COUNTRYWIDE INVESTMENT TRUST, 485BPOS, 1999-07-30

COUNTRYWIDE INVESTMENT TRUST
485BPOS, 1999-07-30

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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. 69
-----
and/or
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
--

Amendment No. 63
-----
(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)
/x/ on August 1, 1999 pursuant to paragraph (b)
/ / 75 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a) of Rule 485

<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
Objectives 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 and Public Offering 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.......................... Principal Security Holders
16.......................... The Investment Adviser and
Underwriter; Distribution Plan;
Custodian; Auditors; Transfer
Agent
17.......................... Securities Transactions
18.......................... The Trust
19.......................... Calculation of Share Price and Public
Offering Price; Other Purchase
Information; Redemption in Kind
20.......................... Taxes
21.......................... The Investment Adviser and
Underwriter
22.......................... Historical Performance Information
23.......................... Annual Report

<PAGE>

Income

Prospectus

Intermediate Term
Government
Income Fund

August 1, 1999

[logo]COUNTRYWIDE
INVESTMENTS

<PAGE>

PROSPECTUS
August 1, 1999

Countrywide Investment Trust
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
800-543-0407

INTERMEDIATE TERM GOVERNMENT INCOME FUND

The Intermediate Term Government Income Fund (the "Fund"), a separate
series of Countrywide Investment Trust, seeks high current income, consistent
with protection of capital, by investing primarily in U.S. Government
obligations having an effective maturity of twenty years or less with a
dollar-weighted effective average portfolio maturity under normal market
conditions of between three and ten years. To the extent consistent with the
Fund's primary objective, capital appreciation is a secondary objective.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANKING OR DEPOSITORY INSTITUTION. SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.

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

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 August 1, 1999
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 the above number.

For further information or assistance in opening an account, please contact
your broker, or call us at the above number.

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>

TABLE OF CONTENTS
Expense Information. . . . . . . . . . . . . . . . . . . . .
Financial Highlights. . . . . .. . . . . . . . . . . . . . .
Investment Objectives 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.

<PAGE>

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

Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.75%
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

** A wire transfer fee is charged 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 .50%
12b-1 Fees(A) .17%
Other Expenses .32%
----
Total Fund Operating Expenses .99%
====

(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 amounts incurred during the most recent 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
$57 $78 $100 $163

- 2 -

<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following information, which has been audited by Arthur Andersen
LLP, is an integral part of the audited financial statements and should be read
in conjunction with the financial statements. The financial statements as of
September 30, 1998 and related auditors' report appear in the Statement of
Additional Information of the Fund, which can be obtained by shareholders at no
charge by calling Countrywide Fund Services, Inc. (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.

PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------
YEARS ENDED SEPTEMBER 30,

<TABLE>
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of year $10.67 $10.49 $10.73 $10.14 $11.59 $11.10 $10.45 $9.85 $10.09 $10.12
------- ------- ------- ------- ------ ------ ------ ------- ------ -------
Income from investment
operations:
Net investment income 0.61 0.61 0.61 0.64 0.56 0.60 0.68 0.75 0.76 0.79
Net realized and
unrealized gains
(losses)on investments 0.48 0.18 (0.24) 0.59 (1.32) 0.49 0.65 0.60 (0.24) (0.03)
------- ----- ------- ------ ------ ------ ------ ------ ----- ------
Total from investment
operations 1.09 0.79 0.37 1.23 (0.76) 1.09 1.33 1.35 0.52 0.76
------- ------- ------- ------- ------- ------- ----- ----- ----- ------
Less distributions:
Dividends from net
investment income (0.61) (0.61) (0.61) (0.64) (0.56) (0.60) (0.68) (0.75) (0.76) (0.79)
Distributions from
net realized gains -- -- -- -- (0.13) -- -- -- -- --
------- ------- ------- ------- ------- ------ ------- ------- ------- ------
Total distributions (0.61) (0.61) (0.61) (0.64) (0.69) (0.60) (0.68) (0.75) (0.76) (0.79)
------- ------- ------- ------- ------- ------- ------- ------- ------ -------
Net asset value at
end of year $11.15 $10.67 $10.49 $10.73 $10.14 $11.59 $11.10 $10.45 $9.85 $10.09
======= ======= ======= ====== ====== ====== ====== ====== ====== =====
Total return(A) 10.54% 7.74% 3.55% 12.52% (6.76%) 10.15% 13.27% 14.19% 5.31% 7.79%
======= ======= ======= ======== ======= ======= ====== ====== ====== ======
Net assets at end
of year (000's) $51,168 $53,033 $56,095 $56,969 $64,395 $89,666 $59,290 $40,896 $37,800 $40,391
======== ======== ======= ======= ======== ======= ======= ======= ======= =======
Ratio of expenses to
average net assets 0.99% 0.99% 0.99% 0.99% 0.99% 0.99% 1.00% 1.00% 1.02% 1.03%

Ratio of net investment
income to average
net assets 5.64% 5.78% 5.75% 6.17% 5.17% 5.31% 6.40% 7.39% 7.57% 7.83%

Portfolio turnover rate 29% 49% 70% 58% 236% 255% 76% 74% 92% 161%

(A)Total returns shown exclude the effect of applicable sales loads.
</TABLE>

- 3 -

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------

The Fund is a series of Countrywide Investment Trust (the "Trust"). The
Fund seeks high current income, consistent with protection of capital, by
investing primarily in U.S. Government obligations having an effective maturity
of twenty years or less with a dollar-weighted effective average portfolio
maturity under normal market conditions of between three and ten years. To the
extent consistent with the Fund's primary objective, capital appreciation is a
secondary objective. In order to achieve its investment objectives, the Fund may
also enter into repurchase agreements collateralized by U.S. Government
obligations. The Fund is not intended to be a complete investment program, and
there is no assurance that its investment objectives can be achieved.

The investment objectives of the Fund may be changed by the Board of
Trustees without shareholder approval, but only after notification has been
given to shareholders and after this Prospectus has been revised accordingly. If
there is a change in the Fund's investment objectives, shareholders should
consider whether the Fund remains an appropriate investment in light of their
then current financial position and needs. 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.

U.S. Government Obligations
---------------------------

The Fund invests in intermediate-term U.S. Government obligations.
"U.S. Government obligations" include securities which are issued or guaranteed
by the United States Treasury, by various agencies of the United States
Government, and by various instrumentalities which have been established or
sponsored by the United States Government. U.S. Treasury obligations are backed
by the "full faith and credit" of the United States Government. U.S. Treasury
obligations include Treasury bills, Treasury notes, and Treasury bonds. U.S.
Treasury obligations also include the separate principal and interest components
of U.S. Treasury obligations which are traded under the Separate Trading of
Registered Interest and Principal of Securities ("STRIPS") program. The Fund may
also invest in inflation-indexed bonds which are U.S. Treasury obligations whose
principal value is periodically adjusted according to the rate of inflation.
Agencies or instrumentalities established by the United States Government
include the Federal Home Loan Banks, the Federal Land Bank, the Government
National Mortgage Association, the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, the Student Loan Marketing Association,
the Small Business Administration, the Bank for Cooperatives, the Federal
Intermediate Credit Bank, the Federal Financing Bank, the Federal Farm Credit
Banks, the Federal Agricultural Mortgage Corporation, the Resolution Funding
Corporation, the Financing Corporation of

- 4 -

<PAGE>

America and the Tennessee Valley Authority. Some of these securities are
supported by the full faith and credit of the United States Government while
others are supported only by the credit of the agency or instrumentality, which
may include the right of the issuer to borrow from the United States Treasury.
In the case of securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency issuing or guaranteeing
the obligation for ultimate repayment, and may not be able to assert a claim
against the United States in the event the agency or instrumentality does not
meet its commitments. Shares of the Fund are not guaranteed or backed by the
United States Government.

The Fund may invest in securities issued or guaranteed by any of the
entities listed above or by any other agency or instrumentality established or
sponsored by the United States Government, provided that the securities are
otherwise permissible investments of the Fund. Certain U.S. Government
obligations which have a variable rate of interest readjusted no less frequently
than annually will be deemed to have a maturity equal to the period remaining
until the next readjustment of the interest rate.

