic
                Development Revenue Bonds,
                Revitalization Projects,
                escrowed to maturity, 7.00%,
                due 5/15/99..................        452,094
     200,000  Kentucky State Turnpike
                Authority, Economic
                Development Revenue Bonds,
                7.25%, due 5/15/10,
                prerefunded 5/15/00 at
                101.50.......................        219,750
                                               -------------
                                                   2,390,946
                                               -------------
EDUCATION FACILITIES REVENUE (19.9%):
     350,000  Fayette County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, Series C, 5.25%, due
                10/1/09......................        334,687
</TABLE>
 
See notes to financial statements.     12              TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
EDUCATION FACILITIES REVENUE, CONTINUED:
$    365,000  Fayette County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, Series C, 5.25%, due
                10/1/10......................  $     346,750
     200,000  Hopkins County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, 5.70%, due 6/1/06.....        204,250
     495,000  Jefferson County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, Series A, 4.875%, due
                1/1/11.......................        449,831
     750,000  Jefferson County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, Series A, MBIA
                insured, 5.00%, due 2/1/07...        731,250
      70,000  Lexington-Fayette Urban County
                Government, KY, School
                Building Revenue Bonds,
                6.80%, due 10/1/01...........         76,300
     770,000  Pendleton County, KY, School
                District Finance Corporation,
                School Building Revenue
                Bonds, 5.05%, due 12/1/15....        685,300
     200,000  University of Louisville, KY,
                Revenue Bonds, Series H,
                5.875%, due 5/1/12...........        201,750
      70,000  University of Louisville, KY,
                Revenue Bonds, Series G,
                6.25%, due 5/1/99............         72,103
                                               -------------
                                                   3,102,221
                                               -------------
GENERAL OBLIGATION (1.8%):
     305,000  Fern Creek, KY, Fire Protection
                District, Holding Company,
                Inc., Revenue Bonds, Fire
                Station #2, 5.75%, due
                1/15/14......................        286,319
                                               -------------
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
HEALTH CARE REVENUE (13.2%):
$    385,000  Jefferson County, KY, Hospital
                Revenue Bonds, NKC Hospitals,
                Inc. Project, MBIA insured,
                7.75%, due 10/1/14,
                prerefunded 10/01/97 at
                102..........................  $     407,492
   1,225,000  Kentucky Economic Development
                Finance Authority, Hospital
                Facilities Revenue Bonds,
                Society National Bank LOC,
                5.75%, due 11/1/05...........      1,211,219
     475,000  Kentucky Economic Development
                Finance Authority, Hospital
                Facilities Revenue Bonds,
                Baptist Healthcare System
                Project, MBIA insured, 5.00%,
                due 8/15/24..................        408,500
      40,000  McCracken County, KY, Revenue
                Bonds, Lourdes Hospital,
                Inc., 6.00%, due 11/1/12,
                prerefunded 11/1/96 at 100...         40,146
                                               -------------
                                                   2,067,357
                                               -------------
HOUSING REVENUE (6.6%):
     725,000  Boone County, KY, Public
                Properties Corporation
                Revenue Bonds, Sewer System
                Lease, 5.15%, due 12/1/12....        667,000
     270,000  Greater Kentucky Housing
                Assistance Corporation,
                Mortgage Revenue Bonds,
                FHA/Section 8 Assisted
                Project, Series A, MBIA/ FHA
                insured, 6.25%, due 7/1/22...        270,337
     100,000  Jefferson County, KY, Capital
                Projects Corporation Revenue
                Bonds, Series A, 0.00%
                (5.747% effective yield), due
                8/15/99......................         86,750
                                               -------------
                                                   1,024,087
                                               -------------
</TABLE>
 
See notes to financial statements.     13              TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
INDUSTRIAL DEVELOPMENT REVENUE (6.1%):
$    750,000  Clark County, KY, Industrial
                Building Revenue Bonds,
                Southern Wood Project, 7.00%,
                due 12/1/08+.................  $     746,250
     200,000  Wickliffe, KY, Industrial
                Building Revenue Bonds,
                Westvaco Corporation Project,
                7.00%, due 1/1/09............        199,956
                                               -------------
                                                     946,206
                                               -------------
JAIL FACILITIES REVENUE (0.7%):
     100,000  Kentucky Local Correctional
                Facilities Construction
                Authority Revenue Bonds,
                7.00%, due 11/1/14,
                prerefunded 11/1/97 at 102...        105,250
                                               -------------
OTHER REVENUE (6.1%):
     475,000  Kentucky Higher Education
                Student Loan Corporation,
                Insured Student Loan Revenue
                Bonds, Series B, 6.40%, due
                6/1/00.......................        503,500
     300,000  Lexington-Fayette Urban County,
                KY, Government Public
                Facilities Corporation
                Revenue Bonds, Recreation
                Project, 7.90%, due 7/1/06,
                prerefunded 7/1/97 at 102....        315,480
     120,000  Puerto Rico Public Buildings
                Authority Guaranteed Revenue
                Bonds, Series K, 6.875%, due
                7/1/21, prerefunded 7/1/02 at
                101.50.......................        134,400
                                               -------------
                                                     953,380
                                               -------------
POLLUTION CONTROL REVENUE (17.7%):
     450,000  Ashland, KY, Pollution Control
                Revenue Bonds, Ashland Oil,
                7.375%, due 7/1/09...........        483,750
     295,000  Ashland, KY, Solid Waste
                Revenue Bonds, Ashland Oil,
                Inc., Project, 7.20%, due
                10/1/20......................        310,488
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
POLLUTION CONTROL REVENUE, CONTINUED:
$    235,000  Jefferson County, KY, Pollution
                Control Revenue Bonds,
                Louisville Gas & Electric
                Company Project A, 7.45%, due
                6/15/15......................  $     255,269
     100,000  Kentucky State Pollution
                Abatement & Water Reserve
                Finance Authority Revenue
                Bonds, Series A, escrowed to
                maturity, 7.40%, due
                8/1/02.......................        112,875
      50,000  Louisville & Jefferson County,
                KY, Metropolitan Sewer
                District, Sewer & Drain
                System Revenue Bonds, Series
                A, AMBAC insured, 6.50%, due
                5/15/00......................         52,938
     455,000  Meade County, KY, Pollution
                Control Revenue Bonds, Olin
                Corporation Project, 6.00%,
                due 7/1/07...................        457,707
     385,000  Trimble County, KY, Pollution
                Control Revenue Bonds, Series
                A, 7.625%, due 11/1/20,
                prerefunded 11/1/00 at 102...        430,719
     600,000  Trimble County, KY, Pollution
                Control Revenue Bonds, Series
                A, 7.625%, due 11/1/20.......        659,250
                                               -------------
                                                   2,762,996
                                               -------------
TRANSPORTATION REVENUE (6.1%):
     655,000  Kentucky State Turnpike
                Authority Resource Recovery
                Road Revenue Bonds, escrowed
                to maturity, 6.125%, due
                7/1/07.......................        674,650
     275,000  Kentucky State Turnpike
                Authority Resource Recovery
                Road Revenue Bonds, Series A,
                FGIC insured, 6.00%, due
                7/1/09.......................        275,405
                                               -------------
                                                     950,055
                                               -------------
</TABLE>
 
See notes to financial statements.     14              TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
UTILITIES REVENUE (1.5%):
$    200,000  Owensboro, KY, Electric Light &
                Power Revenue Bonds, Series
                A, 10.25%, due 1/1/09,
                prerefunded 1/1/00 at 102....  $     232,250
                                               -------------
Total Municipal Bonds
  (cost $15,867,871).........................     15,608,129
                                               -------------
Total Investments (100.0%)
  (cost $15,867,871).........................  $  15,608,129
                                               -------------
                                               -------------
</TABLE>
 
+Securities that may be resold to
 "qualified institutional buyers"
 under rule 144a or securities offered
 pursuant to Section 4(2) of the
 Securities Act of 1933, as amended.
 These securities have been determined
 to be liquid under guidelines
 established by the Board of
 Directors.
 
See notes to financial statements.     15              TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
ASSET BACKED SECURITIES (0.4%):
$    274,424  Federal Home Loan Mortgage
                Corporation, 7.00%, due
                4/1/97.......................  $     275,191
                                               -------------
DISCOUNT NOTES--AGENCY (19.8%):
  15,015,000  Federal Home Loan Mortgage
                Corporation, 5.293% yield,
                9/5/96.......................     15,010,662
                                               -------------
FIXED RATE NOTES--AGENCY (4.2%):
     100,000  Federal Home Loan Bank, 4.75%,
                due 1/13/97..................         99,641
     100,000  Federal Home Loan Bank, 4.57%,
                due 2/3/97...................         99,492
     100,000  Federal Home Loan Bank, 4.80%,
                due 7/24/97..................         98,810
     100,000  Federal Home Loan Mortgage
                Corporation, 4.525%, due
                1/27/97......................         99,521
     220,000  Federal Land Bank, 7.95%, due
                10/21/96.....................        220,645
   1,100,000  Federal National Mortgage
                Association, 4.50%, due
                11/1/96......................      1,097,763
     400,000  Tennessee Valley Authority,
                8.25%, due 11/15/96..........        401,897
     230,000  Tennessee Valley Authority,
                4.60%, due 12/15/96..........        229,209
     861,000  Tennessee Valley Authority,
                6.00%, due 1/15/97...........        861,380
                                               -------------
Total Fixed Rate Notes--Agency...............      3,208,358
                                               -------------
FIXED RATE NOTES--CORPORATE (59.2%):
     175,000  AT&T Capital Corporation,
                7.66%, due 1/30/97...........        176,132
     355,000  American Express Credit
                Corporation, 7.875%, due
                12/1/96......................        356,681
   1,128,000  American Express Credit
                Corporation, 7.75%, due
                3/1/97.......................      1,138,977
      75,000  American General Finance
                Corporation, 7.15%, due
                5/15/97......................         75,568
      80,000  American Home Products
                Corporation, 6.875%, due
                4/15/97......................         80,322
 
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$    660,000  Associates Corporation of North
                America, 7.50%, due
                10/15/96.....................  $     661,211
     215,000  Associates Corporation of North
                America, 8.70%, due 1/1/97...        216,815
     395,000  Associates Corporation of North
                America, 6.875%, due
                1/15/97......................        396,372
      50,000  Associates Corporation of North
                America, 9.70%, due 5/1/97...         51,165
     290,000  Associates Corporation of North
                America, 8.625%, due
                6/15/97......................        295,124
   1,520,000  Bankers Trust New York
                Corporation, 7.25%, due
                11/1/96......................      1,523,248
     190,000  Bausch & Lomb, Inc., 6.80%, due
                12/12/96.....................        190,519
      50,000  Baxter International, Inc.,
                7.50%, due 5/1/97............         50,470
     985,000  CIGNA Corporation, 8.00%, due
                9/1/96.......................        985,000
     245,000  CIT Group Holdings, Inc.,
                8.00%, due 1/13/97...........        246,744
      90,000  CIT Group Holdings, Inc.,
                8.75%, due 7/1/97............         91,839
   2,000,000  CSX Transportation, Inc.,
                5.93%, due 6/1/97............      1,999,743
      75,000  Caterpillar Financial Services
                Corporation, 9.125%, due
                12/15/96.....................         75,642
     230,000  The Chase Manhattan
                Corporation, 7.875%, due
                1/15/97......................        231,566
     150,000  Chrysler Financial Corporation,
                4.99%, due 2/3/97............        149,431
     256,000  Citicorp, 8.75%, due 11/1/96...        257,153
     450,000  Commercial Credit Company,
                8.00%, due 9/1/96............        450,000
     250,000  Commercial Credit Company,
                6.75%, due 1/15/97...........        250,765
     500,000  Commercial Credit Company,
                8.125%, due 3/1/97...........        506,313
</TABLE>
 
See notes to financial statements.     16              TRANS ADVISER FUNDS, INC.
<PAGE>
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$    100,000  Discover Credit, 7.98%, due
                4/7/97.......................  $     101,067
   1,929,000  Dupont Corporation, 8.45%, due
                10/15/96.....................      1,934,870
     250,000  Fireman's Federal Mortgage,
                8.25%, due 11/1/96...........        250,746
     531,000  First Union Corporation,
                8.125%, due 12/15/96.........        534,341
     195,000  Ford Holdings, Inc., 9.25%, due
                7/15/97......................        199,794
     503,000  Ford Motor Company, 7.875%, due
                10/15/96.....................        504,104
   1,007,000  Ford Motor Credit Company,
                8.00%, due 10/1/96...........      1,008,560
     324,000  Ford Motor Credit Company,
                8.00%, due 12/1/96...........        325,584
     450,000  Ford Motor Credit Company,
                7.875%, due 1/15/97..........        453,260
      25,000  Ford Motor Credit Company,
                5.625%, due 3/3/97...........         24,962
     132,000  Ford Motor Credit Company,
                6.80%, due 8/15/97...........        132,772
     500,000  General Electric Capital
                Corporation, 7.46%, due
                9/30/96......................        500,556
   1,345,000  General Electric Capital
                Corporation, 8.75%, due
                11/26/96.....................      1,353,619
     294,000  General Electric Capital
                Corporation, 8.00%, due
                2/1/97.......................        296,320
   1,319,000  General Motors Acceptance
                Corporation, 8.00%, due
                10/1/96......................      1,321,094
     500,000  General Motors Acceptance
                Corporation, 5.00%, due
                1/27/97......................        498,068
     400,000  General Motors Acceptance
                Corporation, 7.65%, due
                2/4/97.......................        403,086
     602,000  General Motors Corporation,
                7.625%, due 2/15/97..........        606,151
     545,000  Hospital Corporation of
                America, 9.00%, due
                3/15/97......................        553,258
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$    130,000  Household Finance Corporation,
                7.80%, due 11/1/96...........  $     130,423
      70,000  ITT Corporation, 7.25%, due
                11/15/96.....................         70,132
     560,000  International Lease Finance
                Corporation, 7.90%, due
                10/1/96......................        560,843
     440,000  International Lease Finance
                Corporation, 4.75%, due
                1/15/97......................        438,099
     500,000  International Lease Finance
                Corporation, 6.35%, due
                1/15/97......................        500,705
     100,000  International Lease Finance
                Corporation, 5.875%, due
                2/1/97.......................         99,909
     275,000  International Lease Finance
                Corporation, 5.50%, due
                4/1/97.......................        273,994
      75,000  John Deere Capital, 4.625%, due
                9/2/96.......................         75,000
      90,000  Lehman Brothers Holdings, Inc.,
                8.375%, due 4/1/97...........         91,155
     247,000  MGM Grand Hotels Financial
                Corporation, Defeased,
                11.75%, due 5/1/97...........        260,637
     200,000  MGM Grand Hotels Financial
                Corporation, Defeased,
                12.00%, due 5/1/97...........        217,831
      45,000  Merck & Company, Inc., 6.00%,
                due 1/15/97..................         44,989
   1,200,000  Morgan Stanley Group, Inc.,
                7.32%, due 1/15/97...........      1,206,451
     432,000  NationsBank Corporation, 8.50%
                due 11/1/96..................        433,784
     250,000  New Zealand Government, 8.25%,
                due 9/25/96..................        250,355
     100,000  Northern Illinois Gas, 5.50%,
                due 2/1/97...................         99,836
     700,000  Norwest Financial, Inc., 4.89%,
                due 11/15/96.................        698,820
     375,000  Norwest Financial, Inc., 7.10%,
                due 11/15/96.................        375,857
     130,000  Norwest Financial, Inc., 6.00%,
                due 8/15/97..................        129,701
</TABLE>
 
See notes to financial statements.     17              TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (continued)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$    110,000  Oklahoma Gas & Electric
                Company, 5.125%, due
                1/1/97.......................  $     109,700
     100,000  Paccar Financial Corporation,
                5.12%, due 3/10/97...........         99,575
     250,000  Pacific Gas & Electric Company,
                4.87%, due 12/9/96...........        249,350
     435,000  Pacific Northwest Bell
                Telephone Company, 7.50%, due
                12/1/96......................        436,644
     860,000  PepsiCo, Inc., 7.00%, due
                11/15/96.....................        861,837
      30,000  PepsiCo, Inc., 6.875%, due
                5/15/97......................         30,170
     600,000  Pfizer, Inc., 7.125%, due
                10/1/96......................        600,583
     834,000  Pfizer, Inc., 6.50%, due
                2/1/97.......................        836,057
   1,699,000  Philip Morris Companies, Inc.,
                8.75%, due 12/1/96...........      1,710,606
   1,335,000  Philip Morris Companies, Inc.,
                7.50%, due 3/17/97...........      1,345,398
      75,000  Philip Morris Companies, Inc.,
                9.75%, due 5/1/97............         76,750
     260,000  Philip Morris Companies, Inc.,
                8.75%, due 6/15/97...........        265,096
   2,666,000  Public Service Electric & Gas
                Company, 8.75%, due
                11/1/96......................      2,859,577
     170,000  Public Service Electric & Gas
                Company, 8.75%, due 2/1/97...        183,393
     250,000  Quaker Oats Company, 8.85%, due
                11/15/96.....................        251,257
     660,000  Quebec Province, 8.74%, due
                7/21/97......................        673,232
     300,000  Sara Lee Corporation, 5.05%,
                due 2/18/97..................        299,131
   1,897,000  Sears Roebuck and Company,
                9.00%, due 9/15/96...........      1,898,891
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$     75,000  Security Pacific Corporation,
                7.75%, due 12/1/96...........  $      75,310
      50,000  Southern California Edison
                Company, 5.90%, due
                1/15/97......................         50,042
     100,000  Tambrands Inc., 4.65%, due
                1/21/97......................         99,479
     325,000  Texaco Capital, 9.00%, due
                11/15/96.....................        326,969
     200,000  Travelers Group, Inc., 8.375%,
                due 12/15/96.................        201,424
     175,000  Travelers Group, Inc., 7.625%,
                due 1/15/97..................        175,983
   2,160,000  U.S. West Capital Funding,
                8.00%, due 10/15/96..........      2,165,190
     135,000  Union Electric Company, 5.50%,
                due 3/1/97...................        134,794
     365,000  Virginia Electric & Power
                Company, 7.25%, due 3/1/97...        367,665
     250,000  Wachovia Bank, 4.875%, due
                2/18/97......................        248,760
     471,000  Wells Fargo & Company, 8.20%,
                due 11/1/96..................        472,623
     445,000  World Book Financial, 8.125%,
                due 9/1/96...................        445,000
                                               -------------
Total Fixed Rate Notes--Corporate............     44,968,019
                                               -------------
REPURCHASE AGREEMENTS (16.4%):
  12,472,423  The First Boston Corporation,
                5.30%, due 9/3/96, to be
                repurchased at 12,479,768
                (collateralized by
                $16,050,000 Federal National
                Mortgage Association, pool
                #339017, 6.092%, due
                12/1/35).....................     12,472,423
                                               -------------
Total Repurchase Agreements..................     12,472,423
                                               -------------
Total Investments (100.0%)...................  $  75,934,653
                                               -------------
                                               -------------
</TABLE>
 
See notes to financial statements.     18              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                INTERMEDIATE
                                                                 AGGRESSIVE         BOND          KENTUCKY     MONEY MARKET
                                            GROWTH/VALUE FUND   GROWTH FUND         FUND        TAX-FREE FUND      FUND
                                            -----------------  --------------  ---------------  -------------  -------------
<S>                                         <C>                <C>             <C>              <C>            <C>
ASSETS:
  Investments, at value...................   $    15,024,572    $  6,527,398    $  13,695,005   $  15,608,129  $  75,934,653
  Cash....................................         --                --              --                 1,798       --
  Interest, dividends and other
    receivables...........................            16,151           1,422          185,929         261,250      1,173,021
  Receivable for fund shares issued.......            70,576          12,716           23,439          45,402       --
  Organization costs, net of
    amortization..........................            25,935          25,935           25,935          25,935         25,935
                                            -----------------  --------------  ---------------  -------------  -------------
Total assets..............................        15,137,234       6,567,471       13,930,308      15,942,514     77,133,609
                                            -----------------  --------------  ---------------  -------------  -------------
LIABILITIES:
  Payable for securities purchased........         --                --               487,264        --              401,228
  Payable for fund shares redeemed........             1,515           1,165            7,000        --             --
  Administration fee payable..............             2,083           2,083            2,083        --                9,429
  Accrued expenses and other payables.....            25,971          14,309            7,064          23,251         49,226
  Dividends payable.......................         --                --                70,005          78,774        310,879
                                            -----------------  --------------  ---------------  -------------  -------------
Total liabilities.........................            29,569          17,557          573,416         102,025        770,762
                                            -----------------  --------------  ---------------  -------------  -------------
NET ASSETS................................   $    15,107,665    $  6,549,914    $  13,356,892   $  15,840,489  $  76,362,847
                                            -----------------  --------------  ---------------  -------------  -------------
                                            -----------------  --------------  ---------------  -------------  -------------
COMPONENTS OF NET ASSETS:
  Capital paid in.........................   $    14,820,155    $  6,473,696    $  13,705,116   $  16,217,070  $  76,360,353
  Undistributed net investment income
    (distributions in excess).............         --                --              --              (114,051)      --
  Unrealized appreciation (depreciation)..           243,081          60,569         (332,831)       (259,742)      --
  Accumulated net realized gain (loss)....            44,429          15,649          (15,393)         (2,788)         2,494
                                            -----------------  --------------  ---------------  -------------  -------------
NET ASSETS................................   $    15,107,665    $  6,549,914    $  13,356,892   $  15,840,489  $  76,362,847
                                            -----------------  --------------  ---------------  -------------  -------------
                                            -----------------  --------------  ---------------  -------------  -------------
SHARES OUTSTANDING........................         1,350,818         598,307        1,370,318       1,574,612     76,360,353
NET ASSET VALUE PER SHARE.................   $         11.18    $      10.95    $        9.75   $       10.06  $        1.00
OFFERING PRICE PER SHARE EXCEPT MONEY
  MARKET FUND (NAV  DIVIDED BY (1 -
  4.50%)).................................   $         11.71    $      11.47    $       10.21   $       10.53  $        1.00
INVESTMENTS AT COST.......................   $    14,781,491    $  6,466,829    $  14,027,836   $  15,867,871  $  75,934,653
</TABLE>
 
See notes to financial statements.     19              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF OPERATIONS
PERIOD ENDED AUGUST 31, 1996 (1)
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   AGGRESSIVE     INTERMEDIATE     KENTUCKY       MONEY
                                                GROWTH/VALUE         GROWTH           BOND         TAX-FREE       MARKET
                                                    FUND              FUND            FUND           FUND          FUND
                                              -----------------  --------------  ---------------  -----------  ------------
<S>                                           <C>                <C>             <C>              <C>          <C>
INVESTMENT INCOME:
  Interest income...........................     $    30,853      $     13,762     $   667,383     $ 843,000   $  2,798,408
  Dividend income...........................          78,497             7,604         --             --            --
                                              -----------------  --------------  ---------------  -----------  ------------
Total income................................         109,350            21,366         667,383       843,000      2,798,408
                                              -----------------  --------------  ---------------  -----------  ------------
EXPENSES:
  Advisory..................................          81,961            31,177          38,478        63,051         99,711
  Management................................          22,916            22,917          22,917        23,644         74,783
  Transfer agency...........................          28,121            27,644          25,552        33,235         23,393
  Shareholder services......................          20,490             7,794          24,049        39,407        124,638
  Custody...................................           1,964               741           5,455         4,415         21,297
  Accounting................................          33,000            33,000          33,000        35,600         34,000
  Legal.....................................           6,682             4,238           8,200        12,962         29,232
  Registration..............................          10,402             6,732           8,984         7,892         35,373
  Audit.....................................          14,812            14,319          15,846        16,755         15,268
  Amortization of organization costs........           5,824             5,824           5,824         5,824          5,824
  Trustees..................................             716               196           1,251         1,532          5,351
  Other.....................................           5,453             2,874           6,345        15,916         24,224
                                              -----------------  --------------  ---------------  -----------  ------------
Total expenses..............................         232,341           157,456         195,901       260,233        493,094
  Expenses reimbursed and fees waived.......         (72,244)          (96,565)       (130,304)     (132,065)      (168,154)
                                              -----------------  --------------  ---------------  -----------  ------------
Net expenses................................         160,097            60,891          65,597       128,168        324,940
                                              -----------------  --------------  ---------------  -----------  ------------
  NET INVESTMENT INCOME (LOSS)..............         (50,747)          (39,525)        601,786       714,832      2,473,468
                                              -----------------  --------------  ---------------  -----------  ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
  INVESTMENTS:
  Net realized gain (loss) on investments...          89,352            43,284         (15,393)       (2,788)         2,494
  Net change in unrealized appreciation
    (depreciation)..........................         243,081            60,569        (332,831)     (259,742)       --
                                              -----------------  --------------  ---------------  -----------  ------------
Net realized and unrealized gain (loss) from
  investments...............................         332,433           103,853        (348,224)     (262,530)         2,494
                                              -----------------  --------------  ---------------  -----------  ------------
INCREASE IN NET ASSETS FROM OPERATIONS......     $   281,686      $     64,328     $   253,562     $ 452,302   $  2,475,962
                                              -----------------  --------------  ---------------  -----------  ------------
                                              -----------------  --------------  ---------------  -----------  ------------
 
                                                                                                   Sept. 27,    Sept. 29,
                                               Sept. 29, 1995    Sept. 29, 1995   Oct. 3, 1995       1995          1995
(1) Date of commencement of operations
</TABLE>
 
See notes to financial statements.     20              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED AUGUST 31, 1996 (1)
- - ---------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                              AGGRESSIVE     INTERMEDIATE       KENTUCKY          MONEY
                                           GROWTH/VALUE         GROWTH           BOND           TAX-FREE         MARKET
                                               FUND              FUND            FUND             FUND            FUND
                                         -----------------  --------------  ---------------  --------------  ---------------
<S>                                      <C>                <C>             <C>              <C>             <C>
NET ASSETS--September 1, 1995..........         --                --              --               --              --
                                         -----------------  --------------  ---------------  --------------  ---------------
OPERATIONS:
  Net investment income (loss).........   $       (50,747)   $    (39,525)   $     601,786   $      714,832  $     2,473,468
  Net realized gain (loss) on
    investments........................            89,352          43,284          (15,393)          (2,788)           2,494
  Net change in unrealized appreciation
    (depreciation).....................           243,081          60,569         (332,831)        (259,742)       --
                                         -----------------  --------------  ---------------  --------------  ---------------
                                                  281,686          64,328          253,562          452,302        2,475,962
                                         -----------------  --------------  ---------------  --------------  ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income................         --                --              (601,786)        (828,883)      (2,473,468)
                                         -----------------  --------------  ---------------  --------------  ---------------
CAPITAL SHARE TRANSACTIONS:
  Sale of shares.......................        15,471,301       7,269,024       14,919,014       28,751,437      446,620,681
  Reinvested dividends.................         --                --                13,886          559,139           84,304
  Cost of shares repurchased...........          (645,322)       (783,438)      (1,227,784)     (13,093,506)    (370,344,632)
                                         -----------------  --------------  ---------------  --------------  ---------------
                                               14,825,979       6,485,586       13,705,116       16,217,070       76,360,353
                                         -----------------  --------------  ---------------  --------------  ---------------
NET ASSETS--August 31, 1996............   $    15,107,665    $  6,549,914    $  13,356,892   $   15,840,489  $    76,362,847
                                         -----------------  --------------  ---------------  --------------  ---------------
                                         -----------------  --------------  ---------------  --------------  ---------------
 
                                          Sept. 29, 1995    Sept. 29, 1995   Oct. 3, 1995    Sept. 27, 1995  Sept. 29, 1995
(1) Date of commencement of operations
</TABLE>
 
See notes to financial statements.     21              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
 
NOTE 1. ORGANIZATION
Trans Adviser Funds, Inc. (the "Company") is an open-end management investment
company incorporated under the laws of the State of Maryland. The Company
currently consists of five operational non-diversified investment portfolios,
the Growth/Value Fund, the Aggressive Growth Fund, the Intermediate Bond Fund,
the Kentucky Tax-Free Fund, and the Money Market Fund (each a "Fund" and
collectively the "Funds"). The Funds, except for Money Market Fund, are offered
at Net Asset Value ("NAV") plus a sales charge, currently 4.50% of NAV. The
Money Market Fund is offered at NAV. The Funds commenced investment operations
on the following dates:
 
<TABLE>
<S>                       <C>
Growth/Value Fund         September 29, 1995
Aggressive Growth Fund    September 29, 1995
Intermediate Bond Fund    October 3, 1995
Kentucky Tax-Free Fund    September 27, 1995
Money Market Fund         September 29, 1995
</TABLE>
 
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Funds' financial statements are prepared in accordance with generally
accepted accounting principles which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates and are expected to be immaterial to the net assets of the Funds.
 
SECURITY VALUATION-All securities held by the Money Market Fund are valued
utilizing the amortized cost method, which approximates market value, in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Securities,
other than short-term, held by the other Funds (the "Bond and Equity Funds") for
which market quotations are readily available are valued using the last reported
sales price provided by independent pricing services. If no sales are reported,
the mean of the last bid and ask price is used. In the absence of readily
available market quotations, securities are valued at fair value as determined
by the Board of Directors. Securities with a maturity of 60 days or less held by
the Bond and Equity Funds are valued at amortized cost.
 
PREMIUM AMORTIZATION AND DISCOUNT ACCRETION-In all Funds other than the Kentucky
Tax-Free Fund, if a fixed income investment is purchased at a premium, the
premium is not amortized. The Kentucky Tax-Free Fund amortizes premium on fixed
income investments to the maturity (or first call) date using the yield to
maturity method. If a fixed income investment is purchased at a discount (other
than original issue discount), the discount is not accreted. Original issue
discount on fixed income investments is accreted daily using the yield to
maturity method.
 
INTEREST AND DIVIDEND INCOME AND DISTRIBUTIONS TO SHAREHOLDERS-Interest income
is accrued as earned. Dividends on securities held by the Funds are recorded on
the ex-dividend date. Distributions of net investment income are declared daily
and paid monthly for Money Market Fund, Kentucky Tax-Free Fund, and Intermediate
Bond Fund, and declared and paid annually for Growth/Value Fund and Aggressive
Growth Fund. Net capital gain, if any, is distributed at least annually.
 
Distributions from net investment income and realized capital gains are based on
their tax basis. The significant difference between financial statement amounts
available for distribution and distributions made in accordance with income tax
regulations are primarily attributable to the deferral of post-October losses
and wash sales.
 
ORGANIZATION COSTS-The costs incurred by the Funds in connection with their
organization, in amounts of $31,759 for each Fund, have been capitalized and are
being amortized using the straight-line method over a five year period beginning
on the commencement of each Fund's investment operations. Certain of these costs
were paid by Forum Financial Services, Inc. and have been reimbursed by the
respective Funds. Organization expenses are being amortized to operations over a
five-year period on a straight-line basis. In the event any of the initial
shares are redeemed by any
 
                                       22              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
 
holder thereof during the five-year amortization period, redemption proceeds
will be reduced by any unamortized organization expenses in the same proportion
as the number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of redemption.
 
FEDERAL INCOME TAX-Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income. Therefore, no Federal income
tax provision is required.
 
OTHER-Realized gains and losses on investments sold are recorded on the basis of
identified cost. Security transactions are accounted for on a trade date basis.
 
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser of the Funds is Trans Financial Bank, N.A. (the
"Adviser"). The Adviser receives an advisory fee from Growth/Value Fund and
Aggressive Growth Fund at an annual rate of 1.00% of the respective Fund's
average daily net assets. The Adviser receives an advisory fee from Intermediate
Bond Fund and Kentucky Tax-Free Fund at an annual rate of 0.40% of the
respective Fund's average daily net assets. The Adviser receives an advisory fee
from Money Market Fund at an annual rate of 0.20% of the Fund's average daily
net assets. Pursuant to an agreement between the Adviser and Mastrapasqua and
Associates, Inc. ("M&A") (the "Sub-Adviser"), the Adviser may delegate certain
of its advisory responsibilities to the Sub-Adviser. For its services, M&A is
paid by the Adviser as follows: with respect to the Aggressive Growth and the
Growth/Value Funds, the Adviser (not the Fund) pays to M&A an annual fee,
calculated daily and paid monthly, of .50% on the first $100 million of such
Funds' combined average daily net assets plus .25% of such Funds' combined
average daily net assets in excess of $100 million for its services, and, with
respect to each other Trans Adviser Fund, the Adviser (not the Fund) pays M&A an
annual fee, calculated daily and paid monthly, of .03% of average daily net
assets for its services.
 
The Adviser has agreed to reimburse each Fund for certain operating expenses
(exclusive of interest, taxes, brokerage fees, fees and other expenses paid
pursuant to any distribution plan and organization expenses, all to the extent
permitted by applicable state law or regulation) which in any year exceed the
limits prescribed by any state in which the Fund's shares are qualified for
sale. Each Fund's annual expenses are estimated and accrued daily, and any
related reimbursements are made monthly by the Adviser.
 
The administrator of the Company is Forum Financial Services, Inc. ("Forum"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. For its administrative services Forum receives a fee for each Fund
equal to the greater of $25,000 per year or 0.15% of the annual average daily
net assets of each Fund. Forum also acts as the Company's distributor pursuant
to a separate Distribution Agreement with the Company. Forum receives no
compensation under that agreement. In addition, certain legal expenses were
charged to the Company by Forum amounting to $18,053.
 
Forum Financial Corp. ("FFC"), an affiliate of Forum, serves as the Company's
transfer agent and dividend disbursing agent, and for those services receives an
annual fee of $12,000 per year for each Fund, an annual shareholder account fee
of $25 per shareholder, additional class charges, and out of pocket expenses
billed at cost. The Company has adopted a shareholder service plan under which
the Company pays Forum a shareholder servicing fee at an annual rate of 0.25% of
the daily net assets of each Fund. Forum may pay any or all amounts of these
payments to various institutions which provide shareholder servicing to their
customers. FFC also serves as the Company's fund accountant and is compensated
for those services at an amount of $36,000 per year per Fund plus certain
amounts based upon the number and types of portfolio transactions within each
Fund.
 
                                       23              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1996
- - ---------------------------------------------------------------------------
 
For the period ended August 31, 1996, fees waived and expenses reimbursed were
as follows:
 
<TABLE>
<CAPTION>
                                                              EXPENSES     EXPENSES       EXPENSES
                                                             VOLUNTARILY  VOLUNTARILY   VOLUNTARILY
                                                              WAIVED BY    WAIVED BY   REIMBURSED BY
                                                                FORUM     THE ADVISER   THE ADVISER
                                                             -----------  -----------  --------------
<S>                                                          <C>          <C>          <C>
Growth/Value Fund..........................................   $     543    $  34,323     $   37,378
Aggressive Growth Fund.....................................         288       31,178         65,099
Intermediate Bond Fund.....................................         178       38,478         91,648
Kentucky Tax-Free Fund.....................................      11,185       63,051         57,829
Money Market Fund..........................................       2,071       93,026         73,057
</TABLE>
 
NOTE 4. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales (including maturities) of securities
(excluding short-term investments) during the period ended August 31, 1996 were
as follows:
 
<TABLE>
<CAPTION>
                                                            COST OF PURCHASES    PROCEEDS FROM SALES
                                                            ------------------  ---------------------
<S>                                                         <C>                 <C>
Growth/Value Fund.........................................    $   15,678,024        $   1,713,849
Aggressive Growth Fund....................................         6,815,109              465,088
Intermediate Bond Fund....................................        12,911,112              965,841
Kentucky Tax-Free Fund....................................        38,298,203           23,002,307
</TABLE>
 
The cost of investments for federal income tax purposes is the same as for
financial reporting purposes. Unrealized appreciation and depreciation as of
August 31, 1996 were as follows:
 
<TABLE>
<CAPTION>
                                                     UNREALIZED APPRECIATION  UNREALIZED DEPRECIATION
                                                     -----------------------  -----------------------
<S>                                                  <C>                      <C>
Growth/Value Fund..................................       $   1,166,837             $   923,756
Aggressive Growth Fund.............................             661,156                 600,587
Intermediate Bond Fund.............................              13,166                 345,997
Kentucky Tax-Free Fund.............................              25,840                 285,582
</TABLE>
 
NOTE 5. CAPITAL SHARE TRANSACTIONS
Transactions of Fund shares for the period ended August 31, 1996 are summarized
in the following table:
 
<TABLE>
<CAPTION>
                         GROWTH/VALUE    AGGRESSIVE    INTERMEDIATE  KENTUCKY TAX-    MONEY MARKET
                             FUND        GROWTH FUND    BOND FUND      FREE FUND          FUND
                         -------------  -------------  ------------  --------------  --------------
<S>                      <C>            <C>            <C>           <C>             <C>
Sale of Shares.........     1,408,416       668,440      1,491,710       2,814,888     446,620,681
Shares Issued on
 Reinvested
 Dividends.............            --            --          1,404          57,538          84,304
Shares Repurchased.....        57,598        70,133        122,796       1,297,814     370,344,632
                         -------------  -------------  ------------  --------------  --------------
Net Increase...........     1,350,818       598,307      1,370,318       1,574,612      76,360,353
                         -------------  -------------  ------------  --------------  --------------
                         -------------  -------------  ------------  --------------  --------------
</TABLE>
 
NOTE 6. CONCENTRATION OF CREDIT RISK
The Kentucky Tax-Free Fund invests substantially all of its assets in debt
obligations of issuers located in the state of Kentucky. The issuers' abilities
to meet their obligations may be affected by Kentucky economic or political
developments.
 
                                       24              TRANS ADVISER FUNDS, INC.
<PAGE>
FINANCIAL HIGHLIGHTS
PERIOD ENDED AUGUST 31, 1996 (a)
- - ---------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA AND                          AGGRESSIVE       INTERMEDIATE      KENTUCKY       MONEY
RATIOS FOR A SHARE OUTSTANDING    GROWTH/VALUE         GROWTH             BOND          TAX-FREE      MARKET
THROUGHOUT THE PERIOD                 FUND              FUND              FUND            FUND         FUND
                                -----------------  ---------------  ----------------  ------------  -----------
<S>                             <C>                <C>              <C>               <C>           <C>
Beginning Net Asset Value Per
  Share.......................      $   10.00         $   10.00         $   10.00       $   10.00    $    1.00
                                      -------           -------           -------     ------------  -----------
Net Investment Income
  (Loss)(c)...................          (0.06)            (0.11)             0.57            0.51         0.05
Net Realized and Unrealized
  Gain/(Loss) on
  Investments.................           1.24              1.06             (0.25)           0.06           --
Distributions from Net
  Investment Income...........             --                --             (0.57)          (0.51)       (0.05)
                                      -------           -------           -------     ------------  -----------
Ending Net Asset Value Per
  Share.......................      $   11.18         $   10.95         $    9.75       $   10.06    $    1.00
                                      -------           -------           -------     ------------  -----------
                                      -------           -------           -------     ------------  -----------
Ratios to Average Net Assets:
  Expenses(b)(e)..............           1.95%             1.95%             0.68%           0.82%        0.65%
  Net Investment Income
    (Loss)(e).................          (0.62)%           (1.26)%            6.31%           5.30%        4.94%
Total Return (f)..............          11.80%             9.50%             3.23%           5.80%        4.70%
Portfolio Turnover Rate.......          21.12%            15.70%            12.38%         145.12%         N/A
Average Commission Rate.......           0.07(d)           0.08(d)            N/A             N/A          N/A
Net Assets at End of Period
  (000's omitted).............        $15,108            $6,550           $13,357         $15,840      $76,363
</TABLE>
 
<TABLE>
<S>                             <C>                  <C>                <C>                 <C>                <C>
(a) Date of commencement of          Sept. 29, 1995     Sept. 29, 1995        Oct. 3, 1995     Sept. 27, 1995     Sept. 29, 1995
operations
</TABLE>
 
(b) During the period, various fees and expenses were waived and reimbursed. Had
    such waiver and reimbursement not occurred, the ratio of expenses to average
    net assets would have been:
 
<TABLE>
<S>                             <C>                  <C>              <C>                 <C>            <C>
                                          2.83     %         5.05   %           2.04    %         1.65 %        0.99 %
</TABLE>
 
(c) Calculated using weighted average shares outstanding for the period.
 
(d) Amount represents the average commission per share paid to brokers on the
    purchase or sale of equity securities.
 
(e)  Annualized.
 
(f)  Excludes applicable sales charge.
- - ----------------------------------------------------------------------------
Federal Tax Status of Dividends Declared (unaudited)
 
None of the Funds paid long-term capital gain dividends during the period. All
dividends declared by the Funds were distributions of ordinary income. None of
these dividends qualify for the corporate dividend received deduction from
Federal income tax. The amount of the dividends per share declared by the
Kentucky Tax-Free Fund that is exempt from Federal taxes follows.
 
Sep-95  $0.0086
Oct-95  0.0430
Nov-95  0.0344
Dec-95  0.0430
Jan-96  0.0430
Feb-96  0.0344
Mar-96  0.0430
Apr-96  0.0344
May-96  0.0430
Jun-96  0.0344
Jul-96  0.0344
Aug-96  0.0430
        ------
        $0.4386
        ------
        ------
 
See notes to financial statements.     25              TRANS ADVISER FUNDS, INC.
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors and Shareholders
Trans Adviser Funds, Inc.
 
We have audited the accompanying statements of assets and liabilities of
Growth/Value Fund, Aggressive Growth Fund, Intermediate Bond Fund, Kentucky
Tax-Free Fund, and Money Market Fund, portfolios of Trans Adviser Funds, Inc.
(the Funds), including the schedules of investments, as of August 31, 1996, and
the related statements of operations, statements of changes in net assets and
financial highlights for the periods presented on pages 20, 21 and 25,
respectively. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Growth/Value Fund, Aggressive Growth Fund, Intermediate Bond Fund, Kentucky
Tax-Free Fund, and Money Market Fund, as of August 31, 1996, and the results of
their operations, the changes in their net assets and financial highlights for
the periods presented on pages 20, 21 and 25, respectively, in conformity with
generally accepted accounting principles.
 
                                          KPMG Peat Marwick LLP
 
Boston, Massachusetts
October 18, 1996

<PAGE>
                                                  
 
  
                   April 11, 1997

 
Dear Shareholder:
 
We are pleased to present the report on the operations of the Trans Adviser
Funds, Inc. during the semi-annual period ended February 28, 1997. This report
covers the five Funds: Aggressive Growth, Growth/Value, Intermediate Bond,
Kentucky Tax-Free, and Money Market Funds.
 
During the period, the stock market, as measured by the S&P 500 Index, rose
21.30%. Because the Index is weighted by the market capitalization of the
issuers comprising the Index, the stock of the fifty largest issuers accounts
for approximately 50% of the performance of the entire Index. Investments in
popular index funds have supported the stock prices of this relatively small
group of issuers, even though many observers have noted that it is primarily the
prices of these companies' stocks that exceed normal valuation parameters. We
are therefore pleased with the total return of 21.34% the Growth/Value Fund and
15.27% for the Aggressive Growth Fund, even though they did not surpass the S&P
benchmark. In our view, by investing in quality companies with strong
fundamentals such as low relative price-to-earnings ratios these Funds are
poised to take advantage of economic data and company results that meet or
exceed the market's current bearish expectations.
 
The bond market during the last six months has continued to exhibit yield and
price volatility. During this period, the Trans Adviser Intermediate Bond Fund
had a total return of 4.40%. By comparison, the Merrill Lynch Taxable Bond Index
had a total return of 4.12%. The Kentucky Tax-Free Fund's return was 4.45% as
compared to the 4.46% average total return of the funds in the Morningstar
National Municipal Bond category. The Kentucky Tax-Free Fund has also maintained
a relatively stable net asset value despite the movement in interest rates
during this period. On the whole, we continue to believe that superior returns
in the bond markets can be achieved through an actively-managed relative value
approach that seeks out inefficiencies in the market.
 
During this period, investments in the Money Market Fund grew to over $100
million. The Fund continues to offer a highly diversified and convenient vehicle
for cash management.
 
We take great pride in the accomplishments of the Trans Adviser Funds during
their first eighteen months of operations. The Funds' continued growth has
confirmed our original vision that there is a broad-based appeal for funds
managed locally that employ our investment style and experience. We are
confident that the Funds will enjoy continued growth as word of our investment
approach and capabilities spreads to a broader network of investors.
 
If you have any questions or would like additional information about the Trans
Adviser Funds, please call 800-811-8258. Thank you once again for choosing to
invest with the Trans Adviser Funds.
 
