PILOT FUNDS, 485APOS, 1996-02-26

PILOT FUNDS
485APOS, 1996-02-26

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<PAGE> 1
1933 Act Registration No. 2-78440
1940 Act Registration No. 811-3517

As filed with the Securities and Exchange Commission on February 23, 1996

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________

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

Post-Effective Amendment No. 30 /x/

and

REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /x/

Amendment No. 31 /x/

(Check appropriate box or boxes)
____________

THE PILOT FUNDS
(Exact name of Registrant as specified in charter)

3435 Stelzer Road
Columbus, Ohio 43219
(Address of principal executive offices)

Registrant's Telephone Number, including Area Code
800-717-4568

____________

Copy to:

George O. Martinez, Esq. Phil Newman, Esq.
BISYS Fund Services, Inc. Goodwin, Procter & Hoar
3435 Stelzer Road Exchange Place
Columbus, Ohio 43219 Boston, Massachusetts 02109
(Name and Address of Agent for Service of Process)

____________

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

/ / immediately upon filing pursuant to paragraph (b)

/ / on _____________________ pursuant to paragraph (b)

/ / 60 days, after filing pursuant to paragraph (a)

/ / on _____________________ pursuant to paragraph (a), of Rule 485

/x/ 75 days after filing pursuant to paragraph (a) (2).

REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF SHARES UNDER THE SECURITIES
ACT OF 1933 PURSUANT TO RULE 24f-2. REGISTRANT FILED A RULE 24f-2 NOTICE FOR THE
FISCAL YEAR ENDED AUGUST 31, 1995 ON OCTOBER 30, 1995.

<PAGE> 2
THE PILOT FUNDS

(Pilot Growth Fund and
Pilot Diversified Bond Income Fund)

----------

FORM N-1A

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
ITEM NUMBER IN PART A PROSPECTUS CAPTION
--------------------- ------------------
<S> <C> <C>
1. Cover Page...................................... Cover Page

2. Synopsis........................................ Not Applicable

3. Condensed Financial Information................. Financial Highlights

4. General Description of Registrant............... Cover Page; Investment Objectives, Risk Factors; The Pilot
Family of Funds

5. Management of the Fund.......................... The Business of the Fund - Fund Management

5A. Management's Discussion of Fund Performance..... Not Applicable

6. Capital Stock and Other Securities.............. Investing in The Pilot Funds - Dividends and Distributions;
The Pilot Family of Funds; The Business of the Fund - Tax
Implications

7. Purchase of Securities Being Offered............ Investing in The Pilot Funds - How to Buy Shares; Investing
in The Pilot Funds - Explanation of Sales Price; Investing
in The Pilot Funds - Exchange Privileges

8. Redemption or Repurchase........................ Investing in The Pilot Funds - How to Sell Shares; Investing
in The Pilot Funds - Exchange Privilege

9. Pending Legal Proceedings....................... Not Applicable
</TABLE>

<PAGE> 3

FINANCIAL
DIRECTION May ___, 1996

PILOT GROWTH
FUND

PILOT DIVERSIFIED
BOND INCOME FUND

THE
PILOT
FUNDS

Class A Shares and
Class B Shares

THE
PILOT
FUNDS

PROSPECTUS ENCLOSED

<PAGE> 4

TABLE OF CONTENTS

PAGE
----
EXPENSE SUMMARY
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
Pilot Growth Fund
Pilot Diversified Bond Income Fund
PORTFOLIO INSTRUMENTS AND PRACTICES
RISK FACTORS
FUNDAMENTAL LIMITATIONS
INVESTING IN THE PILOT FUNDS
HOW TO BUY SHARES
HOW TO SELL SHARES
TRANSACTION RULES
SHAREHOLDER SERVICES
DIVIDENDS AND DISTRIBUTIONS
DISTRIBUTION AND SERVICE ARRANGEMENTS
THE PILOT FAMILY OF FUNDS
THE BUSINESS OF THE FUND
FUND MANAGEMENT
TAX IMPLICATIONS
MEASURING PERFORMANCE

<PAGE> 5

THE PILOT FUNDS

PROSPECTUS FOR CLASS A SHARES AND CLASS B SHARES OF THE PILOT GROWTH AND PILOT
DIVERSIFIED BOND INCOME FUNDS

May ___, 1996

<TABLE>
<CAPTION>
PILOT FUND GOAL FOR INVESTORS WHO WANT
---------- ---- ----------------------
<S> <C> <C>
GROWTH Long-term capital growth through Capital growth over the long
investments primarily in equity term and are willing to
securities. accept the relative risks
associated with equity
investments.

DIVERSIFIED BOND Total return and preservation of capital Current income from debt
INCOME by investing primarily in debt securities and are willing
securities. The Fund emphasizes the to accept fluctuations in
current income component of total return price and yield.
and will have an average weighted
maturity of from five to fifteen years.
</TABLE>

FUND SHARES ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, BOATMEN'S TRUST COMPANY OR ANY OF ITS AFFILIATES AND ARE NOT FEDERALLY
INSURED BY, GUARANTEED BY OR OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. IN ADDITION, THE
AMOUNT OF DIVIDENDS PAID BY A FUND WILL GO UP AND DOWN. BOATMEN'S TRUST
COMPANY SERVES AS INVESTMENT ADVISER TO THE FUNDS, IS PAID A FEE FOR ITS
SERVICES, AND IS NOT AFFILIATED WITH PILOT FUNDS DISTRIBUTORS, INC., THE FUNDS'
DISTRIBUTOR.

This Prospectus describes two classes of shares from which investors may choose
in the Pilot Growth and Pilot Diversified Bond Income Funds. Class A Shares are
sold with a front-end sales charge; Class B shares are sold with a deferred
sales charge. This Prospectus describes concisely the information about the
Funds that you should know before investing. Please read it carefully and keep
it for future reference.

More information about the Funds is contained in a Statement of Additional
Information that has been filed with the Securities and Exchange Commission. The
Statement of Additional Information can be obtained free upon request by calling
800/71-PILOT. The Statement of Additional Information, as it may be revised
from time to time, is dated May __, 1996 and is incorporated by reference into
(considered a part of) the Prospectus.

LIKE ALL MUTUAL FUNDS, 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> 6

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when buying or selling
shares of a Fund.

ANNUAL FUND OPERATING EXPENSES are paid out of the Fund's assets and include
fees for portfolio management, maintenance of shareholder accounts, general Fund
administration, accounting and other services.

Below is information regarding the Funds' shareholder transaction expenses and
the operating expenses which the Funds expect to incur during the current fiscal
year on their Class A and Class B Shares. Examples based on this information
are also provided.

<TABLE>
<CAPTION>
DIVERSIFIED
GROWTH BOND INCOME
FUND FUND
---- ----
CLASS A CLASS B CLASS A CLASS B(6)
------- ------- ------- ----------
<S> <C> <C> <C> <C>

SHAREHOLDER TRANSACTION EXPENSES:
Front End Sales Charge Imposed
on Purchases (as a
percentage of offering
price) 4.50%(1) None 4.00%(1) None
Sales Charge Imposed on
Reinvested Dividends None None None None
Deferred Sales Charge (as a
percentage of original
purchase price or
redemption proceeds,
whichever is lower) None 4.50%(2) None 4.00%(3)
Exchange Fee None None None None
ANNUAL FUND OPERATING
EXPENSES AFTER FEE WAIVERS
AND EXPENSE REIMBURSEMENTS
(as a percentage of average
net assets):
Management Fees(4) 0.50% 0.50% 0.40% 0.40%
Rule 12b-1/Distribution
Payments 0.25% 1.00% 0.25% 1.00%
Other Expenses(5) 0.25% 0.25% 0.25% 0.25%
---- ---- ---- ----
Total Fund Operating
Expenses After Fee
Waivers and Expense
Reimbursements(4) 1.00% 1.75% 0.90% 1.65%
==== ==== ==== ====
</TABLE>

(1) Reduced sales charges may be available. See "Shareholder Services--
Front-End Sales Charge Reductions."

(2) This amount applies to redemptions during the first year. The charge
decreases .50% annually to 2.50% for redemptions made during the fifth
year and then decreases .75% to 1.75% for redemptions made during the
sixth year. No deferred sales charge is charged for redemptions made
after the sixth year. See "How to Buy Shares--Explanation of Sales
Price."

<PAGE> 7

(3) This amount applies to redemptions during the first year. The charge
decreases .50% annually to 2.00% for redemptions made during the fifth
year and then decreases .75% to 1.25% for redemptions made during the
sixth year. No deferred sales charge is charged for redemptions made
after the sixth year. See "How to Buy Shares--Explanation of Sales
Price."

(4) This expense information is provided to help you understand the expenses
you would bear either directly (as with the transaction expenses) or
indirectly (as with the annual operating expenses) as a shareholder of one
of the Funds. The Adviser has agreed to waive a portion of its management
fee for each Fund until August 31, 1996. Without waivers by the Adviser,
investment management fees as a percentage of net assets would be 0.75%
and 0.55% for the Pilot Growth and Pilot Diversified Bond Income Funds,
respectively. The Adviser and Administrator also have agreed to reimburse
a portion of the operating expenses of Class A Shares and Class B Shares
of the Funds until August 31, 1996. Absent waivers and expense
reimbursements, the total operating expenses for the Funds would be 1.77%
and 2.52% for Class A Shares and Class B Shares, respectively, of the
Pilot Growth Fund; and 1.57% and 2.32% for Class A Shares and Class B
Shares, respectively, of the Pilot Diversified Bond Income Fund. You
should note that any fees that are charged by the Funds' Adviser, its
affiliates or any other institutions directly to their customer accounts
for services related to an investment in the Funds are in addition to and
not reflected in the fees and expenses described above.

(5) "Other Expenses" are based on estimated amounts for the current fiscal
year. The table does not reflect the allocation of any miscellaneous
"class expenses" (i.e. certain printing and registration expenses).

(6) Class B Shares of the Pilot Diversified Bond Income Fund are not
currently offered.

BECAUSE OF THE DISTRIBUTION PAYMENTS PAID BY THE FUNDS AS SHOWN IN THE ABOVE
TABLE, LONG-TERM SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE
MAXIMUM FRONT-END SALES CHARGE PERMITTED BY THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC.

<PAGE> 8

EXAMPLE: Assume that the annual return on each of the Funds is 5%, and that
their operating expenses are as described above. For every $1,000 you invested
in a particular Fund, after the periods shown below, you would have paid this
much in expenses during such periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
AFTER AFTER
PURCHASE PURCHASE
-------- --------
<S> <C> <C>

PILOT GROWTH FUND
Class A Shares(1) $55 $75
Class B Shares
Assuming complete redemption at end
of period(2) $63 $90
Assuming no redemption $18 $55
PILOT DIVERSIFIED BOND INCOME FUND
Class A Shares(1) $49 $68
Class B Shares
Assuming complete redemption at end
of period(2) $57 $82
Assuming no redemption $17 $52
</TABLE>

(1) Assumes deduction at time of purchase of maximum applicable front-end
sales charge.

(2) Assumes deduction of maximum applicable contingent deferred sales charge.

The Example shown above should not be considered a representation of future
investment returns or operating expenses. The Funds are new and actual
investment returns and operating expenses may be more or less than those shown.

<PAGE> 9

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

The Pilot Funds use different investments and investment techniques in seeking
to achieve a Fund's investment objective. Each Fund does not use all of the
investments and investment techniques described below, which involve various
risks, and which are also described in the following sections. You should
consider whether one or both of the Funds best meets your investment goals.
Although each Fund will attempt to attain its investment objective, there can
be no assurance it will be successful. Shareholder approval is not required to
change the investment objective of a Fund. However, shareholders will be given
at least 30 days' prior written notice in the event of a change in a Fund's
investment objective. If there is a change in investment objective,
shareholders should consider whether a Fund remains an appropriate investment
in light of their current financial position and needs. Unless otherwise
stated, each investment policy described below may be changed at any time by
The Pilot Funds' Board of Trustees without shareholder approval.

Pilot Growth Fund

The Pilot Growth Fund offers investors a means of participating in the equity
securities market.

The investment objective of the Pilot Growth Fund is to provide long-term
capital growth by investing primarily in equity securities. Under normal
circumstances, the Fund will invest at least 65% of its total assets in equity
securities, including securities convertible into equity securities.

In making investment decisions for the Fund, the Adviser classifies
approximately 1000 companies by market value and growth characteristics on a
quarterly basis. Due to the number of possible growth stock investments, the
Adviser uses a selection process employing advanced quantitative techniques to
identify buy and sell candidates in an effort to select and hold those
companies which appear able to consistently achieve superior returns by
reinvesting profits into attractive new projects and products. Dividend income
is, therefore, incidental and not an objective of the Fund. The Adviser's
sophisticated investment approach uses an internally designed valuation process
which measures the persistence of future cash flows, the acceleration of
profitability, and evaluates a companies revenue generation relative to its
stock price. The goal of this investment process is to identify businesses
where superior growth appears sustainable and avoid or sell companies where
growth is beginning to deteriorate. The Fund will concentrate on long-term
growth industries where market leaders produce superior products and/or
services and demonstrate a competitive advantage.

The Pilot Growth Fund may also acquire debt obligations, including both
convertible and non-convertible corporate and government bonds, debentures,
zero coupon bonds and cash equivalents. "Cash equivalents" include commercial
paper (which is unsecured promissory notes issued by corporations);
certificates of deposit, bankers' acceptances, notes and time deposits issued
or supported by U.S. or foreign banks and savings institutions; repurchase
agreements; variable or floating rate notes; U.S. Government obligations;
and money market mutual fund shares. Under normal conditions, the Fund will
not invest more than 10% of its total assets in debt obligations, unless the
Fund assumes a temporary defensive position as discussed below. The Fund will
purchase only those debt obligations which are rated AA or better by at least
one Nationally Recognized Statistical Rating Organization ("NRSRO") or, if
unrated, are determined by the Adviser to be of comparable quality. (A
description of applicable ratings is attached to the Statement of Additional
Information as Appendix A.)

<PAGE> 10

The Fund may invest in the securities of foreign issuers, either directly in
the securities of such issuers or indirectly through American Depository
Receipts ("ADRs") and European Depository Receipts ("EDRs"). ADRs are receipts
typically issued by a United States bank or trust company, and EDRs are
receipts issued by a European financial institution evidencing ownership of the
underlying foreign securities. ADRs, in registered form, are designed for use
in the United States securities markets, while EDRs, in bearer form, are
generally designed for use in the European securities markets. These
securities may not be denominated in the same currency as the securities they
represent. The Fund will not invest more than 10% of its total assets in
foreign securities.

The Fund may also invest in futures contracts and options. From time to time,
the Funds may hold cash reserves that do not earn income. For a further
description of the Fund's policies with respect to convertible securities,
foreign securities and other instruments, see "Portfolio Instruments and
Practices" and "Risk Factors" below.

The Fund reserves the right to invest up to 100% of its assets in cash, cash
equivalents and debt obligations when the Adviser believes such a position is
advisable for temporary defensive purposes during periods of unusual market or
economic activity.

Pilot Diversified Bond Income Fund

The Pilot Diversified Bond Income Fund offers investors a means of
participating in the fixed income securities market.

The investment objective of the Pilot Diversified Bond Income Fund is to seek
total return and preservation of capital by investing primarily in debt
securities. The Fund emphasizes the current income component of total return.
While there are no restrictions on the maturity of individual securities
selected by the Fund, the Fund's average weighted maturity will be between five
and fifteen years except during temporary defensive periods or unusual market
conditions.

Under normal circumstances, the Pilot Diversified Bond Income Fund invests at
least 65% of its total assets in debt securities including debt obligations of
U.S. and foreign corporate and government issuers, ADRs and EDRs, zero coupon
bonds and cash equivalents. The Fund does currently intend to invest more than
10% of its total assets in foreign securities. See "Pilot Growth Fund" above
for a description of ADRs, EDRs, and cash equivalents. The Fund will purchase
only those debt securities rated A or better by at least one NRSRO or, if
unrated, determined by the Adviser to be of comparable quality. If a portfolio
security ceases to be rated at least A or if the Adviser determines that an
unrated security held by the Fund is no longer of comparable quality, the Fund
may continue to hold that security so long as the security is rated at least
BBB (or its equivalent) by at least one NRSRO or, if unrated, is determined by
the Adviser to be of comparable quality. The value of such downgraded
securities will not exceed 35% of the Fund's total assets.