It is the current policy of the Fund to limit its investments and
transactions to those investments and transactions permissible for Federal
credit unions pursuant to 12 U.S.C. Section 1757(7) and (8) and 12 CFR Part 703.
If this policy is changed as to permit the Fund to make portfolio investments
and engage in transactions not permissible for Federal credit unions, the Trust
will so notify all Federal credit union shareholders.

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. The net asset value of the Fund also will fluctuate due to these
changes. 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 price in the same way,
i.e., all those securities experiencing appreciation when interest rates decline
and depreciation when interest rates rise. In addition, the prepayment
experience of the mortgages underlying mortgage-related U.S. Government
obligations, such as obligations issued by the Government National Mortgage
Association, the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation, may affect the value of, and the return on an investment
in, such securities.

- 5 -

<PAGE>

Other Investment Techniques
----------------------------
The Fund may also engage in the following investment techniques, each
of which may involve certain risks:

MORTGAGE-RELATED U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in
mortgage-related U.S. Government obligations, including GNMA Certificates, FHLMC
Certificates and FNMA Certificates.

GNMA Certificates are U.S. Government obligations guaranteed by the
Government National Mortgage Association (the GNMA) and are mortgage-backed
securities representing part ownership of a pool of mortgage loans. The pool of
mortgage loans underlying the GNMA Certificates is assembled by the issuer,
usually a private mortgage lender. The loans in the pool, issued by lenders such
as mortgage bankers, commercial banks and savings and loan associations, are
either insured by the Federal Housing Administration or the Farmers' Home
Administration or guaranteed by the Veterans Administration. If the pool is
approved by the GNMA, GNMA Certificates are issued and sold to investors such as
the Fund. The Fund's investments in GNMA Certificates may include pass-through
GNMA Certificates which entitle the holder to receive all interest and principal
payments owed on the pool of mortgage loans, net of fees paid to the issuer and
the GNMA. In addition, the timely payment of interest and principal on this type
of GNMA Certificate is guaranteed by the GNMA, even in the event of the
foreclosure of underlying mortgage loans. The GNMA guarantee is backed by the
full faith and credit of the United States. However, shares of the Fund are not
guaranteed or backed by either the GNMA or the United States Government.

FHLMC Certificates are U.S. Government obligations guaranteed by the
Federal Home Loan Mortgage Corporation (the FHLMC). FHLMC Certificates are
pass-through mortgage-backed securities representing part ownership of a pool of
mortgage loans. The FHLMC generally purchases such mortgage loans from those
lenders insured by the Federal Deposit Insurance Corporation, or Federal Housing
Administration mortgagees approved by the Department of Housing and Urban
Development. The securities and guarantees of the FHLMC are not backed, directly
or indirectly, by the full faith and credit of the United States.

FNMA Certificates are U.S. Government obligations guaranteed by the
Federal National Mortgage Association (the FNMA). The FNMA is a U.S. Government
sponsored corporation owned entirely by private stockholders. It is subject to
general regulation by the Secretary of Housing and Urban Development. The FNMA
purchases residential mortgages from a list of approved sellers, which include
state and federally-chartered savings and loan associations, mutual savings
banks, commercial banks, credit unions and mortgage banks. Pass-through
securities issued by the FNMA are not backed by the full faith and credit of the
United States, although the Secretary of the Treasury of the United

- 6 -

<PAGE>

States has discretionary authority to lend the FNMA up to $2.25 billion
outstanding at any time.

Prepayments of and payments on foreclosures of mortgage loans
underlying a mortgage-related security are passed through to the registered
holder with the regular monthly payments of principal and interest, and have the
effect of reducing future payments. The mortgage loans underlying a
mortgage-related security may be prepaid at any time without penalty. If a
prepayment of a mortgage loan underlying a particular mortgage-related security
occurs, the return to the Fund may be lower if the Fund acquired the security at
a premium over par or higher if the Fund acquired the security at a discount
from par. In addition, prepayments of mortgage loans underlying a particular
mortgage-related security held by the Fund will reduce the market value of the
security to the extent the market value of the security at the time of
prepayment exceeds its par value. In periods of declining mortgage interest
rates, prepayments may occur with increasing frequency because, among other
reasons, mortgagors may be able to refinance outstanding mortgages at lower
interest rates. In general, a decline in interest rates will cause the net asset
value of the Fund to increase to the extent that prepayments do not occur, while
a rise in interest rates will cause the net asset value of the Fund to decrease.

Some of the pass-through mortgage securities in which the Fund invests may
be adjustable rate mortgage securities ("ARMS"). ARMS are collateralized by
adjustable rather than fixed-rate mortgages. The ARMS in which the Fund invests
are actively traded. Generally, adjustable rate mortgages have a specified
maturity date and amortize principal over their life. In periods of declining
interest rates there is a reasonable likelihood that ARMS will experience
increased rates of prepayment of principal. However, the major difference
between ARMS and fixed-rate mortgage securities is that the interest rate can
and does change in accordance with movements in a particular, pre-specified,
published interest rate index. There are two main categories of indices: those
based on U.S. Treasury obligations and those derived from a calculated measure,
such as a cost of funds index or a moving average of mortgage rates. The amount
of interest on an adjustable rate mortgage is calculated by adding a specified
amount to the applicable index, subject to limitations on the maximum and
minimum interest that is charged during the life of the mortgage or to maximum
and minimum changes to that interest rate during a given period. Because the
interest rate on ARMS generally moves in the same direction as market interest
rates, the market value of ARMS tends to be more stable than that of fixed-rate
mortgage securities and ARMS tend to experience lower rates of prepayment of
principal than fixed-rate mortgage securities. However, ARMS are also less
likely than fixed-rate

- 7 -

<PAGE>

mortgage securities of comparable quality and maturity to increase significantly
in value during periods of declining interest rates.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS") AND REAL ESTATE MORTGAGE
INVESTMENT CONDUITS ("REMICS"). The Fund may invest in CMOs and REMICs issued or
guaranteed by U.S. Government agencies or instrumentalities. CMOs and REMICs are
debt instruments issued by special purpose entities that are secured by pools of
mortgage loans or other mortgage-backed securities. Payments of principal and
interest on the underlying collateral provides the funds to pay the debt service
on CMOs or REMICs.

CMOs are issued in multiple classes. Each class, often referred to as a
"tranche," is issued at a specified coupon rate or adjustable rate and has a
stated maturity or final distribution date. Principal prepayments on collateral
underlying CMOs may cause the CMOs to be retired substantially earlier than
their stated maturities or final distribution dates. Interest is paid or accrues
on classes of a CMO on a monthly, quarterly or semiannual basis. The principal
and interest on the mortgages underlying CMOs may be allocated among the several
classes in many ways.

REMICs, which are authorized under the Tax Reform Act of 1986, are
private entities formed for the purpose of holding a fixed pool of mortgages
secured by an interest in real property. REMICs are similar to CMOs in that they
issue multiple classes of securities. As with CMOs the underlying mortgages
include those backed by GNMA Certificates or other mortgage pass-throughs issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.

ASSET-BACKED SECURITIES. The Fund may invest in various types of
adjustable rate securities in the form of asset-backed securities issued or
guaranteed by U.S. Government agencies or instrumentalities. The securitization
techniques used in the context of asset-backed securities are similar to those
used for mortgage-related securities. Thus, through the use of trusts and
special purpose corporations, various types of receivables are

- 8 -

<PAGE>

securitized in pass-through structures similar to the mortgage pass-through
structures described above or in a pay-through structure similar to the CMO
structure. In general, collateral supporting asset-backed securities has shorter
maturities than mortgage loans and has been less likely to experience
substantial prepayment.

The Fund's investments in asset-backed securities may include
pass-through securities collateralized by Student Loan Marketing Association
("SLMA") guaranteed loans whose interest rates adjust in much the same fashion
as described above with respect to ARMS. The underlying loans are originally
made by private lenders and are guaranteed by the SLMA. It is the guaranteed
loans that constitute the underlying financial assets in these asset-backed
securities. There may be other types of asset-backed securities that are
developed in the future in which the Fund may invest.