                               THOMAS A. TRANTUM
 
THOMAS A. TRANTUM
President
<PAGE>
GROWTH/VALUE FUND
 
SCHEDULE OF INVESTMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
COMMON STOCKS (98.8%)
AMUSEMENT & RECREATION SERVICES (1.7%)
    10,000  Promus Hotel Corp.(a)............  $     353,751
                                               -------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS (0.9%)
     7,500  Autozone, Inc.(a)................        185,625
                                               -------------
BUSINESS SERVICES (8.0%)
    20,000  ADT Ltd.(a)......................        435,000
    15,000  Oracle Systems Corp.(a)..........        588,750
    20,000  Sun Microsystems, Inc.(a)........        617,500
                                               -------------
                                                   1,641,250
                                               -------------
CHEMICALS & ALLIED PRODUCTS (8.9%)
     4,000  Bristol-Myers Squibb Co. ........        522,000
     6,000  Merck & Co., Inc. ...............        552,000
    10,000  Schering-Plough Corp. ...........        766,250
                                               -------------
                                                   1,840,250
                                               -------------
DEPOSITORY INSTITUTIONS (7.8%)
    12,000  Carolina First Corp. ............        213,000
     5,000  Chase Manhattan Corp. ...........        500,625
    22,500  MBNA Corp. ......................        720,000
     4,000  Union Planters Corp. ............        179,000
                                               -------------
                                                   1,612,625
                                               -------------
EATING & DRINKING PLACES (2.1%)
    10,000  Host Marriott Corp.(a)...........        180,000
     4,000  Quality Dining, Inc.(a)..........         46,500
    25,000  Shoney's, Inc.(a)................        206,250
                                               -------------
                                                     432,750
                                               -------------
ELECTRIC, GAS, & SANITARY SERVICES (2.2%)
    10,000  Sonat, Inc. .....................        460,000
                                               -------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
  COMPUTER EQUIPMENT (2.0%)
     5,000  Novellus Systems, Inc.(a)........        408,750
                                               -------------
FOOD STORES (1.9%)
     7,500  Kroger Co.(a)....................        397,500
                                               -------------
GENERAL MERCHANDISE STORES (1.6%)
     6,000  Sears Roebuck and Co. ...........        325,500
                                               -------------
HEALTH SERVICES (9.3%)
    20,000  Beverly Enterprises, Inc.(a).....        287,500
     5,000  Health Management Associates,
              Inc.(a)........................        132,500
     2,345  Healthsouth Rehabilitation
              Corp.(a).......................         94,386
 
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
HEALTH SERVICES, CONTINUED
    10,000  Living Centers of America,
              Inc.(a)........................  $     318,750
     5,000  Quorum Health Group, Inc.(a).....        156,875
    15,000  Tenet Healthcare Corp.(a)........        406,875
    15,000  Vencor, Inc.(a)..................        519,375
                                               -------------
                                                   1,916,261
                                               -------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT
  (13.2%)
     7,500  Baker Hughes, Inc. ..............        266,250
     6,000  IBM Corp. .......................        862,500
    13,000  Lam Research Corp.(a)............        495,625
    10,000  Qlogic Corp.(a)..................        202,500
    15,000  Western Digital Corp.(a).........        885,000
                                               -------------
                                                   2,711,875
                                               -------------
INSURANCE CARRIERS (3.9%)
     5,000  Ace, Ltd. .......................        325,000
     4,000  American International Group,
              Inc. ..........................        484,000
                                               -------------
                                                     809,000
                                               -------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS;
  PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (4.4%)
    10,000  Baxter International, Inc. ......        460,000
     7,500  Input/Output Inc.(a).............        160,312
    10,000  Tech-Sym Corp.(a)................        295,000
                                               -------------
                                                     915,312
                                               -------------
MISCELLANEOUS RETAIL (3.3%)
    10,000  CVS Corp. .......................        462,500
     6,000  Friedman's, Inc. Class A(a)......         90,750
    10,000  OfficeMax, Inc.(a)...............        120,000
                                               -------------
                                                     673,250
                                               -------------
MOTION PICTURES (0.5%)
     1,500  The Walt Disney Co. .............        111,375
                                               -------------
NONDEPOSITORY CREDIT INSTITUTIONS (2.9%)
    12,500  Capital One Financial Corp. .....        496,875
    10,000  Olympic Financial, Ltd.(a).......        110,000
                                               -------------
                                                     606,875
                                               -------------
OIL & GAS EXTRACTION (6.4%)
    12,000  Nuevo Energy Co.(a)..............        498,000
     6,500  Pride Petroleum Services,
              Inc.(a)........................        108,875
     4,000  Schlumberger, Ltd. ..............        402,500
     5,000  Seagull Energy Corp.(a)..........         91,875
</TABLE>
 
See Notes to Schedule of Investments.  2               TRANS ADVISER FUNDS, INC.
<PAGE>
GROWTH/VALUE FUND
 
SCHEDULE OF INVESTMENTS (continued)
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
OIL & GAS EXTRACTION, CONTINUED
    10,000  Stone Energy Corp.(a)............  $     220,000
                                               -------------
                                                   1,321,250
                                               -------------
PHARMECEUTICAL PREPARATIONS (4.0%)
     8,000  American Home Products Corp. ....        512,000
     5,000  Teva Pharmaceutical ADR..........        309,062
                                               -------------
                                                     821,062
                                               -------------
PROFESSIONAL SERVICES (0.9%)
    10,000  SCB Computer Technology,
              Inc.(a)........................        180,000
                                               -------------
WATER TRANSPORTATION (2.1%)
    10,000  Tidewater, Inc. .................        430,000
                                               -------------
WHOLESALE TRADE--DURABLE GOODS (7.2%)
     6,000  Arrow Electronics Inc.(a)........        336,750
     4,000  Avnet, Inc. .....................        250,000
     5,000  Lockheed Martin Corp. ...........        442,500
<CAPTION>
                        SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ---------------------------------  -------------
<C>         <S>                                <C>
WHOLESALE TRADE--DURABLE GOODS, CONTINUED
    15,000  Sybron International Corp.-
              Wisconsin(a)...................  $     446,250
                                               -------------
                                                   1,475,500
                                               -------------
WHOLESALE TRADE--NONDURABLE GOODS (3.6%)
    10,000  AmeriSource Health Corp. ........        503,750
     5,000  Safeway, Inc.(a).................        240,625
                                               -------------
                                                     744,375
                                               -------------
Total Common Stocks
(cost $16,904,586)...........................     20,374,136
                                               -------------
SHORT-TERM HOLDINGS (1.2%)
   254,744  Forum Daily Assets Treasury Fund
              (cost $254,744)................        254,744
                                               -------------
Total Investments (100.0%)
  (cost $17,159,330)(c)......................  $  20,628,880
                                               -------------
                                               -------------
</TABLE>
 
See Notes to Schedule of Investments.  3               TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND
 
SCHEDULE OF INVESTMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
COMMON STOCKS (95.7%)
AMUSEMENT & RECREATION SERVICES (1.9%)
     5,000  Promus Hotel Corp.(a).............  $    176,875
                                                ------------
BUSINESS SERVICES (7.8%)
    10,000  ADT Ltd.(a).......................       217,500
     7,500  Oracle Systems Corp.(a)...........       294,375
     7,000  Sun Microsystems, Inc.(a).........       216,125
                                                ------------
                                                     728,000
                                                ------------
DEPOSITORY INSTITUTIONS (2.3%)
    12,000  Carolina First Corp. .............       213,000
                                                ------------
EATING & DRINKING PLACES (2.5%)
     6,000  Quality Dining, Inc.(a)...........        69,750
    20,000  Shoney's, Inc.(a).................       165,000
                                                ------------
                                                     234,750
                                                ------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
  COMPUTER EQUIPMENT (6.1%)
     4,000  Novellus Systems, Inc.(a).........       327,000
    15,000  Symmetricom, Inc.(a)..............       241,875
                                                ------------
                                                     568,875
                                                ------------
FOOD STORES (3.7%)
     3,500  Kroger Co.(a).....................       185,500
    10,000  Ruddick Corp. ....................       160,000
                                                ------------
                                                     345,500
                                                ------------
GENERAL MERCHANDISE STORES (0.9%)
     2,500  Consolidated Stores Corp.(a)......        87,812
                                                ------------
HEALTH SERVICES (15.7%)
     5,000  Health Management Associates,
              Inc.(a).........................       132,500
     5,000  HealthCare COMPARE Corp.(a).......       213,438
     7,500  Living Centers of America,
              Inc.(a).........................       239,063
    15,000  NABI, Inc.(a).....................       144,375
    15,000  Paracelsus Healthcare Corp.(a)....        71,250
     2,000  Quorum Health Group, Inc.(a)......        62,750
    10,000  Tenet Healthcare Corp.(a).........       271,251
    10,000  Vencor, Inc.(a)...................       346,250
                                                ------------
                                                   1,480,877
                                                ------------
HOME FURNITURE, FURNISHINGS, & EQUIPMENT STORES (0.6%)
     5,000  Movie Gallery, Inc.(a)............        53,750
                                                ------------
 
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
 
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT
  (17.1%)
    10,000  Lam Research Corp.(a).............  $    381,250
    10,000  Qlogic Corp.(a)...................       202,500
    15,000  Smart Modular Technologies(a).....       436,875
    10,000  Western Digital Corp.(a)..........       590,000
                                                ------------
                                                   1,610,625
                                                ------------
INDUSTRY ELECTRONICS & ELECTRICAL EQUIPMENT (2.5%)
    12,000  Semtech Corp.(a)..................       238,500
                                                ------------
INSURANCE CARRIERS (2.8%)
     4,000  Ace, Ltd. ........................       260,000
                                                ------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS;
  PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (1.9%)
     6,000  Tech-Sym Corp.(a).................       177,000
                                                ------------
MISCELLANEOUS RETAIL (2.2%)
     2,500  CVS Corp. ........................       115,625
     6,000  Friedman's, Inc. Class A(a).......        90,750
                                                ------------
                                                     206,375
                                                ------------
NONDEPOSITORY CREDIT INSTITUTIONS (3.7%)
     6,000  Capital One Financial Corp. ......       238,500
    10,000  Olympic Financial, Ltd.(a)........       110,000
                                                ------------
                                                     348,500
                                                ------------
OIL & GAS EXTRACTION (11.8%)
    12,500  GeoScience Corp.(a)...............       162,500
     9,000  Nuevo Energy Co.(a)...............       373,500
    15,000  Pride Petroleum Services,
              Inc.(a).........................       251,250
     5,000  Seagull Energy Corp.(a)...........        91,875
     5,000  St. Mary Land & Exploration
              Co. ............................       121,875
     5,000  Stone Energy Corp.(a).............       110,000
                                                ------------
                                                   1,111,000
                                                ------------
PROFESSIONAL SERVICES (2.1%)
    11,000  SCB Computer Technology,
              Inc.(a).........................       198,000
                                                ------------
TRANSPORTATION SERVICES (1.8%)
    10,000  Simon Transportation
              Services(a).....................       170,000
                                                ------------
WATER TRANSPORTATION (2.7%)
     6,000  Tidewater, Inc. ..................       258,000
                                                ------------
WHOLESALE TRADE-DURABLE GOODS (1.6%)
     5,000  Sybron International Corp.-
              Wisconsin(a)....................       148,750
                                                ------------
</TABLE>
 
See Notes to Schedule of Investments.  4               TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND
 
SCHEDULE OF INVESTMENTS (continued)
 
FEBRUARY 28, 1997 (Unaudited)
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
  SHARES               DESCRIPTION                 VALUE
- - ----------  ----------------------------------  ------------
<C>         <S>                                 <C>
WHOLESALE TRADE-NONDURABLE GOODS (4.0%)
     7,500  AmeriSource Health Corp.(a).......  $    377,812
                                                ------------
Total Common Stocks (cost $7,716,134).........     8,994,001
                                                ------------
SHORT-TERM HOLDINGS (4.3%)
   399,257  Forum Daily Assets Treasury Fund
              (cost $399,257).................       399,257
                                                ------------
Total Investments (100.0%)
  (cost $8,115,391)(c)........................  $  9,393,258
                                                ------------
                                                ------------
</TABLE>
 
See Notes to Schedule of Investments.  5               TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
 
SCHEDULE OF INVESTMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
ASSET BACKED SECURITIES (0.6%)
$     90,434  SBA, Series 87-A, 8.45%, due
                1/1/07 (cost $93,599)........  $      92,490
                                               -------------
COLLATERALIZED MORTGAGE OBLIGATIONS (6.7%)
     260,070  FHLMC, Series 1072, Class G,
                7.00%, due 5/15/06...........        261,833
     800,000  FHLMC, Series 1720, Class E,
                7.50%, due 12/15/09..........        809,438
                                               -------------
Total Collateralized Mortgage Obligations
  (cost $1,088,246)..........................      1,071,271
                                               -------------
CORPORATE BONDS (52.4%)
     686,000  Alabama Power, 8.30%, due
                7/1/22.......................        694,923
     100,000  Anheuser Busch Cos., 7.00%, due
                5/30/00......................        100,211
     400,000  Anheuser Busch Cos., 7.00%, due
                9/1/05.......................        399,210
     278,000  Anheuser Busch Cos., 8.75%, due
                12/1/99......................        293,062
     169,000  Associates Corp. of North
                America, 6.00%, due
                3/15/00......................        166,307
      50,000  Berkley W.R. Corp., 9.875%, due
                5/15/08......................         58,974
     250,000  British Petroleum America,
                Inc., 6.50%, due 12/15/99....        248,942
     215,000  Chase Manhatten Corp., 8.00%,
                due 5/15/04..................        219,689
     140,000  Commonwealth Edison Co., 9.50%,
                due 5/1/16...................        146,709
     150,000  Consumers Power, 6.875%, due
                5/1/98.......................        150,133
     191,000  Dayton Hudson Corp., 9.875%,
                due 6/17/97..................        202,411
     150,000  Deere & Co., 8.95%, due
                6/15/19......................        164,844
     160,000  Florida Power & Light Co.,
                8.00%, due 8/25/22...........        160,673
     100,000  Ford Motor Credit Co., 5.83%,
                due 6/29/98..................         99,591
     172,000  Ford Motor Credit Co., 6.85%,
                due 8/15/00..................        173,301
 
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE BONDS, CONTINUED
$    160,000  Ford Motor Credit Co., 7.50%,
                due 1/15/03..................  $     164,229
     160,000  GTE of Southeast Corp., 8.00%,
                due 12/1/01..................        161,924
     130,000  General Electric Capital Corp.,
                6.66%, due 5/1/18............        130,240
      69,000  Georgia Power Co., First
                Mortgage Bonds, 7.95%, due
                2/1/23.......................         69,401
     250,000  Greyhound Financial Corp.,
                7.82%, due 1/27/03...........        258,036
     250,000  IBM Credit Corp., 6.20%, due
                3/19/01......................        245,254
     300,000  Inco, Ltd., 9.60%, due
                6/15/22......................        327,139
     120,000  Jersey Central Power & Light
                Co., 9.20%, due 7/1/21.......        131,171
      46,000  Kaiser Permanente, 9.55%, due
                7/15/05......................         53,336
      56,000  Kraft, Inc., 8.50%, due
                2/15/17......................         58,367
     200,000  Michigan Bell Telephone Co.,
                6.375%, due 2/1/05...........        193,489
     175,000  Pacific Gas & Electric Co.,
                6.625%, due 6/1/00...........        173,491
     439,000  Pennsylvania Power & Light Co.,
                9.25%, due 10/1/19...........        477,390
     165,000  Questar Pipeline, 9.375%, due
                6/1/21.......................        184,082
      70,000  Rohm & Haas Co., 9.80%, due
                4/15/20......................         84,824
     675,000  Shopko Stores, 9.25%, due
                3/15/22......................        650,830
     200,000  Southern California Edison,
                7.375%, due 12/15/03.........        200,864
      85,000  Southwestern Public Service
                Co., 8.20%, due 12/1/22......         89,562
      40,000  Super Value Store, 8.875%, due
                4/1/16.......................         40,631
     192,000  TJX Cos. Inc., 9.50%, due
                5/1/16.......................        195,740
     250,000  Trans Financial Bancorp, 7.25%,
                due 9/15/03..................        242,072
      68,000  U.S. Leasing Int'l, 6.625%, due
                5/15/03......................         66,858
</TABLE>
 
See Notes to Schedule of Investments.  6               TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
 
SCHEDULE OF INVESTMENTS (continued)
 
FEBRUARY 28, 1997 (Unaudited)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE BONDS, CONTINUED
$    130,000  Union Electric Co., 8.00%, due
                12/15/22.....................  $     133,404
     500,000  Union Oil of California Corp.,
                6.70%, due 10/15/07..........        480,406
     200,000  V.F. Corp., 7.60%, due 4/1/04..        204,744
      65,000  Wisconsin Electric Power,
                7.75%, due 1/15/23...........         65,473
                                               -------------
Total Corporate Bonds
  (cost $8,515,941)..........................      8,361,937
                                               -------------
GOVERNMENT AGENCY NOTES (6.2%)
     500,000  FHLB, 6.62%, due 12/6/00.......        497,854
     150,000  FNMA, 6.17%, due 12/2/03.......        144,653
     265,000  TVA, 6.875%, due 1/15/02.......        266,217
      50,000  TVA, 6.875%, due 8/1/02........         50,132
      30,000  TVA, 8.05%, due 7/15/24........         29,844
                                               -------------
Government Agency Notes
  (cost $998,362)............................        988,700
                                               -------------
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
REPURCHASE AGREEMENTS (12.2%)
$  1,955,394  The First Boston Corp., 5.38%,
                due 3/3/97, to be repurchased
                at $1,955,686 (cost
                $1,955,394)(d)...............  $   1,955,394
                                               -------------
TREASURY NOTES (21.9%)
   3,500,000  U.S. Treasury Notes, 6.50%, due
                8/15/05 (cost $3,553,437)....      3,490,151
                                               -------------
SHORT-TERM HOLDINGS (0.0%)
       5,006  1784 U.S. Treasury Money Market
                Fund (cost $5,006)...........          5,006
                                               -------------
Total Investments (100.0%)
  (cost $16,209,985)(c)......................  $  15,964,949
                                               -------------
                                               -------------
</TABLE>
 
See Notes to Schedule of Investments.  7               TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
 
SCHEDULE OF INVESTMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
MUNICIPAL BONDS (96.0%)
AIRPORT REVENUE (0.5%)
$     50,000  Lexington-Fayette Urban County
                Airport Corp., KY, First
                Mortgage Revenue Bonds,
                7.75%, due 4/1/08............  $      53,562
                                               -------------
ECONOMIC DEVELOPMENT REVENUE (11.5%)
     100,000  Covington, KY, Municipal
                Properties Corp. Revenue
                Bonds, Series A, 8.25%, due
                8/1/10, prerefunded 8/1/98 at
                103..........................        108,750
     455,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #51, escrowed
                to maturity, 6.30%, due
                8/1/01.......................        487,418
      70,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #32, 6.50%,
                due 12/1/99..................         73,762
     200,000  Kentucky State Turnpike
                Authority, Economic
                Development Revenue Bonds,
                7.25%, due 5/15/10,
                prerefunded 5/15/00 at
                101.50.......................        220,000
     425,000  Kentucky State Turnpike
                Authority Economic
                Development Revenue Bonds,
                Revitalization Projects,
                escrowed to maturity, 7.00%,
                due 5/15/99..................        450,500
                                               -------------
                                                   1,340,430
                                               -------------
EDUCATION FACILITIES REVENUE (18.9%)
     200,000  Hopkins County, KY, School
                District Finance Corp.,
                School Building Revenue
                Bonds, 5.70%, due 6/1/06.....        209,250
     495,000  Jefferson County, KY, School
                District Finance Corp.,
                School Building Revenue
                Bonds, Series A, 4.875%, due
                1/1/11.......................        464,062
 
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
EDUCATION FACILITIES REVENUE, CONTINUED
$    750,000  Jefferson County, KY, School
                District Finance Corp. School
                Building Revenue Bonds,
                Series A, MBIA insured,
                5.00%, due 2/1/07............  $     753,750
     475,000  Kentucky Higher Education
                Student Loan Corp., Insured
                Student Loan Revenue Bonds,
                Series B, 6.40%, due
                6/1/00.......................        499,937
      70,000  Lexington-Fayette Urban County
                Government, KY, School
                Buildings Revenue Bonds,
                6.80%, due 10/1/01...........         76,563
     200,000  University of Louisville, KY,
                Revenue Bonds, Series H,
                5.875%, due 5/1/12...........        206,000
                                               -------------
                                                   2,209,562
                                               -------------
GENERAL OBLIGATIONS--BOND BANK (2.5%)
     305,000  Fern Creek, KY, Fire Protection
                District, Holding Co., Inc.,
                Revenue Bonds, Fire Station
                #2, 5.75%, due 1/15/14.......        295,850
                                               -------------
HEALTH CARE REVENUE (10.6%)
   1,225,000  Kentucky Economic Development
                Finance Authority, Hospital
                Facilities Revenue Bonds,
                Society National Bank LOC,
                5.75%, due 11/1/05...........      1,241,844
                                               -------------
HOUSING REVENUE (9.0%)
     725,000  Boone County, KY, Public
                Properties Corp. Revenue
                Bonds, Sewer System Lease,
                5.15%, due 12/1/12...........        695,094
     270,000  Greater Kentucky Housing
                Assistance Corp., Mortgage
                Revenue Bonds, FHA/Section 8
                Assisted Project, Series A,
                MBIA/ FHA insured, 6.25%, due
                7/1/22.......................        272,364
</TABLE>
 
See Notes to Schedule of Investments.  8               TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
 
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
HOUSING REVENUE, CONTINUED
$    100,000  Jefferson County, KY, Capital
                Projects Corp. Revenue Bonds,
                0.00% (5.75% effective
                yield), due 8/15/99..........  $      89,375
                                               -------------
                                                   1,056,833
                                               -------------
INDUSTRIAL DEVELOPMENT REVENUE (6.4%)
     750,000  Clark County, KY, Industrial
                Building Revenue Bonds,
                Southern Wood Project, 7.00%,
                due 12/1/08..................        753,750
                                               -------------
LEASING REVENUE (5.4%)
     490,000  Jefferson County, KY, Capital
                Projects Corp. Revenue Bonds,
                5.65%, due 8/15/03...........        517,563
     100,000  Kentucky State Property &
                Buildings Commission Revenue
                Bonds, Project #52, 6.50%,
                due 8/1/11, Prerefunded
                8/1/01 at 102................        110,000
                                               -------------
                                                     627,563
                                               -------------
OTHER REVENUE (1.2%)
     120,000  Puerto Rico Public Buildings
                Authority Guaranteed Revenue
                Bonds, Series K, 6.875%, due
                7/1/21, prerefunded 7/1/02 at
                101.50.......................        135,750
                                               -------------
POLLUTION CONTROL REVENUE (19.8%)
     450,000  Ashland, KY, PCR Bonds, Ashland
                Oil, 7.375%, due 7/1/09......        486,000
     295,000  Ashland, KY, Solid Waste
                Revenue Bonds, Ashland Oil,
                Inc., Project, 7.20%, due
                10/1/20......................        314,913
     235,000  Jefferson County, KY, PCR
                Bonds, Louisville Gas &
                Electric Co. Project A,
                7.45%, due 6/15/15...........        256,150
<CAPTION>
    FACE                 SECURITY
   AMOUNT               DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
POLLUTION CONTROL REVENUE, CONTINUED
$    100,000  Kentucky State Pollution
                Abatement & Water Reserve
                Finance Authority Revenue
                Bonds, Series A, escrowed to
                maturity, 7.40%, due
                8/1/02.......................  $     113,750
      50,000  Louisville & Jefferson County,
                KY, Metropolitan Sewer
                District, Sewer & Drain
                System Revenue Bonds Series
                A, AMBAC insured, 6.50%, due
                5/15/00......................         53,250
     385,000  Trimble County, KY, PCR Bonds,
                7.625%, due 11/1/20,
                Prerefunded 11/1/00 at 102...        431,681
     600,000  Trimble County, KY, PCR Bonds,
                Series A, 7.625%, due
                11/1/20......................        662,250
                                               -------------
                                                   2,317,994
                                               -------------
RESOURCE RECOVERY REVENUE (2.4%)
     275,000  Kentucky State Turnpike
                Authority Resource Recovery
                Road Revenue, 6.00%, due
                7/1/09.......................        275,770
                                               -------------
TRANSPORTATION REVENUE (5.9%)
     655,000  Kentucky State Turnpike
                Authority Resource Recovery
                Revenue Bonds, escrowed to
                maturity, 6.125%, due
                7/1/07.......................        691,844
                                               -------------
UTILITIES REVENUE (1.9%)
     200,000  Owensboro, KY, Electric Light &
                Power Revenue Bonds, Series
                A, 10.25%, due 1/1/09,
                prerefunded 1/1/00 at 102....        228,500
                                               -------------
Total Municipal Bonds
  (cost $11,188,810).........................     11,229,252
                                               -------------
SHORT TERM-HOLDINGS (4.0%)
     466,600  1784 Tax Free Money Market Fund
                (cost $466,600)..............        466,600
                                               -------------
Total Investments (100.0%)
  (cost $11,655,410)(c)......................  $  11,695,852
                                               -------------
                                               -------------
</TABLE>
 
See Notes to Schedule of Investments.  9               TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
 
SCHEDULE OF INVESTMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
ASSET BACKED SECURITIES (0.2%)
$    226,593  FHLMC, 7.00%, due 4/1/97.......  $     226,698
                                               -------------
DISCOUNT NOTES (20.4%)
   4,376,000  FHLMC, 5.30% yield, due
                3/3/97.......................      4,376,000
   6,000,000  FHLMC, 5.28% yield, due
                3/19/97......................      5,986,155
   6,700,000  FNMA, 5.31% yield, due
                3/3/97.......................      6,700,000
   3,000,000  FNMA, 5.31% yield, due
                3/4/97.......................      2,999,564
                                               -------------
Total Discount Notes.........................     20,061,719
                                               -------------
GOVERNMENT AGENCY NOTES (0.8%)
     200,000  FHLB, 6.99%, due 4/25/97.......        200,398
     100,000  FHLB, 4.80%, due 7/24/97.......         99,476
     500,000  FNMA, 6.84%, due 10/3/97.......        503,289
                                               -------------
Total Government Agency Notes................        803,163
                                               -------------
CORPORATE NOTES (58.3%)
     500,000  Alcan Aluminum, 6.375%, due
                9/1/97.......................        500,717
     100,000  Allied Corp., 0.00% (5.95%
                effective yield), due
                8/1/97.......................         97,605
   1,373,000  American Express Credit Corp.,
                7.75%, due 3/1/97............      1,373,000
     140,000  American General Finance Corp.,
                5.80%, due 4/1/97............        140,000
      75,000  American General Finance Corp.,
                7.15%, due 5/15/97...........         75,164
      80,000  American General Finance Corp.,
                7.70%, due 11/15/97..........         80,941
     703,000  American Home Products Corp.,
                6.875%, due 4/15/97..........        703,886
     125,000  Associates Corp. of North
                America, 9.70%, due 5/1/97...        125,749
   1,005,000  Associates Corp. of North
                America, 8.625%, due
                6/15/97......................      1,011,880
      15,000  Associates Corp. of North
                America, 6.75%, due
                7/15/97......................         15,050
      30,000  Associates Corp. of North
                America, 6.75%, due
                7/15/97......................         30,080
 
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE NOTES, CONTINUED
$  1,470,000  Associates Corp. of North
                America, 5.875%, due
                8/15/97......................  $   1,470,594
     750,000  Associates Corp. of North
                America, 7.75%, due
                11/1/97......................        758,588
     110,000  Associates Corp. of North
                America, 6.625%, due
                11/15/97.....................        110,504
      70,000  B.P. America, 9.50%, due
                1/1/98.......................         71,912
      75,000  Bank of Boston, 9.50%, due
                8/15/97......................         76,174
     187,000  BankAmerica Corp., 6.00%, due
                7/15/97......................        186,999
     175,000  Baxter International, Inc.,
                7.50%, due 5/1/97............        175,416
      90,000  Bell Atlantic Financial,
                6.625%, due 11/30/97.........         90,359
     600,000  Beneficial Corp., 6.79%, due
                11/20/97.....................        604,556
     240,000  British Petroleum America,
                Inc., 8.875%, due 12/1/97....        245,010
     485,000  Brunswick Corp., 8.125%, due
                4/1/97.......................        485,791
     164,000  CIT Group Holdings, Inc.,
                8.75%, due 7/1/97............        165,362
   2,000,000  CSX Transportation, Inc., 5.93
                %, due 6/1/97................      1,999,915
      55,000  Campbell Soup Co., 9.00%, due
                11/1/97......................         56,084
     100,000  Carolina Power & Light Co.,
                6.375%, due 10/1/97..........        100,000
     159,000  Coca-Cola Enterprises Inc.,
                6.50%, due 11/15/97..........        159,539
     500,000  Commercial Credit Co., 8.125%,
                3/1/97.......................        500,000
     500,000  Conagra Inc., 9.75%, due
                11/1/97......................        512,573
     125,000  Consolidated Edison, 5.30%, due
                8/1/97.......................        124,699
     100,000  Discover Credit, 7.98%, due
                4/7/97.......................        100,173
     430,000  Dow Capital, 5.75%, due
                9/15/97......................        429,098
</TABLE>
 
See Notes to Schedule of Investments.  10              TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
 
SCHEDULE OF INVESTMENTS (continued)
 
FEBRUARY 28, 1997 (Unaudited)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE NOTES, CONTINUED
$    250,000  Dupont Corp., 8.65%, due
                12/1/97......................  $     255,222
     200,000  Eastman Kodak Co., 8.55%, due
                5/1/97.......................        200,866
     205,000  Exxon Capital Corp., 7.875%,
                due 8/15/97..................        206,496
      60,000  First Interstate Bancorp,
                12.75%, due 5/1/97...........         60,632
   1,682,000  Ford Holdings Inc., 9.25%, due
                7/15/97......................      1,701,846
     250,000  Ford Motor Co., 5.30%, due
                7/1/97.......................        249,408
     125,000  Ford Motor Credit Co., 5.625%,
                due 3/3/97...................        125,000
     357,000  Ford Motor Credit Co., 6.80%,
                due 8/15/97..................        358,204
     150,000  Ford Motor Credit Co., 7.125%,
                due 12/1/97..................        151,216
      77,000  Ford Motor Credit Co., 8.00%,
                due 12/1/97..................         78,101
   1,379,000  GMAC, 7.75%, due 4/15/97.......      1,382,185
     220,000  GMAC, 8.375%, due 5/1/97.......        220,882
      75,000  GMAC, 6.40%, due 7/30/97.......         75,016
      75,000  GMAC, 7.00%, due 8/15/97.......         75,320
   1,400,000  GMAC, 6.25%, due 9/12/97.......      1,405,076
   1,000,000  GMAC, 7.85%, due 11/17/97......      1,014,921
      20,000  GTE California, 6.25%, due
                1/15/98......................         20,000
     750,000  GTE North, Inc., 6.25%, due
                7/1/97.......................        750,528
      80,000  GTE South, Inc., 6.25%, due
                11/15/97.....................         80,067
      30,000  General Electric Capital,
                8.00%, due 1/15/98...........         30,525
     369,000  Golden West Financial Corp.,
                10.25%, due 5/15/97..........        372,192
   2,100,000  Greyhound Financial Corp.,
                8.25%, due 3/11/97...........      2,101,197
     700,000  H.F. Ahmanson & Co., 6.00%, due
                4/1/97.......................        700,000
      78,000  Heinz (H.J.) Co., 5.50%, due
                9/15/97......................         77,833
   4,010,000  Heller Financial, 7.75%, due
                5/15/97......................      4,026,170
     965,000  Hospital Corp. of America,
                9.00%, due 3/15/97...........        965,907
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE NOTES, CONTINUED
$     85,000  Household Finance Co., 7.75%,
                due 6/15/97..................  $      85,434
     375,000  IBM Corp., 6.375%, due
                11/1/97......................        376,087
     100,000  IBM Credit Corp., 5.54%, due
                8/18/97......................         99,812
      50,000  Interamerican Development Bank,
                9.50%, due 10/15/97..........         51,051
     325,000  International Lease Finance,
                5.50%, due 4/1/97............        324,848
     655,000  International Lease Finance,
                6.50%, due 7/15/97...........        656,991
     250,000  International Lease Finance,
                6.75%, due 8/1/97............        250,901
     500,000  Iowa, Illinois Gas & Electric
                Co., 5.875%, due 7/15/97.....        500,000
     160,000  John Deere Capital, 7.20%, due
                5/15/97......................        160,395
   4,020,000  Kellogg Co., 5.90%, due
                7/15/97......................      4,024,995
      60,000  Kimberly-Clark Corp., 9.125%,
                due 6/1/97...................         60,470
     480,000  Lehman Brothers, Inc., 7.375%,
                due 8/15/97..................        483,534
     376,000  Lehman Brothers Holdings, Inc.,
                8.375%, due 4/1/97...........        376,733
     760,000  Lehman Brothers Holdings, Inc.,
                7.625%, due 6/15/97..........        763,745
   2,066,000  MGM Grand Hotels Financial
                Corp., Defeased, 11.75%, due
                5/1/97.......................      2,124,746
     871,000  MGM Grand Hotels Financial
                Corp., Defeased, 12.00%, due
                5/1/02(b)....................        925,377
   2,982,000  Marine Midland Banks, Inc.,
                8.625%, due 3/1/97...........      2,982,000
     285,000  Maytag Corp., 8.875%, due
                7/1/97.......................        287,373
     100,000  Monongahela Power, 6.50%, due
                8/1/97.......................        100,026
     125,000  Morgan Stanley Group, 5.65%,
                due 6/15/97..................        125,014
   1,265,000  National Rural Utilities Corp.,
                9.50%, due 5/15/97...........      1,273,487
</TABLE>
 
See Notes to Schedule of Investments.  11              TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
 
SCHEDULE OF INVESTMENTS (continued)
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE NOTES, CONTINUED
$    390,000  New York Telephone Co., 4.625%,
                due 10/1/97..................  $     387,017
     275,000  Norwest Corp., 7.70%, due
                11/15/97.....................        278,426
     130,000  Norwest Financial Inc., 6.00%,
                due 8/15/97..................        129,859
      65,000  Norwest Financial Inc., 6.50%,
                due 11/15/97.................         65,239
     100,000  Paccar Financial Corp., 5.12%,
                due 3/10/97..................         99,984
     183,000  Pacific, Gas, & Electric Co.,
                4.625%, due 6/1/97...........        182,443
     230,000  PepsiCo, Inc., 6.875%, due
                5/15/97......................        230,442
   1,513,000  Philip Morris Cos., Inc.,
                7.50%, due 3/15/97...........      1,513,729
     300,000  Philip Morris Cos., Inc.,
                9.75%, due 5/1/97............        301,765
     590,000  Philip Morris Cos., Inc.,
                8.75%, due 6/15/97...........        594,305
      30,000  Philip Morris Cos., Inc.,
                9.35%, due 11/21/97..........         30,726
     485,000  Philip Morris Cos. Inc., 9.25%,
                due 12/1/97..................        496,301
      45,000  Philip Morris Cos., Inc.,
                6.375%, due 1/15/98..........         45,137
     190,000  Procter & Gamble Co., 6.85%,
                due 6/1/97...................        190,375
      50,000  Province of Ontario Global
                Bond, 5.70%, due 10/1/97.....         49,941
     360,000  Public Service Electric & Gas
                Co., 6.875%, due 6/1/97......        360,908
      40,000  Public Service Electric & Gas
                Co., 7.125%, due 11/1/97.....         40,282
   1,115,000  Public Service Electric & Gas
                Co., 7.125%, due 11/1/97.....      1,124,331
<CAPTION>
                         SECURITY
FACE AMOUNT             DESCRIPTION                VALUE
- - ------------  -------------------------------  -------------
<C>           <S>                              <C>
CORPORATE NOTES, CONTINUED
$    660,000  Quebec Province, 8.74%, due
                7/21/97......................  $     665,770
     466,000  Sears Roebuck and Co., 9.25%,
                due 8/1/97...................        471,962
     830,000  Southern California Edison Co.,
                6.125%, due 7/15/97..........        830,936
     205,000  Texaco Capital, 9.00%, due
                11/15/97.....................        209,251
     190,000  U.S. Leasing International,
                Inc., 7.00%, due 11/1/97.....        191,383
     135,000  Union Electric Co., 5.50%, due
                3/1/97.......................        135,000
     937,000  Unisys Corp., 15.00%, due
                7/1/97.......................        964,938
     650,000  Virginia Electric & Power Co.,
                7.25%, due 3/1/97............        650,000
      85,000  WMX Technologies, 8.125%, due
                2/1/98.......................         86,500
   1,064,000  Wal-Mart Stores, Inc., 5.50%,
                due 9/15/97..................      1,063,000
     716,000  Waste Management, Inc. 6.375%,
                due 7/1/97...................        717,010
     115,000  Wisconsin Natural Gas, 6.125%,
                due 9/1/97...................        115,090
                                               -------------
Total Corporate Notes........................     57,517,297
                                               -------------
REPURCHASE AGREEMENTS (20.3%)
  19,973,319  The First Boston Corp., 5.38%,
                due 3/3/97, to be repurchased
                at 19,976,304 (d)............     19,973,319
                                               -------------
Total Investments (100.0%)...................  $  98,582,196
                                               -------------
                                               -------------
</TABLE>
 
See Notes to Schedule of Investments.  12              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
- - ---------------------------------------------------------------------------
 
(a) Non-income producing securities.
 
(b) Variable rate demand notes are payable upon not more than one, seven or
    thirty business days notice. Put bonds and notes have demand features which
    mature within one year. The interest rate shown reflects the rate in effect.
 
(c) Aggregate cost for Federal tax purposes.
 
(d) The First Boston Corporation is a tri-party repurchase agreement
    collateralized by various Federal Gold Loan Mortgage Corporation 6.50% to
    8.50%, due 11/1/21 to 2/1/27, Par $705,941 and by various Federal National
    Conventional Loan 6.00% to 9.00%, due 10/1/03 to 3/1/27, Par $24,865,226.
 
<TABLE>
<S>        <C>
AMBAC      American Municipal Bond Assurance Corporation
FHA        Federal Housing Authority
FHLB       Federal Home Loan Bank
FHLMC      Federal Home Loan Mortgage Corporation
FNMA       Federal National Mortgage Association
GMAC       General Motors Acceptance Corporation
LOC        Letter of Credit
MBIA       Municipal Bond Insurance Association
PCR        Pollution Control Revenue
SBA        Small Business Administration
TVA        Tennessee Valley Authority
</TABLE>
 
                                       13              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                  GROWTH/                      INTERMEDIATE
                                                   VALUE        AGGRESSIVE         BOND          KENTUCKY     MONEY MARKET
                                                   FUND        GROWTH FUND         FUND        TAX-FREE FUND      FUND
                                               -------------  --------------  ---------------  -------------  -------------
<S>                                            <C>            <C>             <C>              <C>            <C>
ASSETS:
  Investments (Note 2):
    Investments at cost......................  $  17,159,330   $  8,115,391    $  14,254,591   $  11,655,410  $  78,608,877
    Repurchase Agreements at cost............       --              --             1,955,394        --           19,973,319
    Net unrealized appreciation
      (depreciation).........................      3,469,550      1,277,867         (245,036)         40,442       --
                                               -------------  --------------  ---------------  -------------  -------------
      Total investments at value.............     20,628,880      9,393,258       15,964,949      11,695,852     98,582,196
  Interest, dividends and other receivables..         13,372          1,131          211,309         152,340      1,345,605
  Receivable for Fund shares issued..........         75,000         25,000               47        --             --
  Organization costs, net of amortization
    (Note 2).................................         22,760         22,760           22,760          22,760         22,760
                                               -------------  --------------  ---------------  -------------  -------------
Total Assets.................................     20,740,012      9,442,149       16,199,065      11,870,952     99,950,561
                                               -------------  --------------  ---------------  -------------  -------------
LIABILITIES:
  Dividends payable..........................       --              --                73,869          26,034        319,424
  Payable for securities purchased...........       --              --                48,161        --            1,873,737
  Payable for Fund shares redeemed...........         15,801          2,977           37,220        --             --
  Payable to Trans Financial.................         26,993        --              --              --                1,206
  Payable to other related parties...........         11,831         15,064           12,286          28,388         66,618
                                               -------------  --------------  ---------------  -------------  -------------
Total Liabilities............................         54,625         18,041          171,536          54,422      2,260,985
                                               -------------  --------------  ---------------  -------------  -------------
NET ASSETS...................................  $  20,685,387   $  9,424,108    $  16,027,529   $  11,816,530  $  97,689,576
                                               -------------  --------------  ---------------  -------------  -------------
                                               -------------  --------------  ---------------  -------------  -------------
 
COMPONENTS OF NET ASSETS:
  Paid in capital............................  $  17,439,553   $  8,411,427    $  16,227,629   $  11,956,651  $  97,691,530
  Undistributed net investment income
    (loss)...................................        (90,354)       (63,130)        --              (173,707)      --
  Unrealized appreciation (depreciation) on
    investments..............................      3,469,550      1,277,867         (245,036)         40,442       --
  Accumulated net realized gain (loss).......       (133,362)      (202,056)          44,936          (6,856)        (1,954)
                                               -------------  --------------  ---------------  -------------  -------------
NET ASSETS...................................  $  20,685,387   $  9,424,108    $  16,027,529   $  11,816,530  $  97,689,576
                                               -------------  --------------  ---------------  -------------  -------------
                                               -------------  --------------  ---------------  -------------  -------------
 
SHARES OF BENEFICIAL INTEREST................      1,554,603        755,681        1,625,149       1,155,557     97,691,530
                                               -------------  --------------  ---------------  -------------  -------------
                                               -------------  --------------  ---------------  -------------  -------------
NET ASSET VALUE PER SHARE, AND REDEMPTION
  PRICE PER SHARE............................  $       13.31   $      12.47    $        9.86   $       10.23  $        1.00
                                               -------------  --------------  ---------------  -------------  -------------
                                               -------------  --------------  ---------------  -------------  -------------
OFFERING PRICE PER SHARE, EXCEPT MONEY MARKET
  (NAV  DIVIDED BY (1 - 4.50%))..............  $       13.94   $      13.06    $       10.32   $       10.71  $        1.00
                                               -------------  --------------  ---------------  -------------  -------------
                                               -------------  --------------  ---------------  -------------  -------------
</TABLE>
 
See Notes to Financial Statements.     14              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF OPERATIONS
 
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                     GROWTH/       AGGRESSIVE     INTERMEDIATE     KENTUCKY       MONEY
                                                      VALUE          GROWTH           BOND         TAX-FREE       MARKET
                                                       FUND           FUND            FUND           FUND          FUND
                                                   ------------  --------------  ---------------  -----------  ------------
<S>                                                <C>           <C>             <C>              <C>          <C>
INVESTMENT INCOME:
  Interest income................................  $     16,937   $      7,330     $   511,819     $ 432,568   $  2,402,069
  Dividend income................................        65,970          5,885         --             --            --
                                                   ------------  --------------  ---------------  -----------  ------------
Total Investment Income..........................        82,907         13,215         511,819       432,568      2,402,069
                                                   ------------  --------------  ---------------  -----------  ------------
EXPENSES:
  Investment advisory (Note 3)...................        89,000         39,197          28,976        28,478         85,174
  Administration (Note 3)........................        13,512         12,500          12,500        12,500         63,881
  Transfer agent (Note 3)........................        12,809         12,445          11,847        13,654         10,336
  Shareholder service (Note 3)...................        22,250          9,799          18,110        17,799        106,468
  Custody........................................           697            911           2,157           355          7,772
  Accounting (Note 3)............................        18,000         18,000          18,000        18,000         24,000
  Legal (Note 3).................................         9,767          6,568           9,468        11,320         12,402
  Registration...................................         2,632          2,476           1,943           280          3,054
  Audit..........................................         7,946          7,522           8,376         8,431          9,300
  Directors......................................           967            417             821           915          4,721
  Amortization of organization costs (Note 3)....         3,176          3,176           3,176         3,176          3,176
  Miscellaneous..................................         5,133          2,531           4,427         7,705         17,339
                                                   ------------  --------------  ---------------  -----------  ------------
Total Expenses...................................       185,889        115,542         119,801       122,613        347,623
  Expenses reimbursed and fees waived
    (Note 4).....................................       (12,628)       (39,197)        (58,242)      (62,115)       (70,760)
                                                   ------------  --------------  ---------------  -----------  ------------
Net Expenses.....................................       173,261         76,345          61,559        60,498        276,863
                                                   ------------  --------------  ---------------  -----------  ------------
NET INVESTMENT INCOME (LOSS).....................       (90,354)       (63,130)        450,260       372,070      2,125,206
                                                   ------------  --------------  ---------------  -----------  ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
  INVESTMENTS:
  Net realized gain (loss) on investments sold...      (133,362)      (201,524)         60,329        (4,068)        (1,928)
  Net change in unrealized appreciation
    (depreciation) on investments................     3,226,469      1,217,298          87,795       300,184        --
                                                   ------------  --------------  ---------------  -----------  ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
  INVESTMENTS....................................     3,093,107      1,015,774         148,124       296,116         (1,928)
                                                   ------------  --------------  ---------------  -----------  ------------
NET INCREASE IN NET ASSETS RESULTING FROM
  OPERATIONS.....................................  $  3,002,753   $    952,644     $   598,384     $ 668,186   $  2,123,278
                                                   ------------  --------------  ---------------  -----------  ------------
                                                   ------------  --------------  ---------------  -----------  ------------
</TABLE>
 See Notes to Financial Statements.     15           TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
 
FOR THE YEAR ENDED AUGUST 31, 1996
AND THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                        GROWTH/                   AGGRESSIVE                INTERMEDIATE
                                                         VALUE                      GROWTH                      BOND
                                                          FUND                       FUND                       FUND
                                               --------------------------  ------------------------  --------------------------
                                                  AMOUNT        SHARES        AMOUNT       SHARES       AMOUNT        SHARES
                                               -------------  -----------  ------------  ----------  -------------  -----------
<S>                                            <C>            <C>          <C>           <C>         <C>            <C>
NET ASSETS--September 1, 1995(a).............  $    --                     $    --                   $    --
- - ----------------------------------
                                               -------------               ------------              -------------
OPERATIONS:
  Net investment income (loss)...............        (50,747)                   (39,525)                   601,786
  Net realized gain (loss) on investments
    sold.....................................         89,352                     43,284                    (15,393)
  Net change in unrealized appreciation
    (depreciation) on investments............        243,081                     60,569                   (332,831)
                                               -------------               ------------              -------------
    Net Increase in Net Assets Resulting from
      Operations.............................        281,686                     64,328                    253,562
                                               -------------               ------------              -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income......................       --                          --                        (601,786)
                                               -------------               ------------              -------------
CAPITAL SHARE TRANSACTIONS:
  Sale of shares.............................     15,471,301    1,408,416     7,269,024     668,440     14,919,014    1,491,710
  Reinvestment of distributions..............       --            --            --           --             13,886        1,404
  Redemption of shares.......................       (645,322)     (57,598)     (783,438)    (70,133)    (1,227,784)    (122,796)
                                               -------------  -----------  ------------  ----------  -------------  -----------
    Net Increase (Decrease) in Capital
      Transactions...........................     14,825,979    1,350,818     6,485,586     598,307     13,705,116    1,370,318
                                               -------------  -----------  ------------  ----------  -------------  -----------
                                                              -----------                ----------                 -----------
  Net Increase (Decrease) in Net Assets......     15,107,665                  6,549,914                 13,356,892
                                               -------------               ------------              -------------
NET ASSETS--August 31, 1996..................     15,107,665                  6,549,914                 13,356,892
- - -----------------------------
                                               -------------               ------------              -------------
OPERATIONS:
  Net investment income (loss)...............        (90,354)                   (63,130)                   450,260
  Net realized gain (loss) on investments....       (133,362)                  (201,524)                    60,329
  Net change in unrealized appreciation
    (depreciation) on investments............      3,226,469                  1,217,298                     87,795
                                               -------------               ------------              -------------
    Net Increase in Net Assets Resulting from
      Operations.............................      3,002,753                    952,644                    598,384
                                               -------------               ------------              -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income......................       --                          --                        (450,260)
  Net realized gain (loss) on investments
    sold.....................................        (44,429)                   (16,181)                  --
                                               -------------               ------------              -------------
    Total Distribution to Shareholders.......        (44,429)                   (16,181)                  (450,260)
                                               -------------               ------------              -------------
CAPITAL SHARE TRANSACTIONS:
  Sale of shares.............................      4,624,904      361,307     2,810,182     230,029      3,603,774      361,955
  Reinvestment of distributions..............         10,879          875         4,532         376         10,125        1,023
  Redemption of shares.......................     (2,016,385)    (158,397)     (876,983)    (73,031)    (1,091,386)    (108,147)
                                               -------------  -----------  ------------  ----------  -------------  -----------
    Net Increase (Decrease) in Capital
      Transactions...........................      2,619,398      203,785     1,937,731     157,374      2,522,513      254,831
                                               -------------  -----------  ------------  ----------  -------------  -----------
                                                              -----------                ----------                 -----------
  Net Increase (Decrease) in Net Assets......      5,577,722                  2,874,194                  2,670,637
                                               -------------               ------------              -------------
NET ASSETS--February 28, 1997 (Unaudited)....  $  20,685,387               $  9,424,108              $  16,027,529
- - -----------------------------------------
                                               -------------               ------------              -------------
                                               -------------               ------------              -------------
 
(a) See Note 1 of Notes to Financial Statements for date of commencement of operations.
</TABLE>
 
See Notes to Financial Statements.     16              TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
 
FOR THE YEAR ENDED AUGUST 31, 1996
AND THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                KENTUCKY                      MONEY
                                                                                TAX-FREE                      MARKET
                                                                                  FUND                         FUND
                                                                        -------------------------  ----------------------------
                                                                           AMOUNT       SHARES        AMOUNT         SHARES
                                                                        ------------  -----------  -------------  -------------
<S>                                                                     <C>           <C>          <C>            <C>
NET ASSETS--September 1, 1995(a)......................................  $    --                    $    --
                                                                        ------------               -------------
- - ----------------------------------
OPERATIONS:
  Net investment income (loss)........................................       714,832                   2,473,468
  Net realized gain (loss) on investments sold........................        (2,788)                      2,494
  Net change in unrealized appreciation (depreciation)
    on investments....................................................      (259,742)                   --
                                                                        ------------               -------------
    Net Increase in Net Assets Resulting
      from Operations.................................................       452,302                   2,475,962
                                                                        ------------               -------------
DISTRIBUTIONS TO SHAREHOLDERS
  FROM:
  Net investment income...............................................      (828,883)                 (2,473,468)
                                                                        ------------               -------------
CAPITAL SHARE TRANSACTIONS:
  Sale of shares......................................................    28,751,437    2,814,888    446,620,681    446,620,681
  Reinvestment of distributions.......................................       559,139       57,538         84,304         84,304
  Redemption of shares................................................   (13,093,506)  (1,297,814)  (370,344,632)  (370,344,632)
                                                                        ------------  -----------  -------------  -------------
    Net Increase (Decrease) in Capital Transactions...................    16,217,070    1,574,612     76,360,353     76,360,353
                                                                        ------------  -----------  -------------  -------------
                                                                                      -----------                 -------------
  Net Increase (Decrease) in Net Assets...............................    15,840,489                  76,362,847
                                                                        ------------               -------------
NET ASSETS--August 31, 1996...........................................    15,840,489                  76,362,847
- - -----------------------------
                                                                        ------------               -------------
OPERATIONS:
  Net investment income (loss)........................................       372,070                   2,125,206
  Net realized gain (loss) on investments.............................        (4,068)                     (1,928)
  Net change in unrealized appreciation (depreciation)
    on investments....................................................       300,184                    --
                                                                        ------------               -------------
    Net Increase in Net Assets Resulting from
      Operations......................................................       668,186                   2,123,278
                                                                        ------------               -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income...............................................      (431,726)                 (2,125,206)
  Net realized gain (loss) on investments sold........................       --                           (2,520)
                                                                        ------------               -------------
    Total Distribution to Shareholders................................      (431,726)                 (2,127,726)
                                                                        ------------               -------------
CAPITAL SHARE TRANSACTIONS:
  Sale of shares......................................................       519,442       51,065    241,892,119    241,846,519
  Reinvestment of distributions.......................................       180,402       17,695        193,146        193,146
  Redemption of shares................................................    (4,960,263)    (487,815)  (220,754,088)  (220,708,488)
                                                                        ------------  -----------  -------------  -------------
    Net Increase (Decrease) in Capital Transactions...................    (4,260,419)    (419,055)    21,331,177     21,331,177
                                                                        ------------  -----------  -------------  -------------
                                                                                      -----------                 -------------
  Net Increase (Decrease) in Net Assets...............................    (4,023,959)                 21,326,729
                                                                        ------------               -------------
NET ASSETS--February 28, 1997 (Unaudited).............................  $ 11,816,530               $  97,689,576
- - -----------------------------------------
                                                                        ------------               -------------
                                                                        ------------               -------------
 
(a) See Note 1 of Notes to Financial Statements for date of commencement of operations.
</TABLE>
 
See Notes to Financial Statements.     17              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
NOTE 1. ORGANIZATION
 
Trans Adviser Funds, Inc. (the "Company") is an open-end management investment
company incorporated under the laws of the State of Maryland. The Company
currently consists of five operational non-diversified investment portfolios,
the Growth/Value Fund, the Aggressive Growth Fund, the Intermediate Bond Fund,
the Kentucky Tax-Free Fund, and the Money Market Fund (each a "Fund" and
collectively the "Funds"). The Funds, except for Money Market Fund, are offered
at Net Asset Value ("NAV") plus a sales charge, currently 4.50% of NAV. The
Money Market Fund is offered at NAV. The Funds commenced investment operations
on the following dates:
 
<TABLE>
<S>                       <C>
Growth/Value Fund         September 29, 1995
Aggressive Growth Fund    September 29, 1995
Intermediate Bond Fund    October 3, 1995
Kentucky Tax-Free Fund    September 27, 1995
Money Market Fund         September 29, 1995
</TABLE>
 
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates but are expected to be immaterial.
 