The Fund may also invest in futures contracts and options. From time to time,
the Fund may also hold uninvested cash reserves which do not earn income. For
a further description of the Fund's policies with respect to foreign securities
and other instruments, see "Portfolio Instruments and Practices" and "Risk
Factors" below.

The value of the Fund's portfolio (and consequently its shares) is expected to
fluctuate inversely in relation to changes in the direction of interest rates.

<PAGE> 11

PORTFOLIO INSTRUMENTS AND PRACTICES

- --U.S. Government Obligations. EACH FUND may invest in securities issued or
guaranteed by the U.S. Government, as well as in obligations issued or
guaranteed by U.S. Government agencies and instrumentalities. Securities
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities include U.S. Treasury securities, which differ only in their
interest rates, maturities and times of issuance: Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one
to ten years; and Treasury Bonds generally have initial maturities of greater
than ten years. Some obligations issued or guaranteed by certain U.S.
Government agencies and instrumentalities, such as the Government National
Mortgage Association, are supported by the U.S. Treasury; others, like the
Export-Import Bank, are supported by the issuer's right to borrow from the
Treasury; others, including the Federal National Mortgage Association, are
backed by the discretionary ability of the U.S. Government to purchase the
entity's obligations; and still others, like the Student Loan Marketing
Association, are backed solely by the issuer's credit. U.S. Government
obligations also include U.S. Government-backed trusts that hold obligations of
foreign governments and are guaranteed or backed by the full faith and credit
of the United States. There is no assurance that the U.S. Government would
support a U.S. Government-sponsored entity were it not required to do so by
law.

- --Asset-Backed and Mortgage-Backed Securities. EACH FUND may invest in
asset-backed securities (i.e. securities backed by installment sale contracts,
credit card receivables or other assets.) In addition, each Fund may make
significant investments in U.S. Government securities that are backed by
adjustable or fixed rate mortgage loans. The rate of prepayments on
asset-backed instruments and hence the life of the security, will be primarily
a function of current market rates and current conditions in the relevant
market. In calculating the average weighted maturity of a Fund's portfolio,
the maturity of asset-backed instruments will be based on estimates of average
life. The relationship between prepayments and interest rates may give some
high-yielding asset-backed securities less potential for growth in value than
conventional bonds with comparable maturities. In addition, in periods of
falling interest rates, the rate of prepayment tends to increase. During such
periods, the reinvestment of prepayment proceeds by a Fund will generally be at
lower rates than the rates that were carried by the obligations that have been
prepaid. Because of these and other reasons, an asset-backed security's total
return may be difficult to predict precisely. To the extent a Fund purchases
asset-backed securities at a premium, prepayments (which often may be made at
any time without penalty) may result in some loss of a Fund's principal
investment to the extent of any premiums paid.

The timely payment of principal and interest on mortgage-backed securities
issued or guaranteed by the Government National Mortgage Association ("GNMA")
is backed by GNMA and the full faith and credit of the U.S. Government. These
guarantees, however, do not apply to the market value or yield of
mortgage-backed securities or the value of a Fund's shares. Also, GNMA and
other mortgage-backed securities may be purchased at a premium over the
maturity value of the underlying mortgages. This premium is not guaranteed and
will be lost if prepayment occurs. Each Fund may also invest in
mortgage-backed securities of other issuers, such as the Federal National
Mortgage Association, which are not guaranteed by the U.S. Government.
Moreover, each Fund may invest in debt securities which are secured with
collateral consisting of mortgage-backed securities and in other types of
mortgage-related securities. Unscheduled or early payments on the underlying
mortgage may shorten the effective maturities of mortgage-backed securities and
lessen their growth potential. A Fund may agree to purchase or sell these
securities with payment and delivery taking place at a future date. A decline
in interest rates may lead to a faster rate of repayment of the underlying
mortgages and expose a Fund to a lower rate of return on reinvestment. To the
extent that such mortgage-backed securities are

<PAGE> 12

held by a Fund, the prepayment right of mortgagors may limit the increase in
net asset value of the Fund because the value of the mortgage-backed securities
held by the Fund does not appreciate as rapidly as the price of non-callable
debt securities.

- --Corporate Obligations. EACH FUND may purchase corporate bonds and cash
equivalents that meet a Fund's quality and maturity limitations. These
investments may include obligations issued by Canadian corporations and
Canadian counterparts of U.S. corporations, Eurobonds, which are U.S.
dollar-denominated obligations of foreign issuers, and Yankee bonds, which are
U.S. dollar-denominated bonds issued by foreign issuers in the U.S., and
equipment trust certificates. Each Fund may also purchase obligations issued
by foreign corporations. Corporate bonds are subject to call risk during
periods of falling interest rates. Securities with high stated interest rates
may be prepaid (or called) prior to maturity, requiring a Fund to invest the
proceeds at generally lower interest rates.

Cash equivalents, such as commercial paper and other similar obligations
purchased by a Fund that have an original maturity of thirteen months or less,
will either have short-term ratings at the time of purchase in the top two
categories by one or more NRSROs or be issued by issuers with such ratings.
Unrated instruments of these types purchased by a Fund will be determined by
the Adviser to be of comparable quality.

- --Repurchase Agreements. EACH FUND may enter into repurchase agreements which
involve a purchase of portfolio securities subject to the seller's agreement to
repurchase them at an agreed upon time and price. The Funds will enter into
repurchase agreements only with financial institutions (such as banks and
broker-dealers) deemed to be creditworthy by the Adviser, pursuant to
guidelines established by the Board of Trustees. The term of these agreements
is usually from overnight to one week and in any event, the Funds intend that
such agreements will not have maturities longer than 60 days.

A repurchase agreement may be viewed as a fully collateralized loan of money by
a Fund to the seller. During the term of any repurchase agreement, the Adviser
will monitor the creditworthiness of the seller, and the seller must maintain
the value of the securities subject to the agreement in an amount that is
greater than the repurchase price. Default or bankruptcy of the seller would,
however, expose a Fund to possible loss because of adverse market action or
delays connected with the disposition of the underlying obligations. Because
of the seller's repurchase obligation, the securities subject to repurchase
agreements do not have maturity limitations.

- --Reverse Repurchase Agreements. EACH FUND is authorized to make limited
borrowings for temporary purposes by entering into reverse repurchase
agreements. Under such an agreement a Fund sells portfolio securities to
financial institutions (such as banks and broker-dealers) and then buys them
back later at an agreed-upon time and price. When a Fund enters into a reverse
repurchase agreement it will place in a separate custodial account either
liquid assets or high grade debt securities that have a value equal to or more
than the price a Fund must pay when it buys back the securities, and the
account will be continuously monitored by the Adviser to make sure the
appropriate value is maintained. Reverse repurchase agreements involve the
possible risk that the value of portfolio securities a Fund relinquishes may
decline below the price a Fund must pay when the transaction closes. Interest
paid by a Fund in a reverse repurchase or other borrowing transaction will
reduce a Fund's income. The Funds will only enter into reverse repurchase
agreements to avoid the need to sell portfolio securities to meet redemption
requests during unfavorable market conditions.

- --Variable and Floating Rate Instruments. EACH FUND may purchase variable and
floating rate instruments. These instruments may include variable amount
master demand notes, which are instruments under which the indebtedness
represented by the instrument as well as its interest rate may vary. Because
of the absence of a market in which to resell

<PAGE> 13

variable or floating rate instruments, a Fund might have trouble selling an
instrument should the issuer default or during periods when a Fund is not
permitted by agreement to demand payment of the instrument, and for this or
other reasons a loss could occur with respect to the instrument.

- --Zero Coupon Securities. EACH FUND may invest in zero coupon securities. Zero
coupon securities are debt obligations which do not entitle the holder to any
periodic payments of interest prior to maturity or a specified date when the
securities begin paying current interest (the "cash payment date") and
therefore are issued and traded at a discount from their face amounts or par
value. Such bonds carry an additional risk in that, unlike bonds which pay
interest throughout the period to maturity, a Fund will realize no cash until
the cash payment date and, if the issuer defaults, the Fund may obtain no
return at all on its investment.

A Fund will be required to include in income daily portions of original issue
discount accrued which will cause the Fund to be required to make distributions
of such amounts to shareholders annually, even if no payment is received before
the distribution date. These distributions must be made from the Fund's cash
assets or, if necessary, from the proceeds of sales of portfolio securities.
The Fund will not be able to purchase additional income producing securities
with cash used to make such distributions and its current income ultimately may
be reduced as a result.

- --Stripped Securities. EACH FUND may invest in instruments known as "stripped"
securities. These instruments include U.S. Treasury bonds and notes and
federal agency obligations on which the unmatured interest coupons have been
separated from the underlying obligation. These obligations are usually issued
at a discount to their "face value", and because of the manner in which
principal and interest are returned may exhibit greater price volatility than
more conventional debt securities. Each Fund may invest in "interest only"
stripped securities that have been issued by a federal instrumentality known as
the Resolution Funding Corporation and other stripped securities issued or
guaranteed by the U.S. Government, where the principal and interest components
are traded independently under the Separate Trading of Registered Interest and
Principal Securities program ("STRIPS"). Each Fund may also invest in
instruments that have been stripped by their holder, typically a custodian bank
or investment brokerage firm, and then resold in a custodian receipt program
under names such as TIGRS (Treasury Income Growth Receipts) and CATS
(Certificates of Accrual on Treasuries).

In addition, EACH FUND may purchase stripped mortgage-backed securities
("SMBS") issued by the U.S. Government (or a U.S. Government agency or
instrumentality) or by private issuers such as banks and other institutions.
SMBS, in particular, may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.

- --Participations and Trust Receipts. EACH FUND may purchase from domestic
financial institutions and trusts created by such institutions participation
interests and trust receipts in high quality debt securities. A participation
interest or receipt gives a Fund an undivided interest in the security in the
proportion that a Fund's participation interest or receipt bears to the total
principal amount of the security. Each Fund intends only to purchase
participations and trust receipts from an entity or syndicate, and do not
intend to serve as a co-lender in any such activity.

- --When-Issued Purchases, Forward Commitments and Delayed Settlements. EACH FUND
may purchase securities on a "when-issued" basis and purchase or sell
securities on a "forward commitment" basis. Additionally, the Funds may
purchase or sell securities on a "delayed settlement" basis.

<PAGE> 14

When-issued and forward commitment transactions, which involve a commitment by
a Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit a Fund
to lock-in a price or yield on a security it intends to purchase or sell,
regardless of future changes in interest rates. Delayed settlement refers to a
transaction in the secondary market that will settle some time in the future.
These transactions involve the risk that the price or yield obtained may be
less favorable than the price or yield available when the delivery takes place.
When-issued purchases, forward commitments and delayed settlement transactions
are not expected to exceed 25% of the value of a Fund's total assets under
normal circumstances. In the event a Fund's when-issued purchases, forward
commitments and delayed settlement transactions ever exceeded 25% of the value
of its total assets, a Fund's liquidity and the ability of the Adviser to
manage the Fund might be adversely affected. These transactions will not be
entered into for speculative purposes but only in furtherance of a Fund's
investment objective.

- --Other Investment Companies. EACH FUND may invest in the securities of other
mutual funds that invest in the particular instruments in which a Fund itself
may invest subject to requirements of applicable securities laws. The Trust,
on behalf of each of the Funds, has sought relief from the SEC to permit each
Fund to invest in affiliated money market funds. Such relief is currently
pending before the SEC. When a Fund invests in another mutual fund, it pays a
pro rata portion of the advisory and other expenses of that fund as a
shareholder of that fund. These expenses are in addition to the advisory and
other expenses a Fund pays in connection with its own operations. The Adviser
may waive its advisory fee on that portion of any Fund's assets which are
invested in the securities of affiliated money market funds managed by the
Adviser or any of its affiliates.

- --Securities Lending. EACH FUND may lend securities held in its portfolio to
financial institutions (such as banks and broker-dealers) as a means of earning
additional income. These loans present risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially.
However, securities loans will be made only to financial institutions the
Adviser deems to be of good standing, and will only be made if the Adviser
thinks the possible rewards from such loan justify the possible risks. A loan
will not be made if, as a result, the total amount of a Fund's outstanding
loans exceeds 33-1/3% of its total assets. Securities loans will be fully
collateralized.

- --Mortgage Rolls. THE PILOT DIVERSIFIED BOND INCOME FUND may enter into
transactions known as "mortgage dollar rolls" in which the Fund sells
mortgage-backed securities for current delivery and simultaneously contracts to
repurchase substantially similar securities in the future at a specified price
which reflects an interest factor and other adjustments. During the roll
period, the Fund does not receive principal and interest on the mortgage-backed
securities but it does earn interest on the cash proceeds of the initial sale.
In addition, the Fund is paid a fee as consideration for entering into the
commitment to purchase. Unless a roll has been structured so that it is
"covered," meaning that there exists an offsetting cash or cash-equivalent
security position that will mature at least by the time of settlement of the
roll transaction, cash or U.S. Government securities or other liquid high grade
debt instruments in the amount of the future purchase commitment will be set
apart for the Fund in a separate account at the custodian. Mortgage rolls are
not a primary investment technique for the Fund, and it is expected that, under
normal market conditions, the Fund's commitments under mortgage rolls will not
exceed 10% of the value of its total assets.

- --Options. EACH FUND may write covered call options, buy put options, buy call
options and sell, or "write," secured put options on particular securities or
various securities indices. A call option for a particular security gives the
purchaser of the option the right to buy, and a writer the obligation to sell,
the underlying security at the stated

<PAGE> 15

exercise price at any time prior to the expiration of the option, regardless of
the market price of the security. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. A put
option for a particular security gives the purchaser the right to sell the
underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.
In contrast to an option on a particular security, an option on a securities
index provides the holder with the right to make or receive a cash settlement
upon exercise of the option.

Options purchased by a Fund will not exceed 5%, and options written by a Fund
will not exceed 25% of its net assets.

OPTIONS TRADING IS A HIGHLY SPECIALIZED ACTIVITY AND MAY CARRY GREATER THAN
ORDINARY INVESTMENT RISK. Purchasing options may result in the complete loss of
the amounts paid as premiums to the writer of the option. In writing a covered
call option, a Fund gives up the opportunity to profit from an increase in the
market price of the underlying security above the exercise price (except to the
extent the premium represents such a profit). Moreover, it will not be able to
sell the underlying security until the covered call option expires or is
exercised or a Fund closes out the option. In writing a secured put option, a
Fund assumes the risk that the market value of the security will decline below
the exercise price of the option. The Funds may use options to manage their
exposure to changing interest rates and/or security prices. The use of covered
call and secured put options will not be a primary investment technique of any
Fund.

- --Futures and Related Options. EACH FUND may enter into futures contracts and
options on such futures contracts to protect against the effect of anticipated
market or interest rate fluctuations on securities that a Fund holds in its
portfolio or intends to sell or purchase. Futures contracts obligate a Fund,
at maturity, to take or make delivery of certain securities or the cash value
of a securities index. A Fund may not purchase or sell a futures contract (or
related option) except for bona fide hedging purposes unless immediately after
any such transaction the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related options
is 5% or less of its total assets (after taking into account certain technical
adjustments).

EACH FUND may also purchase and sell call and put options on futures contracts
traded on an exchange or board of trade. When a Fund purchases an option on a
futures contract, it has the right to assume a position as a purchaser or
seller of a futures contract at a specified exercise price at any time during
the option period. When a Fund sells an option on a futures contract, it
becomes obligated to purchase or sell a futures contract if the option is
exercised. In anticipation of a market advance, a Fund may purchase call
options on futures contracts as a substitute for the purchase of futures
contracts to hedge against a possible increase in the price of securities which
a Fund intends to purchase. Similarly, if the value of a Fund's portfolio
securities is expected to decline, the Fund might purchase put options or sell
call options on futures contracts rather than sell futures contracts.