INFLATION-INDEXED BONDS. The Fund may invest in inflation-indexed
bonds, which are fixed-income securities whose principal value is periodically
adjusted according to the rate of inflation. Such bonds generally are issued at
an interest rate lower than typical bonds, but are expected to retain their
principal value over time. The interest rate on these bonds is fixed at
issuance, but over the life of the bond this interest may be paid on an
increasing principal value, which has been adjusted for inflation.

The value of inflation-indexed bonds is expected to change in response
to changes in real interest rates. Real interest rates in turn are tied to the
relationship between nominal interest rates and the rate of inflation.
Therefore, if inflation were to rise at a faster rate than nominal interest
rates, real interest rates might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increased at a
faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. While these securities are
expected to be protected from long-term inflationary trends, short-term
increases in inflation may lead to a decline in value. If interest rates rise
due to reasons other than inflation (for example, due to changes in currency
exchange rates), investors in these securities may not be protected to the
extent that the increase is not reflected in the bond's inflation measure.

DELAYED SETTLEMENT TRANSACTIONS. The Fund may trade securities on a
"when-issued" or "to-be-announced" basis. Obligations issued on a when-issued
or to-be-announced basis are settled by delivery and payment after the date of
the transaction, usually within 15 to 45 days. In a to-be-announced

- 9 -

<PAGE>

transaction, the Fund has committed to purchasing or selling securities for
which all specific information is not yet known at the time of the trade,
particularly the face amount in transactions involving mortgage-related
securities. The Fund will only make commitments to purchase obligations on a
when- issued or to-be-announced basis with the intention of actually acquiring
the obligations, but the Fund may sell these securities before the settlement
date if it is deemed advisable as a matter of investment strategy or in order to
meet its obligations, although it would not normally expect to do so. The Fund
will not enter into a delayed settlement transaction which settles in more than
120 days.

Purchases of securities on a when-issued or to-be-announced basis are
subject to market fluctuations and their current value is determined in the same
manner as other portfolio securities. When effecting such purchases for the
Fund, a segregated account of cash or U.S. Government obligations of the Fund
in an amount sufficient to make payment for the portfolio securities to be
purchased will be maintained with the Fund's Custodian at the trade date and
valued daily at market for the purpose of determining the adequacy of the
securities in the account. If the market value of segregated securities
declines, additional cash or U.S. Government obligations will be segregated on
a daily basis so that the market value of the Fund's segregated assets will
equal the amount of the Fund's committments to purchase when-issued obligations
and securities on a to-be-announced basis. The Fund's purchase of securities on
a when-issued or to-be-announced basis may increase its overall investment
exposure and involves a risk of loss if the value of the securities declines
prior to the settlement date or if the broker-dealer selling the securities
fails to deliver after the value of the securities has risen.

REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which
the 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, the Fund could experience both delays
in liquidating the underlying security and losses. To minimize these
possibilities, the Fund intends to enter into repurchase agreements only with
its Custodian, banks having assets in excess of $10 billion and the largest and,
in the judgment of the Adviser under guidelines established by the Board of
Trustees, most creditworthy primary U.S. Government securities dealers. The Fund
will enter into repurchase agreements which are collateralized by U.S.
Government obligations. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Fund's Custodian at the Federal
Reserve Bank. At the time the Fund enters into a repurchase agreement, the value
of the collateral, 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 agrees to maintain sufficient collateral so that the value
of the underlying collateral, including accrued interest, will at all times
equal or exceed the value of the repurchase agreement. The 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.

- 10 -

<PAGE>

securities if outstanding borrowings exceed 5% of the value of its total assets.
Borrowing magnifies the potential for gain or loss on the Fund's portfolio
securities and, therefore, if employed, increases the possibility of fluctuation
in the Fund's net asset value. This is the speculative factor known as leverage.
To reduce the risks of borrowing, the Fund will limit its borrowings as
described above. The Fund's policies on borrowing and pledging are fundamental
policies which may not be changed without the affirmative vote of a majority of
its outstanding shares.

PORTFOLIO TURNOVER. The Fund does not intend to use short-term trading
as a primary means of achieving its investment objectives. However, the Fund's
rate of portfolio turnover will depend upon market and other conditions, and it
will not be a limiting factor when portfolio changes are deemed necessary or
appropriate by the Adviser. High turnover involves correspondingly greater
commission expenses and transaction costs and may result in the Fund recognizing
greater amounts of income and capital gains, which would increase the amount of
income and capital gains which the Fund must distribute to its shareholders in
order to maintain its status as a regulated investment company and to avoid the
imposition of federal income or excise taxes (see "Taxes").

HOW TO PURCHASE SHARES
- ----------------------
Your initial investment in the Fund ordinarily must be at least $1,000
($250 for tax-deferred retirement plans). However, the minimum initial
investment for employees, shareholders and customers of Countrywide Credit
Industries, Inc. or any affiliated company, including members of the immediate
family of such individuals, is $50. 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 Term Government Income Fund." An account
application is included in this Prospectus.

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 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

- 11 -

<PAGE>

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 Class A shares applicable to investors
whose accounts are opened after July 31, 1999 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 $50,000 4.75% 4.99% 4.00%
$ 50,000 but less than $100,000 4.50% 4.72% 3.75%
$100,000 but less than $250,000 3.50% 3.63% 2.75%
$250,000 but less than $500,000 2.95% 3.04% 2.25%
$500,000 but less than $1,000,000 2.25% 2.31% 1.75%
$1,000,000 or more None* None*

Investors whose accounts were opened prior to August 1, 1999 and after
January 31, 1995 are subject to a different table of sales loads as follows:

Dealer
Reallowance
Sales Load as % of: as % of
Public Net Public
Offering Amount Offering
Amount of Investment Price Invested Price
- -------------------- ------- --------- ------
Less than $100,000 2.00% 2.04% 1.80%
$100,000 but less than $250,000 1.50% 1.52% 1.35%
$250,000 but less than $500,000 1.00% 1.01% .90%
$500,000 but less than $1,000,000 .75% .76% .65%
$1,000,000 or more None* None*

Investors whose accounts were opened prior to February 1, 1995 are
subject to a different table of sales loads as follows:

* There is no front-end sales load on purchases of $1 million or more but
a contingent deferred sales load of 1% 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.

- 12 -

<PAGE>

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, participating unaffiliated dealers
will receive first year compensation of up to 1% of such purchases from the
Adviser. 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 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 Charge for
Certain Purchases of Shares" below.

In addition to the compensation otherwise paid to securities dealers,
the Adviser may from time to time pay from its own resources additional cash
bonuses or other incentives to selected dealers in connection with the sale of
shares of the Fund. On some occasions, such bonuses or incentives may be
conditioned upon the sale of a specified minimum dollar amount of the shares of
the Fund and/or other funds of Countrywide Investments during a specific period
of time. Such bonuses or incentives may include financial assistance to dealers
in connection with conferences, sales or training programs for their employees,
seminars for the public, advertising, sales campaigns and other dealer-sponsored
programs or events.

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.

- 13 -

<PAGE>

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 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.

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 tables 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. Shares of the Fund may be purchased at
net asset value by pension and profit-sharing plans, pension funds and other
company-sponsored benefit plans that (1) have plan assets of $500,000 or more,
or (2) have, at the time of purchase, 100 or more eligible participants, or (3)
certify that they project to have annual plan purchases of $200,000 or more, or
(4) are provided administrative services by certain third-party administrators
that have entered into a special service arrangement with the Adviser relating
to such plan.

- 14 -

<PAGE>

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.

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 may also purchase shares of the Fund at
net asset value if their investment adviser or broker-dealer has made
arrangements to permit them to do so with the Trust. The investment adviser must
notify the Transfer Agent that an investment qualifies as a purchase at net
asset value.

Associations and affinity groups and their members may purchase shares
of the Fund at net asset value provided that management of these groups or their
financial adviser has made arrangements to permit them to do so with the Trust.
Investors or their financial adviser must notify the Transfer Agent that an
investment qualifies as a purchase at net asset value.