The following represent significant accounting policies of the Funds:
 
SECURITY VALUATION-All securities held by the Money Market Fund are valued
utilizing the amortized cost method, which approximates market value, in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Securities,
other than short-term, held by the other Funds (the "Bond and Equity Funds") for
which market quotations are readily available are valued using the last reported
sales price provided by independent pricing services. If no sales are reported,
the mean of the last bid and asked price is used. In the absence of readily
available market quotations, securities are valued at fair value as determined
by the Board of Directors. Securities with a maturity of 60 days or less held by
the Bond and Equity Funds are valued at amortized cost.
 
PREMIUM AMORTIZATION AND DISCOUNT ACCRETION-In all Funds other than the Kentucky
Tax-Free Fund, if a fixed income investment is purchased at a premium, the
premium is not amortized. The Kentucky Tax-Free Fund amortizes premium on fixed
income investments to the maturity (or first call) date using the yield to
maturity method. If a fixed income investment is purchased at a discount (other
than original issue discount), the discount is not accreted. Original issue
discount on fixed income investments is accreted daily using yield to maturity
method.
 
INTEREST AND DIVIDEND INCOME-Interest income is accrued as earned. Dividends on
securities held by the Funds are recorded on the ex-dividend date.
 
DISTRIBUTIONS TO SHAREHOLDERS-Distributions to shareholders of net investment
income, if any, are declared daily and paid monthly for the Money Market Fund,
the Kentucky Tax-Free Fund, and the Intermediate Bond Fund, and declared and
paid annually for the Aggressive Growth Fund and the Growth/Value Fund. Net
capital gain, if any, is distributed to shareholders at least annually.
Distributions are based on amounts calculated in accordance with applicable
income tax regulations.
 
ORGANIZATION COSTS-The costs incurred by the Funds in connection with their
organization and registration of shares have been capitalized and are being
amortized using the straight-line method over a five year period beginning with
the commencement of the respective Fund's operations. Certain of these costs
were paid by Forum Financial Services, Inc. and have been reimbursed by the
respective Funds.
 
                                       18              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
FEDERAL TAXES-Each Fund intends to qualify and continue to qualify each year as
a regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, each Fund
will not be subject to a federal excise tax. Therefore, no Federal income or
excise tax provision is required.
 
EXPENSE ALLOCATION-The Company accounts separately for the assets and
liabilities and operations of each Fund. Expenses that are directly attributable
to more than one Fund are allocated among the respective Funds.
 
REPURCHASE AGREEMENTS-The Aggressive Growth Fund, the Intermediate Bond Fund and
the Money Market Fund may invest in repurchase agreements. Each Fund, through an
agent bank under a tri-party agreement, receives delivery of the underlying
securities, whose market value must always equal or exceed the repurchase price
plus accrued interest. The investment adviser is responsible for determining the
value of the underlying securities at all times. In the event of default, the
Fund may have difficulties with the disposition of such securities.
 
REALIZED GAIN AND LOSS-Security transactions are accounted for on a trade date
basis and realized gain and loss on investments sold are determined on the basis
of identified cost.
 
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser of the Funds is Trans Financial Bank, N.A. (the
"Adviser"). The Adviser receives a monthly advisory fee from the Growth/Value
Fund and the Aggressive Growth Fund at an annual rate of 1.00% of the respective
Fund's average daily net assets. The Adviser receives a monthly advisory fee
from the Intermediate Bond Fund and the Kentucky Tax-Free Fund at an annual rate
of 0.40% of the respective Fund's average daily net assets. The Adviser receives
a monthly advisory fee from the Money Market Fund at an annual rate of 0.20% of
the Fund's average daily net assets. Pursuant to a Sub - Advisory Agreement
between the Adviser and Mastrapasqua and Associates, Inc. ("M&A") (the
"Sub-Adviser"), the Adviser may delegate certain of its advisory
responsibilities to the Sub-Adviser. For its services, M&A is paid by the
Adviser as follows: with respect to the Aggressive Growth and the Growth/Value
Funds, the Adviser (not the Fund) pays to M&A an annual fee, calculated daily
and paid monthly, of 0.50% on the first $100 million of such Funds' combined
average daily net assets plus 0.25% of such Funds' combined average daily net
assets in excess of $100 million for its services, and, with respect to each
other, the Adviser (not the Fund) pays M&A an annual fee, calculated on a daily
basis and paid monthly, of 0.03% of average daily net assets for its services.
 
Effective October 24, 1996, the administrator of the Funds is Forum
Administrative Services, LLC ("FAS") and for its services it receives a fee for
each Fund equal to the greater of $25,000 per year or 0.15% of the annual
average daily net assets of each Fund. Forum Financial Services, Inc. ("Forum")
acts as the Company's distributor pursuant to a separate Distribution Agreement
with the Company. Forum receives no compensation under that agreement. In
addition, certain legal expenses were charged to the Company by FAS amounting to
$1,931.
 
Prior to October 24, 1996, the administrator of the Funds was Forum, and for its
services received a fee for each Fund equal to the greater of $25,000 per year
or 0.15% of the annual average daily net assets of each Fund.
 
Forum Financial Corp. ("FFC"), an affiliate of FAS and Forum, serves as the
Funds' transfer agent and dividend disbursing agent, and for those services
receives an annual fee of $12,000 plus account and series charges. The Company
has adopted a shareholder service plan under which the Company pays FAS a
shareholder servicing fee at an annual rate of 0.25% of the daily net assets of
each Fund. FAS may pay any or all amounts of these payments to various
institutions which provide shareholder servicing to their customers. FFC also
serves as the Company's fund accountant and is compensated for those services at
an amount of $36,000 per year per Fund plus certain amounts based upon the
number and types of portfolio transactions within each Fund.
 
                                       19              TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
FEBRUARY 28, 1997 (Unaudited)
- - ----------------------------------------------------------------------------
 
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Adviser has voluntarily waived a portion of its fees and assumed certain
expenses of the Funds so that total expenses of the Funds would not exceed a
certain limitation. For the six months ended February 28, 1997, fees waived and
expenses reimbursed were as follows:
 
<TABLE>
<CAPTION>
                                                                  FEES WAIVED    EXPENSES REIMBURSED
                                                                 -------------  ----------------------
<S>                                                              <C>            <C>
Growth/Value Fund..............................................    $  12,628          $       --
Aggressive Growth Fund.........................................       39,197                  --
Intermediate Bond Fund.........................................       28,976              29,266
Kentucky Tax-Free Fund.........................................       28,478              33,637
Money Market Fund..............................................       70,760                  --
</TABLE>
 
NOTE 5. SECURITIES TRANSACTIONS
 
Cost of purchases and proceeds from sales (including maturities) of securities
(excluding short-term investments) during the six months ended February 28, 1997
were as follows:
 
<TABLE>
<CAPTION>
                                                            COST OF PURCHASES    PROCEEDS FROM SALES
                                                            ------------------  ---------------------
<S>                                                         <C>                 <C>
Growth/Value Fund.........................................     $  6,225,001         $   3,240,579
Aggressive Growth Fund....................................        2,689,176             1,164,824
Intermediate Bond Fund....................................        5,640,333             3,374,356
Kentucky Tax-Free Fund....................................               --             4,519,568
</TABLE>
 
For the period ended February 28, 1997, aggregate gross unrealized appreciation
for all securities in which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities in which there was an
excess of tax cost over value for Federal income tax purposes were as follows:
 
<TABLE>
<CAPTION>
                                                                                    NET APPRECIATION
                                  UNREALIZED APPRECIATION  UNREALIZED DEPRECIATION   (DEPRECIATION)
                                  -----------------------  -----------------------  -----------------
<S>                               <C>                      <C>                      <C>
Growth/Value Fund...............       $   3,848,668             $   379,118          $   3,469,550
Aggressive Growth Fund..........           1,773,754                 495,887              1,277,867
Intermediate Bond Fund..........              30,934                 275,970               (245,036)
Kentucky Tax-Free Fund..........              77,419                  36,977                 40,442
</TABLE>
 
NOTE 6. CONCENTRATION OF CREDIT RISK
 
The Kentucky Tax-Free Fund invests substantially all of its assets in debt
obligations of issuers located in the state of Kentucky. The issuers' abilities
to meet their obligations may be affected by Kentucky economic or political
developments.
 
                                       20              TRANS ADVISER FUNDS, INC.
<PAGE>
FINANCIAL HIGHLIGHTS
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                         GROWTH                  AGGRESSIVE               INTERMEDIATE
                                         VALUE                     GROWTH                     BOND
                                          FUND                      FUND                      FUND
SELECTED PER SHARE DATA AND     ------------------------  ------------------------  ------------------------
RATIOS FOR A                    SIX MONTHS      YEAR      SIX MONTHS      YEAR      SIX MONTHS      YEAR
SHARE OUTSTANDING THROUGHOUT       ENDED        ENDED        ENDED        ENDED        ENDED        ENDED
THE PERIOD                      2/28/97(f)   8/31/96(a)   2/28/97(f)   8/31/96(a)   2/28/97(f)   8/31/96(a)
                                -----------  -----------  -----------  -----------  -----------  -----------
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Net Asset Value, Beginning of
  Period......................   $   11.18    $   10.00    $   10.95    $   10.00    $    9.75    $   10.00
                                -----------  -----------  -----------  -----------  -----------  -----------
Investment Operations
  Net Investment Income
    (Loss)....................       (0.06)       (0.06)(c)      (0.08)      (0.11)(c)       0.31       0.57(c)
  Net Realized and Unrealized
    Gain (Loss) on
    Investments...............        2.22         1.24         1.63         1.06         0.11        (0.25)
                                -----------  -----------  -----------  -----------  -----------  -----------
Total from Investment
  Operations..................        2.16         1.18         1.55         0.95         0.42         0.32
                                -----------  -----------  -----------  -----------  -----------  -----------
Distributions from
  Net Investment Income.......       (0.03)      --            (0.03)      --            (0.31)       (0.57)
  Net Realized Gain on
    Investments...............      --           --           --           --           --           --
                                -----------  -----------  -----------  -----------  -----------  -----------
Total Distributions...........       (0.03)      --            (0.03)      --            (0.31)       (0.57)
                                -----------  -----------  -----------  -----------  -----------  -----------
Net Asset Value, End of
  Period......................   $   13.31    $   11.18    $   12.47    $   10.95    $    9.86    $    9.75
                                -----------  -----------  -----------  -----------  -----------  -----------
                                -----------  -----------  -----------  -----------  -----------  -----------
 
Total Return(b)............       42.67%(e)    11.80%       30.53%(e)     9.50%        8.79%(e)     3.23%
 
Ratio/Supplementary Data:
Net Assets at End of Period
  (000's omitted).............   $  20,685    $  15,108    $   9,424    $   6,550    $  16,028    $  13,357
Ratios to Average Net Assets:
  Expenses including
    reimbursement/waiver
    (e).......................        1.95%        1.95%        1.95%        1.95%        0.85%        0.68%
  Expenses excluding
    reimbursement/waiver
    (e).......................        2.09%        2.83%        2.95%        5.05%        1.65%        2.04%
  Net investment income (loss)
    including
    reimbursement/waiver
    (e).......................       (1.02)%      (0.62 )%      (1.61 )%      (1.26 )%       6.22%       6.31%
Average Commission Rate(d)....  $   0.0576   $   0.0700   $   0.0553   $   0.0800          N/A          N/A
Portfolio Turnover Rate.......       18.89%       21.12%       15.45%       15.70%       26.77%       12.38%
- - --------------------
</TABLE>
 
(a) See Note 1 of Notes to Financial Statements for date of commencement of
    operations.
 
(b) Total return calculation does not include sales charges.
 
(c) Using weighted average shares outstanding for the period.
 
(d) Amount represents the average commission per share paid to brokers on the
    purchase or sale of equity securities.
 
(e) Annualized.
 
(f)  Unaudited.
 
                                       21              TRANS ADVISER FUNDS, INC.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - ----------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                        KENTUCKY                   MONEY
                                        TAX-FREE                   MARKET
                                          FUND                      FUND
SELECTED PER SHARE DATA AND     ------------------------  ------------------------
RATIOS FOR A                    SIX MONTHS      YEAR      SIX MONTHS      YEAR
SHARE OUTSTANDING THROUGHOUT       ENDED        ENDED        ENDED        ENDED
THE PERIOD                      2/28/97(f)   8/31/96(a)   2/28/97(f)   8/31/96(a)
                                -----------  -----------  -----------  -----------
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Net Asset Value, Beginning of
  Period......................   $   10.06    $   10.00    $    1.00    $    1.00
                                -----------  -----------  -----------  -----------
Investment Operations
  Net Investment Income
    (Loss)....................        0.18         0.51(c)       0.03        0.05(c)
  Net Realized and Unrealized
    Gain (Loss) on
    Investments...............        0.25         0.06       --           --
                                -----------  -----------  -----------  -----------
Total from Investment
  Operations..................        0.43         0.57         0.03         0.05
                                -----------  -----------  -----------  -----------
Distributions from
  Net Investment Income.......       (0.26)       (0.51)       (0.03)       (0.05)
  Net Realized Gain on
    Investments...............      --           --           --           --
                                -----------  -----------  -----------  -----------
Total Distributions...........       (0.26)       (0.51)       (0.03)       (0.05)
                                -----------  -----------  -----------  -----------
Net Asset Value, End of
  Period......................   $   10.23    $   10.06    $    1.00    $    1.00
                                -----------  -----------  -----------  -----------
                                -----------  -----------  -----------  -----------
Total Return(b)............        8.90%(e)     5.80%        5.11%(e)     4.70%
 
Ratio/Supplementary Data:
Net Assets at End of Period
  (000's omitted).............   $  11,817    $  15,840    $  97,690    $  76,363
Ratios to Average Net Assets:
  Expenses including
    reimbursement/waiver
    (e).......................        0.85%        0.82%        0.65%        0.65%
  Expenses excluding
    reimbursement/waiver
    (e).......................        1.72%        1.65%        0.82%        0.99%
  Net investment income (loss)
    including
    reimbursement/waiver
    (e).......................        5.23%        5.30%        4.99%        4.94%
Average Commission Rate(d)....         N/A          N/A          N/A          N/A
Portfolio Turnover Rate.......        0.00%      145.12%         N/A          N/A
- - --------------------
</TABLE>
 
(a) See Note 1 of Notes to Financial Statements for date of commencement of
    operations.
 
(b) Total return calculation does not include sales charges.
 
(c) Using weighted average shares outstanding for the period.
 
(d) Amount represents the average commission per share paid to brokers on the
    purchase or sale of equity securities.
 
(e) Annualized.
 
(f)  Unaudited.
 
                                       22              

<PAGE>
                                COUNTRYWIDE INVESTMENT TRUST

PART C.           OTHER INFORMATION
                  -----------------

Item 24.          Financial Statements and Exhibits
- -------           ---------------------------------
   
                 (a)      (i)      Financial Statements included in Part A:

                                    Financial Highlights

                           (ii)     Financial Statements included in Part B:

                                    Schedule of Investments

                                    Statements of Assets and Liabilities

                                    Statements of Operations

                                    Statements of Changes in Net Assets

                                    Notes to Financial Statements

                                    Financial Highlights
    
                  (b) Exhibits:

                    (1) (i)         Registrant's Restated Agreement and
                                    Declaration of Trust, which was filed as an
                                    Exhibit to Registrant's Post-Effective
                                    Amendment No. 58, is hereby incorporated by
                                    reference.

                           (ii)     Amendment No. 1, dated December 8, 1994, to
                                    Registrant's Restated Agreement and
                                    Declaration of Trust, which was filed as an
                                    Exhibit to Registrant's Post-Effective
                                    Amendment No. 60, is hereby incorporated by
                                    reference.

                         (iii)      Amendment No. 2, dated January 31, 1995, to
                                    Registrant's Restated Agreement and
                                    Declaration of Trust, which was filed as an
                                    Exhibit to Registrant's Post-Effective
                                    Amendment No. 61, is hereby incorporated by
                                    reference.
   
                          (iv)      Amendment No. 3, dated February 28, 1997, 
                                    to Registrant's Restated Agreement and
                                    Declaration of Trust is filed herewith.
    
              (2)         (i)       Registrant's Bylaws, which was filed as an
                                    Exhibit to Registrant's Post-Effective
                                    Amendment No. 26, is hereby incorporated by
                                    reference.

                         (ii)       Amendment to Registrant's Bylaws adopted on
                                    January 10, 1984, which was filed as an
                                    Exhibit to Registrant's Post-Effective
                                    Amendment No. 35, is hereby incorporated by
                                    reference.



<PAGE>



                  (3) Voting Trust Agreements - None.

                  (4)      Specimen of Share Certificate, which was filed as
                           an Exhibit to Registrant's Post-Effective
                           Amendment No. 38, is hereby incorporated by
                           reference.
   
                  (5) (i)           Registrant's Management Agreement with
                                    Countrywide Investments, Inc. for the Short
                                    Term Government Income Fund is filed
                                    herewith.

                      (ii)          Registrant's Management Agreement with
                                    Countrywide Investments, Inc. for the
                                    Intermediate Term Government Income Fund is
                                    filed herewith.

                     (iii)          Registrant's Management Agreement with
                                    Countrywide Investments, Inc. for the
                                    Institutional Government Income Fund is 
                                    filed herewith.

                     (iv)           Registrant's Management Agreement with
                                    Countrywide Investments, Inc. for the
                                    Adjustable Rate U.S. Government Securities
                                    Fund is filed herewith.

                     (v)            Registrant's Management Agreement with
                                    Countrywide Investments, Inc. for the Global
                                    Bond Fund is filed herewith.

                     (vi)           Subadvisory Agreement between Countrywide
                                    Investments, Inc. and Rogge Global Partners
                                    plc for the Global Bond Fund is filed
                                    herewith.

                     (vii)          Form of Registrant's Management Agreement
                                    with Countrywide Investments, Inc. for the
                                    Money Market Fund and the Intermediate Bond
                                    Fund is filed herewith.

                  (6) (i)           Registrant's Underwriting Agreement with
                                    Countrywide Investments, Inc. is filed
                                    herewith.

                      (ii)          Form of Underwriter's Dealer Agreement is
                                    filed herewith.
    
                  (7)      Bonus, Profit Sharing, Pension or Similar
                           Contracts for the benefit of Directors or Officers
                           - None.

                  (8)  (i)         Custody Agreement with The Fifth Third Bank,
                                   the custodian for the Short Term Government
                                   Income Fund, the Intermediate Term Government
                                   Income Fund, the Institutional Government
                                   Income Fund, the Adjustable Rate U.S.


<PAGE>



                                    Government Securities Fund, the Money Market
                                    Fund and the  Intermediate  Bond Fund, which
                                    was  filed  as an  Exhibit  to  Registrant's
                                    Post- Effective  Amendment No. 49, is hereby
                                    incorporated by reference.

                      (ii)         Custody Agreement with The Northern Trust
                                   Company, the custodian for the Global Bond
                                   Fund, which was filed as an Exhibit to
                                   Registrant's Post-Effective Amendment No. 61,
                                   is hereby incorporated by reference.
   
                  (9) (i)          Transfer Agency, Dividend Disbursing,
                                   Shareholder Service and Plan Agency Agreement
                                   with Countrywide Fund Services, Inc. is filed
                                   herewith.

                      (ii)         Accounting and Pricing Services Agreement
                                   with Countrywide Fund Services, Inc. is filed
                                   herewith.

                      (iii)         Administration Agreement between Countrywide
                                    Investments, Inc. and Countrywide Fund
                                    Services, Inc. is filed herewith.

                       (iv)         License Agreement with Countrywide Credit
                                    Industries, Inc. is filed herewith.
    
                  (10)     Opinion and Consent of Goodwin, Procter & Hoar, which
                           was filed with Registrant's Rule 24f-2 Notice for the
                           fiscal  year  ended  September  30,  1996,  is hereby
                           incorporated by reference.

                  (11)     Consent of Arthur Andersen LLP is filed herewith.

                  (12)     Financial Statements Omitted from Item 23 - None.

                  (13)     Agreements or understandings concerning initial
                           capital - None.

                  (14)     (i)     Copy of the Midwest Group Individual
                                   Retirement Account Plan, including Schedule
                                   of Fees, which was filed as an Exhibit to
                                   Registrant's Post-Effective Amendment No. 45,
                                   is hereby incorporated by reference.

                          (ii)     Copy of the Midwest Group 403(b) Plan,
                                   including Schedule of Fees, which was filed
                                   as an Exhibit to Registrant's Post-Effective
                                   Amendment No. 49, is hereby incorporated by
                                   reference.





<PAGE>



                       (iii)        Copy of the Midwest Group Prototype Defined
                                    Contribution Plan, which was filed as an
                                    Exhibit to Post-Effective Amendment No. 4 of
                                    Leeb Personal FinanceTM Investment Trust
                                    (File No. 811-6374), is hereby incorporated
                                    by reference.
   
                  (15)  (i)         Registrant's Plans of Distribution Pursuant
                                    to Rule 12b-1 are filed herewith.

                       (ii)         Form of Sales Agreement for Money Market
                                    Funds is filed herewith.

                      (iii)        Form of Administration Agreement with respect
                                   to the administration of shareholder accounts
                                   is filed herewith.

                  (16)     Computations of each performance quotation
                           provided in response to Item 22, which were filed
                           as an Exhibit to Registrant's Post-Effective
                           Amendment No. 43, are hereby incorporated by
                           reference.

                  (17)     Financial Data Schedules

                           (i)      Financial Data Schedules for Short Term
                                    Government Income Fund, Intermediate Term
                                    Government Income Fund, Institutional
                                    Government Income Fund, Adjustable Rate U.S.
                                    Government Securities Fund and Global Bond
                                    Fund, which were filed as Exhibits to
                                    Registrant's Post-Effective Amendment No. 
                                    65, are hereby incorporated by reference.

                           (ii)     Financial Data Schedule for Money Market 
                                    Fund is filed herewith.

                          (iii)     Financial Data Schedule for Intermediate 
                                    Bond Fund is filed herewith.

                  (18)     Amended Rule 18f-3 Plan Adopted With Respect to
                           the Multiple Class Distribution System, which was
                           filed as an Exhibit to Registrant's Post-Effective
                           Amendment No. 65, is hereby incorporated by
                           reference.

                  (19)     Powers of Attorney for Donald L. Bogdon, M.D.,
                           Angelo R. Mozilo, John F. Seymour, Jr. and
                           Sebastiano Sterpa are filed herewith.
    



<PAGE>



Item 25.          Persons Controlled by or Under Common Control with the
- -------           ------------------------------------------------------
                  Registrant
                  ----------

                  None.

Item 26.          Number of Holders of Securities (as of March 31, 1997)
- -------           -----------------------------------------------------------
                  Title of Class                                Number of
                  --------------                                Record
                                                                Holders
                                                               ----------
      
                  Short Term Government Income Fund              6,189

                  Intermediate Term Government Income Fund
                           Class A Shares                        1,918
                           Class C Shares                           61

                  Institutional Government Income Fund             592

                  Adjustable Rate U.S. Government Securities Fund
                           Class A Shares                            519
                           Class C Shares                             40

                  Global Bond Fund
                           Class A Shares                            327
                           Class C Shares                            139

                  Money Market Fund                                    0

                  Intermediate Bond Fund                               0
    

Item 27.          Indemnification
- -------           ---------------

                  Article VI of Registrant's  Restated Agreement and Declaration
                  of Trust provides for indemnification of officers and Trustees
                  as follows:

         "Section 6.4 Indemnification of Trustees,
      ----------- ---------------------------
         Officers, etc.  The Trust shall indemnify each of its
     -------------
         Trustees  and  officers  (including  persons  who serve at the  Trust's
         request as directors,  officers or trustees of another  organization in
         which  the  Trust  has  any  interest  as a  shareholder,  creditor  or
         otherwise, and including persons who served as directors or officers of
         Midwest  Income  Investment  Company)  (hereinafter  referred  to  as a
         "Covered Person") against all liabilities, including but not limited to
         amounts paid in satisfaction of judgments, in compromise or as fines


<PAGE>



         and penalties,  and expenses,  including  reasonable  accountants'  and
         counsel fees,  incurred by any Covered  Person in  connection  with the
         defense or disposition of any action, suit or other proceeding, whether
         civil or criminal,  before any court or  administrative  or legislative
         body, in which such Covered  Person may be or may have been involved as
         a party or  otherwise or with which such person may be or may have been
         threatened, while in office or thereafter, by reason of being or having
         been such a Trustee or officer, director or trustee, and except that no
         Covered Person shall be indemnified  against any liability to the Trust
         or its  Shareholders  to which such Covered  Person would  otherwise be
         subject by reason of willful  misfeasance,  bad faith, gross negligence
         or  reckless  disregard  of the duties  involved in the conduct of such
         Covered  Person's  office   ("disabling   conduct").   Anything  herein
         contained to the contrary  notwithstanding,  no Covered Person shall be
         indemnified for any liability to the Trust or its Shareholders to which
         such  Covered  Person  would  otherwise  be subject  unless (1) a final
         decision on the merits is made by a court or other body before whom the
         proceeding was brought that the Covered  Person to be  indemnified  was
         not liable by reason of  disabling  conduct  or, (2) in the  absence of
         such a  decision,  a  reasonable  determination  is made,  based upon a
         review of the facts,  that the Covered  Person was not liable by reason
         of  disabling  conduct,  by (a) the vote of a  majority  of a quorum of
         Trustees who are neither "interested persons" of the Company as defined
         in the  Investment  Company Act of 1940 nor  parties to the  proceeding
         ("disinterested,  non-party  Trustees"),  or (b) an  independent  legal
         counsel in a written opinion.

         Section 6.5                Advances of Expenses.  The Trust
         -----------                --------------------
         shall advance  attorneys' fees or other expenses  incurred by a Covered
         Person in defending a proceeding,  upon the undertaking by or on behalf
         of the  Covered  Person to repay the  advance  unless it is  ultimately
         determined that such Covered Person is entitled to indemnification,  so
         long as one of the following  conditions is met: (i) the Covered Person
         shall  provide  security for his  undertaking,  (ii) the Trust shall be
         insured  against  losses arising by reason of any lawful  advances,  or
         (iii) a majority of a quorum of the disinterested non-party Trustees of
         the Trust, or an independent legal counsel in a written opinion,  shall
         determine,  based on a review of readily available facts (as opposed to
         a full  trial-type  inquiry),  that there is reason to believe that the
         Covered Person ultimately will be found entitled to indemnification.




<PAGE>



         Section 6.6                Indemnification Not Exclusive, etc.  The
         -----------                -----------------------------------
         right of  indemnification  provided  by this  Article  VI shall  not be
         exclusive  of or  affect  any other  rights  to which any such  Covered
         Person may be  entitled.  As used in this  Article  VI,  "Trust"  shall
         include  Midwest  Income  Investment  Company,  "Covered  Person" shall
         include  such  person's  heirs,   executors  and   administrators,   an
         "interested  Covered  Person" is one against  whom the action,  suit or
         other  proceeding  in  question  or  another  action,   suit  or  other
         proceeding  on the same or similar  grounds is then or has been pending
         or threatened,  and a  "disinterested"  person is a person against whom
         none of such actions,  suits or other  proceedings  or another  action,
         suit or other  proceeding on the same or similar grounds is then or has
         been pending or  threatened.  Nothing  contained in this article  shall
         affect any rights to  indemnification  to which personnel of the Trust,
         other than Trustees and officers,  and other persons may be entitled by
         contract or otherwise under law, nor the power of the Trust to purchase
         and maintain liability insurance on behalf of any such person."

         The Registrant maintains a standard mutual fund and investment advisory
         professional and directors and officers  liability  policy.  The policy
         provides  coverage to the  Registrant,  its  Trustees  and officers and
         Countrywide  Investments,  Inc.  (the  "Adviser"),  in its  capacity as
         investment adviser and principal  underwriter,  among others.  Coverage
         under the policy includes losses by reason of any act, error, omission,
         misstatement,  misleading  statement,  neglect  or breach of duty.  The
         Registrant  may not pay for insurance  which  protects the Trustees and
         officers  against  liabilities  rising  from action  involving  willful
         misfeasance,  bad faith,  gross negligence or reckless disregard of the
         duties involved in the conduct of their offices.

         The Advisory  Agreements provide that each investment adviser shall not
         be liable for any error of  judgment  or mistake of law or for any loss
         suffered by the Registrant in connection  with the matters to which the
         Agreements  relate,  except a loss resulting from willful  misfeasance,
         bad  faith  or  gross  negligence  of  an  investment  adviser  in  the
         performance  of its  duties  or  from  the  reckless  disregard  by the
         investment  adviser of its obligations under the Agreement.  Registrant
         will  advance   attorneys'  fees  or  other  expenses  incurred  by  an
         investment  adviser in defending a proceeding,  upon the undertaking by
         or on behalf of the  investment  adviser to repay the advance unless it
         is ultimately  determined  that the  investment  adviser is entitled to
         indemnification.


<PAGE>




         The Underwriting  Agreement with the Adviser provides that the Adviser,
         its directors,  officers,  employees,  shareholders and control persons
         shall not be liable for any error of  judgment or mistake of law or for
         any loss suffered by Registrant in connection with the matters to which
         the  Agreement   relates,   except  a  loss   resulting   from  willful
         misfeasance,  bad faith or gross  negligence on the part of any of such
         persons in the performance of the Adviser's duties or from the reckless
         disregard  by any of such  persons  of the  Adviser's  obligations  and
         duties under the Agreement.  Registrant will advance attorneys' fees or
         other  expenses  incurred by any such person in defending a proceeding,
         upon the  undertaking  by or on  behalf  of such  person  to repay  the
         advance if it is ultimately determined that such person is not entitled
         to indemnification.

Item 28.          Business and Other Connections of the Investment
- -------           ------------------------------------------------
                  Advisers
                  --------
   
          A.      Countrywide Investments, Inc. (the "Adviser") is a
                  registered investment adviser providing investment
                  advisory services to the Short Term Government Income
                  Fund, the Intermediate Term Government Income Fund, the
                  Institutional Government Income Fund and the Adjustable
                  Rate U.S. Government Securities Fund and investment
                  management supervisory services to the Global Bond
                  Fund.  The Adviser acts as the investment adviser to
                  six series of Countrywide Tax-Free Trust and to four
                  series of Countrywide Strategic Trust, both of which
                  are registered investment companies.  The Adviser also
                  acts as the subadviser to the Capitol Square Bond Fund
                  series of Capitol Square Funds, a registered investment
                  company.  The Adviser provides investment advisory
                  services to individual and institutional accounts and
                  is a registered broker-dealer.

                  The   following   list  sets  forth  the  business  and  other
                  connections  of the directors  and  executive  officers of the
                  Adviser.   Unless  otherwise  noted(*),  the  address  of  the
                  corporations  listed below is 312 Walnut  Street,  Cincinnati,
                  Ohio 45202.

                  *The address of each  corporation  is 4500 Park Granada  Road,
                  Calabasas, California 91302.




<PAGE>



                  (1)      Angelo R. Mozilo - Chairman and a Director of the
                           Adviser.

                           (a)      Chairman and a Trustee of Countrywide
                                    Strategic Trust,Countrywide Investment Trust
                                    and Countrywide Tax-Free Trust, registered
                                    investment companies.

                           (b)      Chairman  and  a  Director  of   Countrywide
                                    Financial   Services,   Inc.,   a  financial
                                    services company, Countrywide Fund Services,
                                    Inc.,   a   registered    transfer    agent,
                                    Countrywide   Servicing  Exchange,*  a  loan
                                    servicing  broker  and  Countrywide  Capital
                                    Markets, Inc.,* a parent company.

                           (c)      Vice  Chairman,  Director and Executive Vice
                                    President of Countrywide  Credit Industries,
                                    Inc.,*  a  holding  company  which  provides
                                    residential    mortgages    and    ancillary
                                    financial products and services.

                           (d)      A Director of Countrywide Home Loans, Inc.,*
                                    a  residential   mortgage   lender  and  CTC
                                    Foreclosure    Services    Corporation,*   a
                                    foreclosure trustee.

                           (e)      A Director of  LandSafe,  Inc.* and Chairman
                                    and   a   director   of   various   Landsafe
                                    subsidiaries   which   provide   residential
                                    mortgage title and closing services.

                           (f)      Chairman and CEO of Countrywide Securities
                                    Corporation,* a registered broker-dealer.

                           (g)      Vice Chairman of CWM Mortgage Holdings,
                                    Inc.,* a real estate investment trust.

                  (2)      Robert H. Leshner - President and a Director of
                           the Adviser.

                           (a)      President and a Trustee of Countrywide
                                    Strategic Trust, Countrywide Investment 
                                    Trust and Countrywide Tax-Free Trust.

                           (b)      President and a Director of Countrywide
                                    Financial Services, Inc.

                           (c)      Vice Chairman and a Director of Countrywide
                                    Fund Services, Inc.

                           (d)      President and Director of Leshner Financial
                                    Services, Inc., a registered investment
                                    adviser and registered broker-dealer until
                                    December 1994.


<PAGE>




                  (3)      Andrew S. Bielanski - A Director of the Adviser.

                           (a)      A Director of Countrywide Financial Services
                                    Inc., Countrywide Fund Services, Inc. and
                                    Countrywide  Agency,   Inc.,*  an  insurance
                                    agency.

                           (b)      Managing Director - Marketing of Countrywide
                                    Credit Industries, Inc. and Countrywide Home
                                    Loans, Inc.

                  (4)      Thomas H. Boone - A Director of the Adviser.

                           (a)      A   Director   of   Countrywide    Financial
                                    Services,  Inc.,  Countrywide Fund Services,
                                    Inc.,  Countrywide Agency, Inc., Countrywide
                                    Tax  Services  Corporation,*  a  residential
                                    mortgage    tax   service    provider    and
                                    Countrywide Lending  Corporation,* a lending
                                    institution.

                           (b)      Managing Director- Chief Loan Administration
                                    Officer of Countrywide Credit Industries,
                                    Inc. and Countrywide Home Loans, Inc.

                           (c)      A Director and Executive Vice President of
                                    CWABS, Inc.,* an asset-backed securities
                                    issuer and CWMBS, Inc.,* a mortgage-backed
                                    securities issuer.

                           (d)      CEO and a Director of CTC Foreclosure
                                    Services Corporation.

                  (5)      Marshall M. Gates - A Director of the Adviser.

                           (a)      A Director of Countrywide Financial Services
                                    Inc., Countrywide Fund Services, Inc. and
                                    Countrywide Agency, Inc.

                           (b)      Managing Director- Production of Countrywide
                                    Credit Industries, Inc. and Countrywide Home
                                    Loans, Inc.

                           (c)      President  and a Director of Second  Charter
                                    Reinsurance    Corporation,*   a   mortgage,
                                    property and casualty reinsurance agency and
                                    Charter Reinsurance Corporation,* a mortgage
                                    reinsurance agency.

                  (6)      David Sambol - A Director of the Adviser.

                           (a)      A Director of Countrywide Financial Services
                                    Inc., Countrywide Fund Services, Inc. and
                                    Countrywide Securities Corporation.



<PAGE>



                           (b)      Managing Director - Capital Markets of
                                    Countrywide Credit Industries, Inc. and
                                    Countrywide Home Loans, Inc.

                           (c)      CEO, President and a Director of Countrywide
                                    Capital Markets, Inc. and Countrywide
                                    Servicing Exchange,* a loan servicing broker

                  (7)      John J. Goetz - Vice President and Chief
                           Investment Officer of the Adviser.

                           (a)      Vice President of Countrywide Financial
                                    Services, Inc. until February 1997.

                  (8)      Maryellen Peretzky - Vice President-
                           Administration, Human Resources and Operations of
                           the Adviser.

                           (a)      Vice President-Administration, Human
                                    Resources and Operations of Countrywide
                                    Financial Services, Inc. and Countrywide 
                                    Fund Services, Inc.

                           (b)      Assistant Secretary of The Tuscarora
                                    Investment Trust and The Gannett Welsh &
                                    Kotler Funds.

                  (9)      Sharon L. Karp - Vice President-Marketing of the
                           Adviser.

                           (a)      Vice President of Countrywide Financial
                                    Services, Inc. until February 1997.

                  (10)     John F. Splain - Secretary and General Counsel of
                           the Adviser.

                           (a)     Vice President, Secretary and General Counsel
                                   of Countrywide Fund Services, Inc.

                           (b)      Secretary and General Counsel of Countrywide
                                    Financial Services, Inc.

                           (c)      Secretary of Countrywide Tax-Free Trust,
                                    Countrywide Investment Trust, Countrywide
                                    Strategic Trust, Brundage, Story and Rose
                                    Investment Trust, Williamsburg Investment
                                    Trust, Markman MultiFund Trust, The 
                                    Tuscarora Investment Trust, PRAGMA 
                                    Investment Trust, Maplewood Investment 
                                    Trust, a series company,
                                    and The Thermo Opportunity Fund, Inc.,
                                    registered investment companies.





<PAGE>



                           (d)      Assistant Secretary of Fremont Mutual Funds,
                                    Inc., Schwartz Investment Trust, The Gannett
                                    Welsh & Kotler Funds,  Capitol Square Funds,
                                    Interactive  Investments,   Dean  Family  of
                                    Funds  and The New  York  State  Opportunity
                                    Funds, registered investment companies.

                           (e)      Secretary of Leeb Personal Finance(TM)
                                    Investment Trust, a registered investment
                                    company, until November 1996.

                  (11)     Robert G. Dorsey - Treasurer of the Adviser.

                           (a)      President and Treasurer of Countrywide Fund
                                    Services, Inc.

                           (b)      Vice President-Finance and Treasurer of
                                    Countrywide Financial Services, Inc.

                           (c)      Vice President of Countrywide Tax-Free Trust
                                    Countrywide Investment Trust, Countrywide
                                    Strategic Trust, Brundage, Story and Rose
                                    Investment Trust, Markman MultiFund Trust,
                                    PRAGMA Investment Trust, Maplewood 
                                    Investment Trust, a series company, The 
                                    Thermo Opportunity Fund, Inc., Capitol 
                                    Square Funds, Dean Family of Funds and 
                                    The New York State Opportunity Funds.

                           (d)      Assistant  Vice  President  of  Williamsburg
                                    Investment Trust, Schwartz Investment Trust,
                                    Fremont  Mutual  Funds,  Inc.,  The  Gannett
                                    Welsh  &   Kotler   Funds,   The   Tuscarora
                                    Investment     Trust     and     Interactive
                                    Investments.

                           (e)      Vice President of Leeb Personal Finance(TM)
                                    Investment Trust until November 1996.

                  (12)     Susan F. Flischel - Vice President-Investments of
                           the Adviser

                  (13)     Scott Weston - Assistant Vice President-
                           Investments of the Adviser.

         B.       Rogge Global Partners plc ("Rogge") is a registered
                  investment adviser providing investment advisory
                  services to the Global Bond Fund.  Rogge also acts as
                  the investment adviser to the Manager's Global Bond
                  Fund and the Pace Global Fixed Income Investments Fund,
                  registered investment companies, and other
                  institutional clients.  The following are the directors
                  of Rogge.  The address of Rogge is 5-6 St. Andrew's
                  Hill, London, England EC4V-5BY.




<PAGE>



                  (1)      Olaf Rogge

                  (2)      John Graham

                  (3)      Richard Bell

                  (4)      Adrian James

                  (5)      David Russell

                           (a)      A Director  and  consultant  to United Asset
                                    Management  Corporation,  One  International
                                    Place,   Boston,   Massachusetts  02110,  an
                                    institutional investment management service
                                    provider.

Item 29.          Principal Underwriters
- -------           ----------------------

                  (a)      Countrywide Investments, Inc. also acts as 
                           underwriter for Countrywide Strategic Trust, 
                           Countrywide Tax-Free Trust, The Milestone Funds and 
                           Brundage, Story and Rose Investment Trust.  Unless 
                           otherwise indicated(*), the address of the persons 
                           named below is 312 Walnut Street, Cincinnati, 
                           Ohio 45202.

                           *The address is 4500 Park Granada Road, Calabasas,
                            California 91302.

                                            Position           Position
                                              with               with
                  (b)  Name                Underwriter         Registrant
                       -----               -----------         -----------
                    * Angelo R. Mozilo       Chairman and      Chairman and
                                             Director          Trustee

                      Robert H. Leshner      President         President
                                             and Director      and
                                                               Trustee

                    * Andrew S. Bielanski    Director          None

                    * Thomas H. Boone        Director          None

                    * Marshall M. Gates      Director          None

                    * David Sambol           Director          None

                      John J. Goetz          Vice              None
                                             President and
                                             Chief
                                             Investment
                                             Officer

                     Maryellen Peretzky      Vice President-   None
                                             Administration,
                                             Human Resources
                                             and Operations

                     Sharon L. Karp          Vice President-   None
                                             Marketing



<PAGE>




                    John F. Splain          Secretary and      Secretary
                                            General Counsel

                    Robert G. Dorsey        Treasurer          Vice
                                                               President

                    Susan F. Flischel       Vice President-    None
                                            Investments

                    Scott Weston            Assistant Vice     None
                                            President-
                                            Investments
    

                  (c)      None

Item 30.                   Location of Accounts and Records
- -------                    --------------------------------
                           Accounts,  books and other  documents  required to be
                           maintained by Section 31(a) of the Investment Company
                           Act of 1940 and the Rules promulgated thereunder will
                           be maintained by the Registrant.

Item 31.                   Management Services Not Discussed in Parts A or B
- -------                    -------------------------------------------------
                           None.

Item 32.                   Undertakings
- -------                    ------------
                  (a)      Not Applicable.
   
                  (b)      Not Applicable.
    
                  (c)      The Registrant undertakes that, if so requested, it
                           will  furnish  each  person to whom a prospectus is
                           delivered with a copy of  Registrant's latest annual
                           report to shareholders without charge.

                  (d)      Insofar as indemnification for liabilities arising
                           under the Securities Act of 1933 may be permitted
                           to trustees, officers and controlling persons of
                           Countrywide Investment Trust pursuant to the
                           provisions of Massachusetts law and the Restated
                           Agreement and Declaration of Trust of Countrywide
                           Investment Trust or the Bylaws of Countrywide 
                           Investment Trust, or otherwise, the Registrant has 
                           been advised that in the opinion of the Securities 
                           and Exchange Commission such indemnification is
                           against public policy as expressed in the Act and
                           is, therefore, unenforceable.  In the event that a
                           claim for indemnification against such liabilities
                           (other than the payment by the Registrant of


<PAGE>



                           expenses  incurred  or paid by a trustee,  officer or
                           controlling person of Countrywide Investment 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
                           being registered,  the Registrant will, unless in the
                           opinion of its counsel the matter has been settled by
                           controlling   precedent,   submit   to  a  court   of
                           appropriate  jurisdiction  the question  whether such
                           indemnification  by it is  against  public  policy as
                           expressed  in the Act and  will  be  governed  by the
                           final adjudication of such issue.

                  (e)      The Registrant undertakes that, within five
                           business days after receipt of a written
                           application by shareholders holding in the
                           aggregate at least 1% of the shares then
                           outstanding or shares then having a net asset
                           value of $25,000, whichever is less, each of whom
                           shall have been a shareholder for at least six
                           months prior to the date of application
                           (hereinafter the "Petitioning Shareholders"),
                           requesting to communicate with other shareholders
                           with a view to obtaining signatures to a request
                           for a meeting for the purpose of voting upon
                           removal of any Trustee of the Registrant, which
                           application shall be accompanied by a form of
                           communication and request which such Petitioning
                           Shareholders wish to transmit, Registrant will:

                           (i)  provide such Petitioning Shareholders with
                                access to a list of the names and addresses
                                of all shareholders of the Registrant; or

                         (ii)   inform such Petitioning Shareholders of the
                                approximate number of shareholders and the
                                estimated costs of mailing such
                                communication, and to undertake such mailing
                                promptly after tender by such Petitioning
                                Shareholders to the Registrant of the
                                material to be mailed and the reasonable
                                expenses of such mailing.



<PAGE>
   


                                        SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this  Registration  Statement  to be  signed on its  behalf by the  undersigned,
thereunto duly authorized, in the City of Cincinnati, State of Ohio, on the 6th
day of June, 1997.

                                           COUNTRYWIDE INVESTMENT TRUST



                                           By: /s/ John F. Splain
                                               ------------------------
                                               JOHN F. SPLAIN
                                               Attorney-in-Fact

         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 6th day of June, 1997.

*ANGELO R. MOZILO                           Chairman & Trustee
                   
                        
/s/ Robert H. Leshner                        President &
- ----------------------                       Trustee     
ROBERT H. LESHNER                        

/s/ Mark J. Seger                            Treasurer
- -----------------------
MARK J. SEGER

*DONALD L. BOGDON, M.D.                      Trustee

JOHN R. DELFINO                              Trustee

*H. JEROME LERNER                            Trustee

*OSCAR P. ROBERTSON                          Trustee

*JOHN F. SEYMOUR, JR.                        Trustee

*SEBASTIANO STERPA                           Trustee


By: /s/ John F. Splain
- ----------------------
JOHN F. SPLAIN
Attorney-In-Fact
June 6, 1997

    


                                 EXHIBIT INDEX

1.        Amendment No. 3 to Restated Agreement and Declearation of Trust

2.        Management Agreement with Countrywide Investments, Inc. for the
          Short Term Government Income Fund

3.        Management Agreement with Countrywide Investments, Inc. for the
          Intermediate Term Government Income Fund

4.        Management Agreement with Countrywide Investments, Inc. for the
          Institutional Government Income Fund

5.        Management Agreement with Countrywide Investments, Inc. for the
          Adjustable Rate U.S. Government Securities Fund

6.        Management Agreement with Countrywide Investments, Inc. for the
          Global Bond Fund

7.        Subadvisory Agreement between Countrywide Investments, Inc. and
          Rogge Global Partners plc for the Global Bond Fund

8.        Form of Management Agreement with Countrywide Investments, Inc.
          for the Money Market Fund and the Intermediate Bond Fund

9.        Underwriting Agreement with Countrywide Investments, Inc.

10.       Form of Underwriter's Dealer Agreement

11.       Transfer Agency, Dividend Disbursing, Shareholder Service and
          Plan Agency Agreement with Countrywide Fund Services, Inc.

12.       Accounting and Pricing Services Agreement with Countrywide Fund
          Services, Inc.

13.       Administration Agreement between Countrywide Investments, Inc.
          and Countrywide Fund Services, Inc.

14.       License Agreement with Countrywide Credit Industries, Inc.

15.       Consent of Arthur Andersen LLP

16.       Consent of KPMG Peat Marwick LLP

17.       Plans of Distribution Pursuant to Rule 12b-1

18.       Form of Sales Agreement for Shares of Money Market Funds

19.       Form of Administration Agreement for Administration of
          Shareholder Accounts

20.       Financial Data Schedule for Money Market Fund

21.       Financial Data Schedule for Intermediate Bond Fund

22.       Powers of Attorney for Donald L. Bodgon, M.D., Angelo R. Mozilo,
          John F. Seymour, Jr. and Sebastiano Sterpa


<PAGE>





                                  MIDWEST TRUST


         AMENDMENT NO. 3 TO RESTATED AGREEMENT AND DECLARATION OF TRUST


         The undersigned  hereby certifies that he is the duly elected Secretary
of Midwest Trust and that, pursuant to Section 4.1 of the Restated Agreement and
Declaration of Trust of Midwest Trust, the Trustees,  at a meeting on January 8,
1997, at which a quorum was present, adopted the following resolutions:

         RESOLVED, that the name of Midwest Trust be changed to
         "Countrywide Investment Trust"; and

         FURTHER RESOLVED,  that the Trust's Restated  Agreement and Declaration
         of Trust and  other  Trust  documents  and  records,  as  necessary  or
         appropriate,  be amended,  as of the consummation of the acquisition of
         Leshner  Financial,  Inc. by Countrywide  Credit  Industries,  Inc., to
         reflect the change in name of the Trust; and

         FURTHER RESOLVED,  that the officers of the Trust are hereby authorized
         to take such  further  actions as  necessary  to effect the  purpose of
         these resolutions.