More information regarding futures contracts and related options can be found
in the Statement of Additional Information, which is available upon request.

- --Forward Foreign Currency Exchange Contracts. Because EACH FUND and may buy
and sell securities and receive dividend and interest proceeds in currencies
other than the U.S. dollar, the Funds may from time to time enter into forward
foreign currency exchange contracts ("forward contracts"). A forward contract
involves an obligation to purchase or sell a specific currency for an agreed
price at a future date, which may be any fixed number of days from the date of
the contract.

<PAGE> 16

The purpose of entering into these contracts is to minimize the risk to the
Funds from adverse changes in the relationship between the U.S. dollar and
foreign currencies. At the same time, such contracts may limit potential gain
from a positive change in the relationship between the U.S. dollar and foreign
currencies. The use of currency transactions can result in a Fund incurring
losses as a result of a number of factors, including the imposition of exchange
controls, suspension of settlements, or the inability to deliver or receive a
specified currency. Unanticipated changes in currency prices may result in
poorer overall performance for a Fund than the performance it would have had if
it had not engaged in forward contracts.

- --Liquidity Considerations. An illiquid investment is any investment that
cannot be disposed of within seven days in the normal course of business at
approximately the amount at which it is valued by a Fund. Disposing of
illiquid investments may involve time-consuming negotiations and legal
expenses, and it may be difficult or impossible to dispose of such investments
promptly at an acceptable price. Additionally, the absence of a trading market
can make it difficult to value a security. For these and other reasons, a FUND
WILL NOT INVEST MORE THAN 15% OF ITS NET ASSETS IN ILLIQUID SECURITIES.
Illiquid securities include repurchase agreements, securities loans and time
deposits that do not permit a Fund to terminate them after seven days notice,
certain certificates of participation, trust receipts, stripped mortgage-backed
securities issued by private issuers, over-the-counter options and securities
that are not registered under the securities laws. Certain securities that
might otherwise be considered illiquid, however, such as some issues of
commercial paper and variable amount master demand notes with maturities of
nine months or less and securities for which the Adviser has determined
pursuant to guidelines adopted by the Board of Trustees that a liquid trading
market exists (including certain securities that may be purchased by
institutional investors under SEC Rule 144A), are not subject to this 15%
limitation.

- --Portfolio Turnover. Although EACH FUND may engage in short-term trading to
achieve its investment objective, the annual portfolio turnover rates for the
Funds are not expected to exceed 100% during the next twelve months. Portfolio
turnover will not be a limiting factor in making investment decisions.
Portfolio turnover may occur for a variety of reasons, including the appearance
of a more favorable investment opportunity. Turnover may require payment of
brokerage commissions, impose other transaction costs and could increase the
amount of income received by a Fund that constitutes taxable capital gains. To
the extent capital gains are realized, distributions from the gains may be
ordinary income for federal tax purposes (see "The Business of the Fund--Tax
Implications").

- --Other Information. Certain brokers who are affiliated with The Pilot Funds
may act as broker for the Funds on exchange portfolio transactions, subject,
however, to procedures adopted by the Board of Trustees. Commissions, fees or
other remuneration paid to an affiliated broker must be at least as favorable
as those which the Trustees believe to be charged by other brokers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time.
A transaction will not be placed with an affiliated broker if a Fund would have
to pay a commission rate less favorable than the affiliated broker's
contemporaneous charges for comparable transactions for its other most favored,
but unaffiliated, customers, except for accounts for which the affiliated
broker acts as a clearing broker for another brokerage firm, and any customers
of the affiliated broker not comparable to The Pilot Funds as determined by the
Board of Trustees.

The Pilot Funds has also adopted certain procedures which enable a Fund to
purchase certain instruments during the existence of an underwriting or selling
syndicate of which an affiliated broker is a member. These procedures
establish certain limitations on the amount of securities which can be
purchased in any single offering and on the amount of a Fund's assets which may
be invested in any single offering. Because of the active role

<PAGE> 17

which may be played by affiliated brokers in the underwriting of securities, a
Fund's ability to purchase securities in the primary market may from time to
time be limited.

RISK FACTORS

- --General Risk Considerations. As with an investment in any mutual fund, an
investment in the Funds entails market and economic risks associated with
investments generally. However, there are certain specific risks of which you
should be aware.

Generally, the market value of fixed income securities in the Funds can be
expected to vary inversely to changes in prevailing interest rates. You should
be aware that in periods of declining interest rates the market value of
investment portfolios comprised primarily of fixed income securities will tend
to increase, and in periods of rising interest rates the market value will tend
to decrease. You should also be aware that in periods of declining interest
rates, the yields of investment portfolios comprised primarily of fixed income
securities will tend to be higher than prevailing market rates and, in periods
of rising interest rates, yields will tend to be somewhat lower. The Funds may
purchase zero-coupon bonds (i.e., discount debt obligations that do not make
periodic interest payments). Zero-coupon bonds are subject to greater market
fluctuations from changing interest rates than debt obligations of comparable
maturities which make current distributions of interest. Debt securities with
longer maturities, which tend to produce higher yields, are subject to
potentially greater capital appreciation and depreciation than obligations with
shorter maturities. Changes in the financial strength of an issuer or changes
in the ratings of any particular security may also affect the value of these
investments. Fluctuations in the market value of fixed income securities
subsequent to their acquisition will not affect cash income from such
securities but will be reflected in a Fund's net asset value.

The value of the equity securities held by the Pilot Growth Fund can be
expected to vary in response to a variety of factors. Stock values fluctuate
in response to the activities of individual companies and in response to
general market and economic conditions. In general, equity securities are
subject to greater fluctuations in value than fixed income securities.
Therefore, while an investment in the Pilot Growth Fund is likely to have
greater potential for total return over the long term than an investment in the
Pilot Diversified Bond Income Fund, it also presents greater risk of loss.

- --Foreign Securities. There are risks and costs involved in investing in
securities of foreign issuers (including foreign governments), which are in
addition to the usual risks inherent in U.S. investments. Investments in
foreign securities may involve higher costs than investments in U.S.
securities, including higher transaction costs as well as the imposition of
additional taxes by foreign governments. In addition, foreign investments may
involve further risks associated with the level of currency exchange rates,
less complete financial information about the issuer, less market liquidity and
political instability. Future political and economic developments, the
possible imposition of withholding taxes on interest income, the possible
seizure or nationalization of foreign holdings, the possible establishment of
exchange controls or the adoption of other governmental restrictions might
adversely affect the payment of principal and interest on foreign obligations.
Additionally, foreign banks and foreign branches of domestic banks may be
subject to less stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements.

FUNDAMENTAL LIMITATIONS

Certain of the investment policies of each Fund may not be changed without a
vote of the holders of a majority of the Fund's outstanding shares. Policies
requiring such a vote to effect a change are known as "fundamental". Some of
these fundamental limitations are

<PAGE> 18

summarized below, and all of the Funds' fundamental limitations are set out in
full in the Statement of Additional Information, which is available upon
request.

1. A Fund may not invest 25% or more of its total assets in one or more
issuers conducting their principal business activities in the same industry
(with certain limited exceptions).

2. A Fund may not invest (with certain limited exceptions, including U.S.
Government securities) more than 5% of its total assets in the securities of a
single issuer or subject to puts from any one issuer, except that up to 25% of
the total assets of each Fund can be invested without regard to the 5%
limitation. A Fund may not purchase more than 10% of the outstanding voting
securities of any issuer subject, however, to the foregoing 25% exception.

3. A Fund may not borrow money except as a temporary measure for extraordinary
or emergency purposes or except in connection with reverse repurchase
agreements and mortgage rolls; provided that the Fund will maintain asset
coverage of 300% for all borrowings.

4. A Fund may not make loans, except that it may invest in debt securities,
enter into repurchase agreements and lend its portfolio securities.

If a percentage limitation is met at the time an investment is made, a
subsequent change in that percentage that is the result of a change in value of
a Fund's portfolio securities does not mean that the limitation has been
violated.

In order to permit the sale of a Fund's shares (or a particular class of
shares) in some states, The Pilot Funds may agree to certain restrictions that
may be stricter than the investment policies and limitations discussed above.
If The Pilot Funds decide that any of these restrictions is no longer in a
Fund's (or class's) best interest, it may revoke its agreement to abide by such
restriction by no longer selling shares in the state involved.

INVESTING IN THE PILOT FUNDS

Getting Your Investment Started

Investing in The Pilot Funds is quick and convenient. Fund Shares may be
purchased either through the account you maintain with Boatmen's Investment
Services, Inc., another broker-dealer or certain other institutions or from The
Pilot Funds directly. Fund shares are distributed by Pilot Funds Distributors,
Inc. (the "Distributor"). The Distributor is located at 3435 Stelzer Road,
Columbus, Ohio 43219-3035.

You may choose to invest through your Boatmen's Investment Services account
where an Account Representative can advise you in selecting among The Pilot
Funds. Whether you currently have a Boatmen's Investment Services account or
wish to open one, your Pilot Funds investment can be executed within a few
minutes by telephone or, if you prefer, during a consultation with an
Investment Officer of Boatmen's Investment Services, Inc. Call The Pilot Funds
at 800/71-PILOT to arrange a consultation scheduled at your convenience.

Clients of Boatmen's Investment Services, Inc. and other institutions (such as
broker-dealers) that have entered into agreements with the Distributor
("Service Organizations") may purchase shares through their accounts at their
Service Organization and should contact the Service Organization directly for
appropriate purchase instructions. Share purchases (and redemptions) made
through Boatmen's Investment Services, Inc. or another Service Organization are
effected only on days the particular

<PAGE> 19

institution and the Fund involved are open for business. When shares are
purchased through Boatmen's Investment Services, Inc. or another Service
Organization, a fee may be charged by those institutions for providing
administrative services in connection with your investment.

Should you wish to establish an account directly with The Pilot Funds, please
refer to the purchase options described under "Opening and Adding to Your Pilot
Funds Account".

Payments for Fund shares must normally be in U.S. dollars and in order to avoid
fees and delays should be drawn on a U.S. bank. Please remember that The Pilot
Funds retains the right to reject any purchase order.

Your Alternative Purchase Options

Your purchases of Fund shares are subject to either a front-end or back-end
sales charge. You may elect to have the sales charge deducted at the time of
your investment--on the "front-end"--or choose to defer the sales charge until
your investment is redeemed--on the "back-end". This back-end sales charge
declines over time and is known as a "contingent deferred sales charge." If you
decide to pay the sales charge at the time you make your investment, your
purchase will be made in Class A Shares, whereas if you prefer to pay the sales
charge when you redeem your investment, your purchase will be made in Class B
Shares. Once you have held Class B Shares for six years, you do not pay the
contingent deferred sales charge when you redeem those shares. CLASS B SHARES
OF THE PILOT DIVERSIFIED BOND INCOME FUND ARE NOT CURRENTLY OFFERED.

Characteristics of Class A Shares and Class B Shares

Class A Shares and Class B Shares differ primarily in their sales charge
structures and distribution arrangements, including ongoing distribution fees.
The classes may also have differing transfer agency and other fees, although
the Funds currently do not intend to allocate such fees on a class basis. You
should understand that the purpose and function of the sales charge structures
and distribution arrangements for both Class A Shares and Class B Shares are
the same.

Class A Shares: Class A Shares are sold at their net asset value plus a
front-end sales charge of up to 4.50% for the Pilot Growth Fund and up to 4.0%
for the Pilot Diversified Bond Income Fund. (See "How to Buy
Shares--Explanation of Sales Price".) This front-end sales charge may be
reduced or waived in some cases. (See "Transaction Rules" and "Shareholder
Services--Front-End Sales Charge Reductions.") Class A Shares are subject to
ongoing distribution fees at an annual rate of up to 0.25% of a Fund's average
daily net assets attributable to its Class A Shares.

Class B Shares: Class B Shares are sold at net asset value without an initial
sales charge. Normally, however, a deferred sales charge is paid if the shares
are redeemed within six years of investment. (See "How to Buy
Shares--Explanation of Sales Price".) Class B Shares are subject to ongoing
distribution fees at an annual rate of up to 1.00% of a Fund's average daily
net assets attributable to its Class B Shares. These ongoing fees, which are
higher than those charged on Class A Shares, will cause Class B Shares to have
a higher expense ratio and pay lower dividends than Class A Shares.

Eight years after purchase, Class B Shares will convert automatically to Class
A Shares. The conversion relieves a shareholder of Class B Shares of the
higher ongoing expenses charged to those shares, after enough time has passed
to allow the Distributor to recover approximately the amount it would have
received if a front-end sales charge had been charged.

<PAGE> 20

The conversion from Class B Shares to Class A Shares takes place at net asset
value, so you receive dollar-for-dollar the same value of Class A Shares as you
had of Class B Shares. The conversion occurs eight years after the beginning
of the calendar month in which the shares are purchased. As a result of the
conversion, the converted shares are relieved of the distribution fees borne by
Class B Shares, although they are subject to the distribution fees borne by
Class A Shares.

Class B Shares of a Fund acquired through a reinvestment of dividends or
distributions from that Fund (as discussed under "Dividends and Distributions")
are also converted at the earlier of two dates--eight years after the beginning
of the calendar month in which the reinvestment occurred or the date of
conversion of the most recently purchased Class B Shares that were not acquired
through reinvestment of dividends or distributions. For example, if you make a
one-time purchase of Class B Shares of a particular Fund, and subsequently
acquire additional Class B Shares of that Fund only through reinvestment of
dividends and/or distributions from that Fund, all of your Class B Shares in
that Fund, including those acquired through reinvestment, will convert to Class
A Shares of that Fund on the same date.

Considerations In Choosing Between Class A And
Class B Shares

The decision as to which share class may be more beneficial for you depends, in
part, on the amount and intended length of your investment. Due to the lower
ongoing distribution fees on Class A Shares, the dividends for those shares
will be higher than the Class B Shares. However, since a front-end sales
charge is deducted from your purchase at the time of your investment, not all
of your purchase amount will purchase shares. Thus, the same initial
investment will purchase more Class B Shares than Class A Shares of the same
Fund. In addition, Class B Shares are subject to a contingent deferred sales
charge.

Since large investors may qualify for a reduced front-end sales charge (see
"Shareholder Services--Front-End Sales Charge Reductions"), such investors
should consider making their purchase in Class A Shares.

Because of these possible front-end sales charge reductions, purchases in
excess of $100,000 may be more advantageous to you if made in Class A Shares
rather than Class B Shares. In any event The Pilot Funds will not accept any
order of $250,000 or more for Class B Shares. In addition, regardless of
whether you qualify for a reduced front-end sales charge, if you expect to hold
your investment for an extended period of time, you might still consider
purchasing Class A Shares because the accumulated higher ongoing expenses,
together with the contingent deferred sales charge, of the Class B Shares will
exceed the amount of the front-end sales charge and ongoing distribution fees
related to Class A Shares.

On the other hand, you might decide, because you would be subject to higher
front-end charges or for other reasons, that it would be more advantageous for
you to have all of your purchase amount invested immediately in Fund shares,
even though you would also be subject to higher ongoing distribution fees.
These higher ongoing fees might be offset by any return you receive from the
additional shares you originally purchased as a result of not having to pay a
front-end sales charge. You should note however, that a Fund's future returns
cannot be predicted, and that there is no assurance that such returns, if any,
would compensate for those higher ongoing expenses. You should also remember
that you would be subject to any applicable contingent deferred sales charge
during the first six years of your investment in Class B Shares.

If You Have Questions

<PAGE> 21

If you are investing in The Pilot Funds through an account with Boatmen's
Investment Services, Inc. or another Service Organization, you may choose to
speak directly with your assigned Account Representative or contact person at
such organization. If you are a direct investor with The Pilot Funds and need
assistance with your account, a Pilot Funds service representative is available
to answer your questions by calling the appropriate toll-free numbers listed
below.

<TABLE>
CALL FOR INFORMATION
- ---- ---------------
<S> <C>
800/71-PILOT
8:00 am to 7:00 pm
Central time Regarding the Funds' investment objectives and policies or
for information about opening an account (including
information regarding the Funds' alternative purchase
options). Information on changing your Pilot Funds'
services, and Statements of Additional Information, are
also available at this number.