Employees, shareholders and customers of Countrywide Credit Industries,
Inc. or any affiliated company, including members of the immediate family of
such individuals and employee benefit plans established by such entities, 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 1% 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

- 15 -

<PAGE>

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 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 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 initial
investment requirements and 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.

The Trust mails you confirmations of all purchases or redemptions of
Fund shares. Certificates representing shares are not issued. The Trust and the
Adviser reserve the rights to limit the amount of investments and to refuse to
sell to any person.

- 16 -

<PAGE>

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.

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.

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, including
Roth IRAs and Education IRAs

-- 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

- 17 -

<PAGE>

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.

InvestPlus Plan
----------------
If you are a Countrywide Home Loans mortgage holder, you may make
monthly investments in the Fund by including your investment with your mortgage
payment. You may write one check for the total amount.

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 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, government check or wire.

- 18 -

<PAGE>

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 having a value of less than $25,000
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. IRA accounts
are not redeemable by telephone.

Unless you have specifically notified the Transfer Agent not to honor
redemption requests by telephone, the telephone redemption privilege is
automatically available to your account. 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.

The Transfer Agent reserves the right to suspend the telephone
redemption privilege with respect to any account if the name(s) or the address
on the account has been changed within the previous 30 days.

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

- 19 -

<PAGE>

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
signature must be guaranteed by any of the eligible guarantor institutions
outlined above. If the name(s) or the address on your account has been changed
within 30 days of your redemption request, you will be required to request the
redemption in writing with your signature guaranteed, regardless of the value of
the shares being redeemed.

Written redemption requests may also direct that the proceeds be
deposited directly in a domestic bank or brokerage account designated on your
account application for telephone redemptions. Proceeds of redemptions requested
by mail are normally 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. 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. However, there is no charge for any check redemptions
effected by employees, shareholders and customers of

- 20 -

<PAGE>

Countrywide Credit Industries, Inc. or any affiliated company, including members
of the immediate family of such individuals.

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.

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, the proceeds will be wired directly to your existing account
in any commercial bank or brokerage firm in the United States as designated on
your application and you will be charged an $8 processing fee. 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 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. In order
to redeem such shares, the certificate must be delivered to the Transfer Agent,
or the dealer in the case of a wire redemption, duly endorsed or

- 21 -

<PAGE>

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 the minimum amount required by the Trust for your
account (based on actual amounts invested including any sales load paid,
unaffected by market fluctuations), 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.

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).

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.

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.

- 22 -

<PAGE>

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 *Equity Fund
Ohio Tax-Free Money Fund *Utility Fund
California Tax-Free Money Fund *Aggressive Growth Fund
Florida Tax-Free Money Fund *Growth/Value Fund
*Tax-Free Intermediate Term Fund
*Ohio Insured 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

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.

- 23 -

<PAGE>

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:

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. No interest
will accrue on amounts represented by uncashed distribution checks.

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.

- 24 -

<PAGE>

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 capital gains (i.e., the excess of net long-term
capital gains over net short-term capital losses) by the Fund to its
shareholders are taxable to the recipient shareholders as capital gains, without
regard to the length of time a shareholder has held Fund shares. The maximum
capital gains rate for individuals is 20% with respect to assets held more than
12 months. The maximum capital gains rate for corporate shareholders is the same
as the maximum tax rate for ordinary income. Redemptions of shares of the Fund
are taxable events on which a shareholder may realize a gain or loss.

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 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 five other series of the Trust, six series of Countrywide Tax-Free
Trust and four 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

- 25 -

<PAGE>

million; .4% of such assets from $150 million to $250 million; and .375% of such
assets in excess of $250 million.

Margaret D. Weinblatt, Chief Investment Officer-Taxable Fixed Income of
the Adviser, and Scott Weston, Assistant Vice President-Investments of the
Adviser, are primarily responsible for managing the portfolio of the Fund. Ms.
Weinblatt has been managing the Fund's portfolio since she became employed by
the Adviser in July 1998. From 1996 until 1998, she was President of Copernicus
Asset Management, Ltd. and from 1986 until 1995, she was Senior Portfolio
Manager-Fixed Income Group of Neuberger & Berman. Mr. Weston has been employed
by the Adviser since 1992 and has been managing the Fund's portfolio since March
1996.
The Adviser serves as principal underwriter for the Fund and, as such,
is the exclusive agent for the distribution of shares of the Fund. The officers
of the Trust are also officers of the Adviser.

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

- 26 -

<PAGE>

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.

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

- 27 -

<PAGE>

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.

Pursuant to the Plan, the Fund may make payments to dealers and other
persons, including the Adviser and its affiliates, who may be advising investors
regarding the purchase, sale or retention of shares of the Fund. For the fiscal
year ended September 30, 1998, the Fund paid $83,500 to the Adviser to reimburse
it for payments made to dealers and other persons who may be advising
shareholders in this regard.

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 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

- 28 -

<PAGE>

provide such services; however, in selecting investments for the Fund, no
preference will be shown for such securities.

The National Association of Securities Dealers places certain
limitations on asset-based sales charges of mutual funds. These limitations
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 the 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 securities. Securities (and other
assets) of the Fund 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
(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

- 29 -

<PAGE>

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.

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.

- 30 -

<PAGE>
<TABLE>
<S> <C>
ACCOUNT NO. 1- ____________________________
(For Fund Use Only)
Please mail account application to:
Countrywide Fund Services, Inc.
P.O. Box 5354 FOR BROKER/DEALER USE ONLY
Cincinnati, Ohio 45201-5354 Firm Name:______________________________________
INTERMEDIATE TERM Home Office Address:____________________________
GOVERNMENT INCOME FUND Branch Address:_________________________________
Rep Name & No.:_________________________________
Rep Signature:__________________________________

___________________________________________________________________________________________________________________
Initial Investment of $_____________

[ ] Check or draft enclosed payable to the Fund.

[ ] Bank Wire From: _________________________________________________________________________________________________

[ ] Exchange From: _________________________________________________________________________________________________
(Fund Name) (Fund Account Number)

Account Name S.S. #/Tax I.D.#

_________________________________________________________________ _________________________________________________
Name of Individual, Corporation, Organization, or Minor, etc. (In case of custodial account
please list minor's S.S.#)

_________________________________________________________________ Citizenship: [ ] U.S.
Name of Joint Tenant, Partner, Custodian [ ] Other ______________________

Address Phone

_________________________________________________________________ (_____)__________________________________________
Street or P.O. Box Business Phone

_________________________________________________________________ (_____)__________________________________________
City State Zip Home Phone

Check Appropriate Box: [ ] Individual [ ] Joint Tenant (Right of survivorship presumed) [ ] Partnership
[ ] Corporation [ ] Trust [ ] Custodial [ ] Non-Profit [ ] Other

Occupation and Employer Name/Address __________________________________________________________________________________

Are you an associated person of an NASD member? [ ] Yes [ ] No
___________________________________________________________________________________________________________________

DISTRIBUTIONS (If no election is checked the SHARE OPTION will be assigned.)
[ ] Share Option _ Income distributions and capital gains distributions automatically 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
[ ] By Check [ ] By ACH to my bank checking or savings account. Please attach a voided check.
- --------------------------------------------------------------------------------------------------------------------------------
REDUCED SALES CHARGES
Right of Accumulation: I apply for Right of Accumulation subject to the Agent's confirmation of the following holdings of eligible
load funds of Countrywide Investments.

Account Number/Name Account Number/Name
___________________________________________________________- ________________________________________________________

___________________________________________________________- ________________________________________________________
<PAGE>
Letter of Intent: (Complete the Right of Accumulation section if related accounts are being applied to your
Letter of Intent.)