         The  undersigned  certifies  that the  actions to effect the  foregoing
Amendment were duly taken in the manner  provided by the Restated  Agreement and
Declaration of Trust,  that said Amendment is to be effective as of February 28,
1997, and that he is causing this Certificate to be signed and filed as provided
in Section 7.4 of the Restated Agreement and Declaration of Trust.

         WITNESS my hand this 28th day of February, 1997.



                                         /s/ John F. Splain
                                        ------------------------------
                                         John F. Splain, Secretary

















                              MANAGEMENT AGREEMENT

TO:      COUNTRYWIDE INVESTMENTS, INC.
         312 Walnut Street
         Cincinnati, Ohio  45202

Dear Sirs:

         Countrywide  Investment Trust (hereinafter  referred to as the "Trust")
herewith confirms our agreement with you.

         The Trust has been organized to engage in the business of an investment
company.  The Short Term Government Income Fund (the "Fund") has
been  established as a series of the Trust. You have been selected to act as the
investment  adviser of the Fund and to provide certain other  services,  as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions  hereinafter  set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.

1.       ADVISORY SERVICES

         You will regularly  provide the Fund with such investment advice as you
in your  discretion  deem  advisable  and will furnish a  continuous  investment
program for the Fund consistent with its investment objectives and policies. You
will determine what  securities  shall be purchased for the Fund, what portfolio
securities  shall be held or sold by the Fund,  and what  portion  of the Fund's
assets  shall  be held  uninvested,  subject  always  to the  Fund's  investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect,  and subject  further,  to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies  thereof.  You will  advise and assist the  officers of the
Trust in taking  such steps as are  necessary  or  appropriate  to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Fund.

2.       ALLOCATION OF CHARGES AND EXPENSES

         You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers,  directors,  stockholders or employees of
your  corporation  and will make  available,  without  expense to the Fund,  the
services of such of your  employees as may duly be elected  officers or trustees
of  the  Trust,  subject  to  their  individual  consent  to  serve  and  to any
limitations  imposed by law.  The  compensation  and  expenses of any  officers,
trustees and employees of the Trust who are not officers,  directors,  employees
or stockholders of your corporation will be paid by the Trust.
                                                                            
                                                    - 1 -


<PAGE>



         You  will  pay all  advertising  and  promotion  expenses  incurred  in
connection with the sale or distribution of the Fund's shares to the extent such
expenses  are not  assumed by the Fund under the Trust's  Plans of  Distribution
Pursuant to Rule 12b-1.

         The  Fund  will  also be  responsible  for  the  payment  of all  other
operating expenses of the Fund, including fees and expenses incurred by the Fund
in connection with  membership in investment  company  organizations,  brokerage
fees and  commissions,  legal,  auditing and  accounting  expenses,  expenses of
registering shares under federal and state securities laws,  insurance expenses,
taxes or  governmental  fees,  fees and  expenses  of the  custodian,  transfer,
shareholder  service and dividend  disbursing  agent and  accounting and pricing
agent  of the  Fund,  expenses  including  clerical  expenses  of  issue,  sale,
redemption  or  repurchase  of  shares  of the Fund,  the fees and  expenses  of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing  reports  and  notices to  shareholders,  the cost of  printing  or
preparing  prospectuses  for  delivery to the Fund's  shareholders,  the cost of
printing or preparing stock  certificates or any other documents,  statements or
reports  to  shareholders,   expenses  of   shareholders'   meetings  and  proxy
solicitations,  such  extraordinary  or  nonrecurring  expenses  as  may  arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's  officers and trustees  with respect  thereto,  or any other expense not
specifically   described  above  incurred  in  the  performance  of  the  Fund's
obligations.  All other expenses not assumed by you herein  incurred by the Fund
in connection  with the  organization,  registration of shares and operations of
the Fund will be borne by the Fund.

3.       COMPENSATION OF THE ADVISER

         For all of the services to be rendered and payments made as provided in
this  Agreement,  the Fund will pay you as of the last day of each month,  a fee
equal to the annual rate of .50% of the average value of the daily net assets of
the  Fund  up  to  $50,000,000;   .45%  of  such  assets  from   $50,000,000  to
$150,000,000;   .40%  of  such  assets  from   $150,000,000   to  and  including
$250,000,000; and .375% of such assets in excess of $250,000,000.

         The total fees  payable  during each of the first and second  halves of
each fiscal year of the Trust shall not exceed the semiannual total of the daily
fee  accruals  requested  by you during the  applicable  six month  period.  The
average  value of net assets  shall be  determined  pursuant  to the  applicable
provisions  of the  Declaration  of Trust of the  Trust or a  resolution  of the
Board, if required.  If, pursuant to such provisions,  the  determination of net
asset value of the Fund is suspended for any


                                                     - 2 -


<PAGE>



particular  business day, then for the purposes of this paragraph,  the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business  day, or as of such other time as
the value of the Fund's net assets may lawfully be  determined,  on that day. If
the determination of the net asset value of the Fund's shares has been suspended
for a period including such month, your compensation  payable at the end of such
month  shall be computed on the basis of the value of the net assets of the Fund
as last determined (whether during or prior to such month).

         Your  compensation  with respect to each additional series of the Trust
effectively  registered  for sale in a public  offering  after  the date of this
Agreement shall be determined by the Board, including a majority of the Trustees
who are not  "interested  persons" (as defined in the Investment  Company Act of
1940) of you or of the Trust, and approved pursuant to the provisions of Section
15 of the Investment Company Act of 1940.

4.       EXECUTION OF PURCHASE AND SALE ORDERS

         In connection  with purchases or sales of portfolio  securities for the
account of the Fund, it is  understood  that you will arrange for the placing of
all orders for the  purchase  and sale of  portfolio  securities  for the Fund's
accounts  with  brokers or dealers  selected  by you,  subject to review of this
selection  by the  Board  from  time to time.  You will be  responsible  for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed  at all  times to seek for the  Fund  the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services provided by the broker or dealer.

         You should  generally seek favorable  prices and commission  rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution,  you are  authorized  to select  brokers or dealers who also  provide
brokerage and research  services (as those terms are defined in Section 28(e) of
the Securities  Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion.  You are authorized to pay a broker or
dealer who  provides  such  brokerage  and research  services a  commission  for
executing a portfolio transaction which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
you  determine in good faith that the amount of the  commission is reasonable in
relation to the value of the  brokerage  and research  services  provided by the
executing broker or dealer. The determination may be viewed in terms of either a

                                                     - 3 -


<PAGE>



particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that,  although the information may be useful to the Fund and you, it
is not  possible to place a dollar  value on such  information.  The Board shall
periodically  review  the  commissions  paid  by the  Fund to  determine  if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.

         Consistent with the Rules of Fair Practice of the National  Association
of Securities Dealers,  Inc., and subject to seeking best qualitative execution,
you may give  consideration  to sales of  shares  of the Fund as a factor in the
selection of brokers and dealers to execute Fund portfolio transactions.

         If any occasion should arise in which you give any advice to clients of
yours  concerning  the  shares of the Fund,  you will act  solely as  investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this  Agreement are not to be deemed to be exclusive and
it is understood  that you may render  investment  advice,  management and other
services to others.

5.       LIMITATION OF LIABILITY OF ADVISER

         You  (including  your  directors,  officers,  shareholders,  employees,
control persons and affiliates of any thereof) shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement  relates,  except a loss resulting from
willful  misfeasance,  bad  faith  or  gross  negligence  on  your  part  in the
performance  of  your  duties  or from  the  reckless  disregard  by you of your
obligations and duties under this Agreement ("disabling conduct").  However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the  proceeding was brought that
you were not liable by reason of  disabling  conduct,  or (2) in the  absence of
such a decision, a reasonable  determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct,  by (a) the vote
of a majority of a quorum of trustees  who are neither  "interested  persons" of
the Trust as defined in the  Investment  Company  Act of 1940 nor parties to the
proceeding  ("disinterested,  non-party trustees"),  or (b) an independent legal
counsel in a written  opinion.  The Fund will advance  attorneys'  fees or other
expenses  incurred by you in defending a proceeding,  upon the undertaking by or
on behalf of you to repay the advance  unless it is ultimately  determined  that
you are  entitled  to  indemnification,  so long as you meet at least one of the
following as a condition to the  advance:  (1) you shall  provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of

                                                     - 4 -


<PAGE>



any  lawful  advances,  or (3) a  majority  of a  quorum  of the  disinterested,
non-party  trustees of the Trust,  or an independent  legal counsel in a written
opinion,  shall  determine,  based on a review of  readily  available  facts (as
opposed to a full trial- type inquiry), that there is reason to believe that you
ultimately will be found entitled to indemnification. Any person employed by you
who may also be or become an employee of the Trust shall be deemed,  when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as your employee or agent.

6.       DURATION AND TERMINATION OF THIS AGREEMENT

         This Agreement  shall be effective upon its execution,  shall remain in
force for a period of two (2) years from that date and remain in force from year
to year thereafter,  subject to annual approval by (i) the Board of the Trust or
(ii) a vote of a majority (as defined in the Investment  Company Act of 1940) of
the  outstanding  voting  securities of the Fund,  provided that in either event
continuance  is  also  approved  by a  majority  of the  trustees  who  are  not
interested persons of you or of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.

         If the  shareholders  of the Fund fail to approve the  Agreement in the
manner set forth above, upon approval of the Board,  including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to  serve or act in such  capacity  for the Fund  for the  period  of time  (not
exceeding one hundred and twenty days after the  termination  of the  Agreement)
pending  required  approval of the  Agreement,  of a new agreement with you or a
different adviser or other definitive action;  provided that the compensation to
be paid by the  Fund to you will be equal to the  lesser  of your  actual  costs
incurred in furnishing  investment  advisory  services to the Fund or the amount
you would have received under this Agreement.

         This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty,  by the Board,  by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.

7.       AMENDMENT OF THIS AGREEMENT

         No provision of this  Agreement may be changed,  waived,  discharged or
terminated  orally,  and no amendment of this Agreement shall be effective until
approved  by  vote  of the  holders  of a  majority  of the  outstanding  voting
securities  of the Fund and by the Board,  including a majority of the  trustees
who are not  interested  persons  of you or of the  Trust,  cast in  person at a
meeting called for the purpose of voting on such approval.

                                                     - 5 -


<PAGE>



8.       LIMITATION OF LIABILITY

         It is expressly agreed that the obligations of the Fund hereunder shall
not be  binding  upon any of the  trustees,  shareholders,  nominees,  officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Fund, as provided in the Declaration of Trust of the Trust. The execution
and delivery of this Agreement have been authorized by the trustees of the Trust
and the shareholders of the Fund and signed by the officers of the Trust, acting
as such, and neither such  authorization  by such trustees and  shareholders nor
such  execution and delivery by such officers  shall be deemed to have been made
by  any of  them  individually  or to  impose  any  liability  on  any  of  them
personally,  but shall bind only the trust  property  of the Fund as provided in
the Trust's Declaration of Trust.

9.       MISCELLANEOUS

         The  captions  in  this  Agreement  are  included  for  convenience  of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise  affect their  construction or effect.  This Agreement may be executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original, but all of which together shall constitute one and the same Agreement.

         If you are in  agreement  with the  foregoing,  please sign the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart to the Trust,  whereupon this letter shall become a binding contract
upon the date thereof.

                                               Yours very truly,

ATTEST:                                        COUNTRYWIDE INVESTMENT TRUST


/s/ John F. Splain                             /s/ Robert H. Leshner    
- --------------------                           ------------------------------  
                                               Dated: February 28, 1997


                             ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:                                       COUNTRYWIDE INVESTMENTS, INC.   


/s/ John F. Splain
- -------------------                            By: /s/ Robert H. Leshner
                                                  -----------------------------
                                                   Dated: February 28, 1997


                                                     - 6 -





                              MANAGEMENT AGREEMENT

TO:      COUNTRYWIDE INVESTMENTS, INC.
         312 Walnut Street
         Cincinnati, Ohio  45202

Dear Sirs:

         Countrywide  Investment Trust (hereinafter  referred to as the "Trust")
herewith confirms our agreement with you.

         The Trust has been organized to engage in the business of an investment
company.  The Intermediate Term Government Income Fund (the "Fund") has
been  established as a series of the Trust. You have been selected to act as the
investment  adviser of the Fund and to provide certain other  services,  as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions  hereinafter  set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.

1.       ADVISORY SERVICES

         You will regularly  provide the Fund with such investment advice as you
in your  discretion  deem  advisable  and will furnish a  continuous  investment
program for the Fund consistent with its investment objectives and policies. You
will determine what  securities  shall be purchased for the Fund, what portfolio
securities  shall be held or sold by the Fund,  and what  portion  of the Fund's
assets  shall  be held  uninvested,  subject  always  to the  Fund's  investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect,  and subject  further,  to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies  thereof.  You will  advise and assist the  officers of the
Trust in taking  such steps as are  necessary  or  appropriate  to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Fund.

2.       ALLOCATION OF CHARGES AND EXPENSES

         You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers,  directors,  stockholders or employees of
your  corporation  and will make  available,  without  expense to the Fund,  the
services of such of your  employees as may duly be elected  officers or trustees
of  the  Trust,  subject  to  their  individual  consent  to  serve  and  to any
limitations  imposed by law.  The  compensation  and  expenses of any  officers,
trustees and employees of the Trust who are not officers,  directors,  employees
or stockholders of your corporation will be paid by the Trust.
                                                                            
                                                    - 1 -


<PAGE>



         You  will  pay all  advertising  and  promotion  expenses  incurred  in
connection with the sale or distribution of the Fund's shares to the extent such
expenses  are not  assumed by the Fund under the Trust's  Plans of  Distribution
Pursuant to Rule 12b-1.

         The  Fund  will  also be  responsible  for  the  payment  of all  other
operating expenses of the Fund, including fees and expenses incurred by the Fund
in connection with  membership in investment  company  organizations,  brokerage
fees and  commissions,  legal,  auditing and  accounting  expenses,  expenses of
registering shares under federal and state securities laws,  insurance expenses,
taxes or  governmental  fees,  fees and  expenses  of the  custodian,  transfer,
shareholder  service and dividend  disbursing  agent and  accounting and pricing
agent  of the  Fund,  expenses  including  clerical  expenses  of  issue,  sale,
redemption  or  repurchase  of  shares  of the Fund,  the fees and  expenses  of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing  reports  and  notices to  shareholders,  the cost of  printing  or
preparing  prospectuses  for  delivery to the Fund's  shareholders,  the cost of
printing or preparing stock  certificates or any other documents,  statements or
reports  to  shareholders,   expenses  of   shareholders'   meetings  and  proxy
solicitations,  such  extraordinary  or  nonrecurring  expenses  as  may  arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's  officers and trustees  with respect  thereto,  or any other expense not
specifically   described  above  incurred  in  the  performance  of  the  Fund's
obligations.  All other expenses not assumed by you herein  incurred by the Fund
in connection  with the  organization,  registration of shares and operations of
the Fund will be borne by the Fund.

3.       COMPENSATION OF THE ADVISER

         For all of the services to be rendered and payments made as provided in
this  Agreement,  the Fund will pay you as of the last day of each month,  a fee
equal to the annual rate of .50% of the average value of the daily net assets of
the  Fund  up  to  $50,000,000;   .45%  of  such  assets  from   $50,000,000  to
$150,000,000;   .40%  of  such  assets  from   $150,000,000   to  and  including
$250,000,000; and .375% of such assets in excess of $250,000,000.

         The total fees  payable  during each of the first and second  halves of
each fiscal year of the Trust shall not exceed the semiannual total of the daily
fee  accruals  requested  by you during the  applicable  six month  period.  The
average  value of net assets  shall be  determined  pursuant  to the  applicable
provisions  of the  Declaration  of Trust of the  Trust or a  resolution  of the
Board, if required.  If, pursuant to such provisions,  the  determination of net
asset value of the Fund is suspended for any


                                                     - 2 -


<PAGE>



particular  business day, then for the purposes of this paragraph,  the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business  day, or as of such other time as
the value of the Fund's net assets may lawfully be  determined,  on that day. If
the determination of the net asset value of the Fund's shares has been suspended
for a period including such month, your compensation  payable at the end of such
month  shall be computed on the basis of the value of the net assets of the Fund
as last determined (whether during or prior to such month).

         Your  compensation  with respect to each additional series of the Trust
effectively  registered  for sale in a public  offering  after  the date of this
Agreement shall be determined by the Board, including a majority of the Trustees
who are not  "interested  persons" (as defined in the Investment  Company Act of
1940) of you or of the Trust, and approved pursuant to the provisions of Section
15 of the Investment Company Act of 1940.

4.       EXECUTION OF PURCHASE AND SALE ORDERS

         In connection  with purchases or sales of portfolio  securities for the
account of the Fund, it is  understood  that you will arrange for the placing of
all orders for the  purchase  and sale of  portfolio  securities  for the Fund's
accounts  with  brokers or dealers  selected  by you,  subject to review of this
selection  by the  Board  from  time to time.  You will be  responsible  for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed  at all  times to seek for the  Fund  the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services provided by the broker or dealer.

         You should  generally seek favorable  prices and commission  rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution,  you are  authorized  to select  brokers or dealers who also  provide
brokerage and research  services (as those terms are defined in Section 28(e) of
the Securities  Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion.  You are authorized to pay a broker or
dealer who  provides  such  brokerage  and research  services a  commission  for
executing a portfolio transaction which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
you  determine in good faith that the amount of the  commission is reasonable in
relation to the value of the  brokerage  and research  services  provided by the
executing broker or dealer. The determination may be viewed in terms of either a

                                                     - 3 -


<PAGE>



particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that,  although the information may be useful to the Fund and you, it
is not  possible to place a dollar  value on such  information.  The Board shall
periodically  review  the  commissions  paid  by the  Fund to  determine  if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.

         Consistent with the Rules of Fair Practice of the National  Association
of Securities Dealers,  Inc., and subject to seeking best qualitative execution,
you may give  consideration  to sales of  shares  of the Fund as a factor in the
selection of brokers and dealers to execute Fund portfolio transactions.

         If any occasion should arise in which you give any advice to clients of
yours  concerning  the  shares of the Fund,  you will act  solely as  investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this  Agreement are not to be deemed to be exclusive and
it is understood  that you may render  investment  advice,  management and other
services to others.

5.       LIMITATION OF LIABILITY OF ADVISER

         You  (including  your  directors,  officers,  shareholders,  employees,
control persons and affiliates of any thereof) shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement  relates,  except a loss resulting from
willful  misfeasance,  bad  faith  or  gross  negligence  on  your  part  in the
performance  of  your  duties  or from  the  reckless  disregard  by you of your
obligations and duties under this Agreement ("disabling conduct").  However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the  proceeding was brought that
you were not liable by reason of  disabling  conduct,  or (2) in the  absence of
such a decision, a reasonable  determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct,  by (a) the vote
of a majority of a quorum of trustees  who are neither  "interested  persons" of
the Trust as defined in the  Investment  Company  Act of 1940 nor parties to the
proceeding  ("disinterested,  non-party trustees"),  or (b) an independent legal
counsel in a written  opinion.  The Fund will advance  attorneys'  fees or other
expenses  incurred by you in defending a proceeding,  upon the undertaking by or
on behalf of you to repay the advance  unless it is ultimately  determined  that
you are  entitled  to  indemnification,  so long as you meet at least one of the
following as a condition to the  advance:  (1) you shall  provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of

                                                     - 4 -


<PAGE>



any  lawful  advances,  or (3) a  majority  of a  quorum  of the  disinterested,
non-party  trustees of the Trust,  or an independent  legal counsel in a written
opinion,  shall  determine,  based on a review of  readily  available  facts (as
opposed to a full trial- type inquiry), that there is reason to believe that you
ultimately will be found entitled to indemnification. Any person employed by you
who may also be or become an employee of the Trust shall be deemed,  when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as your employee or agent.

6.       DURATION AND TERMINATION OF THIS AGREEMENT

         This Agreement  shall be effective upon its execution,  shall remain in
force for a period of two (2) years from that date and remain in force from year
to year thereafter,  subject to annual approval by (i) the Board of the Trust or
(ii) a vote of a majority (as defined in the Investment  Company Act of 1940) of
the  outstanding  voting  securities of the Fund,  provided that in either event
continuance  is  also  approved  by a  majority  of the  trustees  who  are  not
interested persons of you or of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.

         If the  shareholders  of the Fund fail to approve the  Agreement in the
manner set forth above, upon approval of the Board,  including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to  serve or act in such  capacity  for the Fund  for the  period  of time  (not
exceeding one hundred and twenty days after the  termination  of the  Agreement)
pending  required  approval of the  Agreement,  of a new agreement with you or a
different adviser or other definitive action;  provided that the compensation to
be paid by the  Fund to you will be equal to the  lesser  of your  actual  costs
incurred in furnishing  investment  advisory  services to the Fund or the amount
you would have received under this Agreement.

         This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty,  by the Board,  by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.

7.       AMENDMENT OF THIS AGREEMENT

         No provision of this  Agreement may be changed,  waived,  discharged or
terminated  orally,  and no amendment of this Agreement shall be effective until
approved  by  vote  of the  holders  of a  majority  of the  outstanding  voting
securities  of the Fund and by the Board,  including a majority of the  trustees
who are not  interested  persons  of you or of the  Trust,  cast in  person at a
meeting called for the purpose of voting on such approval.

                                                     - 5 -


<PAGE>



8.       LIMITATION OF LIABILITY

         It is expressly agreed that the obligations of the Fund hereunder shall
not be  binding  upon any of the  trustees,  shareholders,  nominees,  officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Fund, as provided in the Declaration of Trust of the Trust. The execution
and delivery of this Agreement have been authorized by the trustees of the Trust
and the shareholders of the Fund and signed by the officers of the Trust, acting
as such, and neither such  authorization  by such trustees and  shareholders nor
such  execution and delivery by such officers  shall be deemed to have been made
by  any of  them  individually  or to  impose  any  liability  on  any  of  them
personally,  but shall bind only the trust  property  of the Fund as provided in
the Trust's Declaration of Trust.

9.       MISCELLANEOUS

         The  captions  in  this  Agreement  are  included  for  convenience  of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise  affect their  construction or effect.  This Agreement may be executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original, but all of which together shall constitute one and the same Agreement.

         If you are in  agreement  with the  foregoing,  please sign the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart to the Trust,  whereupon this letter shall become a binding contract
upon the date thereof.

                                               Yours very truly,

ATTEST:                                        COUNTRYWIDE INVESTMENT TRUST


/s/ John F. Splain                             /s/ Robert H. Leshner    
- --------------------                           ------------------------------  
                                               Dated: February 28, 1997


                             ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:                                       COUNTRYWIDE INVESTMENTS, INC.   


/s/ John F. Splain
- -------------------                            By: /s/ Robert H. Leshner
                                                  -----------------------------
                                                   Dated: February 28, 1997


                                                     - 6 -




                              MANAGEMENT AGREEMENT


TO:      COUNTRYWIDE INVESTMENTS, INC.
         312 Walnut Street
         Cincinnati, Ohio  45202

Dear Sirs:

         Countrywide  Investment Trust (hereinafter  referred to as the "Trust")
herewith confirms our agreement with you.

         The Trust has been organized to engage in the business of an investment
company.  The  Institutional  Government  Income  Fund  (the  "Fund")  has  been
established  as a series  of the  Trust.  You have been  selected  to act as the
investment  adviser of the Fund and to provide certain other  services,  as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions  hereinafter  set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.

1.       ADVISORY SERVICES

         You will regularly  provide the Fund with such investment advice as you
in your  discretion  deem  advisable  and will furnish a  continuous  investment
program for the Fund consistent with its investment objectives and policies. You
will determine what  securities  shall be purchased for the Fund, what portfolio
securities  shall be held or sold by the Fund,  and what  portion  of the Fund's
assets  shall  be held  uninvested,  subject  always  to the  Fund's  investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect,  and subject  further,  to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies  thereof.  You will  advise and assist the  officers of the
Trust in taking  such steps as are  necessary  or  appropriate  to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Fund.

2.       ALLOCATION OF CHARGES AND EXPENSES

         You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers,  directors,  stockholders or employees of
your  corporation  and will make  available,  without  expense to the Fund,  the
services of such of your  employees as may duly be elected  officers or trustees
of  the  Trust,  subject  to  their  individual  consent  to  serve  and  to any
limitations  imposed by law.  The  compensation  and  expenses of any  officers,
trustees and employees of the Trust who are not officers,  directors,  employees
or stockholders of your corporation will be paid by the Trust.


                                                     - 1 -


<PAGE>



         You  will  pay all  advertising  and  promotion  expenses  incurred  in
connection with the sale or distribution of the Fund's shares to the extent such
expenses  are not  assumed by the Fund under the Trust's  Plans of  Distribution
Pursuant to Rule 12b-1.

         The  Fund  will  also be  responsible  for  the  payment  of all  other
operating expenses of the Fund, including fees and expenses incurred by the Fund
in connection with  membership in investment  company  organizations,  brokerage
fees and  commissions,  legal,  auditing and  accounting  expenses,  expenses of
registering shares under federal and state securities laws,  insurance expenses,
taxes or  governmental  fees,  fees and  expenses  of the  custodian,  transfer,
shareholder  service and dividend  disbursing  agent and  accounting and pricing
agent  of the  Fund,  expenses  including  clerical  expenses  of  issue,  sale,
redemption  or  repurchase  of  shares  of the Fund,  the fees and  expenses  of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing  reports  and  notices to  shareholders,  the cost of  printing  or
preparing  prospectuses  for  delivery to the Fund's  shareholders,  the cost of
printing or preparing stock  certificates or any other documents,  statements or
reports  to  shareholders,   expenses  of   shareholders'   meetings  and  proxy
solicitations,  such  extraordinary  or  nonrecurring  expenses  as  may  arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's  officers and trustees  with respect  thereto,  or any other expense not
specifically   described  above  incurred  in  the  performance  of  the  Fund's
obligations.  All other expenses not assumed by you herein  incurred by the Fund
in connection  with the  organization,  registration of shares and operations of
the Fund will be borne by the Fund.

3.       COMPENSATION OF THE ADVISER

         For all of the services to be rendered and payments made as provided in
this  Agreement,  the Fund will pay you as of the last day of each month,  a fee
equal to the annual rate of .20% of the average value of the daily net assets of
the Fund.

         The total fees  payable  during each of the first and second  halves of
each fiscal year of the Trust shall not exceed the semiannual total of the daily
fee  accruals  requested  by you during the  applicable  six month  period.  The
average  value of net assets  shall be  determined  pursuant  to the  applicable
provisions  of the  Declaration  of Trust of the  Trust or a  resolution  of the
Board, if required.  If, pursuant to such provisions,  the  determination of net
asset value of the Fund is suspended for any  particular  business day, then for
the purposes of this paragraph,  the value of the net assets of the Fund as last
determined  shall be deemed to be the value of the net assets as of the close of
the business day, or as of such other time as the value of the


                                                     - 2 -


<PAGE>





Fund's net assets may lawfully be determined, on that day.  If
the determination of the net asset value of the Fund's shares has been suspended
for a period including such month, your compensation  payable at the end of such
month  shall be computed on the basis of the value of the net assets of the Fund
as last determined (whether during or prior to such month).

         Your  compensation  with respect to each additional series of the Trust
effectively  registered  for sale in a public  offering  after  the date of this
Agreement shall be determined by the Board, including a majority of the Trustees
who are not  "interested  persons" (as defined in the Investment  Company Act of
1940) of you or of the Trust, and approved pursuant to the provisions of Section
15 of the Investment Company Act of 1940.

4.       EXECUTION OF PURCHASE AND SALE ORDERS

         In connection  with purchases or sales of portfolio  securities for the
account of the Fund, it is  understood  that you will arrange for the placing of
all orders for the  purchase  and sale of  portfolio  securities  for the Fund's
accounts  with  brokers or dealers  selected  by you,  subject to review of this
selection  by the  Board  from  time to time.  You will be  responsible  for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed  at all  times to seek for the  Fund  the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services provided by the broker or dealer.

         You should  generally seek favorable  prices and commission  rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution,  you are  authorized  to select  brokers or dealers who also  provide
brokerage and research  services (as those terms are defined in Section 28(e) of
the Securities  Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion.  You are authorized to pay a broker or
dealer who  provides  such  brokerage  and research  services a  commission  for
executing a portfolio transaction which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
you  determine in good faith that the amount of the  commission is reasonable in
relation to the value of the  brokerage  and research  services  provided by the
executing broker or dealer. The determination may be viewed in terms of either a
particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that,  although the information may be useful to the Fund and you, it
is

                                                     - 3 -


<PAGE>



not  possible  to place a dollar  value on such  information.  The  Board  shall
periodically  review  the  commissions  paid  by the  Fund to  determine  if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.

         Consistent with the Rules of Fair Practice of the National  Association
of Securities Dealers,  Inc., and subject to seeking best qualitative execution,
you may give  consideration  to sales of  shares  of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions of the Fund.

         If any occasion should arise in which you give any advice to clients of
yours  concerning  the  shares of the Fund,  you will act  solely as  investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this  Agreement are not to be deemed to be exclusive and
it is understood  that you may render  investment  advice,  management and other
services to others.

5.       LIMITATION OF LIABILITY OF ADVISER

         You  (including  your  directors,  officers,  shareholders,  employees,
control persons and affiliates of any thereof) shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement  relates,  except a loss resulting from
willful  misfeasance,  bad  faith  or  gross  negligence  on  your  part  in the
performance  of  your  duties  or from  the  reckless  disregard  by you of your
obligations and duties under this Agreement ("disabling conduct").  However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the  proceeding was brought that
you were not liable by reason of  disabling  conduct,  or (2) in the  absence of
such a decision, a reasonable  determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct,  by (a) the vote
of a majority of a quorum of trustees  who are neither  "interested  persons" of
the Trust as defined in the  Investment  Company  Act of 1940 nor parties to the
proceeding  ("disinterested,  non-party trustees"),  or (b) an independent legal
counsel in a written  opinion.  The Fund will advance  attorneys'  fees or other
expenses  incurred by you in defending a proceeding,  upon the undertaking by or
on behalf of you to repay the advance  unless it is ultimately  determined  that
you are  entitled  to  indemnification,  so long as you meet at least one of the
following as a condition to the  advance:  (1) you shall  provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of any  lawful  advances,  or (3) a majority  of a quorum of the  disinterested,
non-party  trustees of the Trust,  or an independent  legal counsel in a written
opinion,  shall  determine,  based on a review of  readily  available  facts (as
opposed to a full trial-

                                                     - 4 -


<PAGE>



type inquiry), that there is reason to believe that you ultimately will be found
entitled  to  indemnification.  Any  person  employed  by you who may also be or
become an employee of the Trust shall be deemed, when acting within the scope of
his  employment  by the Trust,  to be acting in such  employment  solely for the
Trust and not as your employee or agent.

6.       DURATION AND TERMINATION OF THIS AGREEMENT

         This Agreement  shall be effective upon its execution,  shall remain in
force for a period of two (2) years from that date and remain  from year to year
thereafter,  subject to annual  approval by (i) the Board of the Trust or (ii) a
vote of a majority  (as  defined in the  Investment  Company Act of 1940) of the
outstanding  voting  securities  of the  Fund,  provided  that in  either  event
continuance  is  also  approved  by a  majority  of the  trustees  who  are  not
"interested  persons" (as defined in the Investment  Company Act of 1940) of you
or of the Trust, by a vote cast in person at a meeting called for the purpose of
voting such approval.

         If the  shareholders  of the Fund fail to approve the  Agreement in the
manner set forth above, upon approval of the Board,  including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to  serve or act in such  capacity  for the Fund  for the  period  of time  (not
exceeding one hundred and twenty days after the  termination  of the  Agreement)
pending  required  approval of the  Agreement,  of a new agreement with you or a
different adviser or other definitive action;  provided that the compensation to
be paid by the  Fund to you will be equal to the  lesser  of your  actual  costs
incurred in furnishing  investment  advisory  services to the Fund or the amount
you would have received under this Agreement.

         This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty,  by the Board,  by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.

7.       AMENDMENT OF THIS AGREEMENT

         No provision of this  Agreement may be changed,  waived,  discharged or
terminated  orally,  and no amendment of this Agreement shall be effective until
approved  by  vote  of the  holders  of a  majority  of the  outstanding  voting
securities  of the Fund and by the Board,  including a majority of the  trustees
who are not  interested  persons  of you or of the  Trust,  cast in  person at a
meeting called for the purpose of voting on such approval.



                                                     - 5 -


<PAGE>


8.       LIMITATION OF LIABILITY

         It is expressly agreed that the obligations of the Fund hereunder shall
not be  binding  upon any of the  trustees,  shareholders,  nominees,  officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Fund, as provided in the Declaration of Trust of the Trust. The execution
and delivery of this Agreement have been authorized by the trustees of the Trust
and the shareholders of the Fund and signed by the officers of the Trust, acting
as such, and neither such  authorization  by such trustees and  shareholders nor
such  execution and delivery by such officers  shall be deemed to have been made
by  any of  them  individually  or to  impose  any  liability  on  any  of  them
personally,  but shall bind only the trust  property  of the Fund as provided in
the Trust's Declaration of Trust.

9.       MISCELLANEOUS

         The  captions  in  this  Agreement  are  included  for  convenience  of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise  affect their  construction or effect.  This Agreement may be executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original, but all of which together shall constitute one and the same Agreement.

         If you are in  agreement  with the  foregoing,  please sign the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart to the Trust,  whereupon this letter shall become a binding contract
upon the date thereof.

                                            Yours very truly,

ATTEST:                                     COUNTRYWIDE INVESTMENT TRUST


/s/ John F. Splain                          By: /s/ Robert H. Leshner
- ------------------------                    ----------------------------------
                                            Dated: February 28, 1997


                                   ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:                                    COUNTRYWIDE INVESTMENTS, INC.


/s/ John F. Splain                         By: /s/ Robert H. Leshner
- --------------------------                 ----------------------------------- 
                                           Dated: February 28, 1997


                                                     - 6 -






                              MANAGEMENT AGREEMENT

TO:      COUNTRYWIDE INVESTMENTS, INC.
         312 Walnut Street
         Cincinnati, Ohio  45202

Dear Sirs:

         Countrywide  Investment Trust (hereinafter  referred to as the "Trust")
herewith confirms our agreement with you.

         The Trust has been organized to engage in the business of an investment
company.  The Adjustable Rate U.S. Government Securities Fund (the "Fund") has
been  established as a series of the Trust. You have been selected to act as the
investment  adviser of the Fund and to provide certain other  services,  as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions  hereinafter  set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.

1.       ADVISORY SERVICES

         You will regularly  provide the Fund with such investment advice as you
in your  discretion  deem  advisable  and will furnish a  continuous  investment
program for the Fund consistent with its investment objectives and policies. You
will determine what  securities  shall be purchased for the Fund, what portfolio
securities  shall be held or sold by the Fund,  and what  portion  of the Fund's
assets  shall  be held  uninvested,  subject  always  to the  Fund's  investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect,  and subject  further,  to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies  thereof.  You will  advise and assist the  officers of the
Trust in taking  such steps as are  necessary  or  appropriate  to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Fund.

2.       ALLOCATION OF CHARGES AND EXPENSES

         You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers,  directors,  stockholders or employees of
your  corporation  and will make  available,  without  expense to the Fund,  the
services of such of your  employees as may duly be elected  officers or trustees
of  the  Trust,  subject  to  their  individual  consent  to  serve  and  to any
limitations  imposed by law.  The  compensation  and  expenses of any  officers,
trustees and employees of the Trust who are not officers,  directors,  employees
or stockholders of your corporation will be paid by the Trust.
                                                                            
                                                    - 1 -


<PAGE>



         You  will  pay all  advertising  and  promotion  expenses  incurred  in
connection with the sale or distribution of the Fund's shares to the extent such
expenses  are not  assumed by the Fund under the Trust's  Plans of  Distribution
Pursuant to Rule 12b-1.

         The  Fund  will  also be  responsible  for  the  payment  of all  other
operating expenses of the Fund, including fees and expenses incurred by the Fund
in connection with  membership in investment  company  organizations,  brokerage
fees and  commissions,  legal,  auditing and  accounting  expenses,  expenses of
registering shares under federal and state securities laws,  insurance expenses,
taxes or  governmental  fees,  fees and  expenses  of the  custodian,  transfer,
shareholder  service and dividend  disbursing  agent and  accounting and pricing
agent  of the  Fund,  expenses  including  clerical  expenses  of  issue,  sale,
redemption  or  repurchase  of  shares  of the Fund,  the fees and  expenses  of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing  reports  and  notices to  shareholders,  the cost of  printing  or
preparing  prospectuses  for  delivery to the Fund's  shareholders,  the cost of
printing or preparing stock  certificates or any other documents,  statements or
reports  to  shareholders,   expenses  of   shareholders'   meetings  and  proxy
solicitations,  such  extraordinary  or  nonrecurring  expenses  as  may  arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's  officers and trustees  with respect  thereto,  or any other expense not
specifically   described  above  incurred  in  the  performance  of  the  Fund's
obligations.  All other expenses not assumed by you herein  incurred by the Fund
in connection  with the  organization,  registration of shares and operations of
the Fund will be borne by the Fund.

3.       COMPENSATION OF THE ADVISER

         For all of the services to be rendered and payments made as provided in
this  Agreement,  the Fund will pay you as of the last day of each month,  a fee
equal to the annual rate of .50% of the average value of the daily net assets of
the  Fund  up  to  $50,000,000;   .45%  of  such  assets  from   $50,000,000  to
$150,000,000;   .40%  of  such  assets  from   $150,000,000   to  and  including
$250,000,000; and .375% of such assets in excess of $250,000,000.

         The total fees  payable  during each of the first and second  halves of
each fiscal year of the Trust shall not exceed the semiannual total of the daily
fee  accruals  requested  by you during the  applicable  six month  period.  The
average  value of net assets  shall be  determined  pursuant  to the  applicable
provisions  of the  Declaration  of Trust of the  Trust or a  resolution  of the
Board, if required.  If, pursuant to such provisions,  the  determination of net
asset value of the Fund is suspended for any


                                                     - 2 -


<PAGE>



particular  business day, then for the purposes of this paragraph,  the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business  day, or as of such other time as
the value of the Fund's net assets may lawfully be  determined,  on that day. If
the determination of the net asset value of the Fund's shares has been suspended
for a period including such month, your compensation  payable at the end of such
month  shall be computed on the basis of the value of the net assets of the Fund
as last determined (whether during or prior to such month).

         Your  compensation  with respect to each additional series of the Trust
effectively  registered  for sale in a public  offering  after  the date of this
Agreement shall be determined by the Board, including a majority of the Trustees
who are not  "interested  persons" (as defined in the Investment  Company Act of
1940) of you or of the Trust, and approved pursuant to the provisions of Section
15 of the Investment Company Act of 1940.

4.       EXECUTION OF PURCHASE AND SALE ORDERS

         In connection  with purchases or sales of portfolio  securities for the
account of the Fund, it is  understood  that you will arrange for the placing of
all orders for the  purchase  and sale of  portfolio  securities  for the Fund's
accounts  with  brokers or dealers  selected  by you,  subject to review of this
selection  by the  Board  from  time to time.  You will be  responsible  for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed  at all  times to seek for the  Fund  the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services provided by the broker or dealer.

         You should  generally seek favorable  prices and commission  rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution,  you are  authorized  to select  brokers or dealers who also  provide
brokerage and research  services (as those terms are defined in Section 28(e) of
the Securities  Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion.  You are authorized to pay a broker or
dealer who  provides  such  brokerage  and research  services a  commission  for
executing a portfolio transaction which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
you  determine in good faith that the amount of the  commission is reasonable in
relation to the value of the  brokerage  and research  services  provided by the
executing broker or dealer. The determination may be viewed in terms of either a

                                                     - 3 -


<PAGE>



particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that,  although the information may be useful to the Fund and you, it
is not  possible to place a dollar  value on such  information.  The Board shall
periodically  review  the  commissions  paid  by the  Fund to  determine  if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.

         Consistent with the Rules of Fair Practice of the National  Association
of Securities Dealers,  Inc., and subject to seeking best qualitative execution,
you may give  consideration  to sales of  shares  of the Fund as a factor in the
selection of brokers and dealers to execute Fund portfolio transactions.

         If any occasion should arise in which you give any advice to clients of
yours  concerning  the  shares of the Fund,  you will act  solely as  investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this  Agreement are not to be deemed to be exclusive and
it is understood  that you may render  investment  advice,  management and other
services to others.

5.       LIMITATION OF LIABILITY OF ADVISER

         You  (including  your  directors,  officers,  shareholders,  employees,
control persons and affiliates of any thereof) shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement  relates,  except a loss resulting from
willful  misfeasance,  bad  faith  or  gross  negligence  on  your  part  in the
performance  of  your  duties  or from  the  reckless  disregard  by you of your
obligations and duties under this Agreement ("disabling conduct").  However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the  proceeding was brought that
you were not liable by reason of  disabling  conduct,  or (2) in the  absence of
such a decision, a reasonable  determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct,  by (a) the vote
of a majority of a quorum of trustees  who are neither  "interested  persons" of
the Trust as defined in the  Investment  Company  Act of 1940 nor parties to the
proceeding  ("disinterested,  non-party trustees"),  or (b) an independent legal
counsel in a written  opinion.  The Fund will advance  attorneys'  fees or other
expenses  incurred by you in defending a proceeding,  upon the undertaking by or
on behalf of you to repay the advance  unless it is ultimately  determined  that
you are  entitled  to  indemnification,  so long as you meet at least one of the
following as a condition to the  advance:  (1) you shall  provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of

                                                     - 4 -


<PAGE>



any  lawful  advances,  or (3) a  majority  of a  quorum  of the  disinterested,
non-party  trustees of the Trust,  or an independent  legal counsel in a written
opinion,  shall  determine,  based on a review of  readily  available  facts (as
opposed to a full trial- type inquiry), that there is reason to believe that you
ultimately will be found entitled to indemnification. Any person employed by you
who may also be or become an employee of the Trust shall be deemed,  when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as your employee or agent.

6.       DURATION AND TERMINATION OF THIS AGREEMENT

         This Agreement  shall be effective upon its execution,  shall remain in
force for a period of two (2) years from that date and remain in force from year
to year thereafter,  subject to annual approval by (i) the Board of the Trust or
(ii) a vote of a majority (as defined in the Investment  Company Act of 1940) of
the  outstanding  voting  securities of the Fund,  provided that in either event
continuance  is  also  approved  by a  majority  of the  trustees  who  are  not
interested persons of you or of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.

         If the  shareholders  of the Fund fail to approve the  Agreement in the
manner set forth above, upon approval of the Board,  including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to  serve or act in such  capacity  for the Fund  for the  period  of time  (not
exceeding one hundred and twenty days after the  termination  of the  Agreement)
pending  required  approval of the  Agreement,  of a new agreement with you or a
different adviser or other definitive action;  provided that the compensation to
be paid by the  Fund to you will be equal to the  lesser  of your  actual  costs
incurred in furnishing  investment  advisory  services to the Fund or the amount
you would have received under this Agreement.

         This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty,  by the Board,  by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.

7.       AMENDMENT OF THIS AGREEMENT

         No provision of this  Agreement may be changed,  waived,  discharged or
terminated  orally,  and no amendment of this Agreement shall be effective until
approved  by  vote  of the  holders  of a  majority  of the  outstanding  voting
securities  of the Fund and by the Board,  including a majority of the  trustees
who are not  interested  persons  of you or of the  Trust,  cast in  person at a
meeting called for the purpose of voting on such approval.

                                                     - 5 -


<PAGE>



8.       LIMITATION OF LIABILITY

         It is expressly agreed that the obligations of the Fund hereunder shall
not be  binding  upon any of the  trustees,  shareholders,  nominees,  officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Fund, as provided in the Declaration of Trust of the Trust. The execution
and delivery of this Agreement have been authorized by the trustees of the Trust
and the shareholders of the Fund and signed by the officers of the Trust, acting
as such, and neither such  authorization  by such trustees and  shareholders nor
such  execution and delivery by such officers  shall be deemed to have been made
by  any of  them  individually  or to  impose  any  liability  on  any  of  them
personally,  but shall bind only the trust  property  of the Fund as provided in
the Trust's Declaration of Trust.

9.       MISCELLANEOUS

         The  captions  in  this  Agreement  are  included  for  convenience  of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise  affect their  construction or effect.  This Agreement may be executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original, but all of which together shall constitute one and the same Agreement.

         If you are in  agreement  with the  foregoing,  please sign the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart to the Trust,  whereupon this letter shall become a binding contract
upon the date thereof.

                                               Yours very truly,

ATTEST:                                        COUNTRYWIDE INVESTMENT TRUST


/s/ John F. Splain                             /s/ Robert H. Leshner    
- --------------------                           ------------------------------  
                                               Dated: February 28, 1997


                             ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:                                       COUNTRYWIDE INVESTMENTS, INC.   


/s/ John F. Splain
- -------------------                            By: /s/ Robert H. Leshner
                                                  -----------------------------
                                                   Dated: February 28, 1997


                                                     - 6 -







                              MANAGEMENT AGREEMENT


         THIS  MANAGEMENT  AGREEMENT  is made this 28th day of  February,  1997,
between Countrywide  Investment Trust (the "Trust"),  a business trust organized
under the laws of the State of Massachusetts,  and Countrywide Investments, Inc.
(the "Manager"), a corporation organized under the laws of the State of Ohio.

         WHEREAS,  the Trust has been  organized  to  operate  as an  investment
company  registered  under the  Investment  Company Act of 1940, as amended (the
"Act");

         WHEREAS,  the Trust's  shares of  beneficial  interest are divided into
separate series and each such share of a series represents an undivided interest
in the assets,  subject to the  liabilities,  located to that  series,  and each
series has separate investment objectives and policies; and

         WHEREAS,  the Global Bond Fund (the "Fund"),  a series of the Trust has
been  created  for the  purpose  of  investing  and  reinvesting  its  assets in
securities  pursuant to the  investment  objectives and policies as set forth in
its  registration  statements  under  the  Act and  the  Securities  Act of 1933
("Registration  Statements"),  as heretofore  amended and supplemented;  and the
Trust desires to avail itself of the services,  information,  advice, assistance
and  facilities  of a manager  and to have a manager  provide or perform  for it
various management,  statistical, portfolio adviser selection and other services
for the Fund; and 


<PAGE>



         WHEREAS, the Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended;

         NOW, THEREFORE, the Trust and Manager agree as follows:

         1.       Employment of the Manager.  The Trust hereby employs
the Manager to manage the investment and  reinvestment of the assets of the Fund
in the manner set forth in  subparagraph  2B of this  Agreement,  subject to the
direction  of the Board of  Trustees  and the  officers  of the  Trust,  for the
period,  in the  manner,  and on the terms  hereinafter  set forth.  The Manager
hereby  accepts  such  employment  and agrees  during  such period to render the
services and to assume the obligations  herein set forth.  The Manager shall for
all purposes herein be deemed to be an independent  contractor and shall, except
as expressly  provided or  authorized  (whether  herein or  otherwise),  have no
authority to act for or represent  the Fund in any way or otherwise be deemed an
agent of the Fund.