800/227-3654
7:30 am to 4:00 pm
Central time To obtain your account balance or to request a telephone
transaction.
</TABLE>

You should note that neither The Pilot Funds nor its service contractors will
be responsible for any loss or expense for acting upon telephone instructions
that are believed to be genuine. In attempting to confirm that telephone
instructions are genuine, The Pilot Funds will use procedures considered
reasonable.

The Pilot Funds will send you the following statements and reports to provide
you with current information on the status of your account:

<TABLE>
<S> <C>
Confirmation Statements After every transaction (other than an Automatic
Investment Plan transaction or dividend credit) that
affects your account balance or your account
registration.

Account Statements On a quarterly basis detailing year to date activity
for each of your accounts.

Financial Reports Every six months. To reduce The Pilot Funds'
expenses, only one copy of most Fund reports will be
mailed to your household, even if you have more than
one account in a Fund.
</TABLE>

<PAGE> 22

HOW TO BUY SHARES

This section provides you with pertinent information on how to buy Fund shares.
Further information can be found under "Transaction Rules". Before investing
you will need to decide whether to purchase Class A Shares (which are sold with
a front-end sales charge) or Class B Shares (which are sold without a front-end
sales charge but are subject to a contingent deferred sales charge). See "Your
Alternative Purchase Options".

<TABLE>
<CAPTION>
MINIMUM INVESTMENT
------------------
TO OPEN ADDITIONAL
ACCOUNT INVESTMENTS
------- -----------
<S> <C> <C>

Regular Account $1,000 $100
Automatic Investment Plan $100 $100
Employee*--Regular Accounts $500 $100
Employee*--Automatic Investment Plan $100 $50
Tax-Sheltered Retirement Plans $500 $50
Exchange Transactions $1,000 $500
</TABLE>

* Applies to employees of the Adviser and its affiliates.

OPENING AND ADDING TO YOUR PILOT FUNDS ACCOUNT

As described above under "Getting Your Investment Started," you may purchase
Fund shares through Boatmen's Investment Services, Inc. or another Service
Organization. Direct investments in The Pilot Funds may also be made in a
number of different ways, as shown in the following chart. Simply choose the
method that is most convenient for you. Any questions you have can be answered
by calling the appropriate toll-free number indicated above under "If You Have
Questions".

<TABLE>
<CAPTION>
TO ADD TO AN
TO OPEN AN ACCOUNT ACCOUNT HELD DIRECTLY
DIRECTLY WITH THE PILOT FUNDS WITH THE PILOT FUNDS
----------------------------- --------------------
<S> <C> <C>
By Mail to: --Complete an Account Application --Make your check payable
The Pilot Funds, and mail it, along with a check to the particular Fund
c/o BISYS Fund Services payable to the Fund in which you in which you are
Dept. L-1709 are investing, to the address on investing and mail it
Columbus, OH 43260-1709 the left. to the address on the
left.

--Please include your
account number on your
check.

--Or use the convenient
form attached to your
regular Fund statement.

In Person to: --Deliver the Account Application --Deliver your check
BISYS Fund Services and your check payable to the payable to the
3435 Stelzer Road particular Fund in which you particular Fund in which
Columbus, OH 43219-3035 are investing to the address on you are investing to
the left. the address on the left.

--Please include your
</TABLE>

<PAGE> 23

<TABLE>
<S> <C> <C>
account number on your
check.

By Wire to: --Ask your bank to send immediately --Ask your bank to wire
Boatmen's available funds by wire. immediately available
Trust Company funds as described at
St. Louis, MO --The wire should say that you are left, except that the
ABA No. __________ opening a new Fund account (if an wire should note that
Re: Pilot Funds Incoming Account Application Form is not it is to make a
Wire Account received for a new account within subsequent purchase
No. ______________ 30 days after the wire is rather than to open a
For further credit to: received, dividends and redemption new account.
Fund and account number proceeds from the account will be
subject to back-up withholding). --Please include your Fund
The wire should say that the account number.
purchase is to be in your name.

--Include your name, address and
taxpayer identification number.
Indicate the name of the Fund in
which you are investing.
Investors should also indicate
share class selection.

Consult your bank for information on remitting funds by
wire and associated bank charges.

Automatic Investment --You must first complete an --Call 800/71-PILOT to
(allows regular investment Account Application and select find out how to set up
without ongoing paperwork) the Automatic Investment Plan this service.
option.
--Additional purchases
--Call 800/71-PILOT for more will then automatically
information. be made as directed by
you.
</TABLE>

Explanation of Sales Price

The public offering price for each class of shares is based upon net asset
value per share plus, in the case of Class A Shares, a front-end sales charge.
Net asset value per share for each class of each Fund will be determined by
adding the value of the Fund's investments, cash and other assets attributable
to the class, subtracting the Fund's liabilities attributable to that class,
and then dividing the result by the number of shares in the class that are
outstanding. The assets of each Fund are valued at market value or, if market
quotes cannot be readily obtained, fair value is used as determined by the
Board of Trustees. Debt securities held by these Funds that have sixty days or
less until they mature are valued at amortized cost, which generally
approximates market value.

The per share net asset values of Class A Shares and Class B Shares will
diverge due to the different distribution expenses borne by the classes. More
information about valuation can be found in the Funds' Statement of Additional
Information, which is available upon request.

<PAGE> 24

Net asset value is computed as of 3:00 P.M., Central time, on all days the New
York Stock Exchange (the "Exchange") is open for trading, which is Monday
through Friday except for holidays (scheduled Exchange holidays for 1996 are
New Years Day (observed), President's Day, Good Friday, Memorial Day,
Independence Day (observed), Labor Day, Thanksgiving Day and Christmas Day
(observed)). On those days when the Exchange closes early as a result of such
day being a partial holiday or otherwise, the right is reserved to advance the
time on that day by which purchase and redemption requests must be received.

CLASS A SHARES: THE FRONT-END SALES CHARGE OPTION. The front-end sales charge
for Class A Shares of the Pilot Growth Fund and the Pilot Diversified Bond
Income Fund begin at 4.50% and 4.00%, respectively, and may decrease as the
amount you invest in Class A Shares increases, as shown in the following two
charts:

<TABLE>
<CAPTION>
PILOT GROWTH FUND
-----------------
PER SHARE
AS A PERCENTAGE OF DEALERS
------------------ REALLOWANCE AS A
NET ASSET PERCENTAGE OF
AMOUNT OF TRANSACTION OFFERING PRICE VALUE OFFERING PRICE
- ---------------------- -------------- ----- --------------
<S> <C> <C> <C>
Less than $100,000 4.50 4.71 4.00
$100,000 to $249,999 3.75 3.90 3.25
$250,000 to $499,999 3.00 3.09 2.50
$500,000 to $999,999 2.00 2.04 1.75
$1,000,000 to $2,499,999 1.00 1.01 0.90
$2,500,000 and over 0.00 0.00 0.00
</TABLE>

<TABLE>
<CAPTION>
PILOT DIVERSIFIED BOND INCOME FUND
----------------------------------
PER SHARE
AS A PERCENTAGE OF DEALERS
------------------ REALLOWANCE AS A
NET ASSET PERCENTAGE OF
AMOUNT OF TRANSACTION OFFERING PRICE VALUE OFFERING PRICE
- ---------------------- -------------- ----- --------------
<S> <C> <C> <C>
Less than $100,000 4.00 4.17 3.50
$100,000 to $249,999 3.25 3.36 2.75
$250,000 to $499,999 2.50 2.56 2.00
$500,000 to $999,999 1.50 1.52 1.25
$1,000,000 to $2,499,999 1.00 1.01 0.90
$2,500,000 and over 0.00 0.00 0.00
</TABLE>

It is possible that the dealers reallowance shown in the tables above may
change over time. Further reductions in the sales charges shown above are also
possible--please see "Shareholder Services--Sales Charge Reductions".

CLASS B SHARES: THE CONTINGENT DEFERRED SALES CHARGE OPTION. Although you pay
no front-end sales charge on Class B Shares, if you redeem those shares within
six years after the date you purchased them, the shares will be subject to a
contingent deferred sales charge at the rates set forth in the charts below.
The sales charge is charged on the lesser of the net asset value on the
redemption date or the original cost of the shares being redeemed. As a
result, no sales charge is charged on any increase in the principal value of
your shares.

The amount of any contingent deferred sales charge will be different depending
on the number of years that elapse between the time you pay for Class B Shares
and the time those shares are redeemed. Solely for purposes of determining the
number of years from the time of payment for your share purchase, all payments
during a month will be aggregated and deemed to have been made on the first day
of the month.

<PAGE> 25

PILOT GROWTH FUND
-----------------

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
(AS A PERCENTAGE OF
NUMBER OF YEARS DOLLAR AMOUNT SUBJECT
ELAPSED SINCE PURCHASE TO THE CHARGE)
- ---------------------- --------------
<S> <C>
One 4.50%
Two 4.00%
Three 3.50%
Four 3.00%
Five 2.50%
Six 1.75%
After Six Years 0.00%
</TABLE>

PILOT DIVERSIFIED BOND INCOME FUND
----------------------------------
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
(AS A PERCENTAGE OF
NUMBER OF YEARS DOLLAR AMOUNT SUBJECT
ELAPSED SINCE PURCHASE TO THE CHARGE)
- ---------------------- --------------
<S> <C>
One 4.00%
Two 3.50%
Three 3.00%
Four 2.50%
Five 2.00%
Six 1.25%
After Six Years 0.00%
</TABLE>

When you sell your Class B Shares, your order is processed to minimize the
amount of the contingent deferred sales charge that will be charged. Class B
Shares are redeemed first from those shares that are not subject to a
contingent deferred sales charge (i.e., shares held longer than six years and
shares that were acquired through reinvestment of dividends or distributions or
that qualify for other deferred sales charge waivers) and after that from the
Class B Shares you have held the longest.

For example, assume you purchased 100 Class B Shares at $10 a share (for a
total cost of $1,000), three years later the shares have a net asset value of
$12 per share and during that time you acquired 10 additional shares through
dividend reinvestment. If you then make your first redemption of 50 shares
(resulting in proceeds of $600, 50 shares x $12 per share), the first 10 shares
redeemed will not be subject to the contingent deferred sales charge because
they were acquired through reinvestment of dividends. With respect to the
remaining 40 shares redeemed, the contingent deferred sales charge is charged
at $10 per share (because the original purchase price of $10 per share is lower
than the current net asset value of $12 per share). Therefore, only $400 of
the $600 you received from selling your shares will be subject to the
contingent deferred sales charge, at a rate of 3.50% for the Pilot Growth Fund
or 3.00% for the Pilot Diversified Bond Income Fund, the applicable rate in the
third year after purchase. The proceeds from the contingent deferred sales
charge that you may pay upon redemption go to the Distributor, which may use
such amounts to defray the expenses associated with the distribution-related
services involved in selling Class B Shares. The contingent deferred sales
charge, along

<PAGE> 26

with the ongoing distribution fees paid with respect to Class B Shares, enables
those shares to be purchased without the imposition of a front-end sales
charge.

From time to time, the Fund's distributor will make or allow additional
payments or promotional incentives in the form of cash or other compensation
such as trips to sales seminars, tickets to sporting and other entertainment
events and gifts of merchandise to firms that sell shares of the Fund.

HOW TO SELL SHARES

The Pilot Funds makes it easy to sell, or "redeem" your shares. If you
purchased your shares through an account at Boatmen's Investment Services, Inc.
or another Service Organization, you may redeem shares in accordance with the
instructions pertaining to that account. If you purchased your shares through
an account at Boatmen's Investment Services, Inc. or another Service
Organization and you, yourself, appear on The Pilot Funds' books as the
shareholder of record, you may redeem shares by mail, phone or hand delivery as
described below; however, you must contact Boatmen's Investment Services, Inc.
or your other Service Organization if you wish to redeem your shares by another
method. If you purchased your shares directly from The Pilot Funds, you have
the ability to redeem shares by any of the methods described below. Requests
must be signed by you and by each other owner of the account (for joint
accounts). Except for a contingent deferred sales charge that may be charged
on Class B shares, The Pilot Funds imposes no charges when you redeem shares.

<PAGE> 27

HOW TO REDEEM SHARES ADDITIONAL LIMITATIONS
<S> <C> <C>
By Mail to: --Send a signed request (each --Requests greater than
The Pilot Funds, owner, including each joint $50,000 per day must
c/o BISYS Fund Services owner, must sign) to the be signature guaranteed.
Dept. L-1709 Transfer Agent at the address
Columbus, OH 43260-1709 on the left. --You should refer to
"Transaction Rules"
--Be sure to include both the name below for additional
of the particular Fund whose limitations.
shares you are selling and your
account number.

By Wire: --After you have signed up for wire --The Transfer Agent may
redemption privileges on the act upon such a request
Account Application, you may from any person
instruct the Transfer Agent to representing himself
wire your redemption proceeds to or herself to be you
your bank account by sending a and reasonably believed
request in writing or by phone by the Transfer Agent
(800/844-1235). to be genuine.

--The transaction amount
must be a $1,000
minimum.

--This privilege may be
subject to limits
regarding frequency and
overall amount.

In Person to: --Deliver your written request --Requests must be signed
BISYS Fund Services directly to the Transfer Agent by each owner, including
3435 Stelzer Road at the address on the left. each joint owner.
Columbus, OH 43219-3035
--Requests greater than
$50,000 per day must
be signature guaranteed.

Automatic Withdrawal --Withdrawals begin after you have --Your account must have
(permits automatic signed up for this service a total net asset value
withdrawal of (either on the account of at least $5,000.
pre-arranged amount) application or in a subsequent
letter to the Transfer Agent). --The transaction amount
must be at least a $50
--Call 800/71-PILOT for more minimum.
information.
</TABLE>

Redemption requests are processed when received in proper form by The Pilot
Funds at the net asset value per share next determined after such receipt
(subject to the contingent deferred sales charge for Class B Shares).

<PAGE> 28

TRANSACTION RULES

THE PURCHASE PROCEDURES differ depending on whether you place your order
directly with The Pilot Funds or use Boatmen's Investment Services, Inc. or
another Service Organization.

IF YOU PLACE AN ORDER FOR FUND SHARES directly with the Fund, in proper form
and accompanied by payment, it will be processed upon receipt by the Transfer
Agent. An order in proper form will also be processed upon receipt by the
Transfer Agent where Boatmen's Investment Services, Inc. or another Service
Organization undertakes to pay for the order in immediately available funds
wired to the Transfer Agent by the close of business the next Business Day. If
the Transfer Agent receives your order and, where required, payment by 3 p.m.,
Central time, your shares will be purchased at the public offering price
calculated on that day. Otherwise, your shares will be purchased at the public
offering price determined as of 3 p.m., Central time, on the next Business Day.

IF YOU PLACE AN ORDER FOR FUND SHARES THROUGH BOATMEN'S INVESTMENT SERVICES,
INC. OR ANOTHER SERVICE ORGANIZATION, and you place your order in proper form
on any Business Day in accordance with their procedures, your purchase will be
processed at the public offering price calculated at 3 p.m. Central time on
that day, if Boatmen's Investment Services, Inc. or your other Service
Organization then sends your order to the Transfer Agent before the end of its
Business Day (which is normally 4 p.m. Central time). Boatmen's Investment
Services, Inc. or your other Service Organization must promise to send to the
Transfer Agent immediately available funds in the amount of the purchase price
within five business days.

WIRE PURCHASES AND REDEMPTIONS. If you purchase shares by wire, you must file
an Account Application before any of those shares can be redeemed. You should
contact your bank (which will need to be a commercial bank that is a member of
the Federal Reserve System) for information about sending and receiving funds
by wire, including any charges by your bank for these services. The Pilot
Funds may decide at any time to no longer permit wire redemptions.

MISCELLANEOUS PURCHASE INFORMATION. You must specify at the time of investment
whether you are purchasing Class A Shares or Class B Shares. Federal
regulations require that you provide a certified taxpayer identification number
whenever you open or reopen an account. Share certificates will not be issued.
If your check does not clear, a fee may be imposed by the Transfer Agent. The
minimum initial investment in the Fund by employees of Boatmen's or its
affiliates is $500. The minimum amount required for subsequent investments is
$100, except in connection with certain investment programs.