[ ] I agree to the Letter of Intent in the current Prospectus of Countrywide Investment Trust. Although I am not obligated to
purchase, and the Trust is not obligated to sell, I intend to invest over a 13 month period beginning ______________________
19 _______ (Purchase Date of not more than 90 days prior to this Letter) an aggregate amount in the load funds of
Countrywide Investments at least equal to (check appropriate box):
[ ] $50,000 [ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT SECURITY
For increased security, Countrywide Fund Services, Inc. requires that you establish a Personal Identification Number [ ][ ][ ][ ]
(PIN). You will need to use this PIN when requesting account information and placing transactions. For institutional
accounts, please use a four digit number. For retail accounts, please use the first four letters of your mother's
maiden name.
- ------------------------------------------------------------------------------------------------------------------------------------

SIGNATURE AND TIN CERTIFICATION
I certify that I have full right and power, and legal capacity to purchase shares of the Funds and affirm that I have received a
current prospectus and understand the investment objectives and policies stated therein. The investor hereby ratifies any
instructions given pursuant to this Application and for himself and his successors and assigns does hereby release Countrywide
Fund Services, Inc., Countrywide Investment Trust, Countrywide Investments, Inc., and their respective officers, employees,
agents and affiliates from any and all liability in the performance of the acts instructed herein. Neither the Trust, Countrywide
Fund Services, Inc., 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 investor(s) will
bear the risk of any such loss. The Trust or Countrywide Fund Services, Inc., or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Trust and/or Countrywide Fund Services, Inc. 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. I certify under the penalities of perjury that (1) the Social
Security Number or Tax Identification Number shown is correct and (2) I am not subject to backup withholding. The certifications
in this paragraph are required from all non-exempt persons to prevent backup withholding of 31% of all taxable distributions and
gross redemption proceeds under the federal income tax law. The Internal Revenue Service does not require my consent to any
provision of this document other than the certifications required to avoid backup withholding. (Check here if you are subject to
backup withholding.) [ ]

___________________________________ __________________________________
Applicant Date Joint Applicant Date

___________________________________ ___________________________________
Other Authorized Signatory Date Other Authorized Signatory Date

NOTE: Corporations, trusts and other organizations must provide a copy of the resolution form on the reverse side.
Unless otherwise specified, each joint owner shall have full authority to act on behalf of the account.
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER INSTITUTIONS
Please retain a copy of this document for your files. Any modification of the information contained in this section will
require an Amendment to this Application Form.
[ ] New Application [ ] Amendment to previous Application dated ________ Account No. _______________
Name of Registered Owner ________________________________________________________________________________

The following named person(s) are currently authorized signatories of the Registered Owner. Any ____ of them is/are authorized
under the applicable governing document to act with full power to sell, assign or transfer securities of Countrywide Investment
Trust for the Registered Owner and to execute and deliver any instrument necessary to effectuate the authority hereby conferred:

Name Title Signature

___________________ ____________________ ___________________

COUNTRYWIDE INVESTMENT TRUST, or any agent of the Trust may, without inquiry, rely upon the instruction of any person(s)
purporting to be an authorized person named above, or in any Amendment received by the Trust or its agent. The Trust
and its Agent shall not be liable for any claims, expenses or losses resulting from having acted upon any instruction reasonably
believed to be genuine.
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS

REDEMPTION INSTRUCTIONS
I understand that the telephone redemption privilege is automatically available to me unless I indicate otherwise below.
(See the prospectus for limitations on this option.)
[ ] I do not wish to have the telephone redemption privilege on my account.
REDEMPTION OPTIONS
[ ] Please mail redemption proceeds to the name and address of record.
[ ] Please wire redemptions to the commercial bank account indicated below (subject to a minimum wire transfer of $1,000 and an
$8.00 fee. For wire redemptions please attach a voided check from the account below).
[ ] Checkwriting - Call 1-800-543-0407 for checkwriting application and signature card.

AUTOMATIC INVESTMENT (For Automatic Investment please attach a voided check from the account below.)
Please purchase shares of the Intermediate Term Government Income Fund by withdrawing from the commercial bank account below, per
the instructions below:
Amount $_________(minimum $50)

______________________________ is hereby authorized to charge to my account the bank draft amount here indicated. I
understand the payment of this draft is subject to all provisions of the contract as stated on my
bank account signature card.
Please make my automatice investment on:
[ ] the last business day of each month [ ] the 15th day of each month [ ] both the 15th and last business day

_________________________________________________________________
(Signature as your name appears on the bank account to be drafted)

Name as it appears on the account __________________________________________________

Commerical bank account #___________________________________________________________

ABA Routing #_______________________________________________________________________

City, State and Zip in which bank is located _______________________________________

Indemnification to Depositor's Bank
In consideration of your participation in a plan which Countrywide Fund Services, Inc. ("CFS") has put into effect, by which
amounts, determined by your depositor, payable to the Fund, for purchase of shares of the Fund, are collected by CFS, CFS hereby
agrees:
CFS will indemnify and hold you harmless from any liability to any person or persons whatsoever arising out of the payment by
you of any amount drawn by the Fund to its own order on the account of your depositor or from any liability to any person
whatsoever arising out of the dishonor by you whether with or without cause or intentionally or inadvertently, of any such
checks. CFS will defend, at its own cost and expense, any action which might be brought against you by any person or persons
whatsoever because of your actions taken pursuant to the foregoing request or in any manner arising by reason of your
participation in this arrangement. CFS will refund to you any amount erroneously paid by you to the Fund on any such check if
the claim for the amount of such erroneous payment is made by you within six (6) months from the date of such erroneous payment;
your participation in this arrangement and that of the Fund may be terminated by thirty (30) days written notice from either
party to the other.
- ---------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC WITHDRAWAL PLAN (Complete for Withdrawals from the Fund)
This is an authorization for you to withdraw $_________________ from my mutual fund account beginning the last business day of the
month of _____________________.

Please Indicate Withdrawal Schedule (Check One):
[ ] Monthly - Withdrawals will be made on the last business day of each month.
[ ] Quarterly - Withdrawals will be made on or about 3/31, 6/30, 9/30 and 12/31.
[ ] Annually - Please make withdrawals on the last business day of the month of:____________________

Please Select Payment Method (Check One):

[ ] Exchange: Please exchange the withdrawal proceeds into another Countrywide account number: ___ ___ _ ___ ___ ___ ___
[ ] Check: Please mail a check for my withdrawal proceeds to the mailing address on this account.
[ ] ACH Transfer: Please send my withdrawal proceeds via ACH transfer to my bank checking or savings account as indicated below.
I understand that the transfer will be completed in two to three business days and that there is no charge.
[ ] Bank Wire: Please send my withdrawal proceeds via bank wire, to the account indicated below. I understand that the wire
will be completed in one business day and that there is an $8.00 fee.

Please attach a voided _______________________________________________________________________________________
check for ACH or bank wire Bank Name Bank Address

_______________________________________________________________________________________
Bank ABA# Account # Account Name

[ ] Send to special payee (other than applicant): Please mail a check for my withdrawal proceeds to the mailing
address below:

Name of payee_____________________________________________________________________________________________________________

Please send to: __________________________________________________________________________________________________________
Street address City State Zip
____________________________________________________________________________________________________________________________
</TABLE>
<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.
H. Jerome Lerner
Robert H. Leshner
Howard J. Levine
Angelo R. Mozilo
Fred A. Rappoport
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

Countrywide
Investments

312 Walnut Street
Cincinnati, Ohio 45202
www.countrywideinvestments.com

1999 Countrywide Investments, Inc. Trade/Service marks are the
property of Countrywide Credit Industries, Inc. and/or its subsidiaries.

<PAGE>

Income

Prospectus

Adjustable Rate
U.S. Government
Securities Fund

August 1, 1999

[logo]COUNTRYWIDE
INVESTMENTS

<PAGE>

PROSPECTUS
August 1, 1999

Countrywide Investment Trust
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
800-543-0407

ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND

The Adjustable Rate U.S. Government Securities Fund (the "Fund"), a
separate series of Countrywide Investment Trust, seeks high current income,
consistent with lower volatility of principal, by investing primarily in
adjustable rate mortgage securities ("ARMS") or other securities collateralized
by or representing an interest in mortgages which have interest rates that reset
at periodic intervals. The Fund will invest in mortgage-related securities only
if they are issued or guaranteed by the United States Government, its agencies
or instrumentalities.

Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any banking or depository institution. Shares are not federally
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other agency and are subject to investment risk, including the possible
loss of the principal amount invested.

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

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 August 1, 1999 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 the above number.

For further information or assistance in opening an account, please contact
your broker, or call us at the above number.

<PAGE>

TABLE OF CONTENTS

Expense Information. . . . . . . . . . . . . . . . . . . . .
Financial Highlights. . . . . .. . . . . . . . . . . . . . .
Investment Objectives 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. . . . . . . . . . . . . . . . . . .
- -----------------------------------------------------------------

- 2 -

<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 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 .00%(A)
12b-1 Fees .05%(B)
Other Expenses After Reimbursements .70%(C)
----
Total Fund Operating Expenses After Waivers .75%(D)
and Reimbursements ====

(A) Absent waivers of management fees, such fees would have been .50%.
(B) The Fund may incur 12b-1 fees in an amount up to .35% of 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 expense reimbursements by the Adviser, other expenses would have
been .82%.
(D) Absent waivers of management fees and expense reimbursements by the
Adviser, total Fund operating expenses would have been 1.37%.

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 $ 8
3 Years 24
5 Years 42
10 Years 93

- 3 -

<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------
The following information, which has been audited by Arthur Andersen
LLP, is an integral part of the audited financial statements and should be read
in conjunction with the financial statements. The financial statements as of
September 30, 1998 and related auditors' report appear in the Statement of
Additional Information of the Fund, which can be obtained by shareholders at no
charge by calling Countrywide Fund Services, Inc. (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.

<TABLE>
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Period
Ended
Years Ended September 30, September 30,
1998 1997 1996 1995 1994 1993(A)
------------------------------------------------------------ ----------
Net asset value at beginning of period .......... $ 9.85 $ 9.81 $ 9.78 $ 9.82 $ 10.01 $ 10.00
---------- -------- --------- -------- --------- --------

Income from investment operations:
Net investment income ........................ 0.53 0.57 0.57 0.55 0.39 0.28
Net realized and unrealized gains (losses)
on investments ............................. (0.16) 0.04 0.03 (0.04) (0.18) 0.01
---------- ---------- -------- ---------- ---------- ------
Total from investment operations ................ 0.37 0.61 0.60 0.51 0.21 0.29
---------- ---------- -------- ---------- ---------- ------

Less distributions:
Dividends from net investment income ......... (0.53) (0.57) (0.57) (0.55) (0.39) (0.28)
Distributions from net realized gains ........ -- -- -- -- (0.01) --
---------- ---------- -------- -------- -------- -------
Total distributions ............................. (0.53) (0.57) (0.57) (0.55) (0.40) (0.28)
----------- ----------- --------- -------- ------- -------

Net asset value at end of period ................ $ 9.69 $ 9.85 $ 9.81 $ 9.78 $ 9.82 $10.01
=========== ========== ========== ======== ====== =======

Total return(B) ................................. 3.88% 6.34% 6.32% 5.33% 2.09% 4.56%(D)
========== ========== ========== ======== ======== ========

Net assets at end of period (000's) ............. $ 10,616 $ 23,202 $ 11,732 $ 20,752 $ 37,572 $ 24,400
========== ========== ========== ========= ========== ========

Ratio of net expenses to average ............... 0.75% 0.75% 0.75% 0.75% 0.68% 0.22%(D)
net assets(C)

Ratio of net investment income to
average net assets ........................... 5.47% 5.73% 5.91% 5.57% 3.91% 4.17%(D)

Portfolio turnover rate ......................... 45% 58% 44% 115% 81% 170%(D)
<FN>
(A) Represents the period from the initial public offering of shares (February 10, 1993) through September 30, 1993.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios of expenses to average net assets
would have been 1.37%, 1.47%, 1.46%, 1.21%, 0.78% and 1.18%(D) for the periods ended September 30, 1998, 1997, 1996, 1995,
1994 and 1993, respectively.
(D) Annualized.
</FN>
</TABLE>

- 4 -

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES
- ---------------------------------
The Fund is a series of Countrywide Investment Trust (the "Trust"). The
Fund seeks high current income, consistent with lower volatility of principal.
The Fund seeks to achieve its investment objective by investing primarily in
adjustable rate mortgage securities ("ARMS") or other securities collateralized
by or representing an interest in mortgages which have interest rates that reset
at periodic intervals. The Fund will invest in mortgage-related securities only
if they are issued or guaranteed by the United States Government, its agencies
or instrumentalities.

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 65% of the Fund's total assets
will be invested in ARMS which have interest rates that are reset at periodic
intervals and which are issued or guaranteed by the U.S. Government or its
agencies or instrumentalities. It is anticipated that by investing primarily in
mortgage-related securities which have variable rates of interest, the Fund will
achieve a less volatile net asset value than is characteristic of mutual funds
that invest primarily in mortgage-related securities paying a fixed rate of
interest. Mortgage-related securities eligible for purchase by the Fund are
described below.

In addition to mortgage-related securities, the Fund may invest in all
types of U.S. Government obligations (described below). For defensive purposes,
the Fund may temporarily hold all or a portion of its assets in short-term
obligations such as bank debt instruments (certificates of deposit, bankers'
acceptances and time deposits) collateralized by U.S. Government obligations.

- 5 -

<PAGE>

policy is changed as to permit the Fund to make portfolio investments and engage
in transactions not permissible for Federal credit unions, the Trust will so
notify all Federal credit union shareholders.

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 interest
rates decline and depreciation when interest rates rise. In addition, the
prepayment experience of the mortgages underlying mortgage-related U.S.
Government obligations, such as obligations issued by the Government National
Mortgage Association, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, may affect the value of, and the return on an
investment in, such securities.

MORTGAGE-RELATED U.S. GOVERNMENT OBLIGATIONS. Mortgage-related U.S.
Government obligations include GNMA Certificates, FHLMC Certificates and FNMA
Certificates.

GNMA Certificates are U.S. Government obligations guaranteed by the
Government National Mortgage Association (the GNMA) and are mortgage-backed
securities representing part ownership of a pool of mortgage loans. The pool of
mortgage loans underlying the GNMA Certificates is assembled by the issuer,
usually a private mortgage lender. The loans in the pool, issued by lenders such
as mortgage bankers, commercial banks and savings and loan associations, are
either insured by the Federal Housing Administration or the Farmers' Home
Administration or guaranteed by the Veterans Administration. If the pool is
approved by the GNMA, GNMA Certificates are issued and sold to investors such as
the Fund. The Fund's investments in GNMA Certificates may include pass-through
GNMA Certificates which entitle the holder to receive all interest and principal
payments owed on the pool of mortgage loans, net of fees paid to the issuer and
the GNMA. In addition, the timely payment of interest and principal on
pass-through GNMA Certificates is guaranteed by the GNMA, even in the event of
the foreclosure of underlying mortgage loans. The GNMA guarantee is backed by
the full faith and credit of the United States. However, shares of the Fund are
not guaranteed or backed by either the GNMA or the United States Government.

FHLMC Certificates are U.S. Government obligations guaranteed by the
Federal Home Loan Mortgage Corporation (the FHLMC). FHLMC Certificates are
pass-through mortgage-backed

- 6 -

<PAGE>

securities representing part ownership of a pool of mortgage loans. The FHLMC
generally purchases such mortgage loans from those lenders insured by the
Federal Deposit Insurance Corporation, or Federal Housing Administration
mortgages approved by the Department of Housing and Urban Development. The
securities and guarantees of the FHLMC are not backed, directly or indirectly,
by the full faith and credit of the United States.