         2.       Obligation of and Services to be Provided by the Manager.
The Manager undertakes to provide the services hereinafter set forth and to 
assume the following obligations:

         A.       Corporate Management and Administrative Services.
                  The Manager shall furnish to the Fund, or retain
                  another party or parties to furnish, the following
                  described services to the Fund: (i) office space, which
                  may be space within the offices of the Manager or in
                  such other place as may be agreed upon from time to
                  time, and (ii) office furnishings, facilities and

                                                     - 2 -


<PAGE>



                  equipment  as may be  reasonably  required  for  managing  and
                  administering  the  operations  and conducting the business of
                  the Fund,  including  complying with the  securities,  tax and
                  other  reporting  requirements  of the  United  States and the
                  various  states in which the Fund  does  business,  conducting
                  correspondence and other  communications with the shareholders
                  of the Fund, and maintaining or supervising the maintenance of
                  all records in  connection  with the  investment  and business
                  activities of the Fund.

         B.       Investment Management Services.

                  (a)      The Manager shall have overall supervisory
                           responsibility   for  the  general   management   and
                           investment of the assets and portfolio  securities of
                           the  Fund  subject  to and  in  accordance  with  the
                           investment  objectives  and policies of the Fund, and
                           any  directions  which the Trust's  Board of Trustees
                           may issue to the Manager from time to time.
                  (b)      The Manager shall provide overall investment programs
                           and  strategies  for  the  Fund,  shall  revise  such
                           programs as  necessary  and shall  monitor and report
                           periodically to the Board of Trustees  concerning the
                           implementation of the programs.
                  (c)      The Manager, with the approval of the Board of
                           Trustees of the Trust as to particular

                                                     - 3 -


<PAGE>



                           appointments,  intends  to (i)  appoint  one or  more
                           persons or companies (the "Adviser") and,  subject to
                           the  terms  and  conditions  of this  Agreement,  the
                           Adviser  shall have full  investment  discretion  and
                           shall  make all  determinations  with  respect to the
                           investment  of the Fund's assets and the purchase and
                           sale of portfolio  securities with those assets,  and
                           (ii) take such steps as may be necessary to implement
                           such  appointments.   The  Manager  shall  be  solely
                           responsible  for paying the fees and  expenses of the
                           Adviser  for its  services  to the Fund.  The Manager
                           shall not be responsible or liable for the investment
                           merits of any  decision by the  Adviser to  purchase,
                           hold or sell a portfolio security for the Fund.
                  (d)      The Manager shall evaluate advisers and shall
                           recommend to the Board of Trustees the Adviser
                           which the Manager believes is best suited to
                           invest the assets of the Fund; shall monitor and
                           evaluate the investment performance of the Fund's
                           Adviser; shall recommend changes in the Adviser
                           when appropriate; shall coordinate the investment
                           activities of the Adviser to ensure compliance
                           with applicable restrictions and limitations
                           applicable to the Fund; and shall compensate the
                           Adviser.

                                                     - 4 -


<PAGE>



                  (e)      The  Manager  shall  render  regular  reports  to the
                           Trust, at regular  meetings of the Board of Trustees,
                           of, among other things, the portfolio  investments of
                           the Fund and  measurement and analysis of the results
                           achieved by the Fund.
                  (f)      The Manager shall employ or provide and compensate
                           the executive, administrative, secretarial and
                           clerical personnel necessary to provide the
                           services set forth in this subparagraph 2B, and
                           shall bear the expense thereof, except as may
                           otherwise be provided in Section 4 of this
                           Agreement.  The Manager shall also compensate all
                           officers and employees of the Fund who are
                           officers or employees of the Manager.
                  (g)      The Manager shall pay all  advertising  and promotion
                           expenses  incurred  in  connection  with  the sale or
                           distribution  of the Fund's shares to the extent such
                           expenses  are not assumed by the Fund under its Plans
                           of Distribution.

         C.       Provision of Information Necessary for Preparation of
                  Securities Registration Statements, Amendments and
                  Other Materials.

                  The  Manager  will  make  available  and  provide   financial,
                  accounting and statistical information required by the Fund in
                  the preparation of registration statements,  reports and other
                  documents  required by federal and state  securities laws, and
                  such information as the Fund

                                                     - 5 -


<PAGE>



                  may  reasonably   request  for  use  in  the   preparation  of
                  registration statements,  reports and other documents required
                  by federal and state securities laws.

         D.       Other Obligations and Services.
                  The Manager shall make available its officers and
                  employees to the Board of Trustees and officers of the
                  Trust for consultation and discussions regarding the
                  administration and management of the Fund and its
                  investment activities.

         3. Execution and  Allocation of Portfolio  Brokerage  Commissions.  The
Adviser,  subject to the limitations contained in this paragraph 3, shall place,
on behalf of the Fund, orders for the execution of portfolio  transactions.  The
Adviser is not authorized by the Fund to take any action, including the purchase
or sale of securities for the Fund's account,  (a) in  contravention  of (i) any
investment  restrictions  set  forth in the Act and the rules  thereunder,  (ii)
specific  instructions  adopted by the Board of Trustees and communicated to the
Adviser, (iii) the investment objectives,  policies and restrictions of the Fund
as set forth in the Trust's  Registration  Statement,  or (iv) instructions from
the Manager  communicated to the Adviser,  or (b) which would have the effect of
causing  the  Fund to fail to  qualify  or to cease to  qualify  as a  regulated
investment  company under the Internal Revenue Code of 1986, as amended,  or any
succeeding statute.

         Subject to the foregoing, the Adviser shall determine the
securities to be purchased or sold by the Fund and will place

                                                     - 6 -


<PAGE>



orders pursuant to its  determination  with or through such persons,  brokers or
dealers in conformity  with the policy with respect to brokerage as set forth in
the Trust's  Registration  Statement or as the Board of Trustees may direct from
time to time.  It is  recognized  that,  in providing  the Fund with  investment
supervision  of the placing of orders for  portfolio  transactions,  the Adviser
will give  primary  consideration  to securing the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services  provided by the broker or dealer.  Consistent  with this  policy,  the
Adviser may select  brokers or dealers who also provide  brokerage  and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) to other Funds  and/or the other  accounts  over which it exercises
investment  discretion.  It is understood that neither the Fund, the Manager nor
the Adviser  have  adopted a formula  for  allocation  of the Fund's  investment
transaction  business.  It is also  understood that it is desirable for the Fund
that the Adviser have access to supplemental  investment and market research and
security  and  economic  analyses  provided  by certain  brokers who may execute
brokerage  transactions at a higher  commission to the Fund than may result when
allocating  brokerage  to other  brokers  on the  basis of  seeking  the  lowest
commission.  Therefore,  the  Adviser  is  authorized  to place  orders  for the
purchase and sale of securities for the Fund with such

                                                     - 7 -


<PAGE>



certain brokers, subject to review by the Trust's Board of Trustees from time to
time with respect to the extent and continuation of this practice, provided that
the  Adviser  determines  in good  faith that the  amount of the  commission  is
reasonable  in  relation to the value of the  brokerage  and  research  services
provided by the executing broker or dealer.  The  determination may be viewed in
terms  of   either  a   particular   transaction   or  the   Adviser's   overall
responsibilities  with respect to the Fund and to other  accounts  over which it
exercises investment discretion.  It is understood that although the information
may be useful to the Trust and the Adviser, it is not possible to place a dollar
value on such  information.  Consistent  with the Rules of Fair  Practice of the
National  Association of Securities  Dealers,  Inc., and subject to seeking best
qualitative execution,  the Adviser may give consideration to sales of shares of
the  Fund as a factor  in the  selection  of  brokers  and  dealers  to  execute
portfolio transactions of the Fund.

         On occasions  when the Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may, but shall be under
no obligation  to,  aggregate the securities to be sold or purchased in order to
obtain the most favorable  price or lower  brokerage  commissions  and efficient
execution.  In such event, allocation of the securities so purchased or sold, as
well as expenses incurred in the transaction, will be made by the Adviser in the
manner it


                                                     - 8 -


<PAGE>



considers to be the most equitable and consistent with its fiduciary obligations
to the Trust with respect to the Fund and to such other clients.

         The Adviser will not execute any portfolio  transactions for the Fund's
account with a broker or dealer which is an  "affiliated  person" (as defined in
the Act) of the Trust,  the  Manager or the Adviser  without  the prior  written
approval of the  Manager.  The Manager  agrees that it will  provide the Adviser
with a list of brokers and dealers which are "affiliated  persons" of the Trust,
the Manager or the Adviser.

         The  Adviser  shall  render  regular  reports to the Trust of the total
brokerage business placed by the Fund and the manner in which the allocation has
been accomplished.

         4. Expenses of the Fund.  It is  understood  that the Fund will pay, or
that the Fund will enter into  arrangements  that require  third parties to pay,
all its expenses other than those expressly assumed by the Manager herein, which
expenses payable by the Fund shall include:

         A.       Expenses of all audits by independent public
                  accountants;
         B.       Expenses of transfer agent, dividend disbursing agent,
                  accounting and pricing agent and shareholder
                  recordkeeping services;
         C.       Expenses of custodial services including recordkeeping
                  services provided by the custodian;
         D.       Expenses of obtaining security valuation quotations for
                  calculating the value of the Fund's net assets;

                                                     - 9 -


<PAGE>



         E.       Salaries and other compensation of any of its executive
                  officers and employees, if any, who are not officers,
                  directors, stockholders or employees of the Manager or
                  the Adviser;
         F.       Taxes or governmental fees levied against the Fund;
         G.       Brokerage fees and commissions in connection with the
                  purchase and sale of the Fund's portfolio securities;
         H.       Costs, including the interest expense, of borrowing
                  money;
         I.       Costs and/or fees incident to Board of Trustee and
                  shareholder meetings, the preparation and mailings of
                  prospectuses, reports and notices to the existing
                  shareholders of the Fund, the filing of reports with
                  regulatory bodies, the maintenance of the Trust's
                  existence as a business trust, membership in investment
                  company organizations, and the registration of shares
                  with federal and state securities authorities;
         J.       Legal fees, including the legal fees related to the
                  registration and continued qualification of the Fund's
                  shares for sale and legal fees arising from litigation
                  to which the Trust may be a party and indemnification
                  of the Trust's officers and trustees with respect
                  thereto;
         K.       Costs of printing share certificates (in the event such
                  certificates are issued) representing shares of the
                  Fund;


                                                     - 10 -


<PAGE>



         L.       Trustees' fees and expenses of Trustees who are not
                  directors, officers, employees or stockholders of the
                  Manager, the Adviser or any of their affiliates; and
         M.       The Fund's pro rata portion of the fidelity bond
                  required by Section 17(g) of the Act and other
                  insurance premiums.

         5.       Activities and Affiliates of the Manager.

         A.       The services of the Manager hereunder are not to be
                  deemed  exclusive,  and the Manager and any of its  affiliates
                  shall  be free to  render  similar  services  to  others.  The
                  Manager shall use the same skill and care in the management of
                  the Fund's  assets as it uses in the  administration  of other
                  accounts to which it provides asset management, consulting and
                  portfolio  manager  selection  services,   but  shall  not  be
                  obligated  to give the Fund  more  favorable  or  preferential
                  treatment vis-a-vis its other clients.
         B.       Subject to and in accordance with the Declaration of
                  Trust and Bylaws of the Trust and to Section 10(a) of
                  the Act, it is understood that Trustees, officers and
                  agents of the Trust and shareholders of the Fund are or
                  may be interested in the Manager or its affiliates as
                  directors, officers, agents or stockholders of the
                  Manager or its affiliates; that directors, officers,
                  agents and stockholders of the Manager or its
                  affiliates are or may be interested in the Trust as
                  Trustees, officers, agents, shareholders or otherwise;

                                                     - 11 -


<PAGE>



                  that the Manager or its  affiliates  may be  interested in the
                  Trust as shareholders or otherwise; and that the effect of any
                  such interests shall be governed by said Declaration of Trust,
                  Bylaws and the Act.

         6.  Compensation  of the  Manager.  For all services to be rendered and
payments  made as  provided in this  Agreement,  the Fund will pay the Manager a
daily fee equal to the annual rate of 70/100 of 1% of the value of the daily net
assets of the Fund up to and  including  $100,000,000  and  60/100 of 1% of such
assets in excess of  $100,000,000.  Manager's  fee shall be payable  monthly and
shall be due with respect to any month as of the first  business  day  following
the end of such month.

         The  value of the  daily net  assets  of the Fund  shall be  determined
pursuant  to the  applicable  provisions  of the  Declaration  of  Trust  and to
resolutions  of the  Board  of  Trustees  of the  Trust.  If,  pursuant  to such
provisions, the determination of net asset value is suspended for any particular
business  day,  then for the purposes of this  paragraph 6, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of the close of  business on that day, or as of such other time as the
value of the Fund's net assets may  lawfully be  determined  on that day. If the
determination of the net asset value of the Fund's shares has been suspended for
a period including such month, the Manager's compensation payable for such month
shall be  computed  on the basis of the  value of the net  assets of the Fund as
last determined (whether during or prior to such month).

                                                     - 12 -


<PAGE>



         7.       Liabilities of the Manager.

         A.       Except as provided below in this paragraph 7, in the
                  absence of willful misfeasance, bad faith, gross
                  negligence, or reckless disregard of obligations or
                  duties hereunder on the part of the Manager ("disabling
                  conduct"), the Manager shall not be subject to
                  liability to the Fund or to any shareholder of the Fund
                  for any act or omission in the course of, or connected
                  with, rendering services hereunder or for any losses
                  that may be sustained in the purchase, holding or sale
                  of any security.
         B.       The Manager shall not be indemnified for any liability
                  unless (i) a final decision is made on the merits by a
                  court or other body before whom the proceeding was
                  brought that the Manager was not liable by reason of
                  disabling conduct, or (ii) in the absence of such a
                  decision, a reasonable determination is made, based
                  upon a review of the facts, that the Manager was not
                  liable by reason of disabling conduct, by (a) the vote
                  of a majority of a quorum of the Trustees who are not
                  interested persons of the Trust or the Manager or (b)
                  an independent legal counsel in a written opinion.  The
                  Fund will advance attorneys' fees or other expenses
                  incurred by the Manager in defending a proceeding, upon
                  the undertaking by or on behalf of the Manager to repay
                  the advance unless it is ultimately determined that the
                  Manager is entitled to indemnification, so long as the

                                                     - 13 -


<PAGE>



                  Manager  meets at least one of the following as a condition to
                  the advance:  (i) the Manager shall provide a security for its
                  undertaking,  (ii) the Fund  shall be insured  against  losses
                  arising by reason of any lawful advances,  or (iii) a majority
                  of a quorum of the Trustees who are not interested  persons of
                  the Trust or the Manager, or an independent legal counsel in a
                  written  opinion,  shall  determine,  based on a review of the
                  readily  available  facts  (as  opposed  to a full  trial-type
                  inquiry),  that  there is reason to  believe  that the  Manger
                  ultimately  will be found  entitled  to  indemnification.  Any
                  person  employed  by the  Manager who may also be or become an
                  employee of the Trust shall be deemed,  when acting within the
                  scope of his  employment  by the  Trust,  to be acting in such
                  employment  solely  for the  Trust  and  not as the  Manager's
                  employee or agent.
         C.       No provision of this Agreement shall be construed to
                  protect any Trustee, director, officer or agent of the
                  Trust or the Manager from liability in violation of
                  Sections 17(h) and (i) of the Act.

         8.       Renewal and Termination.

         A.       This  Agreement  shall become  effective  upon its  execution,
                  shall  remain in force for a period of two (2) years from that
                  date and  remain in force  from year to year  thereafter,  but
                  only so long as such  continuance is specifically  approved at
                  least annually

                                                     - 14 -


<PAGE>



                  by  the  vote  of a  majority  of the  Trustees  who  are  not
                  interested  persons of the Trust,  the Manager or the Adviser,
                  cast in person at a meeting  called for the  purpose of voting
                  on such  approval and by a vote of the Board of Trustees or of
                  a majority of the outstanding voting securities. The aforesaid
                  provision  that this  Agreement  may be  continued  "annually"
                  shall be construed in a manner consistent with the Act and the
                  rules and regulations thereunder.

         B.       This Agreement:

                  (a)      may at any time be terminated  without the payment of
                           any  penalty  either by vote of the Board of Trustees
                           of  the  Trust  or  by  vote  of a  majority  of  the
                           outstanding  voting  securities of the Fund, on sixty
                           (60) days' written notice to the Manager;
                  (b)      shall immediately terminate in the event of its
                           assignment; and
                  (c)      may be terminated by the Manager on sixty (60)
                           days' written notice to the Trust.

         C.       As used in this Section 8, the terms "assignment," "interested
                  person"  and "vote of a  majority  of the  outstanding  voting
                  securities"  shall have the  meanings set forth in the Act and
                  the rules and regulations thereunder.

         D.       Any notice under this Agreement shall be given in
                  writing addressed and delivered or mailed postpaid, to

                                                     - 15 -


<PAGE>



                  the other party to this Agreement at its principal
                  place of business.

         9.       Severability.  If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.

         10.   Limitation  of  Liability.   It  is  expressly  agreed  that  the
obligations of the Fund hereunder shall not be binding upon any of the Trustees,
shareholders,  nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Fund, as provided in the  Declaration of
Trust of the Trust.  The  execution  and  delivery of this  Agreement  have been
authorized  by the  Trustees of the Trust and the  shareholders  of the Fund and
signed  by the  officers  of  the  Trust,  acting  as  such,  and  neither  such
authorization  by such Trustees and shareholders nor such execution and delivery
by such officers  shall be deemed to have been made by any of them  individually
or to impose any  liability on any of them  personally,  but shall bind only the
trust property of the Fund as provided in the Trust's Declaration of Trust.

         11. Amendment of this Agreement.  No provision of this Agreement may be
changed,  waived,  discharged  or  terminated  orally,  and no amendment of this
Agreement shall be effective until approved by vote of the holders of a majority
of the outstanding  voting  securities of the Fund and by the Board of Trustees,
including  a majority  of the  Trustees  who are not  interested  persons of the
Manager or of the Trust, cast in person

                                                     - 16 -


<PAGE>


at a meeting called for the purpose of voting on such approval.

         12.      Governing Law.  To the extent that state law has not
been preempted by the  provisions of any law of the United States  heretofore or
hereafter enacted,  as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of the State
of Ohio.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.

                                            COUNTRYWIDE INVESTMENT TRUST

ATTEST:                                     By: /s/ Robert H. Leshner
/s/ John F. Splain                         --------------------------
- --------------------                        Title: President


                                            COUNTRYWIDE INVESTMENTS, INC.

ATTEST:                                     By: /s/ Robert H. Leshner
/s/ John F. Splain                          ---------------------------
                                            Title: President



                                                     - 17 -






                              SUBADVISORY AGREEMENT


Rogge Global Partners plc
5-6 St. Andrew's Hill
London EC4V 5BY England

Gentlemen:

         Countrywide  Investment  Trust (the "Trust") is a diversified  open-end
management  investment  company  registered under the Investment  Company Act of
1940,  as  amended  (the  "Act"),  and  subject  to the  rules  and  regulations
promulgated  thereunder.  The Trust's shares of beneficial  interest are divided
into separate series or funds. Each such share of a fund represents an undivided
interest in the assets, subject to the liabilities, allocated to that fund. Each
fund has separate investment objectives and policies.  The Global Bond Fund (the
"Fund") has been established as a series of the Trust.

     Countrywide  Investments,  Inc.  (the  "Manager")  acts  as the  investment
manager  for the Fund  pursuant  to the  terms of a  Management  Agreement.  The
Manager is responsible  for the  coordination of investment of the Fund's assets
in portfolio securities. However, specific portfolio purchases and sales for the
investment  portfolio  of the  Fund  are to be  made by  advisory  organizations
recommended by the Manager and approved by the Board of Trustees of the Trust.

         1.       Appointment as an Adviser.  The Trust being duly
authorized hereby appoints and employs Rogge Global Partners plc ("the Adviser")
as the discretionary portfolio manager of the Fund, on the terms and conditions
set forth herein.



<PAGE>



         2.       Acceptance of Appointment; Standard of Performance. The
Adviser accepts the appointment as the discretionary portfolio manager and 
agrees to use its best professional judgment to make timely investment decisions
for the Fund in accordance with the provisions of this Agreement.

         3.  Portfolio  Management  Services of  Adviser.  The Adviser is hereby
employed and  authorized to select  portfolio  securities  for investment by the
Fund, to purchase and sell  securities of the Fund, and upon making any purchase
or  sale  decision,  to  place  orders  for  the  execution  of  such  portfolio
transactions  in  accordance  with  paragraphs  5 and  6  hereof.  In  providing
portfolio  management services to the Fund, the Adviser shall be subject to such
investment  restrictions  as are set forth in the Act and the rules  thereunder,
the Internal Revenue Code, applicable state securities laws, the supervision and
control of the Board of Trustees of the Trust, such specific instructions as the
Board of Trustees  may adopt and  communicate  to the  Adviser,  the  investment
objectives,  policies  and  restrictions  of  the  Fund  furnished  pursuant  to
paragraph  4, the  provisions  of  Schedule A hereto and  instructions  from the
Manager. The Adviser is not authorized by the Fund to take any action, including
the  purchase  or sale of  securities  for the  Fund,  in  contravention  of any
restriction,  limitation,  objective,  policy or  instruction  described  in the
previous sentence.  The Adviser shall maintain on behalf of the Fund the records
listed in  Schedule  A hereto (as  amended  from time to time).  At the  Trust's
reasonable request,

                                                     - 2 -


<PAGE>



the Adviser will  consult with the Manager with respect to any decision  made by
it with respect to the investments of the Fund.

        4.       Investment Objectives, Policies and Restrictions.  The
Trust will provide the Adviser with the statement of investment objectives, 
policies and restrictions applicable to the Fund as contained in the Fund's 
registration statements under the Act and the Securities Act of 1933, and any 
instructions adopted by the Board of Trustees supplemental thereto.  The Trust 
will provide the Adviser with such further information concerning the
investment objectives, policies and restrictions applicable thereto as the 
Adviser may from time to time reasonably request.  The Trust retains the right,
on written notice to the Adviser from the Trust or the Manager, to modify any 
such objectives, policies or restrictions in any manner at any time.

         5.  Transaction  Procedures.  All  transactions  will be consummated by
payment to or delivery by The Northern Trust Company or any successor  custodian
(the  "Custodian"),  or such  depositories or agents as may be designated by the
Custodian in writing,  as custodian for the Fund, of all cash and/or  securities
due to or from the Fund,  and the Adviser  shall not have  possession or custody
thereof.  The Adviser  shall advise the  Custodian and confirm in writing to the
Trust and to the  Manager all  investment  orders for the Fund placed by it with
brokers and dealers.  The Adviser shall issue to the Custodian such instructions
as may be  appropriate  in connection  with the  settlement  of any  transaction
initiated by the Adviser. It shall

                                                     - 3 -


<PAGE>



be the responsibility of the Adviser to take appropriate action if the Custodian
fails to confirm in writing proper execution of the instructions.

         6.       Allocation of Brokerage.  The Adviser shall have the
authority and discretion to select brokers and dealers to execute
portfolio transactions initiated by the Adviser, and for the
selection of the markets on or in which the transactions will be
executed.

                  A. In doing so, the Adviser will give primary consideration to
securing  the best  qualitative  execution,  taking into account such factors as
price  (including the applicable  brokerage  commission or dealer  spread),  the
execution capability,  financial responsibility and responsiveness of the broker
or dealer and the  brokerage  and  research  services  provided by the broker or
dealer.  Consistent with this policy,  the Adviser may select brokers or dealers
who also provide  brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the other accounts over
which it exercises  investment  discretion.  It is  understood  that neither the
Fund,  the Manager nor the Adviser have adopted a formula for  allocation of the
Fund's  investment  transaction  business.  It is  also  understood  that  it is
desirable for the Fund that the Adviser have access to  supplemental  investment
and market  research  and security  and  economic  analyses  provided by certain
brokers who may execute  brokerage  transactions  at a higher  commission to the
Fund than may result when allocating

                                                     - 4 -


<PAGE>



brokerage  to other  brokers  on the basis of  seeking  the  lowest  commission.
Therefore,  the Adviser is  authorized to place orders for the purchase and sale
of securities for the Fund with such certain  brokers,  subject to review by the
Trust's  Board of  Trustees  from time to time with  respect  to the  extent and
continuation  of this  practice,  provided  that the Adviser  determines in good
faith that the amount of the  commission  is reasonable in relation to the value
of the  brokerage  and research  services  provided by the  executing  broker or
dealer.  The  determination  may be  viewed  in  terms of  either  a  particular
transaction or the Adviser's overall  responsibilities  with respect to the Fund
and to the other accounts over which it exercises investment  discretion.  It is
understood  that  although  the  information  may be useful to the Trust and the
Adviser,  it is not  possible  to  place a  dollar  value  on such  information.
Consistent  with the  Rules of Fair  Practice  of the  National  Association  of
Securities Dealers, Inc., and subject to seeking best qualitative execution, the
Adviser may give consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions of the Fund.

         On occasions  when the Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased in order to

                                                     - 5 -


<PAGE>



obtain the most favorable  price or lower  brokerage  commissions  and efficient
execution.  In such event, allocation of the securities so purchased or sold, as
well as expenses incurred in the transaction, will be made by the Adviser in the
manner it considers to be the most equitable and  consistent  with its fiduciary
obligations to the Fund with respect to the Fund and to such other clients.

         For each  fiscal  quarter of the Fund,  the Adviser  shall  prepare and
render  reports to the Manager  and the  Trust's  Board of Trustees of the total
brokerage  business  placed  and the  manner  in which the  allocation  has been
accomplished. Such reports shall set forth at a minimum the information required
to be maintained by Rule 31a-1(b)(9) under the Act.

                  B.  Adviser  agrees  that it will not  execute  any  portfolio
transactions  for the  Fund's  account  with a  broker  or  dealer  which  is an
"affiliated  person"  (as  defined in the Act) of the Trust,  the  Manager,  the
Adviser or any portfolio manager of the Trust without the prior written approval
of the Manager.  The Manager agrees that it will provide the Adviser with a list
of brokers and dealers which are "affiliated  persons" of the Trust, the Manager
or the Adviser.

         7.       Proxies.  The Trust will vote all proxies solicited by
or with respect to the issuers of securities in which assets of the Fund
may be invested from time to time.  At the Fund's request, the Adviser shall 
provide the Trust with its recommendations as to the voting of such proxies.

                                                     - 6 -


<PAGE>



         8.       Reports to the Adviser.  The Trust will provide the
Adviser with such periodic reports concerning the status of the
Fund as the Adviser may reasonably request.

         9. Fees for  Services.  For the  services  provided  to the  Fund,  the
Manager  shall pay the Adviser a fee equal to the annual rate of 35/100 of 1% of
the  average  value of the  daily  net  assets  of the Fund up to and  including
$100,000,000  and  30/100 of 1% of such  assets in excess of  $100,000,000.  The
Adviser agrees to waive all advisory fees for the first sixty days of the Fund's
operations.  Thereafter, however, the Adviser shall not be required to waive any
portion of its fees if not required by an applicable statute or regulation.

         The Adviser's  fees shall be payable  monthly within ten days following
the end of each month.  Pursuant to the provisions of the  Management  Agreement
between the Trust and the  Manager,  the Manager is solely  responsible  for the
payment of fees to the  Adviser,  and the Adviser  agrees to seek payment of the
Adviser's fees solely from the Manager.

         10. Other Investment  Activities of the Adviser. The Trust acknowledges
that  the  Adviser  or one  or  more  of  its  affiliates  may  have  investment
responsibilities  or render  investment  advice to or perform  other  investment
advisory  services for other  individuals or entities and that the Adviser,  its
affiliates or any of its or their directors,  officers,  agents or employees may
buy,  sell or  trade in any  securities  for its or  their  respective  accounts
("Affiliated  Accounts").  Subject to the provisions of paragraph 2 hereof,  the
Trust agrees that the Adviser or its

                                                     - 7 -


<PAGE>



affiliates may give advice or exercise  investment  responsibility and take such
other action with respect to other Affiliated Accounts which may differ from the
advice  given or the timing or nature of action  taken with respect to the Fund,
provided that the Adviser acts in good faith, and provided  further,  that it is
the Adviser's policy to allocate,  within its reasonable discretion,  investment
opportunities  to the Fund over a period of time on a fair and  equitable  basis
relative  to  the  Affiliated  Accounts,  taking  into  account  the  investment
objectives  and  policies of the Fund and any specific  investment  restrictions
applicable  thereto.  The Trust  acknowledges that one or more of the Affiliated
Accounts  may at any time  hold,  acquire,  increase,  decrease,  dispose  of or
otherwise  deal  with  positions  in  investments  in which the Fund may have an
interest from time to time,  whether in  transactions  which involve the Fund or
otherwise.  The  Adviser  shall have no  obligation  to  acquire  for the Fund a
position in any  investment  which any Affiliated  Account may acquire,  and the
Trust shall have no first refusal,  co-investment  or other rights in respect of
any such investment, either for the Fund or otherwise.

         11.      Certificate of Authority.  The Trust, the Manager and
the Adviser shall furnish to each other from time to time certified copies of 
the resolutions of their Board of Trustees or Board of Directors or executive 
committees, as the case may be, evidencing the authority of officers and 
employees who are


                                                     - 8 -


<PAGE>



authorized to act on behalf of the Trust, the Fund, the Manager and/or the 
Adviser.

         12.  Limitation of  Liability.  The Adviser shall not be liable for any
action taken,  omitted or suffered to be taken by it in its reasonable judgment,
in good faith and believed by it to be  authorized  or within the  discretion or
rights or powers conferred upon it by this Agreement,  or in accordance with (or
in the absence of) specific directions or instructions from the Trust, provided,
however,  that such acts or omissions shall not have resulted from the Adviser's
willful misfeasance,  bad faith or gross negligence, a violation of the standard
of care  established  by and applicable to the Adviser in its actions under this
Agreement or breach of its duty or of its obligations hereunder. Nothing in this
paragraph 12 shall be construed in a manner inconsistent with Sections 17(h) and
(i) of the Act.

         13.      Confidentiality.  Subject to the duty of the Adviser and the 
Trust to comply with applicable law, including any demand of any regulatory or 
taxing authority having jurisdiction, the parties hereto shall treat as 
confidential all information pertaining to the Fund and the actions of the 
Adviser and the Trust in respect thereof.

         14.      Assignment.  No assignment of this Agreement shall be
made by the Adviser, and this Agreement shall terminate automatically in the 
event of such assignment.  The Adviser shall notify the Trust in writing 
sufficiently in advance of any proposed change of control, as defined in 
Section 2(a)(9) of the

                                                     - 9 -


<PAGE>



Act, as will enable the Trust to consider  whether an assignment will occur, and
to take the steps necessary to enter into a new contract with the Adviser.

         15.      Representations, Warranties and Agreements of the
Trust.  The Trust represents, warrants and agrees that:

                  A.       The Adviser has been duly appointed by the Board
of Trustees of the Trust to provide investment services to the
Fund as contemplated hereby.

                  B. The Trust will  deliver to the Adviser a true and  complete
copy of its then current  prospectus and statement of additional  information as
effective from time to time and such other  documents or  instruments  governing
the  investments of the Fund and such other  information as is necessary for the
Adviser to carry out its obligations under this Agreement.

                  C.       The Trust is currently in compliance and shall at
all times comply with the requirements imposed upon the Fund by
applicable laws and regulations.

         16.      Representations, Warranties and Agreements of the
Adviser.  The Adviser represents, warrants and agrees that:

                  A.       The Adviser is registered as an "investment
adviser" under the Investment Advisers Act of 1940.

                  B.       The Adviser will maintain, keep current and
preserve on behalf of the Fund, in the manner and for the time
periods required or permitted by the Act, the records identified
in Schedule A.  The Adviser agrees that such records (unless
otherwise indicated on Schedule A) are the property of the Trust,

                                                     - 10 -


<PAGE>



and will be surrendered to the Trust promptly upon request.

                  C.       The Adviser will complete such reports concerning
purchases  or sales of  securities  on behalf of the Fund as the  Manager or the
Trust  may from time to time  require  to ensure  compliance  with the Act,  the
Internal Revenue Code and applicable state securities laws.

                  D. The Adviser will adopt a written  code of ethics  complying
with the  requirements  of Rule 17j-1  under the Act and will  provide the Trust
with a copy  of  the  code  of  ethics  and  evidence  of its  adoption.  Within
forty-five (45) days of the end of the last calendar  quarter of each year while
this  Agreement is in effect,  the president or a vice  president of the Adviser
shall certify to the Trust that the Adviser has complied  with the  requirements
of Rule 17j-1 during the  previous  year and that there has been no violation of
the  Adviser's  code of  ethics  or,  if such a  violation  has  occurred,  that
appropriate  action was taken in  response to such  violation.  Upon the written
request of the Trust, the Adviser shall submit to the Trust the reports required
to be made to the Adviser by Rule 17j-1(c)(1).

                  E.       The Adviser will promptly after filing with the
Securities and Exchange Commission an amendment to its Form ADV
furnish a copy of such amendment to the Trust and to the Manager.

                  F.       Upon request of the Trust, the Adviser will
provide assistance to the Custodian in the collection of income
due or payable to the Fund.  With respect to income from foreign
sources, the Adviser will undertake any reasonable procedural

                                                     - 11 -


<PAGE>



steps required to reduce, eliminate or reclaim non-U.S. withholding taxes under
the terms of applicable United States income tax treaties.

                  G. The  Adviser  will  immediately  notify  the  Trust and the
Manager of the  occurrence of any event which would  disqualify the Adviser from
serving as an investment  adviser of an investment  company  pursuant to Section
9(a) of the Act or otherwise.

         17.  Amendment.  This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Trust, which amendment, other than
amendments  to Schedule  A, is subject to the  approval of the Board of Trustees
and the shareholders of the Fund in the manner required by the Act and the rules
thereunder,  subject to any  applicable  exemptive  order of the  Securities and
Exchange Commission modifying the provisions of the Act with respect to approval
of amendments to this Agreement.

         18.      Effective Date; Term.  This Agreement shall become
effective on the date of its execution and shall remain in force for a period 
of two (2) years from that date; and from year to year thereafter but only so 
long as such continuance is specifically approved at least annually by the vote
of a majority of the Trustees who are not interested persons of the Trust, the
Manager or the Adviser, cast in person at a meeting called for the purpose of 
voting on such approval, and by a vote of the Board of Trustees or of a majority
of the outstanding voting securities of the Fund.  The aforesaid requirement 
that this

                                                     - 12 -


<PAGE>



Agreement may be continued  "annually" shall be construed in a manner consistent
with the Act and the rules and regulations thereunder.

         19.  Termination.  This  Agreement  may be  terminated  by either party
hereto,  without the payment of any penalty,  immediately upon written notice to
the  other in the  event of a breach of any  provision  thereof  by the party so
notified,  or otherwise upon sixty (60) days' written  notice to the other,  but
any such termination shall not affect the status,  obligations or liabilities of
any party hereto to the other.

         20.  Shareholder  Liability.  The  Adviser is hereby  expressly  put on
notice  of  the  limitation  of  shareholder  liability  as  set  forth  in  the
Declaration  of Trust of the Trust and agrees  that  obligations  assumed by the
Trust pursuant to this  Agreement  shall be limited in all cases to the Fund and
its assets.  The Adviser agrees that it shall not seek  satisfaction of any such
obligations from the shareholders or any individual shareholder of the Fund, nor
from the Trustees or any individual Trustee of the Trust.

         21.      Definitions.  As used in paragraphs 14 and 18 of this
Agreement, the terms "assignment," interested person" and "vote of a majority 
of the outstanding voting securities" shall have the meanings set forth in the 
Act and the rules and regulations thereunder.

         22.      Applicable Law.  To the extent that state law is not
preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from

                                                     - 13 -


<PAGE>



time to time,  this  Agreement  shall be  administered,  construed  and enforced
according to the laws of the State of Ohio.


COUNTRYWIDE INVESTMENTS, INC.                     COUNTRYWIDE INVESTMENT TRUST



By: /s/ Robert H. Leshner                          By: /s/ Robert H. Leshner
- ------------------------------                     ----------------------------

Title: President                                   Title: President


Date: February 28, 1997                              Date: February 28, 1997

                                   ACCEPTANCE

         The foregoing Agreement is hereby accepted.

                                                   ROGGE GLOBAL PARTNERS plc


                                                   By: /s/ Olaf Rogge
                                                   ------------------------
                                                   Title: Director

                                                   Date: February 28, 1997

                                                     - 14 -


<PAGE>



                                   SCHEDULE A

                     RECORDS TO BE MAINTAINED BY THE ADVISER

1.       (Rule  31a-1(b)(5) and (6)) A record of each brokerage  order,  and all
         other portfolio  purchases or sales,  given by the Adviser on behalf of
         the  Fund  for,  or  in  connection  with,  the  purchase  or  sale  of
         securities, whether executed or unexecuted. Such records shall include:

         A.       The name of the broker;

         B.       The terms and conditions of the order and of any
                  modification or cancellation thereof;

         C.       The time of entry or cancellation;

         D.       The price at which executed;

         E.       The time of receipt of a report of execution; and

         F.       The name of the person who placed the order on behalf
                  of the Fund.

2.       (Rule  31a-1(b)(9)) A record for each fiscal quarter,  completed within
         ten (10) days after the end of the quarter,  showing  specifically  the
         basis or bases upon which the allocation of orders for the purchase and
         sale of portfolio  securities to named brokers or dealers was effected,
         and the division of brokerage commissions or other compensation on such
         purchase and sale orders. Such record:

         A.       Shall include the consideration given to:

                  (i)      The sale of shares of the Fund by brokers or
                           dealers.

                  (ii)     The supplying of services or benefits by brokers
                           or dealers to:

                           (a)      The Trust;

                           (b)      the Manager;

                           (c)      the Adviser;

                           (d)      any other portfolio adviser of the Trust; 
                                    and 
                           (e)      any person affiliated with the foregoing
                                    persons.

                  (iii) Any other consideration other than the technical
                        qualifications of the brokers and dealers as such.
                            


                                                     - 15 -


<PAGE>


         B.       Shall show the nature of the services or benefits made
                  available.

         C.       Shall  describe  in detail the  application  of any general or
                  specific formula or other determinant used in arriving at such
                  allocation  of purchase  and sale orders and such  division of
                  brokerage commissions or other compensation.

         D.       The name of the person responsible for making the
                  determination of such allocation and such division of
                  brokerage commissions or other compensation.

3.       (Rule 31a-1(b)(10))  A record in the form of an appropriate
         memorandum identifying the person or persons, committees or
         groups authorizing the purchase or sale of portfolio
         securities.  Where an authorization is made by a committee
         or group, a record shall be kept of the names of its members
         who participate in the authorization.  There shall be
         retained as part of this record:  any memorandum,
         recommendation or instruction supporting or authorizing the
         purchase or sale of portfolio securities and such other
         information as is appropriate to support the authorization.*

4.       (Rule  31a-1(f))  Such  accounts,  books  and  other  documents  as are
         required to be maintained by  registered  investment  advisers by rules
         adopted  under Section 204 of the  Investment  Advisers Act of 1940, to
         the extent such  records are  necessary  or  appropriate  to record the
         Adviser's transactions with respect to the Fund.



         *Such  information  might  include:  the current Form 10-K,  annual and
quarterly reports, press releases,  reports by analysts and from brokerage firms
(including their recommendation;  i.e., buy, sell, hold) or any internal reports
or portfolio adviser reviews.



                                                 - 16 -


                              MANAGEMENT AGREEMENT

TO:      COUNTRYWIDE INVESTMENTS, INC.
         312 Walnut Street
         Cincinnati, Ohio  45202

Dear Sirs:

         Countrywide  Investment Trust (hereinafter  referred to as the "Trust")
herewith confirms our agreement with you.

         The Trust has been organized to engage in the business of an investment
company.  The ______________________ Fund (the "Fund") has been
established as a series of the Trust. You have been selected to act as the
investment  adviser of the Fund and to provide certain other  services,  as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions  hereinafter  set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.

1.       ADVISORY SERVICES

         You will regularly  provide the Fund with such investment advice as you
in your  discretion  deem  advisable  and will furnish a  continuous  investment
program for the Fund consistent with its investment objectives and policies. You
will determine what  securities  shall be purchased for the Fund, what portfolio
securities  shall be held or sold by the Fund,  and what  portion  of the Fund's
assets  shall  be held  uninvested,  subject  always  to the  Fund's  investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect,  and subject  further,  to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies  thereof.  You will  advise and assist the  officers of the
Trust in taking  such steps as are  necessary  or  appropriate  to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Fund.

2.       ALLOCATION OF CHARGES AND EXPENSES

         You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers,  directors,  stockholders or employees of
your  corporation  and will make  available,  without  expense to the Fund,  the
services of such of your  employees as may duly be elected  officers or trustees
of  the  Trust,  subject  to  their  individual  consent  to  serve  and  to any
limitations  imposed by law.  The  compensation  and  expenses of any  officers,
trustees and employees of the Trust who are not officers,  directors,  employees
or stockholders of your corporation will be paid by the Trust.
                                                                            
                                                    - 1 -


<PAGE>



         You  will  pay all  advertising  and  promotion  expenses  incurred  in
connection with the sale or distribution of the Fund's shares to the extent such
expenses  are not  assumed by the Fund under the Trust's  Plans of  Distribution
Pursuant to Rule 12b-1.

         The  Fund  will  also be  responsible  for  the  payment  of all  other
operating expenses of the Fund, including fees and expenses incurred by the Fund
in connection with  membership in investment  company  organizations,  brokerage
fees and  commissions,  legal,  auditing and  accounting  expenses,  expenses of
registering shares under federal and state securities laws,  insurance expenses,
taxes or  governmental  fees,  fees and  expenses  of the  custodian,  transfer,
shareholder  service and dividend  disbursing  agent and  accounting and pricing
agent  of the  Fund,  expenses  including  clerical  expenses  of  issue,  sale,
redemption  or  repurchase  of  shares  of the Fund,  the fees and  expenses  of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing  reports  and  notices to  shareholders,  the cost of  printing  or
preparing  prospectuses  for  delivery to the Fund's  shareholders,  the cost of
printing or preparing stock  certificates or any other documents,  statements or
reports  to  shareholders,   expenses  of   shareholders'   meetings  and  proxy
solicitations,  such  extraordinary  or  nonrecurring  expenses  as  may  arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's  officers and trustees  with respect  thereto,  or any other expense not
specifically   described  above  incurred  in  the  performance  of  the  Fund's
obligations.  All other expenses not assumed by you herein  incurred by the Fund
in connection  with the  organization,  registration of shares and operations of
the Fund will be borne by the Fund.

3.       COMPENSATION OF THE ADVISER

         For all of the services to be rendered and payments made as provided in
this  Agreement,  the Fund will pay you as of the last day of each month,  a fee
equal to the annual rate of .50% of the average value of the daily net assets of
the  Fund  up  to  $50,000,000;   .45%  of  such  assets  from   $50,000,000  to
$150,000,000;   .40%  of  such  assets  from   $150,000,000   to  and  including
$250,000,000; and .375% of such assets in excess of $250,000,000.

         The Adviser will, until at least _______________, 1997, waive its fee
and reimburse expenses to the extent necessary to limit total operating
expenses to [.80% of the Money Market Fund's and .95% of the Intermediate Bond
Fund's] average net assets.

         The total fees  payable  during each of the first and second  halves of
each fiscal year of the Trust shall not exceed the semiannual total of the daily
fee  accruals  requested  by you during the  applicable  six month  period.  The
average  value of net assets  shall be  determined  pursuant  to the  applicable
provisions  of the  Declaration  of Trust of the  Trust or a  resolution  of the
Board, if required.  If, pursuant to such provisions,  the  determination of net
asset value of the Fund is suspended for any


                                                     - 2 -


<PAGE>



particular  business day, then for the purposes of this paragraph,  the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business  day, or as of such other time as
the value of the Fund's net assets may lawfully be  determined,  on that day. If
the determination of the net asset value of the Fund's shares has been suspended
for a period including such month, your compensation  payable at the end of such
month  shall be computed on the basis of the value of the net assets of the Fund
as last determined (whether during or prior to such month).

         Your  compensation  with respect to each additional series of the Trust
effectively  registered  for sale in a public  offering  after  the date of this
Agreement shall be determined by the Board, including a majority of the Trustees
who are not  "interested  persons" (as defined in the Investment  Company Act of
1940) of you or of the Trust, and approved pursuant to the provisions of Section
15 of the Investment Company Act of 1940.

4.       EXECUTION OF PURCHASE AND SALE ORDERS

         In connection  with purchases or sales of portfolio  securities for the
account of the Fund, it is  understood  that you will arrange for the placing of
all orders for the  purchase  and sale of  portfolio  securities  for the Fund's
accounts  with  brokers or dealers  selected  by you,  subject to review of this
selection  by the  Board  from  time to time.  You will be  responsible  for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed  at all  times to seek for the  Fund  the best  qualitative  execution,
taking into account such factors as price  (including the  applicable  brokerage
commission or dealer spread), the execution capability, financial responsibility
and  responsiveness  of the  broker or dealer  and the  brokerage  and  research
services provided by the broker or dealer.

         You should  generally seek favorable  prices and commission  rates that
are reasonable in relation to the benefits received. In seeking best qualitative
execution,  you are  authorized  to select  brokers or dealers who also  provide
brokerage and research  services (as those terms are defined in Section 28(e) of
the Securities  Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion.  You are authorized to pay a broker or
dealer who  provides  such  brokerage  and research  services a  commission  for
executing a portfolio transaction which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
you  determine in good faith that the amount of the  commission is reasonable in
relation to the value of the  brokerage  and research  services  provided by the
executing broker or dealer. The determination may be viewed in terms of either a

                                                     - 3 -


<PAGE>



particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that,  although the information may be useful to the Fund and you, it
is not  possible to place a dollar  value on such  information.  The Board shall
periodically  review  the  commissions  paid  by the  Fund to  determine  if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.

         Consistent with the Rules of Fair Practice of the National  Association
of Securities Dealers,  Inc., and subject to seeking best qualitative execution,
you may give  consideration  to sales of  shares  of the Fund as a factor in the
selection of brokers and dealers to execute Fund portfolio transactions.

         If any occasion should arise in which you give any advice to clients of
yours  concerning  the  shares of the Fund,  you will act  solely as  investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this  Agreement are not to be deemed to be exclusive and
it is understood  that you may render  investment  advice,  management and other
services to others.

5.       LIMITATION OF LIABILITY OF ADVISER

         You  (including  your  directors,  officers,  shareholders,  employees,
control persons and affiliates of any thereof) shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement  relates,  except a loss resulting from
willful  misfeasance,  bad  faith  or  gross  negligence  on  your  part  in the
performance  of  your  duties  or from  the  reckless  disregard  by you of your
obligations and duties under this Agreement ("disabling conduct").  However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the  proceeding was brought that
you were not liable by reason of  disabling  conduct,  or (2) in the  absence of
such a decision, a reasonable  determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct,  by (a) the vote
of a majority of a quorum of trustees  who are neither  "interested  persons" of
the Trust as defined in the  Investment  Company  Act of 1940 nor parties to the
proceeding  ("disinterested,  non-party trustees"),  or (b) an independent legal
counsel in a written  opinion.  The Fund will advance  attorneys'  fees or other
expenses  incurred by you in defending a proceeding,  upon the undertaking by or
on behalf of you to repay the advance  unless it is ultimately  determined  that
you are  entitled  to  indemnification,  so long as you meet at least one of the
following as a condition to the  advance:  (1) you shall  provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of

                                                     - 4 -


<PAGE>



any  lawful  advances,  or (3) a  majority  of a  quorum  of the  disinterested,
non-party  trustees of the Trust,  or an independent  legal counsel in a written
opinion,  shall  determine,  based on a review of  readily  available  facts (as
opposed to a full trial- type inquiry), that there is reason to believe that you
ultimately will be found entitled to indemnification. Any person employed by you
who may also be or become an employee of the Trust shall be deemed,  when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as your employee or agent.

6.       DURATION AND TERMINATION OF THIS AGREEMENT

         This Agreement  shall be effective upon its execution,  shall remain in
force for a period of two (2) years from that date and remain in force from year
to year thereafter,  subject to annual approval by (i) the Board of the Trust or
(ii) a vote of a majority (as defined in the Investment  Company Act of 1940) of
the  outstanding  voting  securities of the Fund,  provided that in either event
continuance  is  also  approved  by a  majority  of the  trustees  who  are  not
interested persons of you or of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.

         If the  shareholders  of the Fund fail to approve the  Agreement in the
manner set forth above, upon approval of the Board,  including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to  serve or act in such  capacity  for the Fund  for the  period  of time  (not
exceeding one hundred and twenty days after the  termination  of the  Agreement)
pending  required  approval of the  Agreement,  of a new agreement with you or a
different adviser or other definitive action;  provided that the compensation to
be paid by the  Fund to you will be equal to the  lesser  of your  actual  costs
incurred in furnishing  investment  advisory  services to the Fund or the amount
you would have received under this Agreement.