MISCELLANEOUS REDEMPTION INFORMATION. The Pilot Funds usually makes payment for
the shares that you redeem within Three Business Days after it receives your
request in proper form. SHARES PURCHASED BY CHECK FOR WHICH A REDEMPTION
REQUEST HAS BEEN RECEIVED WILL NOT BE REDEEMED UNLESS THE CHECK PAYMENT USED
FOR INVESTMENT HAS CLEARED, WHICH MAY TAKE UP TO SEVEN BUSINESS DAYS.

When redeeming shares in the Funds, you should indicate whether you are
redeeming Class A Shares or Class B Shares. If you own Class A Shares and
Class B Shares of the same Fund, Class A Shares will be redeemed first unless
you request otherwise.

Certain types of redemption requests will need to include a signature guarantee
for each name in which the account is registered. Signature guarantees must
accompany redemption requests for: (i) an amount in excess of $50,000 per day,
(ii) any amount if the redemption proceeds are to be sent elsewhere than the
address of record on The Pilot Funds' books, or (iii) an amount of $50,000 or
less if the address of record has been on

<PAGE> 29

The Pilot Funds' books for less than sixty days, although the Transfer Agent
reserves the right to require signature guarantees on all redemptions.
Signature guarantees are designed to protect both you and The Pilot Funds from
fraud. To obtain a signature guarantee you should visit a bank, trust company,
credit union, savings association, broker-dealer or other member of a national
securities exchange, or other eligible guarantor institution. (Notaries public
cannot provide signature guarantees.) Guarantees must be signed by an
authorized person at one of these institutions, and be accompanied by the words
"Signature Guarantee".

If you experience difficulty in contacting the Transfer Agent to redeem shares
by phone, for example because of unusual market activity, you are urged to
consider redeeming your shares by mail or in person.

THE VALUE OF SHARES THAT ARE REDEEMED IN A FUND may be more or less than their
original cost, depending on the Fund's current net asset value. In addition,
if you are redeeming Class B Shares you may be subject to a contingent deferred
sales charge, which will be deducted from the proceeds of your redemption.

THE PILOT FUNDS RESERVES THE RIGHT TO INVOLUNTARILY REDEEM AN ACCOUNT (other
than a tax-sheltered retirement plan account) if, after thirty days' written
notice, the account's net asset value falls and remains below a $1,000 minimum
due to share redemptions and not market fluctuations.

In unusual circumstances The Pilot Funds may make payment in readily marketable
portfolio securities at their market value equal to the redemption price.

In certain situations or for certain individuals or entities, the front-end
sales charge for Class A Shares of the Funds may be waived either because of
the nature of the investor or the reduced sales efforts required to attract
such investments. In order to receive the sales charge waiver, you must
explain the status of your investment at the time of purchase. No sales charge
is charged on reinvested dividends or distributions. Likewise, there is no
front-end sales charge on (1) any purchase by Boatmen's, Concord, any of their
affiliates or their respective officers, partners, directors or employees
(including retired employees), any Trustee or officer of The Pilot Funds and
designated family members of any of the above individuals, (2) any purchase by
any registered representative or full-time employee of broker-dealers or
Service Organizations having agreements with the Distributor pertaining to the
sale and/or servicing of Fund shares (and their spouses and minor children) to
the extent permitted by such organizations, (3) any purchase by any state,
county or city, or any instrumentality, department, authority or agency
thereof, which is prohibited by applicable investment laws from paying a sales
load or commission, (4) any purchase by a registered investment adviser who is
purchasing shares for its own account or for accounts for which it is
authorized to make investment decisions (i.e., a discretionary account), (5)
any shares issued in connection with reorganizations with or acquisitions of
the assets of other organizations, (6) under certain circumstances, any
purchase of shares pursuant to the Reinstatement Privilege described below
under "Shareholder Services", (7) under certain circumstances, any purchase of
shares as a result of the Cross-Reinvestment Privilege described below under
"Shareholder Services", (8) under certain circumstances, any purchase of Fund
shares with the proceeds from a recent redemption of shares of any other
non-money market investment portfolio of another investment company, provided
that any purchase must be made within 60 days of such redemption and that a
copy of the account statement showing such redemption must accompany the
purchase request, (9) any purchase of shares offered through a registered
broker-dealer as part of a wrap product, (10) exchanges where the shares being
exchanged are non-money market fund shares that came from the distribution of
assets held in a qualified trust agency or custodian account maintained with
Boatmen's or its affiliates, (11) any purchase of Fund shares by a shareholder
who purchased Class A Shares

<PAGE> 30

of the Pilot International Equity Fund for an account prior to June 1, 1994 and
who qualified for a reduced sales charge on its purchases made prior to that
date, and who has continuously held shares of the Fund, and (12) any purchase
of Fund shares by a shareholder who was a record or beneficial holder of shares
of Kleinwort Benson International Equity Fund, a series of Kleinwort Benson
Investment Strategies, on July 12, 1993, and who became directly or indirectly
a beneficial owner of the Pilot International Equity Fund (the "Fund") as a
result of a reorganization between the two funds (the "Reorganization"), and
who has continuously held shares of the Pilot International Equity Fund. For
more information or to determine eligibility for any of these waivers, contact
The Pilot Funds at 800/71-PILOT.

CERTAIN TYPES OF REDEMPTIONS MAY ALSO QUALIFY FOR AN EXEMPTION FROM THE
CONTINGENT DEFERRED SALES CHARGE. To receive one of the first three exemptions
listed below, you must explain the status of your redemption at the time you
redeem your shares. The contingent deferred sales charge with respect to Class
B Shares is not charged on (1) exchanges described under "Shareholder
Services--Exchange Privileges"; (2) redemptions in connection with minimum
required distributions from IRA, 403(b)(7) and Qualified Plan accounts due to
the shareholder reaching age 70 1/2; (3) redemptions in connection with a
shareholder's death or disability (as defined in the Internal Revenue Code);
and (4) involuntary redemptions as a result of an account's net asset value
remaining below $1,000 after thirty days' written notice. In addition, no
contingent deferred sales charge is charged on shares acquired through the
reinvestment of dividends or distributions.

YOUR PILOT FUND ACCOUNT

SHAREHOLDER SERVICES

The Pilot Funds provides a variety of ways to make managing your investments
more convenient. Some of these methods require you to request them on your
Account Application or you may request them after opening an account by sending
a signature guaranteed letter of instruction to the Transfer Agent.

Tax-Sheltered Retirement Plans

The Funds are available for investment by tax-sheltered retirement plans,
including Individual Retirement Accounts although the Municipal Bond Funds may
not be appropriate investments for such plans. See your Account Representative
for details on eligibility and other information. Consult your tax adviser
with specific reference to your own situation. No minimum initial investment or
additional investment requirement applies to purchases in connection with
tax-sheltered retirement plans.

EXCHANGE PRIVILEGES AMONG THE PILOT FUNDS

You may sell your Fund shares and buy other shares of The Pilot Funds by
calling the Transfer Agent at 800/227-3654 or sending a written exchange
request to the Transfer Agent at The Pilot Funds, c/o BISYS Fund Services,
Dept. L-1709, Columbus, OH 43260-1709. Specifically, Class A Shares of a Fund
may be exchanged for Class A Shares of any other Fund and Class B Shares of a
Fund may be exchanged for Class B Shares of any other Fund. Class A Shares
purchased with a front-end sales charge may be exchanged without the need to
pay any additional front-end charge on the shares acquired through the
exchange. Class B Shares may be exchanged without the payment of any
contingent deferred sales charge at the time the exchange is made. In
determining the holding period for calculating the contingent deferred sales
charge payable on redemption of Class B Shares, the holding period of the
shares originally held will be added to the holding period of the shares
acquired through exchange.

<PAGE> 31

If you have a qualified trust, agency or custodian account with Boatmen's or
its affiliates, and your shares are to be held in that account, you may also
exchange your current Class A Shares in a Fund for Pilot Shares in the same
Fund. Conversely, Pilot Shares may be exchanged for Class A Shares of the same
Fund in connection with the distribution of assets held in such a qualified
trust, agency or custodian account. These exchanges are made without a sales
charge at the net asset value of the respective share classes.

A minimum initial investment of $1,000 must be made to establish an account
into which exchange proceeds will be invested. The minimum amount required for
any subsequent exchanges into the newly established account is $100. Exchanges
may have tax consequences. Please consult your tax adviser for further
information.

If you are opening a new account in a different Fund by exchange, the shares
being exchanged must be at least equal in value to the minimum investment for
the Fund in which the account is being opened. The particular class of shares
you are exchanging into must be registered for sale in your state.

Additional information regarding exchanges can be obtained by reading the
Statement of Additional Information. The Exchange Privilege may be modified or
terminated at any time. At least 60 days' notice will be given to shareholders
of any material modification or termination of the Exchange Privilege except
where notice is not required by the Securities and Exchange Commission.

A shareholder who purchased Class A Shares of the Pilot International Equity
Fund (the "International Equity Fund") as part of a wrap fee program and who
has continuously held shares of that Fund, may exchange Class A Shares in the
International Equity Fund for Class A shares of any other fund in the Pilot
Family of Funds without paying any front-end sales charge on the shares
acquired through the exchange.

A shareholder who purchased Class A Shares of the International Equity Fund for
an account prior to June 1, 1994 and who qualified for a sales charge exemption
or waiver on its purchases made prior to that date, and who has continuously
held shares of that Fund, may exchange Class A Shares in the International
Equity Fund for Class A shares of any other fund in the Pilot Family of Funds
without paying any front-end sales charge on the shares acquired through the
exchange after such date so long as (i) such account remains open on the books
of the Trust or (ii) such investor continues to qualify for one of the sales
load exemptions described above.

A shareholder who was a record or beneficial holder of shares of Kleinwort
Benson International Equity Fund, a series of Kleinwort Benson Investment
Strategies, and who became directly or indirectly a beneficial owner of shares
of the International Equity Fund as a result of a reorganization between the
two funds, and who has continuously held shares of the International Equity
Fund, may exchange Class A Shares or Class A shares of any fund in the Pilot
Family of Funds for Class A shares of any other fund without paying a front-end
sales charge on the shares acquired through the exchange after July 12, 1993 so
long as such account remains open on the books of the Trust.

AUTOMATIC INVESTMENT PLAN
(requires your request)

One easy way to pursue your financial goals is to invest money regularly. The
Pilot Funds offers the Automatic Investment Plan--a convenient service that
lets you transfer money from your bank account into your Fund account
automatically, on a schedule of your choice.

<PAGE> 32

At your option, your bank account will be debited in a particular amount that
you have specified, and Fund shares will be automatically purchased at regular
intervals. Your bank account must be a checking, NOW or bank money market
account maintained at a domestic financial institution which is an Automated
Clearing House member. Your institution must also permit automated withdrawals
(which may be subject to a fee by that institution). A minimum initial
investment of $100 is required for Automatic Investment Plans and the minimum
amount required for subsequent investments is $100. The minimum amount
required for subsequent investments as part of the Plan for employees of
Boatmen's or its affiliates is $50.

The Automatic Investment Plan is one means by which you may use "DOLLAR COST
AVERAGING" in making investments. Dollar Cost Averaging can be useful in
investing in portfolios such as the Funds whose price per share fluctuates.
Instead of trying to time market performance, a fixed dollar amount is invested
in Fund shares at predetermined intervals. This may help you to reduce your
average cost per share because the agreed upon fixed investment amount allows
more shares to be purchased during periods of lower share prices and fewer
shares during periods of higher prices. In order to be effective, Dollar Cost
Averaging should usually be followed on a sustained, consistent basis. You
should be aware, however, that shares bought using Dollar Cost Averaging are
made without regard to their price on the day of investment or to market
trends. While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be a good way to
invest for retirement, a home, educational expenses and other long-term
financial goals.

You may cancel your automatic investments or change the amount of purchase at
any time by mailing written notification to the Transfer Agent at The Pilot
Funds, c/o BISYS Fund Services, Dept. L-1709, Columbus, OH 43260-1709. You
may also implement the Dollar Cost Averaging method on your own initiative.
The Pilot Funds may modify or terminate the Automatic Investment Plan at any
time or charge a service fee, although no such fee currently is contemplated.

AUTOMATIC WITHDRAWAL PLAN
(requires your request)

The Pilot Funds offers a convenient way of withdrawing funds from your
investment portfolio. You may request regular monthly, quarterly, semi-annual
or annual withdrawals in any amount above $50 provided the particular Fund
account you are withdrawing from has a minimum current balance of at least
$5,000. The automatic withdrawal will be made on the first or fifteenth day of
the month. Purchases of additional shares concurrently with withdrawals are
ordinarily not advantageous for share classes that charge a sales charge. Use
of the Plan may also be disadvantageous for Class B Shares during the first six
years a share is held, due to the potential need to pay a contingent deferred
sales charge.

FRONT-END SALES CHARGE REDUCTIONS

YOU MAY BE ENTITLED TO LOWER FRONT-END SALES CHARGES ON CLASS A SHARES OF THE
FUNDS THROUGH RIGHT OF ACCUMULATION, STATEMENT OF INTENTION AND QUANTITY
DISCOUNTS.

Right of Accumulation. When buying Class A Shares, your current aggregate
investment determines the amount of any front-end sales charge that you pay.
If your current aggregate investment in Class A Shares accumulates to $100,000
or beyond, the sales percentage charged to you on subsequent investments is
decreased as shown in the Section entitled "Class A Shares: The Front-End Sales
Charge Option". Your current aggregate investment is the accumulated
combination of your immediate investment along with the shares that you
beneficially own in any Fund on which you paid a front-end sales charge

<PAGE> 33

(including shares that carry no front-end sales charge but were obtained
through an exchange and can be traced back to shares that were acquired with
such a charge).

EXAMPLE

If you beneficially own Class A Shares of the Funds or shares of The Pilot
Funds' money market funds that can be traced back to the purchase of shares
carrying a front-end sales charge (or any combination of such shares) with an
aggregate value of $90,000 and then buy Class A Shares of another fund in the
Pilot Family of Funds with a current value of $10,000, you would pay the
front-end sales charge applicable to a $100,000 purchase in that fund.

To qualify for a reduced front-end sales charge, you or your Service
Organization must notify the Transfer Agent at the time of investment. The
reduced sales charge is subject to confirmation of your holdings through a
check of appropriate records.

Statement of Intention. This Statement provides the means for you to receive a
reduced front-end sales charge on all of your investments in Class A Shares,
whether they are made in one or more transactions. The Statement of Intention
is your commitment to acquire an aggregate investment for $100,000 or more.
You should read the Statement of Intention, which you can obtain by calling
800/71-PILOT, as you will be bound by its terms.

While signing a Statement of Intention does not bind you to purchase, or The
Pilot Funds to sell, the full amount indicated at the front-end sales charge in
effect at the time of signing, you must complete the intended purchase to
obtain the reduced sales charge.

When you sign a Statement of Intention, the Transfer Agent is authorized to
hold in escrow a sufficient number of shares which can be redeemed to make up
any difference in the sales load on the amount actually invested. After the
terms of the Statement of Intention are fulfilled, the escrow will be released.

Within a 13-month period beginning up to 90 days prior to the date of its
execution, the Class A Shares you purchase may be used as a credit toward the
completion of the Statement of Intention. The investments you make during the
period receive the discounted sales charge based on the full amount of your
investment commitment. A shareholder may include the value of all Class A
Pilot Funds shares on which a sales load has previously been paid as an
"accumulation credit" toward the completion of the Statement, but a price
readjustment will be made to reflect any reduced front-end sales charge
applicable to shares purchased only during the 90-day period prior to the
submission of your Statement of Intention.

If your aggregate investment exceeds the amount indicated in your Statement, an
adjustment will be made to reflect any further reduced sales charge applicable
to your excess investment. The adjustment will be in the form of additional
Class A Shares credited to your account at the then current offering price
applicable to a single purchase of the total amount of the total purchase.