Most of the pass-through mortgage securities in which the Fund invests
will be ARMS. ARMS are collateralized by adjustable rather than fixed-rate
mortgages. The ARMS in which the Fund invests are actively traded. Generally,
adjustable rate mortgages have a specified maturity date and amortize principal
over their life. In periods of declining interest rates there is a reasonable
likelihood that ARMS will experience increased rates of prepayment of principal.
However, the major difference between ARMS and fixed-rate mortgage securities is
that the

- 7 -

<PAGE>

interest rate can and does change in accordance with movements in a particular,
pre-specified, published interest rate index. There are two main categories of
indices: those based on U.S. Treasury obligations and those derived from a
calculated measure, such as a cost of funds index or a moving average of
mortgage rates. The amount of interest on an adjustable rate mortgage is
calculated by adding a specified amount to the applicable index, subject to
limitations on the maximum and minimum interest that is charged during the life
of the mortgage or to maximum and minimum changes to that interest rate during a
given period. Because the interest rate on ARMS generally moves in the same
direction as market interest rates, the market value of ARMS tends to be more
stable than that of fixed-rate mortgage securities and ARMS tend to experience
lower rates of prepayment of principal than fixed-rate mortgage securities.
However, ARMS are also less likely than fixed-rate mortgage securities of
comparable quality and maturity to increase significantly in value during
periods of declining interest rates.

The adjustable interest rate feature of the mortgages underlying ARMS
will generally act as a buffer to reduce sharp changes in the Fund's net asset
value in response to normal interest rate fluctuations. As the interest rates on
the mortgages underling ARMS are reset periodically, yields of portfolio
securities will gradually align themselves to reflect changes in market rates
and should cause the net asset value of the Fund to fluctuate less dramatically
than it would if the Fund invested in more traditional long-term, fixed-rate
debt securities. However, during the periods of rising interest rates, changes
in the coupon rate lag behind changes in the market rate resulting in possibly a
slightly lower net asset value until the coupon resets to market rates. Thus,
investors could suffer some principal loss if they sold their shares of the Fund
before the interest rates on the underlying mortgages are adjusted to reflect
current market rates.

The underlying mortgages which collateralize the ARMS in which the Fund
invests will frequently have caps and floors which limit the maximum amount by
which the loan rate to the residential borrower may change up or down (1) per
reset or adjustment interval and (2) over the life of the loan. Some residential
mortgage loans restrict periodic adjustments by limiting changes in the
borrower's monthly principal and interest payments rather than limiting interest
rate changes. These payment caps may result in negative amortization. The value
of mortgage-related securities in which the Fund invests may be affected if
market interest rates rise or fall faster and farther than the allowable caps or
floors on the underlying residential mortgage loans. Additionally, even though
the interest rates on the underlying residential mortgages are adjustable,
amortization

- 8 -

<PAGE>

and prepayments may occur, thereby causing the effective maturities of the
mortgage-related securities in which the Fund invests to be shorter than the
maturities stated in the underlying mortgages.

One or more tranches of a CMO may have coupon rates that reset
periodically at a specified increment over an index, such as the London
Interbank Offered Rate ("LIBOR"). These adjustable rate tranches, known as
"floating-rate CMOs," will be treated as ARMS by the Fund. Floating-rate CMOs
may be backed by fixed-rate or adjustable-rate mortgages. Floating-rate CMOs are
typically issued with lifetime "caps" on the coupon rate. These caps, similar to
the caps on ARMS, represent a ceiling beyond which the coupon rate may not be
increased, regardless of increases in the underlying interest rate index.

The Fund currently intends to limit its investments in CMOs and REMICs
to either floating rate tranches or fixed-rate tranches having an average life
(giving effect to projected prepayments) of 5 years or less at the time of
purchase.

ASSET-BACKED SECURITIES. The Fund may invest in various types of
adjustable rate securities in the form of asset-backed

- 9 -

<PAGE>

securities issued or guaranteed by U.S. Government agencies or
instrumentalities. The securitization techniques used in the context of
asset-backed securities are similar to those used for mortgage-related
securities. Thus, through the use of trusts and special purpose corporations,
various types of receivables are securitized in pass-through structures similar
to the mortgage pass-through structures described above or in a pay-through
structure similar to the CMO structure. In general, collateral supporting
asset-backed securities has shorter maturities than mortgage loans and has been
less likely to experience substantial prepayment.

U.S. GOVERNMENT OBLIGATIONS. "U.S. Government obligations" include
securities which are issued or guaranteed by the United States Treasury, by
various agencies of the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government. U.S. Treasury obligations are backed by the "full faith and credit"
of the United States Government. U.S. Treasury obligations include Treasury
bills, Treasury notes, and Treasury bonds. U.S. Treasury obligations also
include the separate principal and interest components of U.S. Treasury
obligations which are traded under the Separate Trading of Registered Interest
and Principal of Securities ("STRIPS") program. Agencies or instrumentalities
established by the United States Government include the Federal Home Loan Banks,
the Federal Land Bank, the GNMA, the FNMA, the FHLMC, the Student Loan Marketing
Association, the Small Business Administration, the Bank for Cooperatives, the
Federal Intermediate Credit Bank, the Federal Financing Bank, the Federal Farm
Credit Banks, the Federal Agricultural Mortgage Corporation, the Resolution
Funding Corporation, the Financing Corporation of America and the Tennessee
Valley Authority. Some of these securities are supported by the full faith and
credit of the United States Government while others are supported only by the
credit of the agency or instrumentality, which may include the right of the
issuer to borrow from the United States Treasury. In the case of securities not
backed by the full faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate

- 10 -

<PAGE>

repayment, and may not be able to assert a claim against the United States in
the event the agency or instrumentality does not meet its commitments. Shares of
the Fund are not guaranteed or backed by the United States Government.

OTHER INVESTMENT TECHNIQUES

The Fund may also engage in the following investment techniques, each
of which may involve certain risks:

DELAYED SETTLEMENT TRANSACTIONS. Obligations issued on a when-issued or
to-be-announced basis are settled by delivery and payment after the date of the
transaction, usually within 15 to 45 days. In a to-be-announced transaction, the
Fund has committed to purchasing or selling securities for which all specific
information is not yet known at the time of the trade, particularly the face
amount in transactions involving mortgage-related securities. The Fund will only
make commitments to purchase obligations on a when-issued or to-be-announced
basis with the intention of actually acquiring the obligations, but the Fund may
sell these securities before the settlement date if it is deemed advisable as a
matter of investment strategy or in order to meet its obligations, although it
would not normally expect to do so. The Fund will not enter into a delayed
settlement transaction which settles in more than 120 days.

Purchases of securities on a when-issued or to-be-announced basis are
subject to market fluctuations and their current value is determined in the same
manner as other portfolio securities. When effecting such purchases for the
Fund, a segregated account of cash or U.S. Government obligations of the Fund in
an amount sufficient to make payment for the portfolio securities to be
purchased will be maintained with the Fund's Custodian at the trade date and
valued daily at market for the purpose of determining the adequacy of the
securities in the account. If the market value of segregated securities
declines, additional cash or U.S. Government obligations will be segregated on a
daily basis so that the market value of the Fund's segregated assets will equal
the amount of the Fund's commitments to purchase when- issued obligations and
securities on a to-be-announced basis.

- 11 -

<PAGE>

The Fund's purchase of securities on a when-issued or to-be- announced basis may
increase its overall investment exposure and involves a risk of loss if the
value of the securities declines prior to the settlement date or if the
broker-dealer selling the securities fails to deliver after the value of the
securities has risen.

REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which
the 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, the Fund could experience both delays
in liquidating the underlying security and losses. To minimize these
possibilities, the Fund intends to enter into repurchase agreements only with
its Custodian, banks having assets in excess of $10 billion and the largest and,
in the judgment of the Adviser under guidelines established by the Board of
Trustees, most creditworthy primary U.S. Government securities dealers. The Fund
will enter into repurchase agreements which are collateralized by U.S.
Government obligations. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Fund's Custodian at the Federal
Reserve Bank. At the time the Fund enters into a repurchase agreement, the value
of the collateral, 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 agrees to maintain sufficient collateral so that the value
of the underlying collateral, including accrued interest, will at all times
equal or exceed the value of the repurchase agreement. The 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 the net assets of the Fund would be
invested in such securities and other illiquid securities.