         This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty,  by the Board,  by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.

7.       AMENDMENT OF THIS AGREEMENT

         No provision of this  Agreement may be changed,  waived,  discharged or
terminated  orally,  and no amendment of this Agreement shall be effective until
approved  by  vote  of the  holders  of a  majority  of the  outstanding  voting
securities  of the Fund and by the Board,  including a majority of the  trustees
who are not  interested  persons  of you or of the  Trust,  cast in  person at a
meeting called for the purpose of voting on such approval.

                                                     - 5 -


<PAGE>



8.       LIMITATION OF LIABILITY

         It is expressly agreed that the obligations of the Fund hereunder shall
not be  binding  upon any of the  trustees,  shareholders,  nominees,  officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Fund, as provided in the Declaration of Trust of the Trust. The execution
and delivery of this Agreement have been authorized by the trustees of the Trust
and the shareholders of the Fund and signed by the officers of the Trust, acting
as such, and neither such  authorization  by such trustees and  shareholders nor
such  execution and delivery by such officers  shall be deemed to have been made
by  any of  them  individually  or to  impose  any  liability  on  any  of  them
personally,  but shall bind only the trust  property  of the Fund as provided in
the Trust's Declaration of Trust.

9.       MISCELLANEOUS

         The  captions  in  this  Agreement  are  included  for  convenience  of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise  affect their  construction or effect.  This Agreement may be executed
simultaneously  in two or more  counterparts,  each of which  shall be deemed an
original, but all of which together shall constitute one and the same Agreement.

         If you are in  agreement  with the  foregoing,  please sign the form of
acceptance  on the  accompanying  counterpart  of this  letter and  return  such
counterpart to the Trust,  whereupon this letter shall become a binding contract
upon the date thereof.

                                               Yours very truly,

ATTEST:                                        COUNTRYWIDE INVESTMENT TRUST


    
- --------------------                           ------------------------------  
                                               Dated: 


                             ACCEPTANCE

         The foregoing Agreement is hereby accepted.

ATTEST:                                       COUNTRYWIDE INVESTMENTS, INC.   



- -------------------                            By: 
                                                  -----------------------------
                                                   Dated: 


                                                     - 6 -



                             UNDERWRITING AGREEMENT


         This Agreement made as of February 28, 1997 by and between  COUNTRYWIDE
INVESTMENT TRUST, a Massachusetts  business trust (the "Trust"), and COUNTRYWIDE
INVESTMENTS, INC., an Ohio corporation ("Underwriter").

         WHEREAS,  the  Trust is an  investment  company  registered  under  the
Investment Company Act of 1940, as amended (the "Act"); and

         WHEREAS, Underwriter is a broker-dealer registered with the
Securities and Exchange Commission and a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and

         WHEREAS,  Underwriter serves as the principal  underwriter of shares of
beneficial  interest  (the  "Shares") of each series of shares of the Trust (the
"Series") pursuant to an underwriting agreement dated November 18, 1993, and the
Trust and Underwriter are desirous of continuing such arrangement;

         NOW, THEREFORE,  in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:

         1.       Appointment.
                  -----------
                  The Trust hereby  appoints  Underwriter as its exclusive agent
for  the  distribution  of the  Shares,  and  Underwriter  hereby  accepts  such
appointment under the terms of this Agreement. While this Agreement is in force,
the  Trust  shall  not sell any  Shares  except  on the  terms set forth in this
Agreement.  Notwithstanding any other provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares whenever, in its sole discretion,  it
deems such action to be desirable. 


<PAGE>



         2.       Sale and Repurchase of Shares.
                  -----------------------------
         (a)      Underwriter will have the right, as agent for the
Trust, to enter into dealer agreements with responsible  investment dealers, and
to sell Shares to such investment  dealers against orders therefor at the public
offering  price  (as  defined  in  subparagraph  2(e)  hereof)  less a  discount
determined by  Underwriter,  which  discount  shall not exceed the amount of the
sales charge stated in the Trust's effective Registration Statement on Form N-1A
under  the  Securities  Act of 1933,  as  amended,  including  the then  current
prospectus   and  statement  of  additional   information   (the   "Registration
Statement"). Upon receipt of an order to purchase Shares from a dealer with whom
Underwriter has a dealer  agreement,  Underwriter will promptly cause such order
to be filled by the Trust.

         (b)  Underwriter  will also have the  right,  as agent for the
Trust,  to sell such Shares to the public against orders  therefor at the public
offering price.

         (c)  Underwriter  will also have the  right,  as agent for the
Trust,  to sell  Shares  at their  net  asset  value to such  persons  as may be
approved  by the  Trustees  of the  Trust,  all such  sales to  comply  with the
provisions  of the Act and the  rules  and  regulations  of the  Securities  and
Exchange Commission promulgated thereunder.

         (d) Underwriter will also have the right to take, as agent for
the Trust, all actions which, in Underwriter's  judgment, are necessary to carry
into effect the distribution of the Shares.

                                                     - 2 -


<PAGE>



          (e) The public  offering  price for the Shares of each  Series
(and,  with  respect to each Series  offering  multiple  classes of Shares,  the
Shares of each Class of such Series) shall be the  respective net asset value of
the Shares of that  Series (or Class of that  Series)  then in effect,  plus any
applicable  sales charge  determined in the manner set forth in the Registration
Statement  or as  permitted  by the Act and the  rules  and  regulations  of the
Securities and Exchange Commission promulgated thereunder. In no event shall any
applicable  sales charge exceed the maximum sales charge  permitted by the Rules
of Fair Practice of the NASD.

          (f) The net asset  value of the Shares of each Series (or each
Class  of  a  Series)  shall  be  determined  in  the  manner  provided  in  the
Registration Statement,  and when determined shall be applicable to transactions
as provided for in the Registration Statement. The net asset value of the Shares
of each Series (or each Class of a Series)  shall be  calculated by the Trust or
by  another  entity on behalf of the  Trust.  Underwriter  shall have no duty to
inquire into or  liability  for the accuracy of the net asset value per Share as
calculated.
 
          (g) On every sale,  the Trust shall receive the applicable net
asset  value of the  Shares  promptly,  but in no  event  later  than the  tenth
business day  following  the date on which  Underwriter  shall have  received an
order for the purchase of the Shares. Underwriter shall have the right to retain
the sales charge less any applicable dealer discount.

                                                     - 3 -


<PAGE>



          (h) Upon receipt of purchase instructions, Underwriter
will transmit such instructions to the Trust or its transfer
agent for registration of the Shares purchased.
             
          (i) Nothing in this Agreement shall prevent Underwriter or any 
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor  for any other person,  firm or corporation
(including  other  investment  companies)  or  in  any  way  limit  or  restrict
Underwriter or any such  affiliated  person from buying,  selling or trading any
securities  for its or their own account or for the  accounts of others for whom
it or  they  may  be  acting;  provided,  however,  that  Underwriter  expressly
represents  that it will undertake no activities  which,  in its judgment,  will
adversely  affect the  performance  of its  obligations  to the Trust under this
Agreement.

           (j) Underwriter, as agent of and for the account of the Trust,
may  repurchase  the Shares at such prices and upon such terms and conditions as
shall be specified in the Registration Statement.
 
        3.       Sale of Shares by the Trust.
                 ----------------------------
                  The Trust  reserves  the right to issue any Shares at any time
directly  to the  holders  of  Shares  ("Shareholders"),  to sell  Shares to its
Shareholders  or to other persons  approved by  Underwriter at not less than net
asset value and to issue Shares in exchange for  substantially all the assets of
any corporation or trust or for the shares of any corporation or trust.


                                                     - 4 -


<PAGE>



         4.       Basis of Sale of Shares.
                  ------------------------
                  Underwriter  does not  agree to sell any  specific  number  of
Shares. Underwriter, as agent for the Trust, undertakes to sell Shares on a best
efforts basis only against orders therefor.

         5.       Rules of NASD, etc.
                  -------------------
                  (a) Underwriter  will conform to the Rules of Fair Practice of
the NASD and the securities laws of any jurisdiction in which it sells, directly
or indirectly, any Shares.

                  (b) Underwriter will require each dealer with whom Underwriter
has a dealer  agreement to conform to the applicable  provisions  hereof and the
Registration  Statement with respect to the public offering price of the Shares,
and neither  Underwriter  nor any such  dealers  shall  withhold  the placing of
purchase orders so as to make a profit thereby.

                  (c)  Underwriter  agrees to  furnish  to the Trust  sufficient
copies  of any  agreements,  plans  or  other  materials  it  intends  to use in
connection  with any sales of Shares in adequate  time for the Trust to file and
clear them with the proper  authorities  before they are put in use,  and not to
use them until so filed and cleared.

                  (d) Underwriter, at its own expense, will qualify as dealer or
broker,  or otherwise,  under all  applicable  State or federal laws required in
order that Shares may be sold in such  States as may be mutually  agreed upon by
the parties.

                  (e)      Underwriter shall not make, or permit any
representative, broker or dealer to make, in connection with any

                                                     - 5 -


<PAGE>



sale or solicitation of a sale of the Shares, any representations concerning the
Shares except those  contained in the then current  prospectus  and statement of
additional  information  covering the Shares and in printed information approved
by the Trust as  information  supplemental  to such  prospectus and statement of
additional information. Copies of the then effective prospectus and statement of
additional  information and any such printed  supplemental  information  will be
supplied by the Trust to Underwriter in reasonable quantities upon request.

         6.       Records to be Supplied by Trust.
                  --------------------------------
                  The Trust shall furnish to Underwriter copies of all
information,  financial  statements  and  other  papers  which  Underwriter  may
reasonably  request for use in connection  with the  distribution of the Shares,
and this shall include,  but shall not be limited to, one certified  copy,  upon
request by Underwriter,  of all financial  statements  prepared for the Trust by
independent public accountants.

         7.       Expenses.
                  ---------
                  In the  performance of its  obligations  under this Agreement,
Underwriter  will pay the costs  incurred  in  qualifying  as a broker or dealer
under  state  and  federal  laws  and  in   establishing   and  maintaining  its
relationships with the dealers selling the Shares. All other costs in connection
with the  offering  of the Shares  will be paid by the Trust or  Underwriter  in
accordance  with  agreements  between  them  as  permitted  by  applicable  law,
including the Act and rules and regulations promulgated thereunder.

                                                     - 6 -


<PAGE>



         8.       Indemnification of Trust.
                  --------------------------
                  Underwriter,  to the extent of the net commission  received by
it from the sale of Shares but to no greater  amount,  agrees to  indemnify  and
hold harmless the Trust, and each person who has been, is, or may hereafter be a
trustee, officer, employee,  shareholder or control person of the Trust, against
any loss,  damage or expense  (including the reasonable costs of  investigation)
reasonably incurred by any of them in connection with any claim or in connection
with any action,  suit or proceeding to which any of them may be a party,  which
arises  out of or is  alleged  to  arise  out of or is  based  upon  any  untrue
statement or alleged  untrue  statement of a material  fact,  or the omission or
alleged  omission to state a material fact  necessary to make the statements not
misleading,  on the part of  Underwriter or any agent or employee of Underwriter
or any other  person for whose acts  Underwriter  is  responsible,  unless  such
statement or omission was made in reliance upon written information furnished by
the Trust. Underwriter likewise, to the extent of the net commission received by
it from the sale of Shares but to no greater  amount,  agrees to  indemnify  and
hold harmless the Trust and each such person in connection  with any claim or in
connection with any action, suit or proceeding which arises out of or is alleged
to arise out of Underwriter's  failure to exercise reasonable care and diligence
with respect to its services,  if any,  rendered in connection with  investment,
reinvestment, automatic withdrawal and other plans for Shares.

                                                     - 7 -


<PAGE>



The term "expenses" for purposes of this and the next paragraph includes amounts
paid in  satisfaction  of  judgments  or in  settlements  which  are  made  with
Underwriter's  consent.  The  foregoing  rights of  indemnification  shall be in
addition  to any other  rights to which  the  Trust or each such  person  may be
entitled as a matter of law.

         9.       Indemnification of Underwriter.
                  -------------------------------
                  Underwriter, its directors, officers, employees,
shareholders  and control  persons shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust in  connection  with the
matters to which this  Agreement  relates,  except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of any of such persons in
the performance of Underwriter's duties or from the reckless disregard by any of
such persons of Underwriter's  obligations and duties under this Agreement.  The
Trust will advance attorneys' fees or other expenses incurred by any such person
in defending a proceeding,  upon the  undertaking by or on behalf of such person
to repay the  advance if it is  ultimately  determined  that such  person is not
entitled to indemnification.  Any person employed by Underwriter who may also be
or become an officer or  employee  of the Trust  shall be  deemed,  when  acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as an employee or agent of Underwriter.



                                                     - 8 -


<PAGE>



         10.      Termination and Amendment of this Agreement.
                  --------------------------------------------
          This Agreement shall automatically terminate, without
the payment of any penalty,  in the event of its assignment.  This Agreement may
be amended only if such amendment is approved (i) by Underwriter, (ii) either by
action of the Board of Trustees of the Trust or at a meeting of the Shareholders
of the Trust by the affirmative  vote of a majority of the  outstanding  Shares,
and (iii) by a  majority  of the  Trustees  of the Trust who are not  interested
persons  of the  Trust or of  Underwriter  by vote  cast in  person at a meeting
called for the purpose of voting on such approval.

            Either the Trust or Underwriter may at any time terminate this
Agreement on sixty (60) days' written  notice  delivered or mailed by registered
mail, postage prepaid, to the other party.

         11.      Effective Period of this Agreement.
                  -----------------------------------
                  This Agreement shall take effect upon its execution and
shall  remain in full  force and  effect  for a period of two (2) years from the
date of its execution (unless  terminated  automatically as set forth in Section
10),  and from  year to year  thereafter,  subject  to  annual  approval  (i) by
Underwriter,  (ii) by the Board of Trustees of the Trust or a vote of a majority
of the outstanding  Shares, and (iii) by a majority of the Trustees of the Trust
who are not  interested  persons of the Trust or of  Underwriter by vote cast in
person at a meeting called for the purpose of voting on such approval.

                                                     - 9 -


<PAGE>



         12.      Limitation on Liability.
                  -------------------------
                  The term  "Countrywide  Investment  Trust" means and refers to
the Trustees from time to time serving under the Trust's Declaration of Trust as
the same may subsequently thereto have been, or subsequently hereto be, amended.
It is expressly  agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees,  Shareholders,  nominees,  officers, agents or
employees  of the Trust,  personally,  but bind only the trust  property  of the
Trust, as provided in the  Declaration of Trust of the Trust.  The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed  by the  officers  of  the  Trust,  acting  as  such,  and  neither  such
authorization  by such Trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them  individually  or to impose any
liability on any of them  personally,  but shall bind only the trust property of
the Trust as provided in its Declaration of Trust.

         13.      New Series.
                  -----------
                  The  terms  and  provisions  of this  Agreement  shall  become
automatically  applicable  to any  additional  series of the  Trust  established
during the initial or renewal term of this Agreement.

         14.      Successor Investment Company.
                  ----------------------------- 
                  Unless this Agreement has been  terminated in accordance  with
Paragraph  10,  the  terms  and  provisions  of  this  Agreement   shall  become
automatically  applicable to any investment  company which is a successor to the
Trust as a result of a reorganization, recapitalization or change of domicile.


                                                     - 10 -


<PAGE>



         15.      Severability.
                  ------------- 
                  In the event any provision of this  Agreement is determined to
be void or unenforceable,  such determination  shall not affect the remainder of
this Agreement, which shall continue to be in force.

         16.      Questions of Interpretation.
                  ----------------------------
                  (a)  This Agreement shall be governed by the laws of the
State of Ohio.
                  (b) Any question of interpretation of any term or provision of
this  Agreement  having a  counterpart  in or  otherwise  derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretation thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission issued pursuant to said Act.
In  addition,  where the effect of a  requirement  of the Act,  reflected in any
provision  of this  Agreement  is  revised by rule,  regulation  or order of the
Securities  and  Exchange   Commission,   such  provision  shall  be  deemed  to
incorporate the effect of such rule, regulation or order.

         17.      Notices.
                  --------
                  Any  notices  under  this  Agreement   shall  be  in  writing,
addressed  and  delivered  or mailed  postage  paid to the  other  party at such
address as such other party may designate for the receipt of such notice.  Until
further notice to the other party, it is

                                                     - 11 -


<PAGE>


agreed that the address of the Trust and of  Underwriter  for this purpose shall
be 312 Walnut Street, Cincinnati, Ohio 45202.

                  IN WITNESS WHEREOF, the Trust and Underwriter have each
caused this Agreement to be signed in duplicate on its behalf,
all as of the day and year first above written.

ATTEST:                                       COUNTRYWIDE INVESTMENT TRUST


/s/ John F. Splain                            By: /s/ Robert H. Leshner
- --------------------                          ------------------------------


ATTEST:                                        COUNTRYWIDE INVESTMENTS, INC.


/s/ John F. Splain                             By: /s/ Robert H. Leshner
- ---------------------                          -------------------------------



                                                  - 12 -

                                                               Dealer #________
                          COUNTRYWIDE INVESTMENTS, INC.
                                312 WALNUT STREET
                             CINCINNATI, OHIO 45202
                                  800-543-8721
                                  513-629-2000

                               DEALER'S AGREEMENT

         Countrywide  Investments,   Inc.  ("Underwriter")  invites  you,  as  a
selected dealer,  to participate as principal in the distribution of shares (the
"Shares")  of the mutual  funds set forth on Schedule A to this  Agreement  (the
"Funds"), of which it is the exclusive  underwriter.  Underwriter agrees to sell
to you,  subject to any limitations  imposed by the Funds,  Shares issued by the
Funds and to promptly confirm each sale to you. All sales will be made according
to the following terms:

         1. All offerings of any of the Shares by you must be made at the public
offering prices,  and shall be subject to the conditions of offering,  set forth
in the then  current  Prospectus  of the Funds  and to the terms and  conditions
herein set forth,  and you agree to comply with all  requirements  applicable to
you of all applicable  laws,  including  federal and state  securities laws, the
rules and regulations of the Securities and Exchange  Commission,  and the Rules
of Fair Practice of the National  Association of Securities  Dealers,  Inc. (the
"NASD"),  including  Section 24 of the Rules of Fair  Practice of the NASD.  You
will not offer the Shares for sale in any state or other jurisdiction where they
are not qualified for sale under the Blue Sky Laws and regulations of such state
or  jurisdiction,  or  where  you are not  qualified  to act as a  dealer.  Upon
application  to  Underwriter,  Underwriter  will  inform you as to the states or
other  jurisdictions  in which  Underwriter  believes  the Shares may legally be
sold.

         2.       (a)  You will receive a discount from the public offering 
price ("concession") on all Shares purchased by you from Underwriter as 
indicated on Schedule A, as it may be amended by Underwriter from time to time.

                  (b) In all  transactions  in open  accounts  in which  you are
designated as Dealer of Record, you will receive the concessions as set forth on
Schedule A. You hereby authorize  Underwriter to act as your agent in connection
with all  transactions in open accounts in which you are designated as Dealer of
Record.  All  designations  as  Dealer  of  Record,  and all  authorizations  of
Underwriter  to act as  your  Agent  pursuant  thereto,  shall  cease  upon  the
termination of this Agreement or upon the  investor's  instructions  to transfer
his open  account to another  Dealer of Record.  No dealer  concessions  will be
allowed on purchases generating less than $1.00 in dealer concessions.

                  (c) As the exclusive  underwriter  of the Shares,  Underwriter
reserves the privilege of revising the discounts  specified on Schedule A at any
time by written notice.

         3.       Concessions will be paid to you at the address of your 
principal office, as indicated below in your acceptance of this Agreement.

         4. Underwriter  reserves the right to cancel this Agreement at any time
without  notice if any Shares  shall be offered for sale by you at less than the
then current public offering prices determined by, or for, the Funds.

         5. All orders are subject to acceptance or rejection by  Underwriter in
its sole  discretion.  The  Underwriter  reserves the right,  in its discretion,
without notice, to suspend sales or withdraw the offering of Shares entirely.

         6.  Payment  shall be made to the Funds and  shall be  received  by its
Transfer Agent within three (3) business days after the acceptance of your order
or such  shorter  time as may be  required  by law.  With  respect to all Shares
ordered by you for which  payment has not been  received,  you hereby assign and
pledge to  Underwriter  all of your right,  title and interest in such Shares to
secure payment  therefor.  You appoint  Underwriter as your agent to execute and
deliver all documents necessary to effectuate any of the transactions  described
in this  paragraph.  If such  payment is not received  within the required  time
period,  Underwriter  reserves  the right,  without  notice,  and at its option,
forthwith (a) to cancel the sale,  (b) to sell the Shares ordered by you back to
the Funds, or (c) to assign your payment obligation,  accompanied by all pledged
Shares,  to any person.  You agree that Underwriter may hold you responsible for
any loss, including loss of profit, suffered by the Funds, its Transfer Agent or
Underwriter,  resulting  from your failure to make  payment  within the required
time period.


<PAGE>




         7. No  person  is  authorized  to make any  representations  concerning
Shares of the Funds except those contained in the current applicable  Prospectus
and  Statement of  Additional  Information  and in sales  literature  issued and
furnished by  Underwriter  supplemental  to such  Prospectus.  Underwriter  will
furnish  additional copies of the current Prospectus and Statement of Additional
Information and such sales literature and other releases and information  issued
by Underwriter in reasonable quantities upon request.

         8. Under this  Agreement,  you act as principal and are not employed by
Underwriter  as broker,  agent or employee.  You are not  authorized  to act for
Underwriter nor to make any  representation on its behalf;  and in purchasing or
selling  Shares  hereunder,  you rely  only  upon  the  current  Prospectus  and
Statement of Additional Information furnished to you by Underwriter from time to
time  and  upon  such  written  representations  as may  hereafter  be  made  by
Underwriter to you over its signature.

         9. You  appoint  the  transfer  agent  for the  Funds as your  agent to
execute the purchase  transactions  of Shares in  accordance  with the terms and
provisions of any account,  program, plan or service established or used by your
customers and to confirm each purchase to your customers on your behalf, and you
guarantee the legal  capacity of your customers  purchasing  such Shares and any
co-owners of such Shares.

         10. You will (a)  maintain  all  records  required  by law  relating to
transactions in the Shares, and upon the request of Underwriter,  or the request
of the Funds,  promptly  make such records  available to  Underwriter  or to the
Funds as are requested,  and (b) promptly  notify  Underwriter if you experience
any difficulty in maintaining the records required in the foregoing clause in an
accurate  and  complete  manner.  In addition,  you will  establish  appropriate
procedures and reporting forms and schedules, approved by Underwriter and by the
Funds,  to enable the  parties  hereto and the Funds to  identify  all  accounts
opened and maintained by your customers.

         11.  Underwriter has adopted compliance  standards,  attached hereto as
Schedule B, as to when Class A and Class C Shares of the Dual Pricing  Funds may
appropriately  be sold to  particular  investors.  You  agree  that all  persons
associated with you will conform to such standards when selling Shares.

         12. Each party  hereto  represents  that it is  presently,  and, at all
times during the term of this  Agreement,  will be, a member in good standing of
the NASD and agrees to abide by all its Rules of Fair  Practice  including,  but
not limited to, the following provisions:

         (a) You shall not withhold placing  customers' orders for any Shares so
as to profit  yourself as a result of such  withholding.  You shall not purchase
any Shares from Underwriter other than for investment, except for the purpose of
covering purchase orders already received.

         (b)  All conditional orders received by Underwriter must be at a 
specified definite price.

         (c) If any Shares  purchased by you are repurchased by the Funds (or by
Underwriter for the account of the Funds) or are tendered for redemption  within
seven business days after  confirmation  of the original sale of such Shares (1)
you agree to forthwith refund to Underwriter the full concession  allowed to you
on the original sale,  such refund to be paid by  Underwriter to the Funds,  and
(2)  Underwriter  shall  forthwith  pay to the Funds  that part of the  discount
retained by Underwriter on the original sale. Notice will be given to you of any
such  repurchase  or  redemption  within  ten  days  of the  date on  which  the
repurchase or redemption request is made.

<PAGE>

         (d) Neither  Underwriter,  as exclusive  underwriter for the Funds, nor
you as  principal,  shall  purchase  any Shares from a record  holder at a price
lower than the net asset  value then  quoted by, or for,  the Funds.  Nothing in
this  sub-paragraph  shall prevent you from selling  Shares for the account of a
record  holder to  Underwriter  or the Funds at the net  asset  value  currently
quoted by, or for, the Funds and charging  the  investor a fair  commission  for
handling the transaction.

         (e)  You   warrant   on  behalf  of   yourself   and  your   registered
representatives  and employees that any purchase of Shares at net asset value by
the same pursuant to the terms of the Prospectus of the  applicable  Fund is for
investment purposes only and not for purposes of resale. Shares so purchased may
be resold only to the Fund which issued them.

         13.  You agree that you will  indemnify  Underwriter,  the  Funds,  the
Funds' transfer agent and the Funds'  custodians and hold such persons  harmless
from any claims or  assertions  relating  to the  lawfulness  of your  company's
participation  in this  Agreement and the  transactions  contemplated  hereby or
relating  to any  activities  of any persons or  entities  affiliated  with your
company  which  are   performed  in  connection   with  the  discharge  of  your
responsibilities  under this  Agreement.  If any such claims are  asserted,  the
indemnified  parties  shall  have the  right to  engage  in their  own  defense,
including the selection and engagement of legal counsel of their  choosing,  and
all costs of such defense shall be borne by you.



<PAGE>




         14. This  Agreement  will  automatically  terminate in the event of its
assignment.  Either party hereto may cancel this Agreement  without penalty upon
ten days' written  notice.  This Agreement may also be terminated as to any Fund
at any time  without  penalty  by the vote of a majority  of the  members of the
Board of Trustees of the terminating  Fund who are not "interested  persons" (as
such term is  defined  in the  Investment  Company  Act of 1940) and who have no
direct or indirect  financial  interest in the  applicable  Fund's  Distribution
Expense Plan pursuant to Rule 12b-1 under the Investment  Company Act of 1940 or
any agreement relating to such Plan, including this Agreement, or by a vote of a
majority of the outstanding  voting  securities of the  terminating  Fund on ten
days' written notice.

         15. All  communications  to  Underwriter  should be sent to Countrywide
Investments,  Inc., 312 Walnut Street, Cincinnati,  Ohio 45202, or at such other
address as Underwriter may designate in writing. Any notice to you shall be duly
given if mailed or telegraphed  to you at the address of your principal  office,
as indicated below in your acceptance of this Agreement.

         16.  This Agreement supersedes any other agreement with you relating 
to the offer and sale of the Shares, and relating to any other matter discussed
herein.

         17. This  Agreement  shall be binding (i) upon placing your first order
with Underwriter for the purchase of Shares, or (ii) upon receipt by Underwriter
in Cincinnati,  Ohio of a counterpart of this Agreement duly accepted and signed
by you,  whichever  shall occur  first.  This  Agreement  shall be  construed in
accordance with the laws of the State of Ohio.

         18. The  undersigned,  executing  this  Agreement  on behalf of Dealer,
hereby  warrants and  represents  that he is duly  authorized to so execute this
Agreement on behalf of Dealer.

         If the  foregoing  is in  accordance  with  your  understanding  of our
agreement,  please  sign  and  return  all  copies  of  this  Agreement  to  the
Underwriter.



ACCEPTED BY DEALER


By:________________________________________
Authorized Signature

___________________________________________
Type or Print Name, Position

___________________________________________
Dealer Name

___________________________________________
Address

____________________________________________
Address

____________________________________________
Phone

_____________________________________________
Date




COUNTRYWIDE INVESTMENTS, INC.


By: __________________________________________________


_______________________________________________________
Date

<PAGE>
                                                        Schedule A

                            COUNTRYWIDE INVESTMENTS
                              COMMISSION SCHEDULE

                        U.S. Government Securities Fund
                   Tax-Free Intermediate Term Fund - Class A
               Intermediate Term Government Income Fund - Class A
           Adjustable Rate U.S. Government Securities Fund - Class A

                                        Total
        Dollar Amount of Purchase       Sales        Dealer
        (At Offering Price)             Charge*      Concession

Less than $100,000                      2.00%          1.80%
from $100,000 but under $250,000        1.50%          1.35%
from $250,000 but under $500,000        1.00%           .90%
from $500,000 but under $1,000,000       .75%           .65%
$1,000,000 and over**                    None           None

25 basis points annual trailing commission effective immediately, paid 
quarterly.

                             Equity Fund - Class A
                             Utility Fund - Class A
                           Global Bond Fund - Class A
                           Treasury Total Return Fund
                      Ohio Insured Tax-Free Fund - Class A

                                        Total
        Dollar Amount of Purchase       Sales   Dealer
        (At Offering Price)             Charge* Concession

Less than $100,000                      4.00%   3.60%
from $100,000 but under $250,000        3.50%   3.30%
from $250,000 but under $500,000        2.50%   2.30%
from $500,000 but under  $1,000,000     2.00%   1.80%
$1,000,000 and over**                    None    None

25 basis points annual trailing commission effective immediately, paid 
quarterly.
*As a percentage of offering price.
** Broker/Dealers are entitled to a commission of 75 basis points at the time 
the investor purchases Class A shares at NAV in amounts totaling $1 million or
more.  However, the investor is subject to a contingent deferred sales load of
75 basis points if a redemption occurs within one year of purchase.  
See specific Fund prospectus for details.

                             Equity Fund - Class C
                             Utility Fund - Class C
                           Global Bond Fund - Class C
                      Ohio Insured Tax-Free Fund - Class C
                   Tax-Free Intermediate Term Fund - Class C
               Intermediate Term Government Income Fund - Class C
           Adjustable Rate U.S. Government Securities Fund - Class C

The Funds will be offered to clients at net asset value.  A commission of 1% of
the purchase amount of Class C shares will be paid to participating brokers at 
the time of purchase.  Purchases of Class C shares are subject to a contingent 
deferred sales load, according to the following schedule:
        
        Year Since Purchase     Contingent Deferred
        Payment Was Made        Sales Load

              First Year          1%
              Thereafter         None

100 basis points annual trailing commission will be paid quarterly beginning in
the thirteenth month.


Brokers may invest for their own account at NAV
No trailing commissions will be paid to a dealer for any calendar quarter in 
which the average daily balance of all accounts in Countrywide Investments 
funds (including no-load money market funds) is less than $1,000,000.

                          FOR BROKER/DEALER USE ONLY


<PAGE>
                                                          Schedule B



                             POLICIES AND PROCEDURES
                              WITH RESPECT TO SALES
                              OF DUAL PRICING FUND


         As certain  Funds within  Countrywide  Investments  (the "Dual  Pricing
Funds")  offer two classes of Shares  subject to  different  levels of front-end
sales charges,  it is important for an investor not only to choose the Fund that
best suits his  investment  objectives,  but also to choose the sales  financing
method which best suits his particular  situation.  To assist investors in these
decisions, we are instituting the following policy:

         1.       Any purchase order for $1 million or more must be for Class A
                  Shares.

         2.       Any  purchase  order for  $100,000 but less than $1 million is
                  subject  to  approval  by  a   registered   principal  of  the
                  Underwriter,  who must approve the  purchase  order for either
                  Class A  Shares  or Class C  Shares  in light of the  relevant
                  facts and circumstances, including:

                  (a)      the specific purchase order dollar amount;

                  (b)      the length of time the investor expects to hold the 
                           Shares; and

                  (c)      any other relevant circumstances, such as the 
                           availability of purchases under a Letter of Intent.

         3.       Any order to exchange  Class A Shares of a Dual  Pricing  Fund
                  (or Shares of another  Fund having a maximum  sales load equal
                  to or greater than Class A Shares of the Dual  Pricing  Funds)
                  for Shares of another  Dual  Pricing  Fund will be for Class A
                  Shares  only.  Class C Shares  of a Dual  Pricing  Fund may be
                  exchanged for either Class A or Class C Shares of another Dual
                  Pricing Fund,  provided that an exchange of Class C Shares for
                  Class  A  Shares  is  subject  to  approval  by  a  registered
                  principal  of  Underwriter,  who must  approve the exchange in
                  light of the relevant facts and circumstances.

         There are instances when one financing  method may be more  appropriate
than the other.  For  example,  investors  who would  qualify for a  significant
discount  from the maximum  sales  charge on Class A Shares may  determine  that
payment of such a reduced  front-end  sales charge is superior to payment of the
higher ongoing distribution fee applicable to Class C Shares. On the other hand,
an investor  whose order would not qualify for such a discount may wish to pay a
lower sales  charge and have more of his funds  invested  in Class C Shares.  If
such an  investor  anticipates  that he will  redeem his  Shares  within a short
period of time,  the  investor  may,  depending  on the amount of his  purchase,
choose to bear higher  distribution  expenses than if he had  purchased  Class A
Shares.

         In  addition,   investors  who  intend  to  hold  their  Shares  for  a
significantly  long time may wish to  purchase  Class A Shares in order to avoid
the higher ongoing distribution expenses of Class C Shares.

         The  appropriate  supervisor  must ensure that all employees  receiving
investor inquiries about the purchase of Shares of Dual Pricing Funds advise the
investor of the available  financing  methods  offered by mutual funds,  and the
impact of  choosing  one method  over  another.  It may be  appropriate  for the
supervisor to discuss the purchase with the investor.

         This policy is effective  immediately with respect to any order for the
purchase of Shares of all Dual Pricing Funds.  Questions relating to this policy
should be  directed  to Sharon  Karp,  Vice  President  of the  Underwriter,  at
513/629-2000.









               TRANSFER, DIVIDEND DISBURSING, SHAREHOLDER SERVICE
                            AND PLAN AGENCY AGREEMENT

         THIS  AGREEMENT  effective  as of  February  28,  1997  by and  between
COUNTRYWIDE  INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), and
COUNTRYWIDE FUND SERVICES, INC., an Ohio corporation (the "T/A").

                                WITNESSETH THAT:

         WHEREAS,  the Trust  desires to appoint the T/A as its transfer  agent,
dividend disbursing agent, shareholder service agent, plan agent and shareholder
purchase and redemption  agent, and the T/A is willing to act in such capacities
upon the terms and conditions herein set forth;

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants herein contained,  the parties hereto,  intending to be legally bound,
hereby agree as follows:

         1.       APPOINTMENT OF TRANSFER AGENT.

                  The T/A is hereby  appointed  transfer agent for the shares of
the Trust and dividend disbursing agent for the Trust and shall also act as plan
agent,   shareholder  service  agent  and  purchase  and  redemption  agent  for
shareholders  of the Trust,  and the T/A accepts such  appointment and agrees to
act in such capacities under the terms and conditions set forth herein.

         2.       DOCUMENTATION.

         The Trust will furnish from time to time the following documents:

                  A.       Each resolution of the Board of Trustees of the
                           Trust authorizing the original issue of its
                           shares;

                  B.       Each Registration Statement filed with the
                           Securities and Exchange Commission and amendments
                           thereof;

                  C.       A certified copy of each amendment to the
                           Declaration of Trust and the By-Laws of the Trust;

                  D.       Certified copies of each resolution of the Board
                           of Trustees authorizing officers to give
                           instructions to the T/A;

                  E.       Specimens of all new forms of share certificates
                           accompanied by Board of Trustees' resolutions
                           approving such forms;



<PAGE>



                  F.       Such other certificates, documents or opinions
                           which the T/A may, in its discretion, deem
                           necessary or appropriate in the proper performance
                           of its duties;

                  G.       Copies of all Underwriting and Dealer Agreements
                           in effect;

                  H.       Copies of all Administration Agreements and
                           Investment Advisory Agreements in effect;

                  I.       Copies of all documents relating to special
                           investment or withdrawal plans which are offered
                           or may be offered in the future by the Trust and
                           for which the T/A is to act as plan agent.

         3.       T/A TO RECORD SHARES.

                  The T/A shall  record  issues of shares of the Trust and shall
notify the Trust in case any proposed  issue of shares by the Trust shall result
in an over-issue as defined by Section 8- 104(2) of the Uniform Commercial Code,
as provided in Article 8 of the Uniform  Commercial  Code,  Ohio  Revised  Code,
paragraph 1308.01 et. seq., and in case any issue of shares would result in such
an over-issue,  shall refuse to credit said shares and shall not countersign and
issue  certificates  for such  shares.  Except as  provided in Article 8 of said
Uniform  Commercial  Code and in Section 4 of this Agreement and as specifically
agreed in writing from time to time between the T/A and the Trust, the T/A shall
have no obligation,  when countersigning and issuing and/or crediting shares, to
take cognizance of any other laws relating to issue and sale of such shares.

         4.       T/A TO VALIDATE TRANSFERS.

                  Upon  receipt  of a  proper  request  for  transfer  and  upon
surrender to the T/A of certificates,  if any, in proper form for transfer,  the
T/A shall approve such transfer and shall take all necessary steps to effectuate
the  transfer  as  indicated  in the  transfer  request.  Upon  approval  of the
transfer, the T/A shall notify the Trust in writing of each such transaction and
shall make appropriate entries on the shareholder records maintained by the T/A.

         5.       SHARE CERTIFICATES.

                  If the Trust authorizes the issuance of share certificate, the
Trust shall supply the T/A with a sufficient supply of blank share  certificates
and from time to time shall  renew such  supply  upon  request of the T/A.  Such
blank share


                                                     - 2 -


<PAGE>



certificates shall be properly signed,  manually or, if authorized by the Trust,
by  facsimile;  and  notwithstanding  the death,  resignation  or removal of any
officers  of the  Trust  authorized  to  sign  share  certificates,  the T/A may
continue  to  countersign  certificates  which  bear  the  manual  or  facsimile
signature of such officer until otherwise directed by the Trust.

         6.       LOST OR DESTROYED CERTIFICATES.

                  In  case  of the  alleged  loss or  destruction  of any  share
certificate,  no new certificate  shall be issued in lieu thereof,  unless there
shall first be furnished an appropriate bond  satisfactory to T/A and the Trust,
and issued by a surety company satisfactory to the T/A and the Trust.

         7.       RECEIPT OF FUNDS.

                  Upon  receipt  of any  check  or  other  instrument  drawn  or
endorsed  to it as agent for,  or  identified  as being for the  account of, the
Trust  or  Countrywide  Investments,  Inc.  as  underwriter  of the  Trust  (the
"Underwriter"),  the T/A shall  stamp the check or  instrument  with the date of
receipt,  determine  the  amount  thereof  due the  Trust  and the  Underwriter,
respectively,  and shall forthwith process the same for collection. Upon receipt
of  notification of receipt of funds eligible for share purchases and payment of
sales  charges in  accordance  with the  Trust's  then  current  prospectus  and
statement of  additional  information,  the T/A shall  notify the Trust,  at the
close of each business day, in writing of the amounts of said funds  credited to
the Trust and deposited in its account with the Custodian,  and shall  similarly
notify the  Underwriter of the amounts of said funds credited to the Underwriter
and deposited in its account with its designated bank.

         8.       PURCHASE ORDERS.

                  Upon  receipt of a check or other  order for the  purchase  of
shares of the Trust,  accompanied by sufficient information to enable the T/A to
establish a shareholder  account, the T/A shall, as of the next determination of
net asset value after receipt of such order in accordance  with the Trust's then
current prospectus and statement of additional  information,  compute the number
of shares  due to the  shareholder,  credit the share  account of the  investor,
subject  to  collection  of the funds,  with the number of shares so  purchased,
shall  notify the Trust in writing  or by  computer  report at the close of each
business day of such  transactions  and shall mail to the investor and/or dealer
of record a notice of such credit when requested to do so by the Trust.



                                                     - 3 -


<PAGE>



         9.       ISSUE OF SHARE CERTIFICATES.

                  If the Trust authorizes the issuance of share certificates and
an investor requests a share certificate,  the T/A will countersign and mail, by
insured first class mail, a share  certificate to the investor at his address as
set forth on the transfer books of the Trust,  subject to any other instructions
for delivery of certificates  representing newly purchased shares and subject to
the limitation that no certificates  representing newly purchased share shall be
mailed to the  investor  until the cash  purchase  price of such shares has been
collected and credited to the account of the Trust maintained by the Custodian.

         10.      RETURNED CHECKS.

                  In the event that the T/A is notified by the Trust's Custodian
that any check or other order for the  payment of money is  returned  unpaid for
any reason, the T/A will:

                  A.       Give prompt notification to the Trust and the
                           Underwriter of the non-payment of said check;

                  B.       In the absence of other instructions from the
                           Trust or the Underwriter, take such steps as may
                           be necessary to redeem any shares purchased on the
                           basis of such returned check and cause the
                           proceeds of such redemption plus any dividends
                           declared with respect to such shares to be
                           credited to the account of the Trust and to
                           request the Trust's Custodian to forward such
                           returned check to the person who originally
                           submitted the check;

                  C.       Notify the Trust of such actions and correct the
                           Trust's records maintained by the T/A pursuant to
                           this Agreement.

         11.      SALES CHARGE.

                  In computing  the number of shares to credit to the account of
a shareholder  pursuant to Paragraph 8 hereof,  the T/A will calculate the total
of the applicable Underwriter and dealer of record sales charges with respect to
each purchase as set forth in the Trust's  current  prospectus  and statement of
additional  information  and in  accordance  with any  notification  filed  with
respect to combined and accumulated  purchases;  the T/A will also determine the
portio of each sales charge  payable by the  Underwriter to the dealer of record
participating  in the sale in accordance with such schedules as are from time to
time


                                                     - 4 -


<PAGE>



delivered by the Underwriter to the T/A; provided,  however,  the T/A shall have
no liability  hereunder  arising from the incorrect  selection by the T/A of the
gross rate of sales charges except that this exculpation  shall not apply in the
event the rate is specified by the Underwriter or the Trust and the T/A fails to
select the rate specified.

         12.      DIVIDENDS AND DISTRIBUTIONS.

                  The Trust shall furnish the T/A with  appropriate  evidence of
trustee action authorizing the declaration of dividends and other distributions.
The T/A shall  establish  procedures in accordance with the Trust's then current
prospectus  and statement of additional  information  and with other  authorized
actions of the Trust's Board of Trustees under which it will have available from
the  Custodian  of the  Trust or the  Trust any  required  information  for each
dividend  and other  distribution.  After  deducting  any amount  required to be
withheld by any applicable  laws, the T/A shall,  as agent for each  shareholder
who so  requests,  invest  the  dividends  and other  distributions  in full and
fractional  shares in accordance  with the Trust's then current  prospectus  and
statement  of  additional  information.  If an  investor  has elected to receive
dividends or other  distributions in cash, then the T/A shall prepare checks for
approval and verification by the Trust and signature by an authorized officer or
employee  of the  T/A in the  appropriate  amount  and  shall  mail  them to the
shareholders  of record at their  address of record or to such other  address as
the  shareholder  may have  designated.  The T/A shall, on or before the mailing
date of such checks,  notify the Trust and the Custodian of the estimated amount
of cash  required  to pay such  dividend  or  distribution,  and the Trust shall
instruct  the  Custodian to make  available  sufficient  funds  therefore in the
appropriate  account  of the  Trust.  The T/A  shall  mail  to the  shareholders
periodic  statements,  as requested by the Trust, showing the number of full and
fractional shares and the net asset value per share of shares so credited.

                  When  requested  by the Trust,  the T/A shall assist the Trust
(i) with any withholding procedures,  shareholder reports and payments, and (ii)
in the  preparation  and filing  with the  Internal  Revenue  Service,  and when
required,  with the addressing and mailing to shareholders,  of such returns and
information  relating to dividends  and  distributions  paid by the Trust as are
required to be so prepared, filed and mailed by applicable laws.

         13.      UNCLAIMED DIVIDENDS AND UNCLAIMED REDEMPTION PROCEEDS.

                  The T/A shall,  at least  annually,  furnish in writing to the
Trust the names and addresses,  as shown in the shareholder  accounts maintained
pursuant to Paragraph 8, of all investors for


                                                     - 5 -


<PAGE>



which there are, as of the end of the calendar year, dividends, distributions or
redemptions proceeds for which checks or share certificates mailed in payment of
distributions have been returned.  The T/A shall use its best efforts to contact
the shareholders  affected and to follow any other written instructions received
from the Trust  concerning  the  disposition  of any such  unclaimed  dividends,
distributions or redemption proceeds.

         14.      REDEMPTIONS AND EXCHANGES.

                  A. The T/A shall process,  in accordance with the Trust's then
current prospectus and statement of additional  information,  each order for the
redemption of shares  accepted by the T/A. Upon its approval of such  redemption
transactions,  the T/A, if  requested  by the Trust,  shall mail to the investor
and/or dealer of record a  confirmation  showing trade date,  number of full and
fractional  shares  redeemed,  the price  per  share  and the  total  redemption
proceeds.  For such redemption,  the T/A shall either: (a) prepare checks in the
appropriate  amounts for approval and verification by the Trust and signature by
an  authorized  officer  or  employee  of the T/A and  mail  the  checks  to the
appropriate  person,  or (b) in the event  redemption  proceeds  are to be wired
through the Federal Reserve Wire system or by bank wire,  cause such proceeds to
be wired in federal  funds to the  commercial  bank  account  designated  by the
investor,   or  (c)  effectuate  such  other  redemption  procedures  which  are
authorized by the Trust's Board of Trustees or its then current  prospectus  and
statement of additional  information.  The  requirements  as to  instruments  of
transfer and other documentation,  the applicable  redemption price and the time
of payment shall be as provided in the then current  prospectus and statement of
additional  information,  subject to such  supplemental  instructions  as may be
furnished  by the  Trust  and  accepted  by the  T/A.  If the  T/A or the  Trust
determines that a request for redemption  does not comply with the  requirements
for  redemptions,  the T/A shall promptly  notify the investor  and/or dealer of
record indicating the reason therefor.

                  B. If  shares  of the Trust are  eligible  for  exchange  with
shares of any other  investment  company,  the T/A, in accordance  with the then
current prospectus and statement of additional information and exchange rules of
the Trust and such other investment company, or such other investment  company's
transfer  agent,  shall review and approve all exchange  requests and shall,  on
behalf of the Trust's shareholders, process such approved exchange requests.




                                                     - 6 -


<PAGE>



                  C. The T/A shall notify the Custodian, the Underwriter and the
Trust on each  business day of the amount of cash required to meet payments made
pursuant  to the  provisions  of this  Paragraph  14,  and, on the basis of such
notice,  the Trust shall  instruct the Custodian to make  available from time to
time sufficient funds therefor in the appropriate account of the Trust.

                  D.  Procedures for effecting  redemption  orders accepted from
investors  or  dealers  of  record  by  telephone  or  other  methods  shall  be
established by mutual  agreement  between the T/A and the Trust  consistent with
the then current prospectus and statement of additional information.

                  E. The  authority  of the T/A to perform its  responsibilities
under  Paragraph 8,  Paragraph 12 and this  Paragraph 14 shall be suspended upon
receipt of  notification  by it of the  suspension of the  determination  of the
Trust's net asset value.

         15.      AUTOMATIC WITHDRAWAL PLANS.

                  The T/A will process  automatic  withdrawal orders pursuant to
the provisions of the  withdrawal  plans duly executed by  shareholders  and the
current  prospectus  and  statement  of  additional  information  of the  trust.
Payments  upon  such  withdrawal  order  shall  be  made  by the  T/A  from  the
appropriate account maintained by the Trust with the Custodian approximately the
last business day of each month in which a payment has been  requested,  and the
T/A will withdraw  from a  shareholder's  account and present for  repurchase or
redemption as many shares as shall be sufficient to make such withdrawal payment
pursuant to the provisions of the shareholder's  withdrawal plan and the current
prospectus and statement of additional  information  of the Trust.  From time to
time on new automatic withdrawal plans a check for payment date already past may
be issued upon request by the shareholder.

         16.      LETTERS OF INTENT.

                  The T/A will process  such letters of intent for  investing in
shares of the Trust as are provided for in the Trust's  current  prospectus  and
statement of additional  information.  The T/A will make appropriate deposits to
the account of the  Underwriter  for the  adjustment of sales charges as therein
provided and will currently report the same to the Underwriter.