Quantity Discounts. As you can see by looking at the table in the Section
entitled "Class A Shares: The Front-End Sales Charge Option", larger purchases
in Class A Shares may result in lower front-end sales charges to you. If
requested, purchases by you, your spouse and your minor children will be
combined when computing the applicable front-end sales charge.

CROSS-REINVESTMENT PRIVILEGE

<PAGE> 34

You may want to have your dividends received from a Fund automatically invested
in shares of any other Fund or any of The Pilot Funds' other investment
portfolios. Investments will be made at a price equal to the net asset value
of the acquired shares next determined after receipt of the distribution
proceeds by the Transfer Agent. No sales load will be charged on such
investments. In order to qualify for the Cross-Reinvestment Privilege, the
value of your account in the acquired fund must equal or exceed the acquired
fund's minimum initial investment requirement. There are no subsequent
investment requirements for amounts to which dividends are directed nor are
service fees currently charged for effecting these transactions. The election
to cross-reinvest dividends will not affect the tax treatment of such
dividends, which will be treated as received by you and then used to purchase
shares of the acquired fund.

REINSTATEMENT PRIVILEGE

If you are a Class A shareholder in a Fund, you may reinvest all or any portion
of your redemption proceeds in Class A shares of any other Fund without paying
a sales load. Shares so acquired will be purchased at a price equal to the net
asset value next determined after the Transfer Agent receives a reinstatement
request and payment. If you wish to use this privilege, you must submit a
written reinstatement request to the Transfer Agent stating that you are
eligible to use the privilege. The reinstatement request and payment must be
received within 90 days of the trade date of the redemption and the shares
redeemed must have been held for at least 30 days before the redemption. The
reinstatement privilege may be exercised once annually by a Class A
shareholder, except that there is no such limit as to the availability of this
privilege in connection with transactions the sole purpose of which is to
reinvest the proceeds at net asset value in a tax-sheltered retirement plan.

Generally, exercising the reinstatement privilege will not affect the character
of any gain or loss realized on a redemption for federal income tax purposes.
However, if a redemption results in a loss, the reinstatement may result in the
loss being disallowed under IRS "wash sale" rules. Also in certain instances,
shareholders may not be permitted to take into account sales charges incurred
on the original purchase of shares in computing their taxable gain or loss.
Consult your tax adviser for additional information.

DIVIDENDS AND DISTRIBUTIONS

Where do your dividends and distributions come from?

Dividends for each Fund are derived from its net investment income. For the
Pilot Diversified Bond Income Fund, it comes from the interest on the bonds and
other investments that it holds in its portfolio. For the Pilot Growth Fund,
net investment income is made up of dividends received from the stocks it
holds, as well as interest accrued on convertible securities, money market
instruments and other debt obligations held in its portfolio.

The Funds realize capital gains when they sell a security for more than its
cost. Each Fund may make distributions of its net realized capital gains, if
any, after any reductions for capital loss carryforwards.

What are your dividend and distribution options?

Shareholders of record receive dividends and net capital gain distributions.
You will automatically receive dividends and distributions in additional shares
of the same share class of a Fund for which the dividend or distribution was
declared, unless you specifically elect to receive payments in cash or elect
the Cross-Reinvestment Privilege

<PAGE> 35

described above under "Shareholder Services". Your election and any subsequent
change should be made in writing to: The Pilot Funds [name of Fund, including
Class A or Class B Shares, as applicable], c/o BISYS Fund Services, Dept.
L-1709, Columbus, OH 43260-1709.

Your election is effective for dividends and distributions with record dates
(with respect to the Pilot Growth Fund) or payment dates (with respect to the
Pilot Diversified Bond Income Fund) after the date the Transfer Agent receives
the election.

When are dividends and distributions declared and paid?

<TABLE>
<CAPTION>
DIVIDENDS DIVIDENDS
FUND ARE DECLARED ARE PAID
---- ------------ --------
<S> <C> <C>
Pilot Growth Fund Monthly Monthly
Pilot Diversified Bond Income Fund (1) Daily Monthly within five
business days of month
end
</TABLE>

(1) Shares of the Pilot Diversified Bond Income Fund begin earning dividends
the first Business Day after acceptance of the purchase order for which
The Pilot Funds' custodian has received payment and stop earning dividends
the Business Day such shares are redeemed.

With respect to the Pilot Diversified Bond Income Fund, if all of an investor's
shares in a particular share class are redeemed, the Fund will make a cash
payment of any accrued dividends within five business days after redemption.

Net capital gain distributions for each of the Funds, if any, are distributed
at least annually after any reductions for capital loss carryforwards.

The dividends and distributions paid by each Fund on its Class A and Class B
Shares are calculated in the same manner, but because of the differing
distribution expenses borne by the different share classes, the dividends on
those classes are expected to differ.

DISTRIBUTION AND SERVICE ARRANGEMENTS

The Pilot Funds has adopted Distribution Plans for its Class A and Class B
Shares.

UNDER THESE PLANS THE DISTRIBUTOR RECEIVES PAYMENTS FOR DISTRIBUTION AND
SUPPORT SERVICES. The Distribution Plan for Class A Shares authorizes payments
to the Distributor and Service Organizations for personal services provided to
Class A shareholders and/or the maintenance of shareholder accounts. Payments
under the Distribution Plan for Class B Shares will also be used to pay for
sales commissions and other fees payable to the Distributor and to Service
Organizations and other broker-dealers who sell Class B Shares, and may include
interest on such amounts that are not initially repaid by The Pilot Funds.

PAYMENTS UNDER THE DISTRIBUTION PLAN FOR CLASS A SHARES MAY NOT EXCEED 0.25%
(on an annual basis) of the average daily net asset value of the shares to
which such Plan relates. If more money is due the Distributor than it can
collect in any month because of this limitation, the unpaid amount may be
carried forward until it can be paid. Similarly, if in any month the
Distributor does not expend the entire amount to which it would otherwise be
entitled, this amount may be used as a credit and drawn upon to permit the
payment of expenses in the future. Neither of these amounts, however, is
payable beyond the fiscal year in which they accrue.

<PAGE> 36

DISTRIBUTION PAYMENTS UNDER THE DISTRIBUTION PLAN FOR CLASS B SHARES MAY NOT
EXCEED 1.00% (on an annual basis) of the average daily net asset value of the
Class B Shares. Not more than 0.25% of such value will be used to compensate
Service Organizations for personal services provided to Class B shareholders
and/or the maintenance of shareholder accounts. Not more than 0.75% of such
value will be paid to the Distributor as reimbursement for commissions and
transaction fees of up to 4.00% (which amount may change over time) of the net
asset value per share of the Class B Shares purchased by clients of the
Distributor, Service Organizations and other broker-dealers who sell such
Shares as well as expenses related to other promotional and distribution
activities. The distribution payments under this Plan have been structured to
provide you the option of purchasing Fund shares without the need to pay a
front-end sales charge. The purpose and function of the contingent deferred
sales charge and distribution fee for Class B Shares is the same as the
front-end sales charge and distribution fee for Class A Shares. In both cases
the sales charge and distribution fee are used to pay and provide compensation
for the distribution of Fund shares.

Actual distribution expenses paid by the Distributor with respect to Class B
Shares for any given year may exceed the distribution fees and contingent
deferred sales charges received with respect to those Shares. These excess
expenses may be reimbursed by a Fund or its Class B shareholders out of
contingent deferred sales charges and distribution payments in future years as
long as the Distribution Plan for Class B Shares is in effect.

Distribution payments under the Plans are subject to the requirements of a rule
under the Investment Company Act of 1940 known as Rule 12b-1. The distribution
fee and any sales charge applicable to a particular class will not be used to
assist the distribution of any other class.

The Distributor, at its expense, may also provide additional compensation to
dealers in connection with sales of Shares of any of the Funds and other Funds
of the Group. Compensation may include financial assistance to dealers in
connection with conferences, sales or training programs for their employees,
seminars for the public, advertising campaigns regarding one or more Funds of
the Group, and/or other dealer-sponsored special events. In some instances,
this compensation may be made available only to certain dealers whose
representatives have sold or are expected to sell a significant amount of such
shares. Compensation may include payment for travel expenses, including
lodging, incurred in connection with trips taken by invited registered
representatives and members of their families to exotic locations within or
outside of the United States for meetings or seminars of a business nature.
The Distributor, at its expense, currently conducts an annual sales contest for
dealers in connection with their sales of Shares of the Funds. Dealers may not
use sales of a Fund's Shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc.

IF YOU ARE A CLIENT OF BOATMEN'S INVESTMENT SERVICES, INC. OR ANOTHER SERVICE
ORGANIZATION, YOU SHOULD NOTE that they may charge you a separate fee for
administrative services in connection with investments in Fund shares and may
impose minimum customer account and other requirements. These fees and
requirements would be in addition to those imposed by the Funds under the Plans
or otherwise. If you are investing through Boatmen's Investment Services, Inc.
or another Service Organization, please refer to their program materials for
any additional special provisions or conditions that may be different from
those described in this Prospectus (for example, some or all of the services
and privileges described may not be available to you). Boatmen's Investment
Services, Inc. and the other Service Organizations have the responsibility of
transmitting purchase orders and required funds, and of crediting their
customers' accounts following redemptions, in a timely manner in accordance
with their customer agreements and this Prospectus.

<PAGE> 37

Investors may note that federal banking laws currently limit the securities
activities of banks. It is possible that a bank might be prohibited from
acting as a Service Organization in the future. If this were to happen, the
bank's shareholder clients would be permitted by the Funds to remain
shareholders. The Funds' method of operations might, however, change and such
shareholders might not be able to avail themselves of the services provided by
their banks. No adverse financial consequences are expected to occur to these
shareholders from any such event.

THE PILOT FAMILY OF FUNDS

The Pilot Funds was organized on July 15, 1982 as a Massachusetts business
trust under the name Centerland Fund. On June 1, 1994, its name was changed to
The Pilot Funds. The Pilot Funds is a mutual fund of the type known as an
"open-end management investment company." A mutual fund permits an investor to
pool his or her assets with those of others in order to achieve economies of
scale, take advantage of professional money managers and enjoy other advantages
traditionally reserved for large investors. The Agreement and Declaration of
Trust permits the Board of Trustees of The Pilot Funds to create separate
series or portfolios of shares. To date, fourteen portfolios have been
established. The Agreement and Declaration of Trust also permits the Board of
Trustees to classify or reclassify any series or portfolio of shares into one
or more classes. The Trustees have authorized the issuance of an unlimited
number of shares in each of three share classes (Class A Shares, Class B Shares
and Pilot Shares) in the Funds. Each Fund is classified as a diversified
company. Information regarding The Pilot Funds' other portfolios may be
obtained by contacting The Pilot Funds or the Distributor.

Class A and Class B Shares of the Funds are described in this prospectus.
These Funds also offer Pilot Shares solely to Boatmen's and its affiliated
banks, acting on behalf of themselves and their customers. Pilot Shares are
sold without a front-end or contingent deferred sales charge to qualified
shareholders. Shares of each class bear their pro rata portion of all
operating expenses paid by the Funds, except certain payments under the Funds'
Distribution Plans applicable only to Class A or Class B Shares.

Persons selling or servicing different classes of shares of the Funds may
receive different compensation with respect to one particular class of shares
as opposed to another in the same Fund.

SHAREHOLDERS ARE ENTITLED TO ONE VOTE FOR EACH FULL SHARE HELD AND
PROPORTIONATE FRACTIONAL VOTES FOR FRACTIONAL SHARES HELD. Shares of all the
Pilot Fund portfolios vote together and not by class, unless otherwise required
by law or permitted by the Board of Trustees. All shareholders of a particular
Fund will vote together as a single class on matters relating to the Fund's
investment advisory agreement and fundamental investment policies. Only Class
A shareholders, however, will vote on matters relating to the Distribution Plan
for Class A Shares and only Class B shareholders will vote on matters relating
to the Distribution Plan for Class B Shares.

<PAGE> 38

THE PILOT FUNDS IS NOT REQUIRED TO AND DOES NOT CURRENTLY EXPECT TO HOLD ANNUAL
MEETINGS OF SHAREHOLDERS, ALTHOUGH SPECIAL MEETINGS MAY BE CALLED FOR PURPOSES
SUCH AS ELECTING OR REMOVING TRUSTEES OR OTHER PURPOSES.

THE BUSINESS OF THE FUND

FUND MANAGEMENT

THE BUSINESS AFFAIRS OF THE PILOT FUNDS ARE MANAGED UNDER THE GENERAL
SUPERVISION OF THE BOARD OF TRUSTEES.

SERVICE PROVIDERS

Adviser: BOATMEN'S TRUST COMPANY (referred to as "Boatmen's" or the "Adviser")
manages the investment portfolio of each Fund, selecting the investments and
making purchase and sale orders. Its principal offices are located at 100
North Broadway, St. Louis, Missouri 63178-4737.

Administrator: CONCORD HOLDING CORPORATION (referred to as "Concord"), is
responsible for coordinating the Funds' efforts and generally overseeing the
operation of the Funds' business. Concord's principal offices are located at
3435 Stelzer Road, Columbus, Ohio 43219-3035. Concord is a wholly-owned
subsidiary of The BISYS Group, Inc.

Distributor: Each Fund's shares are sold on a continuous basis by the
Distributor, PILOT FUNDS DISTRIBUTORS, INC. (referred to as the
"Distributor"), a registered broker-dealer and a wholly-owned subsidiary of
Concord that is located at 3435 Stelzer Road, Columbus, Ohio 43219-3035.

Custodian: BOATMEN'S TRUST COMPANY (referred to as "Boatmen's") is responsible
for holding the investments purchased by each Fund. Boatmen's has its
principal offices at 100 North Broadway, St. Louis, Missouri 63178-4737.

Transfer Agent: BISYS FUND SERVICES, INC. (referred to as the "Transfer Agent")
is the transfer and dividend disbursing agent of the Funds. It maintains the
account records of all shareholders and administers the distribution of all
income earned as a result of investing in the Funds. The Transfer Agent is
located at 3435 Stelzer Road, Columbus, OH 43219-3035.

Fund Accountant: BISYS FUND SERVICES, INC. is the accounting agent responsible
for preparing the Funds' financial statements and determining daily net asset
value per share for the Funds.

MORE ABOUT BOATMEN'S. Founded in 1889, Boatmen's, a trust company organized
under the laws of Missouri, provides a broad range of trust and investment
services for individuals, privately and publicly held businesses, governmental
units, pension and profit sharing plans and other institutions and
organizations. As of December 31, 1995 Boatmen's and its affiliates managed
nearly $77 billion in assets ($44 billion over which they had investment
discretion and $33 billion over which they did not have investment discretion).

Boatmen's Bancshares, Inc., Boatmen's parent, is a registered bank holding
company which owns substantially all of the outstanding capital stock of
numerous commercial banks located in Arkansas, Illinois, Iowa, Kansas,
Missouri, New Mexico, Oklahoma, Tennessee and Texas, a mortgage banking
company, a credit life insurance company and a credit card bank.

<PAGE> 39

Set forth below is certain performance data relating to a trust fund of the
Adviser and its affiliates (the "Commingled Fund"), which has been managed with
full investment authority by the Adviser and/or its affiliates. This
Commingled Fund has a substantially similar investment objective and uses
similar investment strategies and techniques as will be used by the Pilot
Diversified Bond Income Fund.

THE PERFORMANCE INFORMATION SET FORTH BELOW REFLECTS PAST PERFORMANCE AND IS
NOT NECESSARILY INDICATIVE OF THE FUTURE PERFORMANCE OF THE PILOT DIVERSIFIED
BOND INCOME FUND, OR ANY OF THE OTHER INVESTMENT PORTFOLIOS OF THE PILOT FUNDS.
Performance will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. In addition, because the Pilot
Diversified Bond Income Fund is actively managed, its investments will vary
from time to time and will not be identical to those investments held by the
Commingled Fund.

The Commingled Fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions imposed by the Act. If the
Commingled Fund had been registered under the 1940 Act, its performance may
have been adversely affected.