BORROWING AND PLEDGING. As a temporary measure for extraordinary or
emergency purposes, the Fund may borrow money from banks or other persons in an
amount not exceeding 10% of its total assets. The Fund may pledge assets in
connection with borrowings but will not pledge more than 15% of its total
assets. The Fund will not make any additional purchases of portfolio securities
if outstanding borrowings exceed 5% of the value of its total assets. Borrowing
magnifies the potential for gain or loss on the Fund's portfolio securities and,
therefore, if employed, increases the possibility of fluctuation in its net
asset value. This is the speculative factor known as leverage. To reduce the
risks of borrowing, the Fund will limit its borrowings as described above. The
Fund's policies on borrowing and pledging are fundamental policies which may not
be changed without the affirmative vote of a majority of its outstanding shares.

- 12 -

<PAGE>

LENDING PORTFOLIO SECURITIES. The Fund may make short-term loans of its
portfolio securities to banks, brokers and dealers. Lending portfolio securities
exposes the Fund to the risk that the borrower may fail to return the loaned
securities or may not be able to provide additional collateral or that the Fund
may experience delays in recovery of the loaned securities or loss of rights in
the collateral if the borrower fails financially. To minimize these risks, the
borrower must agree to maintain collateral marked to market daily, in the form
of cash and/or liquid securities, with the Fund's Custodian in an amount at
least equal to the market value of the loaned securities. The Fund will limit
the amount of its loans of portfolio securities to no more than 25% of its net
assets. This lending policy may not be changed by the Fund without the
affirmative vote of a majority of its outstanding shares.

PORTFOLIO TURNOVER. The Fund does not intend to use short-term trading
as a primary means of achieving its investment objective. However, the Fund's
rate of portfolio turnover will depend upon market and other conditions, and it
will not be a limiting factor when portfolio changes are deemed necessary or
appropriate by the Adviser. High turnover involves correspondingly greater
commission expenses and transaction costs and may result in the Fund recognizing
greater amounts of income and capital gains, which would increase the amount of
income and capital gains which the Fund must distribute to its shareholders in
order to maintain its status as a regulated investment company and to avoid the
imposition of federal income or excise taxes (see "Taxes").

HOW TO PURCHASE SHARES
- ----------------------

Your initial investment in the Fund ordinarily must be at least $1,000
($250 for tax-deferred retirement plans). However, the minimum initial
investment for employees, shareholders and customers of Countrywide Credit
Industries, Inc. or any affiliated company, including members of the immediate
family of such individuals, is $50. 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 45201-5354. Checks should be made payable to the
"Adjustable Rate U.S. Government Securities Fund." An account application is
included in this Prospectus.

- 13 -

<PAGE>

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 issued. The Trust and the Adviser reserve the right
to limit the amount of investments and to refuse to sell to any person.

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.

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.

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 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

- 14 -

<PAGE>

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.

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

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, including
Roth IRAs and Education IRAs

-- 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

- 15 -

<PAGE>

$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.

INVESTPLUS PLAN

If you are a Countrywide Home Loans mortgage holder, you may make
monthly investments in the Fund by including your investment with your mortgage
payment. You may write one check for the total amount.

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, government 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.

- 16 -

<PAGE>

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.

- 17 -

<PAGE>

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.

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.

- 18 -

<PAGE>

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 the minimum amount required by the Trust for your
account (based on actual amounts invested, unaffected by market fluctuations),
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.

- 19 -

<PAGE>

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.

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

- 20 -

<PAGE>

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:

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.

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.

- 21 -

<PAGE>

- 22 -

<PAGE>

managing the Fund's portfolio since she became employed by the Adviser in July
1998. From 1996 until 1998, she was President of Copernicus Asset Management,
Ltd. and from 1986 until 1995, she was Senior Portfolio Manager-Fixed Income
Group of Neuberger & Berman. Mr. Weston has been employed by the Adviser since
1992 and has been managing the Fund's portfolio since March 1996.

The Adviser serves as principal underwriter for the Fund and, as such,
is the exclusive agent for the distribution of shares of the Fund. The officers
of the Trust are also officers of the Adviser.

- 23 -

<PAGE>

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.

- 24 -

<PAGE>

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 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.

- 25 -

<PAGE>

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. 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." A nonstandardized quotation
of total return will always be accompanied by the Fund's "average annual total
return" as described above.

- 26 -

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- 27 -

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<S> <C>
ACCOUNT NO. 27 - ____________________________
(For Fund Use Only)
Please mail account application to:
Countrywide Fund Services, Inc.
P.O. Box 5354 FOR BROKER/DEALER USE ONLY
Cincinnati, Ohio 45201-5354 Firm Name:______________________________________

ADJUSTABLE RATE U.S.
GOVERNMENT SECURITIES FUND Home Office Address:____________________________
Branch Address:_________________________________
Rep Name & No.:_________________________________
Rep Signature:__________________________________

___________________________________________________________________________________________________________________
Initial Investment of $_____________

[ ] Check or draft enclosed payable to the Fund.

[ ] Bank Wire From: _________________________________________________________________________________________________

[ ] Exchange From: _________________________________________________________________________________________________
(Fund Name) (Fund Account Number)

Account Name S.S. #/Tax I.D.#

_________________________________________________________________ Citizenship: [ ] U.S.
Name of Joint Tenant, Partner, Custodian [ ] Other ______________________

Address Phone

_________________________________________________________________ (_____)__________________________________________
Street or P.O. Box Business Phone

_________________________________________________________________ (_____)__________________________________________
City State Zip Home Phone

Check Appropriate Box: [ ] Individual [ ] Joint Tenant (Right of survivorship presumed) [ ] Partnership
[ ] Corporation [ ] Trust [ ] Custodial [ ] Non-Profit [ ] Other

Occupation and Employer Name/Address __________________________________________________________________________________

Are you an associated person of an NASD member? [ ] Yes [ ] No
___________________________________________________________________________________________________________________

ACCOUNT SECURITY
For increased security, Countrywide Fund Services, Inc. requires that you establish a Personal Identification Number [ ][ ][ ][ ]
(PIN). You will need to use this PIN when requesting account information and placing transactions. For institutional
accounts, please use a four digit number. For retail accounts, please use the first four letters of your mother's
maiden name.
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TIN CERTIFICATION
I certify that I have full right and power, and legal capacity to purchase shares of the Funds and affirm that I have received a
current prospectus and understand the investment objectives and policies stated therein. The investor hereby ratifies any
instructions given pursuant to this Application and for himself and his successors and assigns does hereby release Countrywide
Fund Services, Inc., Countrywide Investment Trust, Countrywide Investments, Inc., and their respective officers, employees,
agents and affiliates from any and all liability in the performance of the acts instructed herein. Neither the Trust,
Countrywide Fund Services, Inc., 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
investor(s) will bear the risk of any such loss. The Trust or Countrywide Fund Services, Inc., or both, will employ reasonable
procedures to determine that telephone instructions are genuine. If the Trust and/or Countrywide Fund Services, Inc. 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. I certify under the penalities of perjury that
(1) the Social Security Number or Tax Identification Number shown is correct and (2) I am not subject to backup withholding. The
certifications in this paragraph are required from all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law. The Internal Revenue Service does not require my
consent to any provision of this document other than the certifications required to avoid backup withholding. (Check here if you
are subject to backup withholding.) [ ]

___________________________________ __________________________________
Applicant Date Joint Applicant Date

___________________________________ ___________________________________
Other Authorized Signatory Date Other Authorized Signatory Date

Name Title Signature

___________________ ____________________ ___________________

REDEMPTION INSTRUCTIONS
I understand that the telephone redemption privilege is automatically available to me unless I indicate otherwise below.
(See the prospectus for limitations on this option.)
[ ] I do not wish to have the telephone redemption privilege on my account.
[ ] Please mail redemption proceeds to the name and address of record.
[ ] Please wire redemptions to the commercial bank account indicated below (subject to a minimum wire transfer of $1,000 and an
$8.00 fee. For wire redemptions please attach a voided check from the account below).
[ ] Checkwriting - Call 1-800-543-0407 for checkwriting application and signature card.

AUTOMATIC INVESTMENT (For Automatic Investment please attach a voided check from the account below.)
Please purchase shares of the Adjustable Rate U.S. Government Securities Fund by withdrawing from the commercial bank account
below, per the instructions below:
Amount $_________(minimum $50)