                                                     - 7 -


<PAGE>



         17.      WIRE-ORDER PURCHASES.

                  The T/A will send  written  confirmations  to the  dealers  of
record  containing all details of the wire-order  purchases  placed by each such
dealer by close of business on the business day following receipt of such orders
by the T/A or the Underwriter,  with copies to the Underwriter.  Upon receipt of
any check drawn or  endorsed  to the Trust (or the T/A,  as agent) or  otherwise
identified as being payment of an  outstanding  wire- order,  the T/A will stamp
said check with the date of its receipt and  deposit the amount  represented  by
such check to the T/A's deposit accounts maintained with the Custodian.  The T/A
will compute the respective  portions of such deposit which  represent the sales
charge  and the net asset  value of the  shares  so  purchased,  will  cause the
Custodian to transfer federal funds in an amount equal to the net asset value of
the shares so purchased to the Trust's account at the Custodian, and will notify
the Trust and the  Underwriter  before  noon of each  business  day of the total
amount deposited in the Trust's deposit accounts,  and in the event that payment
for a purchase  order is not  received by the T/A or the  Custodian on the tenth
business day following receipt of the order,  prepare an NASD "notice of failure
of dealer to make payment" and forward such notification to the Underwriter.

         18.      OTHER PLANS.

                  The T/A will process such accumulation  plans,  group programs
and other  plans or  programs  for  investing  in shares of the Trust as are now
provided for in the Trust's  current  prospectus  and  statement  of  additional
information and will act as plan agent for shareholders pursuant to the terms of
such plans and programs duly executed by such shareholder.

         19.      BOOKS AND RECORDS.

                  The T/A shall  maintain  records for each  investor's  account
showing the following:

                  A.       Names, addresses and tax identifying numbers;

                  B.       Name of the dealer of record;

                  C.       Number of shares held of each series, if
                           applicable;

                  D.       Historical information regarding the account of
                           each shareholder, including dividends and
                           distributions distributed in cash or invested in
                           shares;


                                                     - 8 -


<PAGE>




                  E.       Information with respect to the source of all
                           dividends and distributions allocated among
                           income, realized short-term gains and realized
                           long-term gains;

                  G.       Information with respect to withholdings on
                           foreign accounts;

                  H.       Any instructions from a shareholder including all
                           forms furnished by the Trust and executed by a
                           shareholder with respect to (i) dividend or
                           distribution elections and (ii) elections with
                           respect to payment options in connection with the
                           redemption of shares;

                  I.       Any dividend address and correspondence relating
                           to the current maintenance of a shareholder's
                           account;

                  J.       Certificate numbers and denominations for any
                           shareholder holding certificates;

                  K.       Any information required in order for the T/A to
                           perform the calculations contemplated under this
                           Agreement;

                  L.       The date and number of shares of the Trust purchased,
                           the date and number of shares of the Trust held,  the
                           date and number of shares reinvested as dividends and
                           the date and number of shares redeemed.

                  All of the records prepared and maintained by the T/A pursuant
to this  Paragraph  19 will be the  property  of the  Trust.  In the event  this
Agreement is  terminated,  all records shall be delivered to the Trust or to any
person  designated  by the Trust at the  Trust's  expense,  and the T/A shall be
relieved of  responsibility  for the  preparation  and  maintenance  of any such
records delivered to the Trust or any such person.

         20.      TAX RETURNS AND REPORTS.

                  The T/A will prepare,  file with the Internal  Revenue Service
and, if required,  mail to shareholders such returns for reporting dividends and
distributions  paid by the Trust as are  required to be so  prepared,  filed and
mailed by applicable laws, rules and regulations; and the T/A will withhold such
sums as are required to be withheld under applicable  federal and state tax law,
rules and regulations.



                                                     - 9 -


<PAGE>



         21.      OTHER INFORMATION TO THE TRUST.

                  Subject to such instructions, verification and approval of the
Custodian and the Trust as shall be required by any agreement or applicable law,
the T/A will also  maintain such records as shall be necessary to furnish to the
Trust the following:  annual shareholder  meeting lists, proxy lists and mailing
materials,   shareholder  reports  and  confirmations,   checks  for  disbursing
redemption proceeds, dividends and other distributions or expense disbursements,
portfolio printouts and general ledger printouts.

         22.      FORM N-SAR.

                  The T/A shall  maintain such records within its control and as
shall  be  requested  by the  Trust  to  assist  the  Trust  in  fulfilling  the
requirements of Form N-SAR.

         23.      COOPERATION WITH ACCOUNTANTS.

                  The T/A shall  cooperate with the Trust's  independent  public
accountants  and shall  take all  reasonable  action in the  performance  of its
obligations  under this  Agreement to assure that the necessary  information  is
made  available to such  accountants  for the  expression  of their  unqualified
opinion where required for any document for the Trust.

         24.      SHAREHOLDER SERVICE AND CORRESPONDENCE.

                  The T/A will provide and maintain adequate personnel,  records
and  equipment  to  receive  and  answer all  shareholder  and dealer  inquiries
relating to account status, share purchases, redemptions and exchanges and other
investment plans available to Trust shareholders.

                  The T/A will answer written  correspondence  from shareholders
relating to their share accounts and such other written or oral inquiries as may
from time to time be mutually  agreed upon, and the T/A will notify the Trust of
any correspondence or inquiries which may require an answer from the Trust.

         25.      PROXIES.

                  The T/A shall  assist the Trust in the  mailing of proxy cards
and other material in connection with shareholder  meetings of the Trust,  shall
receive,  examine and tabulate  returned  proxies and shall, if requested by the
Trust,  provide at lest one inspector of election to attend and  participate  as
required by law in shareholder meetings of the Trust.


                                                     - 10 -


<PAGE>




         26.      FEES AND CHARGES.

                  For performing its services  under this  Agreement,  the Trust
shall  pay the T/A a fee in  accordance  with the  schedule  attached  hereto as
Schedule A and shall promptly  reimburse the T/A for any out of pocket  expenses
and  advances  which are to be paid by the Trust in  accordance  with  Paragraph
27(b).

         27.      EXPENSES.

                  The expenses  connected with the performance of this Agreement
shall be allocated between the Trust and the T/A as follows:

                  (a) The T/A shall furnish,  at its expense and without cost to
the Trust (i) the services of its personnel to the extent that such services are
required to carry out its obligations  under this Agreement and (ii) use of data
processing equipment.

                  (b) All costs and  expenses not  expressly  assumed by the T/A
under Paragraph  27(a) of this Agreement shall be paid by the Trust,  including,
but not limited to costs and expenses for postage,  envelopes,  checks,  drafts,
continuous  forms,  reports,  communications,  statements  and other  materials,
telephone,  telegraph  and remote  transmission  lines,  use of outside  mailing
firms,  necessary  outside record  storage,  media for storage or records (e.g.,
microfilm,  microfiche,  computer tapes), printing,  confirmations and any other
shareholder correspondence and any and all assessments, taxes or levies assessed
on the T/A for services  provided under this Agreement.  Postage for mailings of
dividends,  proxies,  reports and other  mailings to all  shareholders  shall be
advanced  to the T/A  three  business  days  prior to the  mailing  date of such
materials.

         28.      COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.

                  Except as otherwise  provided in this Agreement and except for
the accuracy of  information  furnished to it by the T/A, the Trust assumes full
responsibility for the preparation, contents and distribution of each prospectus
and statement of additional  information  of the Trust,  for complying  with all
applicable  requirements of the Investment  Company Act of 1940 (the "Act"), the
Securities  Act of 1933,  as amended,  and any laws,  rules and  regulations  of
governmental authorities having jurisdiction.




                                                     - 11 -


<PAGE>



         29.      CONFIDENTIALITY.

                  The T/A  agrees to treat  all  records  and other  information
relative  to  the  Trust  and  its  prior,  present  or  potential  shareholders
confidentially  and the T/A on behalf of itself and its employees agrees to keep
confidential  all such  information,  except  (after prior  notification  to and
approval  in writing  by the Trust,  which  approval  shall not be  unreasonably
withheld  and may not be  withheld  where  the T/A may be  exposed  to  civil or
criminal  contempt  proceedings for failure to comply) when requested to divulge
such  information  by duly  constituted  authorities or when so requested by the
Trust.

         30.      REFERENCES TO THE T/A.

                  The  Trust  shall  not  circulate  any  printed  matter  which
contains any reference to the T/A without the prior written approval of the T/A,
excepting  solely such printed  matter as merely  identifies the T/A as Transfer
Agent,  Plan Agent,  Dividend  Disbursing Agent,  Shareholder  Service Agent and
Accounting  and Pricing  Services  Agent.  The Trust will submit  printed matter
requiring approval to the T/A in draft form, allowing sufficient time for review
by the T/A and its counsel prior to any deadline for printing.

         31.      EQUIPMENT FAILURES.

                  In the event of equipment  failures  beyond the T/A's control,
the T/A shall take all steps  necessary to minimize  service  interruptions  but
shall have no liability  with respect  thereto.  The T/A shall endeavor to enter
into one or more  agreements  making  provision  for emergency use of electronic
data processing equipment to the extent appropriate equipment is available.

         32.      INDEMNIFICATION OF THE T/A.

                  (a) The T/A may rely on information  reasonably believed by it
to be accurate and  reliable.  Except as may otherwise be required by the Act or
the rules thereunder, neither the T/A nor its shareholders, officers, directors,
employees, agents, control persons or affiliates of any thereof shall be subject
to any liability for, or any damages,  expenses or losses  incurred by the Trust
in connection  with, any error of judgment,  mistake of law, any act or omission
connected  with or arising out of any services  rendered  under or payments made
pursuant to this Agreement or any other matter to which this Agreement  relates,
except by reason of willful  misfeasance,  bad faith or gross  negligence on the
part of any such persons in the  performance of the duties of the T/A under this
Agreement  or by reason of  reckless  disregard  by any of such  persons  of the
obligations and duties of the T/A under this Agreement.


                                                     - 12 -


<PAGE>




                  (b)  Any  person,  even  though  also  a  director,   officer,
employee,  shareholder  or agent of the T/A,  who may be or become  an  officer,
trustee,  employee  or  agent of the  Trust,  shall be  deemed,  when  rendering
services  to the Trust or  acting  on any  business  of the  trust  (other  than
services or business  in  connection  with the T/A's  duties  hereunder),  to be
rendering such services to or acting solely for the Trust and not as a director,
officer,  employee,  shareholder  or agent  of,  or one  under  the  control  or
direction of the T/A, even though paid by it.

                  (c) Notwithstanding any other provision of this Agreement, the
Trust shall  indemnify  and hold  harmless  the T/A,  its  directors,  officers,
employees, shareholders and agents from and against any and all claims, demands,
expenses and  liabilities  (whether with or without basis in fact or law) of any
and every  nature  which the T/A may  sustain or incur or which may be  asserted
against  the T/A by any  person by reason  of, or as a result of: (i) any action
taken  or  omitted  to be taken by the T/A in good  faith in  reliance  upon any
certificate, instrument, order or share certificate believed by it to be genuine
and to be signed,  countersigned or executed by any duly authorized person, upon
the oral  instructions or written  instructions  of an authorized  person of the
Trust or its own counsel; or (ii) any action taken or omitted to be taken by the
T/A in connection  with its  appointment in good faith in reliance upon any law,
act,  regulation  or  interpretation  of the  same  even  though  the  same  may
thereafter   have  been  altered,   changed,   amended  or  repealed.   However,
indemnification  under this subparagraph shall not apply to actions or omissions
of the T/A or its  directors,  officers,  employees,  shareholders  or agents in
cases of its or their own gross negligence,  willful  misconduct,  bad faith, or
reckless disregard of its or their own duties hereunder.

         33.      MAINTENANCE OF INSURANCE COVERAGE.

                  At all times during the term of this Agreement,  the T/A shall
be a named  insured  party on the  Trust's  Errors &  Omissions  policy  and the
Trust's  Fidelity  Bond,  both of which  shall  include  coverage  of the  T/A's
officers and  employees.  The T/A shall pay its  allocable  share of the cost of
such  policies  in  accordance  with the  provisions  of the Act.  The  scope of
coverage and amount of insurance limits applicable to the Trust on such policies
shall also be made applicable to the T/A.

         34.      FURTHER ACTIONS.

                  Each party  agrees to perform  such  further  acts and execute
such further documents as are necessary to effectuate the purposes hereof.



                                                     - 13 -


<PAGE>



         35.      TERMINATION.

                  (a) The provisions of this  Agreement  shall be effective upon
its  execution,  shall continue in effect for two years from that date and shall
continue  in  force  from  year to  year  thereafter,  but  only so long as such
continuance is approved (1) by the T/A, (2) by vote, cast in person at a meeting
called  for the  purpose,  of a majority  of the  Trust's  trustees  who are not
parties to this  Agreement or interested  persons (as defined in the Act) of any
such party,  and (3) by vote of a majority of the Trust's Board of Trustees or a
majority of the Trust's outstanding voting securities.

                  (b) Either party may terminate  this  Agreement on any date by
giving the other  party at least  sixty (60) days prior  written  notice of such
termination specifying the date fixed therefor.

                  (c) Upon termination of this Agreement, the Trust shall pay to
the T/A such compensation as may be due as of the date of such termination,  and
shall   likewise   reimburse  the  T/A  for  any   out-of-pocket   expenses  and
disbursements  reasonably  incurred  by the T/A to such date,  and for the T/A's
costs,  expenses and disbursements  reasonably incurred by the T/A to such date,
and for the T/A's costs,  expenses and  disbursements  as  contemplated  by this
Agreement.

                  (d) In the event that in connection  with  termination of this
Agreement a successor to any of the T/A's duties or responsibilities  under this
Agreement  is  designated  by the Trust by  written  notice to the T/A,  the T/A
shall,  promptly upon such termination and at the expense of the Trust, transfer
to such successor a certified list of the  shareholders of the Trust (with name,
address  and tax  identification  or Social  Security  number),  a record of the
accounts of such  shareholders  and the status  thereof,  and all other relevant
books,  records and other data  established  or maintained by the T/A under this
Agreement   and  shall   cooperate   in  the   transfer   of  such   duties  and
responsibilities,  including  provision for assistance  from the T/A's cognizant
personnel  in the  establishment  of  books,  records  and  other  data  by such
successor.

         36.      SERVICES FOR OTHERS.

                  Nothing  in  this  Agreement  shall  prevent  the  T/A  or any
affiliated person (as defined in the Act) of the T/A from providing services for
any other person,  firm or corporation  (including other investment  companies);
provided,  however,  that the T/A expressly represents that it will undertake no
activities


                                                     - 14 -


<PAGE>



which, in its judgment, will adversely affect the performance of its obligations
to the Trust under this Agreement.

         37.      MISCELLANEOUS.

                  The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the  provisions  hereof or
otherwise affect their construction or effect.

         38.      LIMITATION ON LIABILITY.

                  The term  "Countrywide  Investment  Trust" means and refers to
the trustees from time to time serving under the Trust's Declaration of Trust as
the same may  subsequently  thereto have been,  or  subsequently  hereto may be,
amended.  It is expressly  agreed that the  obligations  of the Trust  hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Trust.  The execution and delivery of this Agreement have been authorized
by the  trustees  of the Trust and signed by an officer of the Trust,  acting as
such,  and neither such  authorization  by such trustees nor such  execution and
delivery  by such  officer  shall be  deemed  to have  been  made by any of them
individually  or to impose any  liability on any of them  personally,  but shall
bind only the trust property of the Trust.

         39.      SEVERABILITY.

                  In the event any provision of this  Agreement is determined to
be void or unenforceable,  such determination  shall not affect the remainder of
this Agreement, which shall continue to be in force.

         40.      QUESTIONS OF INTERPRETATION.

                  (a)      This Agreement shall be governed by the laws of
the State of Ohio.

                  (b) Any question of interpretation of any term or provision of
this  Agreement  having a  counterpart  in or  otherwise  derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretations  thereof,  if any, by the States Courts or in the
absence of any controlling decision of any such court, by rules,  regulations or
orders of the Securities and Exchange Commission issued pursuant to said Act. In
addition,  where  the  effect  of a  requirement  of the Act,  reflected  in any
provision of this Agreement is revised by rule, regulation or order of the


                                                     - 15 -


<PAGE>



Securities  and  Exchange   Commission,   such  provision  shall  be  deemed  to
incorporate the effect of such rule, regulation or order.

         41.      NOTICES.

                  Any  notices  under  this  Agreement   shall  be  in  writing,
addressed  and  delivered  or mailed  postage  paid to the  other  party at such
address as such other party may designate for the receipt of such notice.  Until
further  notice to the other  party,  it is agreed that the address of the Trust
and of the T/A for this purpose  shall be 312 Walnut  Street,  Cincinnati,  Ohio
45202.

         42.      BINDING EFFECT.

                  Each of the undersigned expressly warrants and represents that
he has the full  power and  authority  to sign this  Agreement  on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.

         43.      COUNTERPARTS.

                  This  Agreement  may be executed in one or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument.

         44.      FORCE MAJEURE.

                  If the T/A shall be delayed in its  performance of services or
prevented  entirely or in part from performing  services due to causes or events
beyond its control, including and without limitation,  acts of God, interruption
of power or other utility,  transportation  or communication  services,  acts of
civil or military authority, sabotages, national emergencies,  explosion, flood,
accident, earthquake or other catastrophe, fire, strike or other labor problems,
legal action, present or future law, governmental order, rule or regulation,  or
shortages of suitable parts, materials,  labor or transportation,  such delay or
non-performance  shall be  excused  and a  reasonable  time for  performance  in
connection  with this Agreement  shall be extended to include the period of such
delay or non-performance.




                                                     - 16 -


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                          COUNTRYWIDE INVESTMENT TRUST



                                           By /s/ Robert H. Leshner
                                           --------------------------------

                                           COUNTRYWIDE FUND SERVICES, INC.



                                            By /s/ Robert G. Dorsey
                                            ---------------------------------




                                                     - 17 -




<PAGE>




                                                    Schedule A



                                  Compensation

 Services                                         Fee

As Transfer Agent and Shareholder
Servicing Agent:

     Short Term Government Income Fund            payable monthly at
                                                  rate of $25.00 per
                                                  account per year

     Intermediate Term                            payable monthly at
     Government Income Fund                       rate of $21.00 per
                                                  account per year

     Institutional Government                     payable monthly at
     Income Fund                                  rate of $25.00 per
                                                  account per year

     Adjustable Rate U.S.                         payable monthly at
     Government Securities Fund                   rate of $21.00 per
                                                  account per year

     Global Bond Fund                             payable monthly at
                                                  rate of $21.00 per
                                                  account per year

Each Fund offering a single class of shares will be subject to a minimum  charge
of $1,000 per month.  Each class of shares of a Fund offering  multiple  classes
will be subject to a minimum charge per class of $1,000 per month.






















                  ACCOUNTING AND PRICING SERVICES AGREEMENT

         THIS  AGREEMENT  effective  as of  February  28,  1997  by and  between
COUNTRYWIDE  INVESTMENT TRUST, a Massachusetts  business trust (the "Trust") and
COUNTRYWIDE FUND SERVICES, INC., an Ohio corporation ("Countrywide").


                            WITNESSETH THAT:

         WHEREAS,  the Trust  desires to hire  Countrywide  to provide the Trust
with certain  accounting  and pricing  services,  and  Countrywide is willing to
provide such services upon the terms and conditions herein set forth;

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants herein contained,  the parties hereto,  intending to be legally bound,
hereby agree as follows:

         1.       APPOINTMENT.

                  Countrywide  is hereby  appointed  to  provide  the Trust with
certain   accounting  and  pricing  services,   and  Countrywide   accepts  such
appointment  and agrees to provide such services  under the terms and conditions
set forth herein.

         2.       CALCULATION OF NET ASSET VALUE.

                  Countrywide  will calculate the net asset value of each series
of the Trust and the per share net asset value of each  series of the Trust,  in
accordance with the Trust's effective  Registration Statement on Form N-1A under
the  Securities  Act of 1933, as amended,  including its current  prospectus and
statement of additional information (the "Registration  Statement"),  once daily
as of the time  selected  by the Trust's  Board of  Trustees.  Countrywide  will
prepare and maintain a daily valuation of all securities and other assets of the
Trust in accordance with instructions from a designated  officer of the Trust or
its  investment  adviser  and in  the  manner  set  forth  in  the  Registration
Statement.  In valuing  securities of the Trust,  Countrywide may contract with,
and rely upon market quotations provided by, outside services, the cost of which
shall be borne by the Trust.

         3.       BOOKS AND RECORDS.

                  Countrywide  will  maintain  such  books  and  records  as are
necessary  to enable it to perform  its duties  under this  Agreement,  and,  in
addition,  will prepare and maintain complete,  accurate and current all records
with  respect to the Trust  required  to be  maintained  by the Trust  under the
Internal Revenue Code, as amended (the "Code") and under the general rules and




<PAGE>



regulations of the Investment  Company Act of 1940, as amended (the "Act"),  and
will preserve  said records in the manner and for the periods  prescribed in the
Code and such rules and  regulations.  The retention of such records shall be at
the expense of the Trust.

                  All of the records  prepared  and  maintained  by  Countrywide
pursuant to this  Paragraph 3 which are required to be  maintained  by the Trust
under the Code and the Act  ("Required  Records")  will be the  property  of the
Trust. In the event this Agreement is terminated,  all Required Records shall be
delivered to the Trust or to any person  designated  by the Trust at the Trust's
expense, and Countrywide shall be relieved of responsibility for the preparation
and  maintenance  of any  Required  Records  delivered  to the Trust or any such
person.

         4.       COOPERATION WITH ACCOUNTANTS.

                  Countrywide  shall  cooperate  with  the  Trust's  independent
public  accountants  and shall take all reasonable  action in the performance of
its obligations under this Agreement to assure that the necessary information is
made  available to such  accountants  for the  expression  of their  unqualified
opinion where required for any document for the Trust.

         5.       FEES AND CHARGES.

                  For performing its services  under this  Agreement,  the Trust
shall pay Countrywide a fee in accordance  with the schedule  attached hereto as
Schedule A.

         6.       COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.

                  Except as otherwise  provided in this Agreement and except for
the accuracy of information  furnished to it by  Countrywide,  the Trust assumes
full  responsibility  for the  preparation,  contents and  distribution  of each
prospectus and statement of additional  information of the Trust,  for complying
with all  applicable  requirements  of the Act, the  Securities  Act of 1933, as
amended, and any laws, rules and regulations of governmental  authorities having
jurisdiction.

         7.       CONFIDENTIALITY.

                  Countrywide  agrees to treat all records and other information
relative  to  the  Trust  and  its  prior,  present  or  potential  shareholders
confidentially  and Countrywide on behalf of itself and its employees  agrees to
keep confidential all such information,  except (after prior notification to and
approval  in writing  by the Trust,  which  approval  shall not be  unreasonably
withheld and may not be withheld  where  Countrywide  may be exposed to civil or
criminal  contempt  proceedings for failure to comply) when requested to divulge
such  information  by duly  constituted  authorities or when so requested by the
Trust.


                                                      - 2 -

<PAGE>



         8.       REFERENCES TO COUNTRYWIDE.

                  The  Trust  shall  not  circulate  any  printed  matter  which
contains any  reference to  Countrywide  without the prior  written  approval of
Countrywide,   excepting  solely  such  printed  matter  as  merely   identifies
Countrywide  as  Transfer  Agent,   Plan  Agent,   Dividend   Disbursing  Agent,
Shareholder  Service Agent and Accounting and Pricing  Services Agent. The Trust
will submit  printed  matter  requiring  approval to  Countrywide in draft form,
allowing  sufficient time for review by Countrywide and its counsel prior to any
deadline for printing.

         9.       EQUIPMENT FAILURES.

                  In  the  event  of  equipment  failures  beyond  Countrywide's
control,  Countrywide  shall  take  all  steps  necessary  to  minimize  service
interruptions  but shall have no  liability  with respect  thereto.  Countrywide
shall  endeavor  to  enter  into one or more  agreements  making  provision  for
emergency use of electronic data processing  equipment to the extent appropriate
equipment is available.

         10.      INDEMNIFICATION OF COUNTRYWIDE.

                  (a) Countrywide may rely on information reasonably believed by
it to be accurate and  reliable.  Except as may otherwise be required by the Act
or the rules thereunder,  neither  Countrywide nor its  shareholders,  officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages,  expenses or losses incurred by
the Trust in connection with, any error of judgment,  mistake of law, any act or
omission  connected  with or  arising  out of any  services  rendered  under  or
payments  made  pursuant  to this  Agreement  or any other  matter to which this
Agreement relates,  except by reason of willful misfeasance,  bad faith or gross
negligence on the part of any such persons in the  performance  of the duties of
Countrywide  under this  Agreement or by reason of reckless  disregard by any of
such persons of the obligations and duties of Countrywide under this Agreement.

                  (b)  Any  person,  even  though  also  a  director,   officer,
employee,  shareholder or agent of Countrywide, who may be or become an officer,
trustee,  employee  or  agent of the  Trust,  shall be  deemed,  when  rendering
services  to the Trust or  acting  on any  business  of the  Trust  (other  than
services or business in connection with Countrywide's  duties hereunder),  to be
rendering such services to or acting solely for the Trust and not as a director,
officer,  employee,  shareholder  or agent  of,  or one  under  the  control  or
direction of Countrywide, even though paid by it.


                                                      - 3 -

<PAGE>



                  (c) Notwithstanding any other provision of this Agreement, the
Trust shall indemnify and hold harmless  Countrywide,  its directors,  officers,
employees, shareholders and agents from and against any and all claims, demands,
expenses and  liabilities  (whether with or without basis in fact or law) of any
and every nature which Countrywide may sustain or incur or which may be asserted
against  Countrywide  by any  person by reason  of, or as a result  of:  (i) any
action  taken or omitted to be taken by  Countrywide  in good faith in  reliance
upon any certificate,  instrument,  order or stock certificate believed by it to
be genuine and to be signed,  countersigned  or executed by any duly  authorized
person,  upon the oral  instructions  or written  instructions  of an authorized
person of the Trust or upon the  opinion of legal  counsel  for the Trust or its
own counsel;  or (ii) any action taken or omitted to be taken by  Countrywide in
connection  with its  appointment  in good faith in reliance  upon any law, act,
regulation  or  interpretation  of the same even though the same may  thereafter
have been altered, changed, amended or repealed. However,  indemnification under
this subparagraph  shall not apply to actions or omissions of Countrywide or its
directors, officers, employees,  shareholders or agents in cases of its or their
own gross negligence,  willful  misconduct,  bad faith, or reckless disregard of
its or their own duties hereunder.

         11.      MAINTENANCE OF INSURANCE COVERAGE.

                  At all times  during the term of this  Agreement,  Countrywide
shall be a named insured party on the Trust's Errors & Omissions  policy and the
Trust's  Fidelity Bond,  both of which shall include  coverage of  Countrywide's
officers and employees. Countrywide shall pay its allocable share of the cost of
such  policies  in  accordance  with the  provisions  of the Act.  The  scope of
coverage and amount of insurance limits applicable to the Trust on such policies
shall also be made applicable to Countrywide.

         12.      FURTHER ACTIONS.

                  Each party  agrees to perform  such  further  acts and execute
such further documents as are necessary to effectuate the purposes hereof.

         13.      TERMINATION.

                  (a) The provisions of this  Agreement  shall be effective upon
its  execution,  shall continue in effect for two years from that date and shall
continue  in  force  from  year to  year  thereafter,  but  only so long as such
continuance  is approved (1) by  Countrywide,  (2) by vote,  cast in person at a
meeting  called for the purpose,  of a majority of the Trust's  trustees who are
not parties to this Agreement or interested persons (as defined

                                                      - 4 -

<PAGE>



in the Act) of any such  party,  and (3) by vote of a  majority  of the  Trust's
Board of Trustees or a majority of the Trust's outstanding voting securities.

                  (b) Either party may terminate  this  Agreement on any date by
giving the other party at least sixty (60) days'  prior  written  notice of such
termination specifying the date fixed therefor.

                  (c) This Agreement shall automatically terminate in the
event of its assignment.

                  (d) In the event that in connection  with the  termination  of
this Agreement a successor to any of  Countrywide's  duties or  responsibilities
under  this   Agreement  is  designated  by  the  Trust  by  written  notice  to
Countrywide,  Countrywide  shall,  promptly  upon  such  termination  and at the
expense of the Trust,  transfer all Required  Records and shall cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from Countrywide's  cognizant  personnel in the establishment of books,  records
and other data by such successor.

         14.      SERVICES FOR OTHERS.

                  Nothing in this  Agreement  shall prevent  Countrywide  or any
affiliated person (as defined in the Act) of Countrywide from providing services
for  any  other  person,   firm  or  corporation   (including  other  investment
companies);  provided,  however,  that Countrywide  expressly represents that it
will undertake no activities  which, in its judgment,  will adversely affect the
performance of its obligations to the Trust under this Agreement.

         15.      MISCELLANEOUS.

                  The captions in this Agreement are included for convenience of
reference  only and in no way  define or limit any of the  provisions  hereof or
otherwise affect their construction or effect.

         16.      LIMITATION OF LIABILITY.

                  The term  "Countrywide  Investment  Trust" means and refers to
the trustees from time to time serving under the Trust's Declaration of Trust as
the same may  subsequently  thereto have been,  or  subsequently  hereto may be,
amended.  It is expressly  agreed that the  obligations  of the Trust  hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust,  personally,  but bind only the trust property
of the Trust.  This  Agreement has been  authorized by the trustees of the Trust
and  signed by an  officer  of the  Trust,  acting  as such,  and  neither  such
authorization by such trustees nor such execution by such officer

                                                      - 5 -

<PAGE>



shall be deemed to have been made by any of them  individually  or to impose any
liability on any of them  personally,  but shall bind only the trust property of
the Trust.

         17.      SEVERABILITY.

                  In the event any provision of this  Agreement is determined to
be void or unenforceable,  such determination  shall not affect the remainder of
this Agreement, which shall continue to be in force.

         18.      QUESTIONS OF INTERPRETATION.

                  (a) This Agreement shall be governed by the laws of the
State of Ohio.

                  (b) Any question of interpretation of any term or provision of
this  Agreement  having a  counterpart  in or  otherwise  derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretations  thereof,  if any, by the United States Courts or
in the  absence  of any  controlling  decision  of any  such  court,  by  rules,
regulations or orders of the Securities and Exchange  Commission issued pursuant
to said  Act.  In  addition,  where  the  effect  of a  requirement  of the Act,
reflected in any provision of this  Agreement is revised by rule,  regulation or
order of the Securities and Exchange Commission,  such provision shall be deemed
to incorporate the effect of such rule, regulation or order.

         19.      NOTICES.

                  Any  notices  under  this  Agreement   shall  be  in  writing,
addressed  and  delivered  or mailed  postage  paid to the  other  party at such
address as such other party may designate for the receipt of such notice.  Until
further  notice to the other  party,  it is agreed that the address of the Trust
and of Countrywide for this purpose shall be 312 Walnut Street, Cincinnati, Ohio
45202.

         20.      BINDING EFFECT.

                  Each of the undersigned expressly warrants and represents that
he has the full  power and  authority  to sign this  Agreement  on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.

         21.      COUNTERPARTS.

                  This  Agreement  may be executed in one or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute one and the same instrument.

                                                      - 6 -

<PAGE>




         22.      FORCE MAJEURE.

                  If Countrywide shall be delayed in its performance of services
or  prevented  entirely  or in part from  performing  services  due to causes or
events  beyond its  control,  including  and  without  limitation,  acts of God,
interruption  of  power  or  other  utility,   transportation  or  communication
services, acts of civil or military authority,  sabotages, national emergencies,
explosion,  flood,  accident,  earthquake or other catastrophe,  fire, strike or
other labor problems,  legal action,  present or future law, governmental order,
rule or  regulation,  or  shortages  of  suitable  parts,  materials,  labor  or
transportation,  such delay or non-performance shall be excused and a reasonable
time for  performance  in connection  with this  Agreement  shall be extended to
include the period of such delay or non-performance.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                  COUNTRYWIDE INVESTMENT TRUST



                                  By: /s/ Robert H. Leshner
                                      ----------------------------

                                  COUNTRYWIDE FUND SERVICES, INC.



                                   By: /s/ Robert G. Dorsey
                                       -----------------------------



                                                      - 7 -

<PAGE>

                                                               Schedule A



                                                   COMPENSATION


                                    FOR FUND ACCOUNTING AND PORTFOLIO PRICING:


Short Term Government Income Fund
Institutional Government Income Fund

                     Asset Size                    Monthly Fee
           $          0 - $100,000,000                  $3,000
           $100,000,000 - $250,000,000                  $3,500
           $250,000,000 - $400,000,000                  $4,000
           Over $400,000,000                            $4,500


Adjustable Rate U.S. Government Securities Fund

                     Asset Size                     Monthly Fee
       $          0 - $ 50,000,000                     $4,250
        $ 50,000,000 - $100,000,000                    $4,750
        $100,000,000 - $250,000,000                    $5,250
        Over $250,000,000                              $5,750


Intermediate Term Government Income Fund

                     Asset Size                         Monthly Fee
        $          0 - $ 50,000,000                      $3,750
        $ 50,000,000 - $100,000,000                      $4,250
        $100,000,000 - $250,000,000                      $4,750
        Over $250,000,000                                $5,250


Global Bond Fund

                     Asset Size                         Monthly Fee
        $          0 - $ 50,000,000                      $4,750
        $ 50,000,000 - $100,000,000                      $5,250
        $100,000,000 - $250,000,000                      $5,750
        Over $250,000,000                                $6,750





                                                   - 8 -



                            ADMINISTRATION AGREEMENT


     AGREEMENT entered into as of February 28, 1997, between Countrywide 
Investments, Inc. ("Adviser") and Countrywide Fund Services, Inc.("CFS"), both 
of which are Ohio corporations having their principal place of business at 
312 Walnut Street, Cincinnati, Ohio 45202.

         WHEREAS,  the Adviser is registered as an investment  adviser under the
Investment  Advisers Act of 1940 and  provides  investment  management  services
under the terms of an investment advisory agreement (the "Management Agreement")
with Countrywide Investment Trust (the "Trust"); and

         WHEREAS, the Trust has been organized as a Massachusetts business trust
to operate as an investment  company registered under the Investment Company Act
of 1940 (the "Act"); and

         WHEREAS, the Adviser manages the business affairs of the
Trust pursuant to the Management Agreement; and

         WHEREAS, the Adviser wishes to avail itself of the information, advice,
assistance  and facilities of CFS to perform on behalf of the Trust the services
as hereinafter described; and

         WHEREAS, CFS wishes to provide such services to the Adviser
under the conditions set forth below;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and CFS agree as follows:

         1.       Employment.  The Adviser, being duly authorized, hereby
employs CFS to perform those services described in this
Agreement.  CFS shall perform the obligations thereof upon the
terms and conditions hereinafter set forth.

         2. Trust  Administration.  Subject to the  direction and control of the
Adviser,  CFS shall  assist the  Adviser in  supervising  the  Trust's  business
affairs not otherwise supervised by other agents of the Trust. To the extent not
otherwise  the primary  responsibility  of, or provided  by, other agents of the
Trust,  CFS shall supply (i)  non-investment  related  statistical  and research
data,  (ii) internal  regulatory  compliance  services,  and (iii) executive and
administrative services. CFS shall supervise the preparation of (i) tax returns,
(ii) reports to shareholders of the Trust, (iii) reports to and filings with the
Securities and Exchange  Commission,  state securities  commissions and Blue Sky
authorities   including   preliminary   and  definitive   proxy   materials  and
post-effective  amendments  to the  Trust's  registration  statement,  and  (iv)
necessary  materials  for  meetings  of the  Trust's  Board of  Trustees  unless
prepared by other parties under agreement.






                                                     - 1 -


<PAGE>



         3. Recordkeeping and Other  Information.  CFS shall create and maintain
all  necessary  records  in  accordance  with all  applicable  laws,  rules  and
regulations,  including but not limited to records  required by Section 31(a) of
the Act and the rules thereunder,  as the same may be amended from time to time,
pertaining to the various  functions  performed by it and not otherwise  created
and  maintained  by another  party  pursuant to contract  with the Trust.  Where
applicable,  such records  shall be maintained by CFS for the periods and in the
places required by Rule 31a-2 under the Act.

         4. Audit,  Inspection and  Visitation.  CFS shall make available to the
Adviser  during  regular  business  hours all records and other data created and
maintained pursuant to the foregoing provisions of this Agreement for reasonable
audit and inspection by the Trust or any regulatory agency having authority over
the Trust.

         5.  Compensation.  For the  performance of its  obligations  under this
Agreement, the Adviser shall pay CFS, with respect to ech series of the Trust, a
fee each month  equal to the  annual  rate of .1% of the  average  value of such
series' daily net assets.  The Adviser is solely  responsible for the payment of
fees to CFS, and CFS agrees to seek payment of its fees solely from the Adviser.

         6.  Limitation  of  Liability.  CFS shall not be liable  for any action
taken, omitted or suffered to be taken by it in its reasonable judgment, in good
faith and believed by it to be authorized or within the  discretion or rights or
powers conferred upon it by this Agreement,  or in accordance with  instructions
from the Adviser, provided,  however, that such acts or omissions shall not have
resulted from CFS's willful misfeasance, bad faith or gross negligence.

         7.  Compliance  with the  Investment  Company Act of 1940.  The parties
hereto acknowledge and agree that nothing contained herein shall be construed to
require CFS to perform any services for the Adviser which  services  could cause
CFS to be deemed an  "investment  adviser"  of the Trust  within the  meaning of
Section  2(a)(20) of the Act or to supercede or  contravene  the  Prospectus  or
Statement of Additional  Information  of the Trust or any  provisions of the Act
and the rules thereunder.

         8.  Termination.  The provisions of this  Agreement  shall be effective
upon its  execution,  shall  continue in effect for two years from that date and
shall continue in force from year to year  thereafter,  but only so long as such
continuance  is approved  (1) by CFS,  (2) by vote,  cast in person at a meeting
called  for the  purpose,  of a majority  of the  Trust's  trustees  who are not
parties to this Agreement or interested persons (as defined in

                                                     - 2 -


<PAGE>


the Act) of any such party,  and (3) by vote of a majority of the Trust's  Board
of Trustees or a majority of the Trust's  outstanding  voting  securities.  This
Agreement may be terminated by either party upon sixty (60) days' written notice
to the other party. This Agreement shall terminate automatically in the event of
termination of the Management Agreement. Upon the termination of this Agreement,
the  Adviser  shall pay CFS such  compensation  as may be payable for the period
prior to the effective date of such termination.

         9. No Trust  Liability.  CFS is hereby expressly put on notice that the
Trust is not a contracting  party to this  Agreement and assumes no  obligations
pursuant  to this  Agreement.  CFS shall seek  satisfaction  of any  obligations
arising out of this Agreement only from the Adviser,  and not from the Trust nor
its Trustees,  officers,  employees or shareholders.  CFS shall not act as agent
for or bind either the Adviser or the Trust in any matter.

         10.  Miscellaneous.  Each party agrees to perform such further acts and
execute such  further  documents as are  necessary  to  effectuate  the purposes
hereof.  This Agreement  shall be construed and enforced in accordance  with and
governed by the laws of the State of Ohio.  The captions in this  Agreement  are
included for  convenience  of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the 28th day of February, 1997.


                                            COUNTRYWIDE INVESTMENTS, INC.



                                            By: /s/ Robert H. Leshner
                                                ---------------------------

                                            COUNTRYWIDE FUND SERVICES, INC.



                                            By: /s/ Robert G. Dorsey
                                                -----------------------------

                                                     - 3 -



                                LICENSE AGREEMENT


                  THIS   LICENSE  AGREEMENT,   made  as  of  this  28th day of
February,  1997,  by and between  COUNTRYWIDE  CREDIT  INDUSTRIES,  INC., a
Delaware corporation ("Licensor"), and COUNTRYWIDE INVESTMENT TRUST, COUNTRYWIDE
TAX-FREE  TRUST  and  COUNTRYWIDE  STRATEGIC  TRUST  (the  "Licensees"),  each a
business trust organized under the laws of the Commonwealth of Massachusetts.

                  WHEREAS,  Licensor  has a  proprietary  interest  in the  name
"Countrywide"  and in the logo to be used on the  Licensees'  prospectuses  (the
"Logo"), which interests are recognized by Licensees; and

                  WHEREAS,   Licensor   wishes  to   permit   use  of  the  name
"Countrywide" and the Logo by Licensees, subject to the terms and conditions set
forth herein;

                  NOW, THEREFORE, in consideration of the foregoing and of other
good and valuable consideration, it is hereby understood and agreed as follows:

                  1.  Licensees  acknowledge  that they adopted their  corporate
names and Logo  through  the  permission  of  Licensor,  which  consents  to the
non-exclusive  use by each Licensee of the name  "Countrywide" and the Logo only
as long as an  affiliate  or  affiliates  of Licensor  serve as such  Licensee's
investment advisor.

                  2.  Licensees  recognize  that  their  right  to use the  name
"Countrywide"  is  non-exclusive  and that Licensor may from time to time permit
other entities,  including  entities  engaged in the same or similar business as
the Licensee, to use the name "Countrywide".

                  3. Each Licensee  covenants and agrees to protect,  exonerate,
defend, indemnify and hold harmless Licensor and its directors, agents, officers
and employees  from and against any and all costs,  losses,  claims,  damages or
liabilities,  joint or several, including all legal expenses, which may arise or
have arisen out of Licensee's use or misuse of the name  "Countrywide" or out of
any breach of or failure to comply with this Agreement.

                  4.       If affiliate(s) of Licensor shall cease to serve
as any Licensee's investment advisor, such Licensee:

                           (a)      As  promptly as  practicable,  will take all
                                    necessary  director or shareholder action to
                                    cause its Agreement and Declaration of Trust
                                    to be amended to  accomplish a change of its
                                    name and change of logo; and




<PAGE>




                           (b)      Within 90 days after the termination of this
                                    agreement or such similar contractual
                                    arrangement, shall cease to use in any other
                                    manner, including but not limited to use in
                                    any prospectus, sales literature or
                                    promotional material, the name "Countrywide"
                                    or any name, mark or logotype derived from 
                                    it or similar to it or indicating that the
                                    Licensee is advised by or otherwise
                                    associated with Licensor or any affiliate(s)
                                    of Licensor.

                  5. This Agreement shall be binding upon the parties hereto and
their  respective  successors  and  assigns,  including  any  successors  to the
business now or thereafter conducted by them.

                  IN WITNESS  WHEREOF,  the Licensor  and each of the  Licensees
have caused this  Agreement  to be  executed  by a duly  authorized  officer and
attested by its Secretary as of the day and year first herein written.


ATTEST:                                 COUNTRYWIDE CREDIT INDUSTRIES, INC.



/s/ John F. Splain                        By: /s/ Angelo R. Mozilo
- -------------------                      ----------------------------------

ATTEST:                                   COUNTRYWIDE INVESTMENT TRUST



/s/ John F. Splain                        By: /s/ Robert H. Leshner
- --------------------                      -----------------------------------


ATTEST:                                   COUNTRYWIDE TAX-FREE TRUST



/s/ John F. Splain                         By: /s/ Robert H. Leshner
- ----------------------                     -----------------------------------


ATTEST:                                    COUNTRYWIDE STRATEGIC TRUST



/s/ John F. Splain                         By: /s/ Robert H. Leshner
- ----------------------                     -----------------------------------








                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the use of our name 

and to all references to our Firm included in or made a part of this 

Post-Effective Amendment No. 66.


                                  /s/ Arthur Andersen LLP

                                      ARTHUR ANDERSEN LLP


Cincinnati, Ohio,
June 13, 1997

                       Consent of Independent Auditors




The Board of Directors
Trans Adviser Funds, Inc.:


We consent to the use of our report dated October 18, 1996 included herein and 
to the reference to our Firm under the heading "Financial Highlights" in the 
Prospectus.


                               KPMG Peat Marwick LLP



Boston, Massachusetts
June 18, 1997






                              PLAN OF DISTRIBUTION
                           PURSUANT TO RULE 12b-1 FOR
                     CLASS A SHARES OF MULTIPLE CLASS SERIES
                         AND FOR SINGLE CLASS SERIES OF
                          COUNTRYWIDE INVESTMENT TRUST

         WHEREAS,  Countrywide Investment Trust (the "Trust"), an unincorporated
business trust organized under the laws of The Commonwealth of Massachusetts, is
an open-end  management  investment  company and is registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"),  which are divided into
separate Series of Shares; and

         WHEREAS,  the Trust issues shares of certain Series in Sub- Series (one
of which may be designated as Class A Shares), whereas other Series will operate
with a single class of Shares,  which Shares will be considered  for purposes of
this Plan as Class A Shares; and

         WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect  financial  interest in the  operation of this Plan or in any
agreement relating hereto (the "Rule 12b-1 Trustees"), having determined, in the
exercise of reasonable  business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit each Series and the holders of
its Class A Shares, have approved this Plan by votes cast in person at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

         NOW, THEREFORE, the current Rule 12b-1 distribution plan of each Series
is  hereby  amended  as it  pertains  to the  Class A Shares  of each  Series in
accordance  with  Rule  12b-1  under the 1940 Act,  on the  following  terms and
conditions:

         1. Distribution Activities.  Subject to the supervision of the Trustees
of the Trust,  the Trust may,  directly or indirectly,  engage in any activities
related to the distribution of Class A Shares, which activities may include, but
are not limited to, the following: (a) maintenance fees or other payments to the
Trust's  principal  underwriter  and to  securities  dealers  and others who are
engaged in the sale of Class A Shares and who may be  advising  shareholders  of
the Trust  regarding  the  purchase,  sale or retention  of Class A Shares;  (b)
expenses of maintaining  personnel  (including  personnel of organizations  with
which the Trust has entered into agreements  related to this Plan) who engage in
or  support  distribution  of Class A Shares or who render  shareholder  support
services not otherwise provided by the




<PAGE>



Trust's  transfer  agent,  including,  but not  limited  to,  office  space  and
equipment,  telephone  facilities  and  expenses,  answering  routine  inquiries
regarding the Trust,  processing  shareholder  transactions,  and providing such
other shareholder  services as the Trust may reasonably request; (c) formulating
and  implementing of marketing and promotional  activities,  including,  but not
limited to, direct mail promotions and television,  radio,  newspaper,  magazine
and other mass media advertising; (d) preparing, printing and distributing sales
literature; (e) preparing, printing and distributing prospectuses and statements
of additional  information  and reports of the Trust for  recipients  other than
existing shareholders of the Trust; and (f) obtaining such information, analyses
and reports with respect to marketing  and  promotional  activities as the Trust
may, from time to time, deem advisable. The Trust is authorized to engage in the
activities listed above, and in any other activities related to the distribution
of Class A Shares, either directly or through other persons with which the Trust
has entered into agreements related to this Plan.

         2. Maximum  Expenditures.  The expenditures to be made pursuant to this
Plan and the basis upon which payment of such expenditures will be made shall be
determined by the Trustees of the Trust,  but in no event may such  expenditures
exceed  in any  fiscal  year an  amount  calculated  at the  rate of .35% of the
average  daily net asset value of the Class A Shares of any Series of the Trust.
Such payments for  distribution  activities  may be made directly by the Class A
Shares or the Trust's investment adviser or principal underwriter may incur such
expenses and obtain reimbursement from the Class A Shares.

         3. Term and  Termination.  This Plan shall become effective on the date
hereof. Unless terminated as herein provided, this Plan shall continue in effect
for one year from the date hereof and shall  continue  in effect for  successive
periods of one year  thereafter,  but only so long as each such  continuance  is
specifically  approved  by votes of a majority  of both (i) the  Trustees of the
Trust and (ii) the Rule 12b-1  Trustees,  cast in person at a meeting called for
the purpose of voting on such approval. This Plan may be terminated with respect
to any Series at any time by vote of a majority of the Rule 12b-1 Trustees or by
vote of a  majority  (as  defined  in the 1940 Act) of the  outstanding  Class A
Shares of such Series of the Trust.  In the event this Plan is terminated by any
Series in accordance  with its terms,  the  obligations of the Class A Shares of
such Series to make payments to the Trust's  principal  underwriter  pursuant to
this Plan will cease and such Series  will not be required to make any  payments
for expenses incurred after the date of termination.



                                                     - 2 -


<PAGE>



         4. Amendments.  This Plan may not be amended with respect to any Series
to increase  materially  the amount of  expenditures  provided  for in Section 2
hereof  unless such  amendment is approved by a vote of the majority (as defined
in the 1940  Act) of the  outstanding  Class A  Shares  of such  Series,  and no
material  amendment  to this Plan shall be made  unless  approved  in the manner
provided for annual renewal of this Plan in Section 3 hereof.

         5.  Selection and Nomination of Trustees.  While this Plan is in 
effect,  the selection and nomination of Trustees who are not interested persons
(as defined in the 1940 Act) of the Trust shall be committed  to the  discretion
of the Trustees who are not interested persons of the Trust.

         6.  Quarterly  Reports.  The  Treasurer of the Trust and the  principal
underwriter  shall  provide to the Trustees and the Trustees  shall  review,  at
least quarterly,  a written report of the amounts expended pursuant to this Plan
and any related  agreement,  the purposes for which such  expenditures were made
and the allocation of such expenditures as provided for in Section 7.