PERFORMANCE FOR THE COMMINGLED FUND(1)
SHOWING AVERAGE ANNUAL TOTAL RETURNS(2) FOR VARIOUS
PERIODS ENDED ________ __, 199_

<TABLE>
<CAPTION>
AS ADJUSTED AS ADJUSTED
TO REFLECT TO REFLECT
CLASS A CLASS B
SHARES EXPENSES SHARES EXPENSES
--------------- ---------------
<S> <C> <C>
One Year . % . %
---- ----
Five Years . % . %
---- ----
Ten Years . % . %
---- ----
</TABLE>

1. The Commingled Fund consists of the Active Core Bond Fund, a collective
investment trust, for which Boatmen's Trust Company serves as trustee.

2. The average annual total returns are calculated in conformity with
Securities and Exchange Commission guidelines. In addition, these returns
are adjusted to reflect the performance that the Commingled Fund would
have experienced if Class A and Class B shareholder transaction expenses
and estimated operating expenses applicable to the Class A and Class B
Shares had been incurred during the periods shown.

Boatmen's utilizes a team approach in managing the Pilot Growth Fund.

Mr. Michael E. Kenneally, CFA, Senior Vice President and Director of Research
for Boatmen's, is part of the team responsible for the day to day management of
the Pilot Growth Fund's investment activities. Mr. Kenneally currently
oversees Boatmen's fundamental and quantitative research efforts as well as
passive and quantitative investment management. His additional
responsibilities include investment product development, international equity
investment, and equity derivative strategies. Mr. Kenneally holds both a
bachelor's degree in economics and an MBA in finance from the University of
Missouri. He joined Boatmen's in 1983 as an equity analyst, later became a
quantitative analyst, and subsequently worked as both a fixed-income portfolio
manager and an equity portfolio manager. Mr. Kenneally is also a member of the
Association for Investment Management and Research (AIMR) the St. Louis
Society of Financial Analysts, the Chicago Quantitative Alliance, and the
Society of Quantitative Analysts.

<PAGE> 40

Mr. Daniel N. Ginsparg, Senior Portfolio Manager & Manager of Quantitative
Research is part of the team responsible for the day to day management of the
Pilot Growth Fund's investment activities. Mr. Ginsparg is responsible for
quantitative research applications and is involved in the management of
Boatmen's Small-Capitalization Equity Fund. Mr. Ginsparg received both his
bachelor's degree and MBA from the University of Missouri. He joined Boatmen's
in 1989 and is a member of the Chicago Quantitative Alliance, the Society of
Quantitative Analysts, and the St. Louis Society of Financial Analysts.

Mr. Joseph A. Bybee, CFA, Senior Portfolio Manager & Research Analyst is part
of the team responsible for the day to day management of the Pilot Growth
Fund's investment activities. Mr. Bybee is the research analyst and portfolio
manager for Boatmen's growth equity portfolios, including the Eagle Growth
Equity Fund. He joined Boatmen's Trust Company of Texas, formerly Eagle
Management & Trust, in 1988. Mr. Bybee earned his bachelor's degree with
honors from the University of the South and his MBA with honors from the
University of Chicago. A Chartered Financial Analyst, Mr. Bybee is also a
member of the Houston Society of Financial Analysts.

The Fixed Income Committee of Boatmen's is primarily responsible for the
day-to-day management of the investment portfolio of the Pilot Diversified Bond
Income Fund.

Although expected to be infrequent, Boatmen's may consider the amount of Fund
shares sold by broker-dealers and others (including those who may be connected
with Boatmen's) in allocating orders for purchases and sales of portfolio
securities. This allocation may involve the payment of brokerage commissions
or dealer concessions. Boatmen's will not engage in this practice unless the
execution capability of and the amount received by such broker-dealer or other
company is believed to be comparable to what another qualified firm could
offer.

MORE ABOUT CONCORD. Concord is a Delaware corporation that was organized in
1987 to provide administrative services to mutual funds. Concord is a
wholly-owned subsidiary of The BISYS Group, Inc. Concord provides a wide range
of such services to the Funds, including maintaining the Funds' offices,
providing statistical and research data, coordinating the preparation of
reports to shareholders, calculating or providing for the calculation of the
net asset values of Fund shares and dividends and capital gain distributions to
shareholders, and performing other administrative functions necessary for the
smooth operation of the Funds. The Funds bear all fees and expenses charged by
the Custodian and Fund Accountant for these services. Certain officers of The
Pilot Funds, namely Messrs. Martin Dean, George O. Martinez, William J. Tomko
and Bruce Treff, are also employees and/or officers of Concord, The Distributor
or an affiliate.

EXPENSES. In order to support the services described above, as well as other
matters essential to the operation of the Funds, the Funds incur certain
expenses. Expenses are paid out of a Fund's assets, and thus are reflected in
the Fund's dividends and net asset value, but they are not billed directly to
you or deducted from your account.

Boatmen's is entitled to advisory fees that are calculated daily and payable
monthly at the annual rate of 0.75% of the Pilot Growth Fund's average daily
net assets and 0.55% of the Pilot Diversified Bond Income Fund's average daily
net assets.

Additionally, Concord is entitled to an administration fee from The Pilot Funds
which is calculated based on the net assets of all of the investment portfolios
of The Pilot Funds combined. Under the Administration Agreement, each Fund
pays its pro-rata share of an annual fee to Concord, computed daily and payable
monthly, of .115 of 1% of The Pilot Funds' average net assets up to $1.5
billion, .110 of 1% of The Pilot Funds' average net assets on the next $1.5
billion and .1075 of 1% of The Pilot Funds' average net assets in excess of $3
billion.

<PAGE> 41

Operating expenses borne by the Funds include taxes; interest; fees and
expenses of trustees and officers who are not also officers, directors,
employees or holders of 5% or more of the outstanding voting securities of the
Adviser, Concord or any of their affiliates; Securities and Exchange Commission
fees; state securities registration and qualification fees; advisory fees;
administration fees; charges of the custodian and of the transfer and dividend
disbursing agent; certain insurance premiums; outside auditing and legal
expenses; costs of preparing and printing prospectuses for regulatory purposes
and for distribution to shareholders; costs of shareholder reports and
meetings; and any extraordinary expenses. Each Fund also pays any brokerage
fees, commissions and other transaction charges (if any) incurred in connection
with the purchase and sale of its portfolio securities.

FEE WAIVERS. Expenses can be reduced by voluntary fee waivers and expense
reimbursements by Boatmen's and the Funds' other service providers, as well as
by certain mandatory expense limits imposed by some state securities
regulators. However, as to any amounts voluntarily waived or reimbursed, the
service providers retain the ability to be reimbursed by a Fund for such
amounts prior to fiscal year end. These waivers and reimbursements would
increase the yield to investors when made but would decrease yields if a Fund
were required to reimburse a service provider.

TAX IMPLICATIONS

As with any investment, you should consider the tax implications of an
investment in the Funds. The following is only a short summary of the
important tax considerations generally affecting the Funds and their
shareholders. You should consult your tax adviser with specific reference to
your own tax situation.

YOU WILL BE ADVISED AT LEAST ANNUALLY REGARDING THE FEDERAL INCOME TAX
TREATMENT OF DIVIDENDS AND DISTRIBUTIONS MADE TO YOU.

Federal Taxes. Each Fund intends to qualify as a "regulated investment
company" under the Internal Revenue Code (called the "Code"), meaning that to
the extent a Fund's earnings are passed on to shareholders as required by the
Code, the Fund itself generally will not be required to pay federal income
taxes.

In order to so qualify, each Fund intends to pay as dividends at least 90% of
its investment company taxable income. Investment company taxable income
includes taxable interest, dividends and gains attributable to market discount
on taxable as well as tax-exempt securities. To the extent you receive such a
dividend based on either investment company taxable income or the excess of net
short-term capital gain over net long-term capital loss, you would treat that
dividend as ordinary income in determining your gross income for tax purposes,
whether you received it in the form of cash or additional shares. Unless you
are exempt from federal income taxes, the dividends you receive from each Fund
will be taxable to you as ordinary income. Also, to the extent that a Fund's
income consists of dividends paid by U.S. corporations, a portion of the
dividends paid by the Fund may be eligible for the corporate dividends-received
deduction.

Any distribution you receive of net long-term capital gain over net short-term
capital loss will be taxed as a long-term capital gain, no matter how long you
have held Fund shares. If you hold shares for six months or less, and during
that time receive a distribution that is taxable as a long-term capital gain,
any loss you might realize on the sale of those shares will be treated as a
long-term loss to the extent of the earlier capital gain distribution.

Before you purchase shares of a Fund, you should consider the effect of any
capital gain distributions (or if you are purchasing shares of the Pilot Growth
Fund, you should

<PAGE> 42

consider both dividends and capital gain distributions) that are expected to be
declared or that have been declared, but not yet paid. When a Fund makes these
payments, its share price will be reduced by the amount of the payment, so that
you will in effect have paid full price for the shares and then received a
portion of your price back as a taxable distribution or dividend.

Any dividends declared by a Fund in October, November or December of a
particular year and payable to shareholders during those months will be deemed
to have been paid by the Fund and received by shareholders on December 31 of
that year, so long as the dividends are actually paid in January of the
following year.

Shareholders in the Funds may realize a taxable gain or loss when redeeming,
transferring or exchanging shares of a Fund, generally depending on the
difference in the prices at which the shareholder purchased and sold the
shares. This gain or loss will be long-term or short-term, generally depending
on how long the shareholder held the shares.

Each Fund may be required to withhold federal income tax at the rate of 31% of
all taxable distributions payable to shareholders who fail to provide the Fund
with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service that
they are subject to backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the shareholder's
federal income tax liability.

Further information relating to tax consequences is contained in the Statement
of Additional Information.

STATE AND LOCAL TAXES GENERALLY. Because your state and local taxes may be
different than the federal taxes described above, you should see your tax
adviser regarding these taxes. In particular, except as stated below,
dividends paid by the Pilot Diversified Bond Income Fund may be taxable under
state or local law as dividend income, even though all or part of those
dividends come from interest on obligations that would be free of such income
taxes if held by you directly.

MEASURING PERFORMANCE

Performance information provides you with a method of measuring and monitoring
your investments. Each Fund may quote its performance in advertisements or
shareholder communications. The performance for each class of shares of a Fund
is calculated separately from the performance of the Fund's other classes of
shares.

Understanding performance measures:

TOTAL RETURN for each Fund may be calculated on an AVERAGE ANNUAL total return
basis or an AGGREGATE TOTAL RETURN basis. Average annual total return reflects
the average annual percentage change in value of an investment over the
measuring period. Aggregate total return reflects the total percentage change
in value of an investment over the measuring period. Both measures assume the
reinvestment of dividends and distributions.

YIELDS for the Funds are calculated for a specified 30-day (or one-month)
period by dividing the net income for the period by the maximum offering price
on the last day of the period, and annualizing the result on a semi-annual
basis. Net income used in yield calculations may be different than net income
used for accounting purposes.

The Funds may provide quotes of total returns and yields WITHOUT REFLECTING A
FRONT-END SALES CHARGE, which quotations will, of course, be higher than
quotations that do reflect such a sales charge.

<PAGE> 43

Performance comparisons:

The Funds may compare their yields and total returns to those of mutual funds
with similar investment objectives and to bond, stock or other relevant indices
or to rankings prepared by independent services or other financial or industry
publications that monitor mutual fund performance.

Total return and yield data as reported in national financial publications such
as Money, Forbes, Barron's, The Wall Street Journal and The New York Times, as
well as in publications of a local or regional nature, may be used for
comparison.

The performance of the Funds may also be compared to data prepared by Lipper
Analytical Services, Inc., Mutual Fund Forecaster, Wiesenberger Investment
Companies Services, Morningstar or CDA Investment Technologies, Inc., and total
returns for these Funds may be compared to indices such as the Dow Jones
Industrial Average, the Standard & Poor's 500 Stock Index, the Lehman Brothers
Bond Indexes, the Merrill Lynch Bond Indexes, the Wilshire 5000 Equity Indexes
or the Consumer Price Index.

PERFORMANCE QUOTATIONS WILL FLUCTUATE, AND YOU SHOULD NOT CONSIDER QUOTATIONS
TO BE REPRESENTATIVE OF FUTURE PERFORMANCE. YOU SHOULD ALSO REMEMBER THAT
PERFORMANCE IS GENERALLY A FUNCTION OF THE KIND AND QUALITY OF INVESTMENTS HELD
IN A PORTFOLIO, PORTFOLIO MATURITY, OPERATING EXPENSES AND MARKET CONDITIONS.
FEES THAT BOATMEN'S INVESTMENT SERVICES, INC. OR ANOTHER SERVICE ORGANIZATION
MAY CHARGE DIRECTLY TO ITS CUSTOMER ACCOUNTS IN CONNECTION WITH AN INVESTMENT
IN THE FUNDS WILL NOT BE INCLUDED IN THE FUNDS' CALCULATIONS OF TOTAL RETURN
AND YIELD.

INQUIRIES REGARDING THE FUNDS MAY BE DIRECTED TO THE DISTRIBUTOR AT 3435
STELZER ROAD, COLUMBUS, OHIO 43219-3035.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE STATEMENT OF
ADDITIONAL INFORMATION RELATING TO THE FUNDS INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUNDS OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUNDS OR BY THEIR DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.

<PAGE> 44

FINANCIAL
DIRECTION May __, 1996

THE

PILOT

FUNDS

PILOT GROWTH
FUND

PILOT DIVERSIFIED BOND
INCOME FUND

Pilot Shares

Prospectus Enclosed

<PAGE> 45

TABLE OF CONTENTS

PAGE
----

EXPENSE SUMMARY
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
Pilot Growth Fund
Pilot Diversified Bond Income Fund
PORTFOLIO INSTRUMENTS AND PRACTICES
RISK FACTORS
FUNDAMENTAL LIMITATIONS
INVESTING IN THE PILOT FUNDS
HOW TO BUY SHARES
HOW TO SELL SHARES
DIVIDENDS AND DISTRIBUTIONS
EXCHANGE PRIVILEGE
THE PILOT FAMILY OF FUNDS
THE BUSINESS OF THE FUND
FUND MANAGEMENT
TAX IMPLICATIONS
MEASURING PERFORMANCE

<PAGE> 46

THE PILOT FUNDS

PROSPECTUS FOR PILOT SHARES OF THE PILOT GROWTH AND PILOT DIVERSIFIED BOND
INCOME FUNDS

May __, 199_

This Prospectus describes Pilot Shares of the Pilot Growth and Pilot
Diversified Bond Income Funds. Pilot Shares are sold by Pilot Funds
Distributors, Inc. and selected broker-dealers to Boatmen's Trust Company, St.
Louis, Missouri ("Boatmen's") and its affiliated banks acting on behalf of
themselves and persons maintaining qualified trust, agency or custodial
accounts at such banks. Pilot Shares are sold and redeemed without payment of
any purchase or redemption charge imposed by the Funds, although Boatmen's and
its affiliated banks may charge their customer accounts for services provided
in connection with the purchase or redemption of shares. This Prospectus
describes concisely the information about the Funds that you should know before
investing. Please read it carefully and keep it for future reference.

More information about the Funds is contained in a Statement of Additional
Information that has been filed with the Securities and Exchange Commission.
The Statement of Additional Information can be obtained free upon request by
calling 800/71-PILOT. The Statement of Additional Information, as it may be
revised from time to time, is dated December 29, 1995 and is incorporated by
reference into (considered a part of) the Prospectus.

LIKE ALL MUTUAL FUNDS, 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> 47

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when buying or
selling shares of a Fund.

ANNUAL FUND OPERATING EXPENSES are paid out of a Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
general Fund administration, accounting and other services.

Below is information regarding the Funds' shareholder transaction
expenses and the operating expenses which the Funds expect to incur during the
current fiscal year on their Pilot Shares. Examples based on this information
are also provided.