         7.  Allocating   Expenditures   Between  Classes.   Only   distribution
expenditures  properly  attributable to the sale of a particular class of Shares
may be used to support  the  distribution  fee charged to  shareholders  of such
class of Shares. Distribution expenses attributable to the sale of more than one
class of Shares of a Series will be allocated at least annually to each class of
Shares  based upon the ratio in which the sales of each class of Shares bears to
the sales of all the Shares of such Series. For this purpose, Shares issued upon
reinvestment of dividends or distributions will not be considered sales.

         8. Recordkeeping.  The Trust shall preserve copies of this Plan and any
related  agreement  and all reports  made  pursuant  to Section 6 hereof,  for a
period of not less than six years from the date of this Plan,  the agreements or
such  reports,  as the case may be, the first two years in an easily  accessible
place.

         9. Limitation of Liability.  A copy of the Agreement and Declaration of
Trust  of the  Trust  is on file  with  the  Secretary  of The  Commonwealth  of
Massachusetts and notice is hereby given that this Plan is executed on behalf of
the  Trustees  of the  Trust  as  trustees  and not  individually  and  that the
obligations of this instrument are not binding upon the Trustees or shareholders
of the Trust  individually  but are binding only upon the assets and property of
the Trust.



                                                     - 3 -


<PAGE>


         IN WITNESS WHEREOF, the Trust has caused this Plan to be executed as of
the date set forth below.


Dated: February 28, 1997

Attest:


/s/ John F. Splain                               By: /s/ Robert H. Leshner
- --------------------                                 -----------------------
Secretary                                             President

                                                     - 4 -


<PAGE>


                              PLAN OF DISTRIBUTION
                           PURSUANT TO RULE 12b-1 FOR
                 CLASS C SHARES OF COUNTRYWIDE INVESTMENT TRUST

         WHEREAS,  Countrywide Investment Trust (the "Trust"), an unincorporated
business trust organized under the laws of The Commonwealth of Massachusetts, is
an open-end  management  investment  company and is registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and

         WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest without par value (the "Shares"),  which are divided into
separate Series of Shares; and

         WHEREAS,  the Trust issues shares of certain Series in Sub- Series (one
of which may be designated as Class C Shares); and

         WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect  financial  interest in the  operation of this Plan or in any
agreement relating hereto (the "Rule 12b-1 Trustees"), having determined, in the
exercise of reasonable  business judgment and in light of their fiduciary duties
under state law and under Section 36(a) and (b) of the 1940 Act, that there is a
reasonable likelihood that this Plan will benefit each Series and the holders of
its Class C Shares, have approved this Plan by votes cast in person at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

         NOW, THEREFORE, the current Rule 12b-1 distribution plan of each Series
is  hereby  amended  as it  pertains  to the  Class C Shares  of each  Series in
accordance  with  Rule  12b-1  under the 1940 Act,  on the  following  terms and
conditions:

         1. Distribution Activities.  Subject to the supervision of the Trustees
of the Trust,  the Trust may,  directly or indirectly,  engage in any activities
related to the distribution of Class C Shares, which activities may include, but
are not limited to, the following: (a) maintenance fees or other payments to the
Trust's  principal  underwriter  and to  securities  dealers  and others who are
engaged in the sale of Class C Shares and who may be  advising  shareholders  of
the Trust  regarding  the  purchase,  sale or retention  of Class C Shares;  (b)
expenses of maintaining  personnel  (including  personnel of organizations  with
which the Trust has entered into agreements  related to this Plan) who engage in
or  support  distribution  of Class C Shares or who render  shareholder  support
services not otherwise  provided by the Trust's transfer agent,  including,  but
not limited to, office space and equipment,  telephone  facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder


                                                     - 1 -


<PAGE>



transactions,  and providing  such other  shareholder  services as the Trust may
reasonably   request;   (c)  formulating  and   implementing  of  marketing  and
promotional  activities,  including,  but not limited to, direct mail promotions
and television, radio, newspaper, magazine and other mass media advertising; (d)
preparing,  printing and distributing sales literature; (e) preparing,  printing
and  distributing  prospectuses  and  statements of additional  information  and
reports of the Trust for  recipients  other than  existing  shareholders  of the
Trust; and (f) obtaining such information,  analyses and reports with respect to
marketing and  promotional  activities as the Trust may, from time to time, deem
advisable. The Trust is authorized to engage in the activities listed above, and
in any other activities  related to the  distribution of Class C Shares,  either
directly  or  through  other  persons  with  which the Trust  has  entered  into
agreements related to this Plan.

         2.  Maximum  Expenditures.  The  expenditures  to be made  pursuant  to
Section 1 and the basis upon which  payment  of such  expenditures  will be made
shall be  determined  by the  Trustees  of the  Trust,  but in no event may such
expenditures  exceed in any fiscal year an amount calculated at the rate of .75%
of the average  daily net asset value of the Class C Shares of any Series of the
Trust.  Such payments for  distribution  activities  may be made directly by the
Class C Shares or the Trust's  investment  adviser or principal  underwriter may
incur such expenses and obtain reimbursement from the Class C Shares.

         3.  Maintenance  Fee.  In  addition  to the  payments  of  compensation
provided for in Section 2 and in order to further  enhance the  distribution  of
its Class C Shares, the Trust shall pay the principal  underwriter a maintenance
fee,  accrued  daily and paid  monthly,  in an amount equal to an annual rate of
 .25% of the daily net assets of the Class C Shares of the Trust.  When requested
by and at the  direction  of the  principal  underwriter,  the Trust shall pay a
maintenance  fee to dealers  based on the amount of Class C Shares  sold by such
dealers  and  remaining  outstanding  for  specified  periods  of time,  if any,
determined by the principal underwriter,  in amounts up to .25% per annum of the
average  daily net  assets of the Class C Shares of the Trust.  Any  maintenance
fees paid to dealers shall reduce the maintenance fees otherwise  payable to the
principal underwriter.

         4. Term and  Termination.  This Plan shall become effective on the date
hereof. Unless terminated as herein provided, this Plan shall continue in effect
for one year from the date hereof and shall  continue  in effect for  successive
periods of one year  thereafter,  but only so long as each such  continuance  is
specifically  approved  by votes of a majority  of both (i) the  Trustees of the
Trust and (ii) the Rule 12b-1  Trustees,  cast in person at a meeting called for
the purpose of voting on such

                                                     - 2 -


<PAGE>



approval.  This Plan may be terminated with respect to any Series at any time by
vote of a majority  of the Rule  12b-1  Trustees  or by vote of a  majority  (as
defined in the 1940 Act) of the outstanding Class C Shares of such Series of the
Trust. In the event this Plan is terminated by any Series in accordance with its
terms,  the obligations of the Class C Shares of such Series to make payments to
the  Trust's  principal  underwriter  pursuant  to this Plan will cease and such
Series will not be required to make any payments for expenses incurred after the
date of termination.

         5. Amendments.  This Plan may not be amended with respect to any Series
to increase materially the amount of expenditures provided for in Sections 2 and
3 hereof unless such amendment is approved by a vote of the majority (as defined
in the 1940  Act) of the  outstanding  Class C  Shares  of such  Series,  and no
material  amendment  to this Plan shall be made  unless  approved  in the manner
provided for annual renewal of this Plan in Section 4 hereof.

         6.       Selection and Nomination of Trustees.  While this Plan
is in effect, the selection and nomination of Trustees who are not 
interested persons (as defined in the 1940 Act) of the Trust shall be 
committed to the discretion of the Trustees who are not interested persons 
of the Trust.

         7. Quarterly  Reports.  The principal  underwriter and the Treasurer of
the Trust shall provide to the Trustees and the Trustees shall review,  at least
quarterly,  a written report of the amounts  expended  pursuant to this Plan and
any related  agreement,  the purposes for which such  expenditures were made and
the allocation of such expenditures as provided for in Section 8.

         8.  Allocating   Expenditures   Between  Classes.   Only   distribution
expenditures  properly  attributable to the sale of a particular class of Shares
may be used to support  the  distribution  fee charged to  shareholders  of such
class of Shares. Distribution expenses attributable to the sale of more than one
class of Shares of a Series will be allocated at least annually to each class of
Shares  based upon the ratio in which the sales of each class of Shares bears to
the sales of all the Shares of such Series. For this purpose, Shares issued upon
reinvestment of dividends or distributions will not be considered sales.

         9. Recordkeeping.  The Trust shall preserve copies of this Plan and any
related  agreement  and all reports  made  pursuant  to Section 7 hereof,  for a
period of not less than six years from the date of this Plan,  the agreements or
such  reports,  as the case may be, the first two years in an easily  accessible
place.



                                                     - 3 -


<PAGE>


         10. Limitation of Liability. A copy of the Agreement and Declaration of
Trust  of the  Trust  is on file  with  the  Secretary  of The  Commonwealth  of
Massachusetts and notice is hereby given that this Plan is executed on behalf of
the  Trustees  of the  Trust  as  trustees  and not  individually  and  that the
obligations of this instrument are not binding upon the Trustees or shareholders
of the Trust  individually  but are binding only upon the assets and property of
the Trust.



         IN WITNESS WHEREOF, the Trust has caused this Plan to be executed as of
the date set forth below.


Dated: February 28, 1997

Attest:



/s/ John F. Splain                               By: /s/ Robert H. Leshner
- ------------------------                         --------------------------
Secretary                                        President


<PAGE>




                                                                Dealer #______
                          COUNTRYWIDE INVESTMENTS, INC.
                                312 WALNUT STREET
                             CINCINNATI, OHIO 45202
                                  800-543-8721
                                  513-629-2000

                                 SALES AGREEMENT
                               MONEY MARKET FUNDS



Countrywide Investments is a group of investment companies, organized as Trusts,
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"). All of the Trusts have agreed to the terms hereof. The Trusts are
presently  offering,  or intend to offer,  shares of  beneficial  interest  (the
"Shares") in money market funds (the "Funds") to the public in  accordance  with
the terms and conditions  contained in the Prospectuses of the Trusts.  The term
"Prospectuses"  as used  herein  refers  to the  prospectuses  on file  with the
Securities  and  Exchange   Commission   which  are  part  of  the  most  recent
registration  statements effective from time to time under the Securities Act of
1933, as amended (the  "Securities  Act"). We hereby offer to appoint you to act
as a sales agent of the Trusts in connection  with the offering of Shares to the
public on the following terms and conditions:

1.In all  sales of the  Shares  to the  public,  you  shall act as agent for the
Trust, and in no transaction shall you act as dealer for your own account.

2.As  agent for the  Trusts,  you are  hereby  authorized  to (i)  place  orders
directly with the Trusts' Transfer  Agent(s) for the purchases of the Shares and
(ii) tender the Trusts' Shares to the Trusts' Transfer  Agent(s) for redemption,
in each case  subject to the terms and  conditions  set forth in the  applicable
Prospectus  and  the  operating  procedures  and  policies  established  by  the
applicable Trust.

3.No person is authorized to make any representations  concerning the Trusts, or
the Shares,  except  those  contained  in the  Prospectuses  and in such printed
information  as the  Trusts  may  subsequently  prepare.  You  are  specifically
authorized to distribute the Trusts'  Prospectuses  and sales material  received
from  the  Trusts  or the  Trusts'  Underwriter.  No  person  is  authorized  to
distribute any other sales material  relating to the Trusts or the Funds without
the prior approval of the Trusts.

4.As  agent  for the  Trusts,  and  upon the  request  of the  Trusts,  you will
undertake  from time to time  distribution  efforts to  promote  the sale of the
Shares. Also, as agent for the Trusts, you will undertake  shareholder servicing
activities for customers of yours who have purchased the Shares and who use your
facilities to communicate with the Trusts or to effect redemptions or additional
purchases of the Shares. As compensation for such services,  you will be paid by
the appropriate Trust, to the extent permitted by the Investment Company Act and
the rules promulgated thereunder, or by the applicable Trust's Underwriter, such
fees as are set forth in Schedule A hereto.  All compensation  paid for services
performed by you,  pursuant to the terms of this Agreement,  will be paid to you
at the address of your principal  office,  as indicated in your confirmation and
acceptance of this Agreement.

5.You agree to comply with the provisions contained in all applicable securities
laws governing the distribution of Prospectuses to persons to whom you offer the
Shares as agent for the Trusts.  You further agree to deliver,  upon the request
of a Trust,  copies of any amended  Prospectuses to purchasers  whose Shares you
are  holding as record  owner and to deliver to such  persons  materials  of the
appropriate  Trust.  The Trusts will conduct their businesses in accordance with
the  procedures  set  forth  in,  and the  requirements  of,  the  Prospectuses,
including the prompt  execution of orders for the purchase and redemption of the
Shares and the servicing of their shareholder accounts.

6.You represent that you are, and will be at all times relevant hereto, a member
in good standing of the National Association of Securities Dealers, Inc. and you
further  represent  and warrant  that you are and will be at all times  relevant
hereto a  broker-dealer  properly  registered and qualified under all applicable
federal,  state  and  local  laws to engage  in the  business  and  transactions
described  in  this  Agreement.  You  agree  to  comply  with  all  requirements
applicable to you of all applicable laws, including federal and state securities
laws, the Rules and  Regulations  of the Securities and Exchange  Commission and
the Rules of Fair Practice of the National  Association  of Securities  Dealers,
Inc. You agree that you will not offer the Shares to persons in any jurisdiction
in which  the  Shares  are not  registered  for  sale  and in which  you may not
lawfully make such offer due to the fact that you have not registered  under, or
are not exempt from, the applicable  registration  or licensing  requirements of
such jurisdiction. You further agree that you will maintain all records required
by applicable law relating to transactions involving purchases or redemptions of
the Shares by you or your customers.



<PAGE>




7.The  Trusts have each  registered  an  indefinite  number of Shares  under the
Securities  Act.  Upon  application  to us, the Trusts will inform you as to the
states or other  jurisdictions  in which they believe a Fund's  Shares have been
qualified for sale under, or are exempt from, the requirements of the respective
securities  laws of such  state,  but the  Trusts  assume no  responsibility  or
obligation as to your right to sell any of the Shares in any jurisdiction.

8.The  Trusts  shall have full  authority  to take such  action as they may deem
advisable  in respect to all matters  pertaining  to the offering of the Shares,
including the right in their  discretion,  without  notice,  to suspend sales or
withdraw the offering of the Shares  entirely  with regard to one or more of the
Funds. The Trusts will promptly notify you of any such actions.

9.You will (i) maintain all records  required by law relating to transactions in
the Shares and,  upon request by any of the Trusts,  promptly  make such records
available  as the  Trusts  may  reasonably  request  in  connection  with  their
operations; and (ii) promptly notify the Trusts if you experience any difficulty
in maintaining the records  described in the foregoing clause in an accurate and
complete  manner.  In addition,  you and the Trusts will  establish  appropriate
procedures  and reporting  forms and  schedules to enable the parties  hereto to
identify all accounts  opened and  maintained  by your  customers.  At all times
during  reasonable hours of the Trusts,  you will have the right,  upon 48 hours
prior written notice to the Trusts, to conduct  appropriate audits or reviews of
such  records and to confirm the reports  delivered by the Trusts to you or your
customers.  The cost of such  audits or reviews  will be borne  solely by you or
your customers.

10.The  Trusts  shall  be under no  liability  to you and you  shall be under no
liability to the Trusts except for lack of good faith,  for  negligence  and for
obligations  expressly  assumed by either party hereunder.  Nothing contained in
this  Agreement  is  intended  to operate as a waiver by the Trusts or by you of
compliance with any provision of the Securities Act, the Securities Exchange Act
of 1934, the Investment Company Act or the Rules and Regulations  promulgated by
the Securities and Exchange Commission under these Acts.

11.This Agreement will  automatically  terminate in the event of its assignment.
This Agreement may be terminated as to any Trust or by that Trust's  Underwriter
or by you,  without  penalty,  upon ten (10) days' prior  written  notice to the
other parties. This Agreement may also be terminated as to any Trust at any time
without  penalty  by the  vote of a  majority  of the  members  of the  Board of
Trustees of the terminating Trust who are not "interested persons" (as such term
is defined in the  Investment  Company  Act) and who have no direct or  indirect
financial interest in the applicable Trust's  Distribution Expense Plan pursuant
to Rule 12b-1 under the Investment Company Act or any agreement relating to such
Plan,  including this  Agreement,  or by a vote of a majority of the outstanding
voting  securities of each series of the terminating  Trust on ten days' written
notice.

12.All communications to us should be sent to Countrywide Investments,  Inc. 312
Walnut  Street,  Cincinnati,  Ohio  45202,  or at such  other  address as we may
designate  in  writing.  Any  notice  to you  shall be duly  given if  mailed or
telegraphed to you at the address of your  principal  office as specified by you
below in your confirmation and acceptance of this Agreement.

13.The  obligations of the Trusts under this Agreement shall not be binding upon
any of the Trustees,  shareholders,  nominees,  officers, agents or employees of
the  Trusts  personally,  but shall bind only the  property  of the  Trusts,  as
provided in Trust's  Agreement  and  Declaration  of Trust.  The  execution  and
delivery of this  Agreement has been  authorized by the Trustees and signed by a
duly  authorized  officer  of  the  Trusts  acting  as  such,  and  neither  the
authorization  by the Trustees nor the execution and delivery of this  Agreement
by such  officer of the Trusts  shall be deemed to have been made by any of them
individually,  but shall bind only the  property  of the Trusts as  provided  in
their Agreement and Declaration of Trust.

14."Trusts" as used herein shall refer to all Trusts  offering  series of shares
in the no-load  mutual funds  presently in existence and hereafter  organized as
part of Countrywide  Investments unless any such Trust is specifically  excluded
by a separate writing signed by an authorized officer of such Trust electing not
to be covered by this Agreement.

15.You  will  indemnify  the  Trusts  and the  Underwriter,  transfer  agent and
custodian  of each Trust and hold them  harmless  from any claims or  assertions
relating to the lawfulness of your company's participation in this Agreement and
the  transactions  contemplated  hereby or  relating  to any  activities  of any
persons  or  entities  affiliated  with  your  company  which are  performed  in
connection with the discharge of your responsibilities under this Agreement.  If
any such claims are asserted,  the  indemnified  parties shall have the right to
engage in their own defense,  including the  selection  and  engagement of legal
counsel of their choosing and all costs of such defense shall be borne by you.

16.This Agreement  supersedes any other agreement with you relating to the offer
and  sale  of any of the  Trusts'  Shares,  and  relating  to any  other  matter
discussed herein.



<PAGE>




17.This  Agreement  shall be binding upon  receipt by the Trusts in  Cincinnati,
Ohio of a  counterpart  hereof  duly  accepted  and signed by you,  and shall be
construed in accordance with the laws of the State of Ohio.

18.The  undersigned  executing this  Agreement on behalf of Sales Agent,  hereby
warrants and represents  that he is duly authorized to so execute this Agreement
on behalf of Sales Agent.

If the  foregoing is in accordance  with your  understanding  of our  agreement,
please sign and return all copies of this Agreement to Countrywide  Investments,
Inc.



ACCEPTED BY DEALER

By:________________________________________
Authorized Signature

- -------------------------------------------
Type or Print Name, Position

- -------------------------------------------
Name

- -------------------------------------------
Address

- -------------------------------------------
Address

- -------------------------------------------
Phone

- -------------------------------------------
Date





ON BEHALF OF EACH TRUST OFFERING
SHARES IN THE MONEY MARKET FUNDS OF
COUNTRYWIDE INVESTMENTS


By:________________________________________
Authorized Officer of "Trusts"

- -------------------------------------------
Date


ON BEHALF OF THE UNDERWRITER TO THE
TRUSTS OFFERING SHARES OF MONEY
MARKET FUNDS OF COUNTRYWIDE
INVESTMENTS


By:________________________________________
Authorized Officer of Underwriter to the "Trusts"

- -------------------------------------------
Date




<PAGE>





                                                                 Schedule A














                             12b-1 PAYMENT SCHEDULE


You will receive a trailing  commission of .25% per annum (payable quarterly) of
the  average  balance  during  each  calendar  quarter  of all  accounts  in the
following Countrywide Investments money market funds:


                         Short Term Government Income Fund
                         Tax-Free Money Fund
                         Ohio Tax-Free Money Fund
                         California Tax-Free Money Fund
                         Royal Palm Florida Tax-Free Money Fund


However,  no  trailing  commission  will be paid to a  dealer  for any  calendar
quarter in which the  average  daily  balance  of all  accounts  in  Countrywide
Investments Funds (including load funds) is less than $1,000,000.



























Revised 12/31/96


<PAGE>




                          COUNTRYWIDE INVESTMENTS, INC.
                                312 WALNUT STREET
                             CINCINNATI, OHIO 45202
                                  800-543-8721
                                  513-629-2000

                            Administration Agreement


         This Agreement is made between  _______________________________________
("Administrator") and Countrywide  Investment Trust,  Countrywide Tax-Free Trust
and Countrywide  Strategic Trust (collectively the "Trusts" and individually the
"Trust"),  the issuer of shares of beneficial  interest ("Shares") of the mutual
funds set forth on Schedule A to this  Agreement  (collectively  the "Funds" and
individually the "Fund").  In consideration of the mutual covenants  hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:

         1. The Trusts  hereby  appoint  Administrator  to render or cause to be
rendered  administrative  support  services  to each Fund and its  shareholders,
which  services may include,  without  limitation:  aggregating  and  processing
purchase and redemption  requests and placing net purchase and redemption orders
with the Fund's transfer agent;  answering  client  inquiries about the Fund and
referring to the Trusts those  inquiries  which the  Administrator  is unable to
answer; assisting clients in changing dividend options, account designations and
addresses;  performing  sub-accounting;  establishing,  maintaining  and closing
shareholder  accounts  and  records;  investing  client  account  cash  balances
automatically in Shares of the Fund;  providing  periodic  statements  showing a
client's  account  balance,  integrating  such  statements  with  those of other
transactions  and  balances  in the  client's  other  accounts  serviced  by the
Administrator  and performing such other  recordkeeping  as is necessary for the
Fund's transfer agent to comply with all the  recordkeeping  requirements of the
Investment  Company  Act of 1940  and the  regulations  promulgated  thereunder;
arranging for bank wires;  and providing such other  information and services as
the Trusts reasonably may request,  to the extent the Administrator is permitted
by applicable statute, rule or regulation to provide these services.

         2.  Administrator  shall  provide  such  office  space  and  equipment,
telephone  facilities and personnel  (which may be all or any part of the space,
equipment and facilities currently used in Administrator's  business,  or all or
any  personnel  employed by  Administrator)  as is necessary or  beneficial  for
providing  information  and services to shareholders of each Fund, and to assist
each Trust in  servicing  accounts  of  clients.  Administrator  shall  transmit
promptly to clients all communications  sent to it for transmittal to clients by
or on behalf of a Trust, a Fund, or a Trust's investment  adviser,  custodian or
transfer agent or dividend disbursing agent.

         3. For each account in certain Funds for which the  Administrator is to
render administrative support services, Administrator will receive a fee, as set
forth on  Schedule  B, equal to the  normal  dealer's  discount  from the public
offering price on the Shares purchased by such accounts. During the term of this
Agreement,  each  Trust  or  the  Trust's  underwriter  will  also  pay  to  the
Administrator  quarterly one-fourth of the annual  administration fees set forth
in  Schedule B hereto.  Administrator  shall  notify the Trust if  Administrator
directly  charges  a fee to Fund  shareholders  for its  administrative  support
services as described in this Agreement.

         4.  Administrator  agrees to comply with the  requirements  of all laws
applicable  to it,  including  but not  limited  to,  ERISA,  federal  and state
securities   laws  and  the  rules  and  regulations   promulgated   thereunder.
Administrator  agrees to provide  services to each Trust in compliance  with the
then current Prospectus and Statement of Additional Information of the Trust and
the operating procedures and policies established by the Trust,  including,  but
not limited to, required minimum investment and minimum account size.

         5. No person is  authorized  to make any  representations  concerning a
Fund or its Shares except those contained in the current Prospectus or Statement
of Additional Information of the applicable Fund and any such information as may
be  officially  designated  as  information   supplemental  to  the  Prospectus.
Additional  copies of any  Prospectus  and any  printed  information  officially
designated as  supplemental to such Prospectus will be supplied by the Trusts to
Administrator in reasonable quantities on request.

         6.  Administrator  agrees that it will provide  administrative  support
services only to those persons who reside in any  jurisdiction in which a Fund's
Shares  are  registered  for sale and in which the  Administrator  may  lawfully
provide such services.  Upon request, the Trusts shall provide the Administrator
with a list of the states in which each Fund's  Shares are  registered  for sale
and shall keep such list updated.

<PAGE>

         7. In no transaction shall Administrator have any authority  whatsoever
to act as agent for any Trust, any Fund or any person  affiliated with any Trust
or Fund.

         8. The  Administrator  agrees not to  solicit or cause to be  solicited
directly,  or  indirectly  at any  time in the  future,  any  proxies  from  the
shareholders of a Trust in opposition to proxies  solicited by management of the
Trust,  unless a court of competent  jurisdiction shall have determined that the
conduct of a majority of the Board of Trustees of the Trust constitutes  willful
misfeasance,  bad faith, gross negligence or reckless disregard of their duties.
This paragraph 8 will survive the term of this Agreement.

         9. The  Administrator  shall  prepare such  quarterly  reports for each
Trust  as  shall  reasonably  be  requested  by  the  Trust.  In  addition,  the
Administrator  will furnish the Trust or its designees with such  information as
the  Trust  or they  may  reasonably  request  (including,  without  limitation,
periodic  certifications  confirming  the  provision  to clients of the services
described herein), and will otherwise cooperate with the Trust and its designees
(including and without  limitation,  any auditors  designated by the Trust),  in
connection  with the  preparation  of reports to the  Trust's  Board of Trustees
concerning  this  Agreement  and the monies  paid or payable by the Trust or the
Trust's  underwriter  pursuant  hereto,  as well as any other reports or filings
that may be required by law.

         10.  The  Administrator  acknowledges  that any Trust  may  enter  into
similar agreements with others without the consent of the Administrator.

         11.  Each Trust  reserves  the right,  at its  discretion  and  without
notice,  to  suspend  the sale of Shares or  withdraw  the sale of Shares of any
Fund.

         12. The Trust's underwriter has adopted compliance standards,  attached
hereto as Schedule C, as to when Class A and Class C Shares of the Dual  Pricing
Funds may  appropriately  be sold to  particular  investors.  The  Administrator
agrees that all persons associated with it will conform to such standards.

         13. With respect to each Fund,  this Agreement shall continue in effect
for one year  from the date of its  execution,  and  thereafter  for  successive
periods of one year if the form of this  Agreement is approved as to the Fund at
least annually by the Trustees of the applicable Trust,  including a majority of
the members of the Board of Trustees of the Trust who are not interested persons
("Disinterested Trustees") of the Trust and have no direct or indirect financial
interest in the  operations  of the Trust's  Rule 12b-1 Plan  ("Plan") or in any
documents  related to the Plan cast in person at a meeting for that purpose.  In
the event this  Agreement,  or any part thereof,  is found invalid or is ordered
terminated by any regulatory or judicial  authority,  or the Administrator shall
fail  to  perform  the  shareholder   servicing  and  administrative   functions
contemplated  hereby,  this  Agreement is terminable  effective  upon receipt of
notice thereof by the Administrator.

         14.      Notwithstanding paragraph 13, this Agreement may be
terminated with respect to any Fund as follows:

                  (a) at any time,  without the payment of any  penalty,  by the
         vote of a majority  of the  Disinterested  Trustees  of the  applicable
         Trust or by a vote of a majority of the outstanding  voting  securities
         of the Fund on not more than  thirty  (30) days  written  notice to the
         parties to this Agreement;

                  (b) automatically in the event of the Agreement's assignment
         as defined in the Investment Company Act of 1940; or

                  (c) by any party to the Agreement  without cause by giving the
         other parties at least thirty (30) days written notice of its intention
         to terminate.

         15. Any  termination of this Agreement  shall not affect the provisions
of paragraph  18, which shall  survive the  termination  of this  Agreement  and
continue to be enforceable thereafter.

         16.      This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors.

         17. This Agreement is not intended to, and shall not, create any rights
against  any  party  hereto  by any  third  person  solely  on  account  of this
Agreement.

<PAGE>

         18. The  Administrator  shall  provide such security as is necessary to
prevent  unauthorized use of any computer hardware or software provided to it by
or on  behalf of the  Trusts,  if any.  The  Administrator  agrees  to  release,
indemnify and hold harmless each Fund, each Trust,  each Trust's transfer agent,
custodian and underwriter, and their respective principals, directors, trustees,
officers,  employees and agents from any and all direct or indirect  liabilities
or losses resulting from requests, directions, actions or inactions of or by the
Administrator,  its  officers,  employees  or  agents  regarding  the  purchase,
redemption,   transfer   or   registration   of  Shares  for   accounts  of  the
Administrator,  its clients and other  shareholders.  Such indemnity  shall also
cover  any  losses  and   liabilities   incurred  by  and  resulting   from  the
Administrator's  performance  of or failure to perform  its  obligations  or its
breach of any representations or warranties under this Agreement.  Principals of
the Administrator will be available to consult from time to time with each Trust
concerning the  administration  and performance of the services  contemplated by
this Agreement.

         19.      This Agreement may be amended only by an agreement in writing
signed by the Administrator and the Trusts.

         20. The  obligations  of each Trust under this  Agreement  shall not be
binding upon any of the Trustees,  shareholders,  nominees,  officers, agents or
employees  of such Trust,  personally,  but shall bind only the property of such
Trust,  as provided in such Trust's  Agreement  and  Declaration  of Trust.  The
execution and delivery of this Agreement has been authorized by the Trustees and
signed by a duly authorized  officer of the Trusts,  acting as such, and neither
the authorization by the Trustees nor the execution and delivery by such officer
of the Trusts shall be deemed to have been made by any of them  individually  or
to impose  any  liability  on any of them  personally,  but shall  bind only the
property of the Trusts as provided in their Agreement and Declaration of Trust.

         21. This Agreement does not authorize the  Administrator to participate
in any activities  relating to the sale or distribution  of the Shares,  and the
Administrator agrees that it shall not participate in such activities.

         22. If any provision of this Agreement, or any covenant,  obligation or
agreement  contained  herein,  is  determined  by  a  court  to  be  invalid  or
unenforceable,  the parties agree that (a) such  determination  shall not affect
any other provision, covenant, obligation or agreement contained herein, each of
which shall be construed  and enforced to the full extent  permitted by law, and
(b) such invalid or unenforceable  portion shall be deemed to be modified to the
extent  necessary to permit its  enforcement to the maximum extent  permitted by
applicable law.

         23.      This Agreement shall be construed in accordance with the laws
 of the State of Ohio.

         THIS AGREEMENT WILL BECOME EFFECTIVE UPON THE CLOSING DATE OF THE 
ACQUISITION OF LESHNER FINANCIAL, INC. BY COUNTRYWIDE CREDIT INDUSTRIES, INC. 
PURUSANT TO THE AGREEMENT DATED 12/10/96 FOR THE EXCHANGE OF STOCK BETWEEN THE 
PARTIES.

         IN WITNESS WHEREOF, this Agreement has been executed for the Trusts and
the  Administrator  by their  duly  authorized  officers,  on this  _____ day of
_________________, 1997.


ACCEPTED BY ADMINISTRATOR                      COUNTRYWIDE INVESTMENT TRUST


By: _________________________________          By: ____________________________
Authorized Signature

_____________________________________          COUNTRYWIDE TAX-FREE TRUST
Type or Print Name, Position

_____________________________________          By: ____________________________
Administrator Name

_____________________________________          COUNTRYWIDE STRATEGIC TRUST
Address

_____________________________________          By: ____________________________
Address

_____________________________________          Date: __________________________
Phone                                  




<PAGE>



                                                                 Schedule A









                            SCHEDULE OF MUTUAL FUNDS




Countrywide Investment Trust
    *  Short Term Government Income Fund
   **  Adjustable Rate U.S. Government Securities Fund
   **  Global Bond Fund
   **  Intermediate Term Government Income Fund


Countrywide Tax-Free Trust
    *  Ohio Tax-Free Money Fund
    *  Tax-Free Money Fund
    *  California Tax-Free Money Fund
    *  Royal Palm Florida Tax-Free Money Fund
   **  Tax-Free Intermediate Term Fund
   **  Ohio Insured Tax-Free Fund


Countrywide Strategic Trust

       U.S. Government Securities Fund
       Treasury Total Return Fund
   **  Equity Fund
   **  Utility Fund



















  *  No-load Fund
 **  Dual Pricing Fund
<PAGE>

                                                             Schedule B    


                            COUNTRYWIDE INVESTMENTS
                              COMMISSION SCHEDULE

                        U.S. Government Securities Fund
                   Tax-Free Intermediate Term Fund - Class A
               Intermediate Term Government Income Fund - Class A
           Adjustable Rate U.S. Government Securities Fund - Class A

                                        Total
        Dollar Amount of Purchase       Sales        Dealer
        (At Offering Price)             Charge*      Concession

Less than $100,000                      2.00%          1.80%
from $100,000 but under $250,000        1.50%          1.35%
from $250,000 but under $500,000        1.00%           .90%
from $500,000 but under $1,000,000       .75%           .65%
$1,000,000 and over**                    None           None

25 basis points annual trailing commission effective immediately, paid 
quarterly.

                             Equity Fund - Class A
                             Utility Fund - Class A
                           Global Bond Fund - Class A
                           Treasury Total Return Fund
                      Ohio Insured Tax-Free Fund - Class A

                                        Total
        Dollar Amount of Purchase       Sales   Dealer
        (At Offering Price)             Charge* Concession

Less than $100,000                      4.00%   3.60%
from $100,000 but under $250,000        3.50%   3.30%
from $250,000 but under $500,000        2.50%   2.30%
from $500,000 but under  $1,000,000     2.00%   1.80%
$1,000,000 and over**                    None    None

25 basis points annual trailing commission effective immediately, paid 
quarterly.
*  As a percentage of offering price.
** Broker/Dealers are entitled to a commission of 75 basis points at the time 
the investor purchases Class A shares at NAV in amounts totaling $1 million or
more.  However, the investor is subject to a contingent deferred sales load of
75 basis points if a redemption occurs within one year of purchase.  
See specific Fund prospectus for details.

                             Equity Fund - Class C
                             Utility Fund - Class C
                           Global Bond Fund - Class C
                      Ohio Insured Tax-Free Fund - Class C
                   Tax-Free Intermediate Term Fund - Class C
               Intermediate Term Government Income Fund - Class C
           Adjustable Rate U.S. Government Securities Fund - Class C

The Funds will be offered to clients at net asset value.  A commission of 1% of
the purchase amount of Class C shares will be paid to participating brokers at 
the time of purchase.  Purchases of Class C shares are subject to a contingent 
deferred sales load, according to the following schedule:
        
        Year Since Purchase     Contingent Deferred
        Payment Was Made        Sales Load

              First Year          1%
              Thereafter         None

100 basis points annual trailing commission will be paid quarterly beginning in
the thirteenth month.


Brokers may invest for their own account at NAV
No trailing commissions will be paid to a dealer for any calendar quarter in 
which the average daily balance of all accounts in Countrywide Investments 
funds (including no-load money market funds) is less than $1,000,000.

                          FOR BROKER/DEALER USE ONLY


<PAGE>


                                                          Schedule C



                             POLICIES AND PROCEDURES
                              WITH RESPECT TO SALES
                              OF DUAL PRICING FUND


         As certain  Funds within  Countrywide  Investments  (the "Dual  Pricing
Funds")  offer two classes of Shares  subject to  different  levels of front-end
sales charges,  it is important for an investor not only to choose the Fund that
best suits his  investment  objectives,  but also to choose the sales  financing
method which best suits his particular  situation.  To assist investors in these
decisions, we are instituting the following policy:

         1.       Any purchase order for $1 million or more must be for Class A
                  Shares.

         2.       Any  purchase  order for  $100,000 but less than $1 million is
                  subject  to  approval  by  a   registered   principal  of  the
                  Underwriter,  who must approve the  purchase  order for either
                  Class A  Shares  or Class C  Shares  in light of the  relevant
                  facts and circumstances, including:

                  (a)      the specific purchase order dollar amount;

                  (b)      the length of time the investor expects to hold the 
                           Shares; and

                  (c)      any other relevant circumstances, such as the 
                           availability of purchases under a Letter of Intent.

         3.       Any order to exchange  Class A Shares of a Dual  Pricing  Fund
                  (or Shares of another  Fund having a maximum  sales load equal
                  to or greater than Class A Shares of the Dual  Pricing  Funds)
                  for Shares of another  Dual  Pricing  Fund will be for Class A
                  Shares  only.  Class C Shares  of a Dual  Pricing  Fund may be
                  exchanged for either Class A or Class C Shares of another Dual
                  Pricing Fund,  provided that an exchange of Class C Shares for
                  Class  A  Shares  is  subject  to  approval  by  a  registered
                  principal  of  Underwriter,  who must  approve the exchange in
                  light of the relevant facts and circumstances.

         There are instances when one financing  method may be more  appropriate
than the other.  For  example,  investors  who would  qualify for a  significant
discount  from the maximum  sales  charge on Class A Shares may  determine  that
payment of such a reduced  front-end  sales charge is superior to payment of the
higher ongoing distribution fee applicable to Class C Shares. On the other hand,
an investor  whose order would not qualify for such a discount may wish to pay a
lower sales  charge and have more of his funds  invested  in Class C Shares.  If
such an  investor  anticipates  that he will  redeem his  Shares  within a short
period of time,  the  investor  may,  depending  on the amount of his  purchase,
choose to bear higher  distribution  expenses than if he had  purchased  Class A
Shares.

         In  addition,   investors  who  intend  to  hold  their  Shares  for  a
significantly  long time may wish to  purchase  Class A Shares in order to avoid
the higher ongoing distribution expenses of Class C Shares.

         The  appropriate  supervisor  must ensure that all employees  receiving
investor inquiries about the purchase of Shares of Dual Pricing Funds advise the
investor of the available  financing  methods  offered by mutual funds,  and the
impact of  choosing  one method  over  another.  It may be  appropriate  for the
supervisor to discuss the purchase with the investor.

         This policy is effective  immediately with respect to any order for the
purchase of Shares of all Dual Pricing Funds.  Questions relating to this policy
should be  directed  to Sharon  Karp,  Vice  President  of the  Underwriter,  at
513/629-2000.








WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>


<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAIN SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRANS ADVISER
FUNDS, INC. SEMI-ANNUAL REPORT DATED FEBRUARY 28, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
   <NUMBER> 006
   <NAME> MONEY MARKET FUND
              
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          AUG-31-1997
<PERIOD-START>                             SEP-01-1996
<PERIOD-END>                               FEB-28-1997
<INVESTMENTS-AT-COST>                       98,582,196
<INVESTMENTS-AT-VALUE>                      98,582,196
<RECEIVABLES>                                1,345,605
<ASSETS-OTHER>                                  22,760
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                              99,950,561
<PAYABLE-FOR-SECURITIES>                     1,873,737
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                      387,248
<TOTAL-LIABILITIES>                          2,260,985
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    97,691,530
<SHARES-COMMON-STOCK>                       97,691,530
<SHARES-COMMON-PRIOR>                       76,360,353
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        (1,954)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                97,689,576
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                            2,402,069
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                 276,863
<NET-INVESTMENT-INCOME>                      2,125,206
<REALIZED-GAINS-CURRENT>                       (1,928)
<APPREC-INCREASE-CURRENT>                            0
<NET-CHANGE-FROM-OPS>                        2,123,278
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                    2,125,206
<DISTRIBUTIONS-OF-GAINS>                         2,520
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                    241,892,119
<NUMBER-OF-SHARES-REDEEMED>                220,754,088
<SHARES-REINVESTED>                            193,146
<NET-CHANGE-IN-ASSETS>                      21,326,729
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                        2,494
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           85,174
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                347,623
<AVERAGE-NET-ASSETS>                        85,880,020
<PER-SHARE-NAV-BEGIN>                             1.00
<PER-SHARE-NII>                                    .03
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                          .03
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                               1.00
<EXPENSE-RATIO>                                    .65
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        


        


</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>



<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAIN SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRANS ADVISER
FUNDS, INC. SEMI-ANNUAL REPORT DATED FEBRUARY 28, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
   <NUMBER> 003
   <NAME> INTERMEDIATE BOND FUND
              
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          AUG-31-1997
<PERIOD-START>                             SEP-01-1996
<PERIOD-END>                               FEB-28-1997
<INVESTMENTS-AT-COST>                       16,209,985
<INVESTMENTS-AT-VALUE>                      15,964,949
<RECEIVABLES>                                  211,356
<ASSETS-OTHER>                                  22,760
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                              16,199,065
<PAYABLE-FOR-SECURITIES>                        48,161
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                      123,375
<TOTAL-LIABILITIES>                            171,536
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    16,227,629
<SHARES-COMMON-STOCK>                        1,625,149
<SHARES-COMMON-PRIOR>                        1,370,318
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                         44,936
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                     (245,036)
<NET-ASSETS>                                16,027,529
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                              511,819
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                  61,559
<NET-INVESTMENT-INCOME>                        450,260
<REALIZED-GAINS-CURRENT>                        60,329
<APPREC-INCREASE-CURRENT>                       87,795
<NET-CHANGE-FROM-OPS>                          598,384
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                      450,260
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                      3,603,774
<NUMBER-OF-SHARES-REDEEMED>                  1,091,386
<SHARES-REINVESTED>                             10,125
<NET-CHANGE-IN-ASSETS>                       2,670,637
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                     (15,939)
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           28,976
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                119,801
<AVERAGE-NET-ASSETS>                        14,608,293
<PER-SHARE-NAV-BEGIN>                             9.75
<PER-SHARE-NII>                                    .31
<PER-SHARE-GAIN-APPREC>                            .11
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                          .31
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                               9.86
<EXPENSE-RATIO>                                    .85
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        


        

</TABLE>



                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:

         WHEREAS, COUNTRYWIDE INVESTMENT TRUST, a business trust organized under
the laws of the  Commonwealth of Massachusetts  (hereinafter  referred to as the
"Trust"),  has filed  with the  Securities  and  Exchange  Commission  under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended,  a  registration  statement with respect to the issuance and sale of
the shares of the Trust; and

         WHEREAS, the undersigned is a Trustee of the Trust, as indicated beside
his name;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints JOHN F.
SPLAIN and SANDOR E. SAMUELS, and each of them, his attorneys for him and in his
name, place and stead, to execute and file any amended registration statement or
statements and amended  prospectus or  prospectuses or amendments or supplements
to any of the foregoing, hereby giving and granting to said attorneys full power
and authority to do and perform all and every act and thing whatsoever requisite
and  necessary  to be done in and about the premises as fully to all intents and
purposes  as he might or could do if  personally  present at the doing  thereof,
hereby ratifying and confirming all that said attorneys may or shall lawfully do
or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 19th
day of May, 1997.

                                        /s/ Donald L. Bodgon, M.D.
                                       --------------------------------
                                       DONALD L. BODGON, M.D.
                                       Trustee

STATE OF OHIO                       )
                                    ) ss:
COUNTY OF HAMILTON                  )

         On the 19th day of May, 1997,  personally appeared before me, DONALD L.
BOGDON, M.D., known to me to be the person described in and who executed the 
foregoing instrument,  and who  acknowledged to me that he executed and 
delivered the same for the purposes therein expressed.

         WITNESS my hand and official seal this 19th day of May, 1997.

                                       /s/ Elizabeth A. Santen
                                       ----------------------------------
                                        Notary Public





<PAGE>

                               POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:

         WHEREAS, COUNTRYWIDE INVESTMENT TRUST, a business trust organized under
the laws of the  Commonwealth of Massachusetts  (hereinafter  referred to as the
"Trust"),  has filed  with the  Securities  and  Exchange  Commission  under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended,  a  registration  statement with respect to the issuance and sale of
the shares of the Trust; and

         WHEREAS, the undersigned is the Chairman and a Trustee of
the Trust, as indicated beside his name;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints JOHN F.
SPLAIN and SANDOR E. SAMUELS, and each of them, his attorneys for him and in his
name, place and stead, to execute and file any amended registration statement or
statements and amended  prospectus or  prospectuses or amendments or supplements
to any of the foregoing, hereby giving and granting to said attorneys full power
and authority to do and perform all and every act and thing whatsoever requisite
and  necessary  to be done in and about the premises as fully to all intents and
purposes  as he might or could do if  personally  present at the doing  thereof,
hereby ratifying and confirming all that said attorneys may or shall lawfully do
or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 19th
day of May, 1997.

                                        /s/ Angelo R. Mozilo
                                       --------------------------------
                                       ANGELO R. MOZILO
                                       Chairman and Trustee

STATE OF OHIO                       )
                                    ) ss:
COUNTY OF HAMILTON                  )

         On the 19th day of May, 1997,  personally appeared before me, ANGELO R.
MOZILO, known to me to be the person described in and who executed the foregoing
instrument,  and who  acknowledged to me that he executed and delivered the same
for the purposes therein expressed.

         WITNESS my hand and official seal this 19th day of May, 1997.

                                       /s/ Elizabeth A. Santen
                                       ----------------------------------
                                        Notary Public


<PAGE>

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:

         WHEREAS, COUNTRYWIDE INVESTMENT TRUST, a business trust organized under
the laws of the  Commonwealth of Massachusetts  (hereinafter  referred to as the
"Trust"),  has filed  with the  Securities  and  Exchange  Commission  under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended,  a  registration  statement with respect to the issuance and sale of
the shares of the Trust; and

         WHEREAS, the undersigned is a Trustee of the Trust, as indicated beside
his name;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints JOHN F.
SPLAIN and SANDOR E. SAMUELS, and each of them, his attorneys for him and in his
name, place and stead, to execute and file any amended registration statement or
statements and amended  prospectus or  prospectuses or amendments or supplements
to any of the foregoing, hereby giving and granting to said attorneys full power
and authority to do and perform all and every act and thing whatsoever requisite
and  necessary  to be done in and about the premises as fully to all intents and
purposes  as he might or could do if  personally  present at the doing  thereof,
hereby ratifying and confirming all that said attorneys may or shall lawfully do
or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 19th
day of May, 1997.

                                        /s/ John F. Seymour, Jr.
                                       --------------------------------
                                       JOHN F. SEYMOUR, JR.
                                       Trustee

STATE OF OHIO                       )
                                    ) ss:
COUNTY OF HAMILTON                  )

         On the 19th day of May, 1997,  personally appeared before me, JOHN F. 
SEYMOUR, JR., known to me to be the person described in and who executed the 
foregoing instrument,  and who  acknowledged to me that he executed and 
delivered the same for the purposes therein expressed.

         WITNESS my hand and official seal this 19th day of May, 1997.

                                       /s/ Elizabeth A. Santen
                                       ----------------------------------
                                        Notary Public


<PAGE>

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:

         WHEREAS, COUNTRYWIDE INVESTMENT TRUST, a business trust organized under
the laws of the  Commonwealth of Massachusetts  (hereinafter  referred to as the
"Trust"),  has filed  with the  Securities  and  Exchange  Commission  under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended,  a  registration  statement with respect to the issuance and sale of
the shares of the Trust; and

         WHEREAS, the undersigned is a Trustee of the Trust, as indicated beside
his name;

         NOW, THEREFORE, the undersigned hereby constitutes and appoints JOHN F.
SPLAIN and SANDOR E. SAMUELS, and each of them, his attorneys for him and in his
name, place and stead, to execute and file any amended registration statement or
statements and amended  prospectus or  prospectuses or amendments or supplements
to any of the foregoing, hereby giving and granting to said attorneys full power
and authority to do and perform all and every act and thing whatsoever requisite
and  necessary  to be done in and about the premises as fully to all intents and
purposes  as he might or could do if  personally  present at the doing  thereof,
hereby ratifying and confirming all that said attorneys may or shall lawfully do
or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 19th
day of May, 1997.

                                        /s/ Sebastiano Sterpa
                                       --------------------------------
                                       SEBASTIANO STERPA
                                       Trustee

STATE OF OHIO                       )
                                    ) ss:
COUNTY OF HAMILTON                  )

        On the 19th day of May, 1997,  personally appeared before me, SEBASTIANO
STERPA, known to me to be the person described in and who executed the foregoing
instrument,  and who  acknowledged to me that he executed and delivered the same
for the purposes therein expressed.

         WITNESS my hand and official seal this 19th day of May, 1997.

                                       /s/ Elizabeth A. Santen
                                       ----------------------------------
                                        Notary Public




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