PILOT SHARES

<TABLE>
<CAPTION>
PILOT DIVERSIFIED
PILOT GROWTH BOND INCOME
FUND FUND
---- ----
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Front End Sales Charge Imposed on Purchases
(as a percentage of offering price) None None
Sales Charge Imposed on Reinvested Dividends None None
Deferred Sales Charge None None
ANNUAL FUND OPERATING EXPENSES AFTER FEE
WAIVERS AND EXPENSE REIMBURSEMENTS (as a
percentage of average net assets):
Management Fees(1) 0.50% 0.40%
Distribution Payments 0.00% 0.00%
Other Expenses(2) 0.25% 0.25%
---- ----
Total Fund Operating
Expenses After Fee
Waivers and Expense
Reimbursements(1) 0.75% 0.65%
==== ====
</TABLE>

(1) This expense information is provided to help you understand the
expenses you would bear either directly (as with the transaction
expenses) or indirectly (as with the annual operating expenses) as a
shareholder of one of the Funds. The Adviser has agreed to waive a
portion of its management fee for each Fund until August 31, 1996.
Without waivers by the Adviser, investment management fees as a
percentage of net assets would be 0.75% and 0.55% for the Pilot Growth
and Pilot Diversified Bond Income Funds, respectively. The Adviser
and Administrator also have agreed to reimburse a portion of the
operating expenses of Pilot Shares of the Funds until August 31, 1996.
Absent waivers and expense reimbursements, the total operating
expenses for Pilot Shares of the Funds would be 1.52% for the Pilot
Growth Fund and 1.32% for the Pilot Diversified Bond Income Fund.

(2) "Other Expenses" are based on estimated amounts for the current fiscal
year.

<PAGE> 48

<TABLE>
<CAPTION>
1 3
YEAR AFTER YEARS AFTER
PURCHASE PURCHASE
-------- --------
<S> <C> <C>
PILOT GROWTH FUND
Pilot Shares $8 $24
PILOT DIVERSIFIED BOND INCOME FUND
Pilot Shares $7 $21
</TABLE>

<PAGE> 49

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Pilot Growth Fund

The Pilot Growth Fund offers investors a means of participating in the equity
securities market.

<PAGE> 50

Pilot Diversified Bond Income Fund

The Pilot Diversified Bond Income Fund offers investors a means of
participating in the fixed income securities market.

The value of the Fund's portfolio (and consequently its shares) is expected to
fluctuate inversely in relation to changes in the direction of interest rates.

<PAGE> 51

PORTFOLIO INSTRUMENTS AND PRACTICES

<PAGE> 52

<PAGE> 53

<PAGE> 54

- --Securities Lending. EACH FUND may lend securities held in its portfolio to
financial institutions (such as banks and broker-dealers) as a means of earning
additional income. These loans present risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially.
However, securities loans will be made only to financial institutions the
Adviser deems to be of good standing, and will only be made if the Adviser
thinks the possible rewards from such loan justify the possible risks. A loan
will not be made if, as a result, the total amount of a Fund's outstanding
loans exceeds 33 1/3% of its total assets. Securities loans will be fully
collateralized.

<PAGE> 55

Options purchased by a Fund will not exceed 5%, and options written by a Fund
will not exceed 25%, of its net assets.

- --Futures and Related Options. EACH FUND may enter into futures contracts and
options on such futures contracts to protest against the effect of anticipated
market or interest rate fluctuations on securities that a Fund holds in its
portfolio or intends to sell or purchase. Futures contracts obligate a Fund,
at maturity, to take or make delivery of certain securities or the cash value
of a securities index. A Fund may not purchase or sell a futures contract (or
related option) except for bona fide hedging purposes unless immediately after
any such transaction the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related options
is 5% or less of its total assets (after taking into account certain technical
adjustments).

More information regarding futures contracts and related options can be found
in the Statement of Additional Information, which is available upon request.

<PAGE> 56

- --Portfolio Turnover. Although EACH FUND may engage in short-term trading to
achieve its investment objective, annual portfolio turnover rates for the Funds
are not expected to exceed 100% during the next twelve months. Portfolio
turnover will not be a limiting factor in making investment decisions.
Portfolio turnover may occur for a variety of reasons, including the appearance
of a more favorable investment opportunity. Turnover may require payment of
brokerage commissions, impose other transaction costs and could increase the
amount of income received by a Fund that constitutes taxable capital gains. To
the extent capital gains are realized, distributions from the gains may be
ordinary income for federal tax purposes (see "The Business of the Fund--Tax
Implications").

<PAGE> 57

which may be played by affiliated brokers in the underwriting of securities, a
Fund's ability to purchase securities in the primary market may from time to
time be limited.

RISK FACTORS

FUNDAMENTAL LIMITATIONS

<PAGE> 58

summarized below, and all of the Funds' fundamental limitations are set out in
full in the Statement of Additional Information, which is available upon
request.

1. A Fund may not invest 25% or more of its total assets in one or more
issuers conducting their principal business activities in the same industry
(with certain limited exceptions).

4. A Fund may not make loans, except that it may invest in debt securities,
enter into repurchase agreements and lend its portfolio securities.

INVESTING IN THE PILOT FUNDS

HOW TO BUY SHARES

Pilot Shares are sold on a continuous basis by Pilot Funds Distributors, Inc.
(the "Distributor").

Pilot Shares are sold to Boatmen's Trust Company (referred to as "Boatmen's" or
the "Adviser") and its affiliates (Boatmen's and such affiliates being
sometimes referred to herein individually as an "Institution" and collectively
as "Institutions") acting on behalf of themselves or their customers who
maintain qualified trust, agency or custodial accounts ("Customers").
Customers may include individuals, trusts, partnerships, institutions and
corporations. All share purchases are effected through a Customer's account at
an Institution through procedures established in connection with the
requirements of the account, and confirmations of share purchases and
redemptions will be sent to the Institution involved. Institutions (or their
nominees) will normally be the holders of record of Pilot Shares acting on
behalf of their Customers, and will reflect their Customers' beneficial
ownership of shares in the account statements provided by them to their
Customers. The exercise of voting rights and the delivery to Customers of
shareholder communications from the Funds will be governed by the Customers'
account agreements with the Institutions.

Pilot Shares are sold at the net asset value per share next determined after
receipt of a purchase order from an Institution by the Fund's transfer agent.
The minimum initial

<PAGE> 59

investment in a Fund for an Institution is $500,000 with no minimum subsequent
investment. Institutions may establish different minimum investment
requirements for their Customers and may charge their Customers certain account
fees depending on the type of account a Customer has established with the
Institution. These fees may include, for example, account maintenance fees,
compensating balance requirements or fees based upon account transactions,
assets or income. Information concerning these minimum account requirements,
services and any charges should be obtained from the Institutions before a
customer authorizes the purchase of Fund shares, and this Prospectus should be
read in conjunction with any information so obtained.

Purchase orders placed by an Institution for Pilot Shares must be received by
the Funds' transfer agent before the close of regular trading hours (currently
3:00 p.m. Central time) on the New York Stock Exchange (the "Exchange") on a
day when the Exchange is open for trading (a "Business Day"), which is Monday
through Friday except for holidays (scheduled Exchange holidays for 1996 are
New Years Day (observed), President's Day, Good Friday, Memorial Day,
Independence Day (observed), Labor Day, Thanksgiving Day and Christmas Day
(observed)). Payment for shares must be made by Institutions in federal funds
or other funds immediately available to the Funds' custodian no later than 3:00
p.m. (Central time) on the Business Day immediately following placement of the
purchase order. On those days when the Exchange closes early as a result of
such day being a partial holiday or otherwise, the right is reserved to advance
the time on that day by which purchase and redemption requests must be
received.

It is the responsibility of Institutions to transmit orders for purchases by
their Customers promptly to the Funds in accordance with their agreements with
their Customers, and to deliver required investments on a timely basis. If
federal funds are not received within the period described, the order will be
canceled, notice will be given, and the Institution will be responsible for any
loss to The Pilot Funds or its beneficial shareholders. Payments for shares of
a Fund may, at the discretion of the Adviser, be made in the form of securities
that are permissible investments for that Fund. For further information see
"In-Kind Purchases" in the Statement of Additional Information.

Purchase orders must include the purchasing Institution's tax identification
number. The Pilot Funds reserves the right to reject any purchase order or to
waive the minimum initial investment requirement. Payment for orders which are
not received or accepted will be returned after prompt notice. The issuance of
shares is recorded in the shareholder records of the Funds, and share
certificates will not be issued.

HOW TO SELL SHARES

Redemption orders are effected at the net asset value per share next determined
after receipt of the order from an Institution by The Pilot Funds' transfer
agent. The Pilot Funds imposes no charges when Pilot Shares are redeemed.
Institutions may charge fees to their Customers for their services in
connection with the instructions and limitations pertaining to the account at
the Institution.

The Funds may suspend the right of redemption or postpone the date of payment
upon redemption (as well as suspend the recordation of the transfer of its
shares) for such periods as permitted under the Investment Company Act of 1940.

The Pilot Funds intends to pay cash for all shares redeemed, but in unusual
circumstances may make payment wholly or partly in readily marketable portfolio
securities at their then market value equal to the redemption price if it
appears appropriate to do so in light of the Funds' responsibilities under the
Investment Company Act of 1940. See the Statement of Additional Information
("Additional Purchase and Redemption Information") for examples of when such
redemptions might be appropriate. In those cases, an investor

<PAGE> 60

may incur brokerage costs in converting securities to cash. The Funds may also
redeem shares involuntarily if the balance has fallen below the minimum level
due to shareholder redemptions and not as a result of market fluctuations.

It is the responsibility of the Institutions to provide their customers with
statements of account with respect to transactions made for their accounts at
the Institutions.

Share balances may be redeemed pursuant to arrangements between Institutions
and their Customers. It is the responsibility of an Institution to transmit
redemption orders to The Pilot Funds' transfer agent and to credit its
Customers' accounts with the redemption proceeds on a timely basis. The
redemption proceeds for all Funds are normally wired to the redeeming
Institution the following Business Day after receipt of the order by the
transfer agent. The Pilot Funds reserves the right, however, to delay the
wiring of redemption proceeds for up to seven days after receipt of a
redemption order if, in the judgment of the Adviser, an earlier payment could
adversely affect a Fund.

The net asset value of shares that are redeemed may be more or less than their
original cost, depending on a Fund's current net asset value.

Explanation of Sales Price

Pilot Shares of the Funds are sold at net asset value. Net asset value per
share is determined on each Business Day (as defined above) at 3:00 p.m.
(Central time) with respect to each Fund by adding the value of a Fund's
investments, cash and other assets attributable to its Pilot Shares,
subtracting the Fund's liabilities attributable to those shares, and then
dividing the result by the number of Pilot Shares in the Fund that are
outstanding. The assets of the Funds are valued at market value or, if market
quotes cannot be readily obtained, fair value is used as determined by the
Board of Trustees. Debt securities held by these Funds that have sixty days or
less until they mature are valued at amortized cost, which generally
approximates market value. More information about valuation can be found in
the Funds' Statement of Additional Information, which is available upon
request.

DIVIDENDS AND DISTRIBUTIONS

Where do your dividends and distributions come from?

What are your dividend and distribution options?

<PAGE> 61

Shareholders of record receive dividends and net capital gain distributions.
Dividends and distributions will be paid in cash unless you specifically elect
to receive payment in additional shares of the same share class of a Fund for
which the dividend or distribution was declared. Your election and any
subsequent change should be made in writing to your Institution.

When are dividends and distributions declared and paid?

<TABLE>
<CAPTION>
DIVIDENDS DIVIDENDS
FUND ARE DECLARED ARE PAID
---- ------------ --------
<S> <C> <C>
Pilot Growth Fund Monthly Monthly
Pilot Diversified Bond Income Fund(1) Daily Monthly within five
business days of
month end
</TABLE>

(1) Shares of the Pilot Diversified Bond Income Fund begin earning
dividends the first Business Day after acceptance of the purchase
order for which The Pilot Funds' custodian has received payment and
stop earning dividends the Business Day such shares are redeemed.

With respect to the Pilot Diversified Bond Income Fund, if all of the Pilot
Shares held by an Institution in such a Fund are redeemed, the Fund will make a
cash payment of any accrued dividends within five business days after
redemption.

Net capital gain distributions for each of the Funds, if any, are distributed
at least annually after any reductions for capital loss carryforwards.

EXCHANGE PRIVILEGE

If you wish, Pilot Shares of a Fund may be exchanged for Class A Shares of the
same Fund in connection with the distribution of assets held in a qualified
trust, agency or custodial account maintained with Boatmen's or its affiliates.
Similarly, a Customer may exchange Class A Shares for Pilot Shares of the same
Fund if the shares are to be held in such a qualified trust, agency or
custodial account. Pilot Shares of a Fund may also be exchanged for Pilot
Shares of any of the other investment portfolios of The Pilot Funds. These
exchanges are made without a sales charge at the net asset value of the
respective share classes or Fund. The particular class of shares or Fund you
are exchanging into must be registered for sale in your state. The exchange
privilege may be modified or terminated at any time. At least 60 days' notice
will be given to shareholders of any material modification or termination of
the exchange privilege except where notice is not required by the Securities
and Exchange Commission.

THE PILOT FAMILY OF FUNDS

<PAGE> 62

series or portfolios of shares. To date, fourteen portfolios have been
established. The Agreement and Declaration of Trust also permits the Board of
Trustees to classify or reclassify any series or portfolio of shares into one
or more classes. The Trustees have authorized the issuance of an unlimited
number of shares in each of three share classes (Pilot Shares, Class A Shares
and Class B Shares) in the Funds. Each Fund is classified as a diversified
company. Information regarding The Pilot Funds' other portfolios may be
obtained by contacting The Pilot Funds or the Distributor.

The Pilot Shares of the Funds are described in this prospectus. The Funds also
offer Class A and Class B Shares. Class A Shares are sold with maximum 4.5%
and 4.0% front-end sales charges, and Class B Shares are sold with maximum 4.5%
and 4.0% contingent deferred sales charges. Pilot, Class A and Class B Shares
bear their pro rata portion of all operating expenses paid by the Funds. In
addition, Class A and Class B Shares bear all payments under the Funds'
Distribution Plans (the "Plans"). Under the Plans the Distributor receives
fees for distribution and shareholder support services.

Payments under the Distribution Plan for Class A Shares may be made for
payments to broker-dealers and financial institutions under agreements with
those organizations for personal services provided to Class A shareholders
and/or the maintenance of Class A shareholder accounts. Payments under the
Distribution Plan for Class B Shares, in addition to being used for the same
purposes as payments under the Distribution Plan for Class A Shares, may be
used to reimburse sales commissions and other fees paid to broker-dealers who
sell Class B Shares and may also be used for advertising and marketing.
Payments under the Distribution Plan for Class A Shares may not exceed .25% (on
an annual basis) of the average daily net asset value of outstanding Class A
Shares. Payments under the Distribution Plan for Class B Shares may not exceed
1.00% (on an annual basis) of the average daily net asset value of outstanding
Class B Shares. Distribution payments under the Distribution Plans are subject
to the requirements of a rule under the Investment Company Act of 1940 known as
Rule 12b-1.

The Pilot Funds offers various services and privileges in connection with its
Class A and Class B Shares that are not offered in connection with its Pilot
Shares, including an automatic investment plan and an automatic withdrawal
plan. Class B Shares convert automatically to Class A Shares eight years after
the beginning of the calendar month in which the shares were purchased.
Persons selling or servicing Class A and Class B Shares of the Funds may
receive different compensation with respect to one particular class of shares
over another in the same Fund.

THE BUSINESS OF THE FUND

FUND MANAGEMENT

<PAGE> 63

THE BUSINESS AFFAIRS OF THE PILOT FUNDS ARE MANAGED UNDER THE GENERAL
SUPERVISION OF THE BOARD OF TRUSTEES.

SERVICE PROVIDERS

Distributor: Each Fund's shares are sold on a continuous basis by the
Distributor, PILOT FUNDS DISTRIBUTORS, INC. (referred to as the "Distributor"),
a registered broker-dealer and a wholly-owned subsidiary of Concord that is
located at 3435 Stelzer Road, Columbus, Ohio 43219-3035.

Fund Accountant: BISYS FUND SERVICES, INC. is the accounting agent responsible
for preparing the Funds' financial statements and determining daily net asset
value per share for the Funds.

MORE ABOUT BOATMEN'S. Founded in 1889, Boatmen's, a trust company organized
under the laws of Missouri, provides a broad range of trust and investment
services for individuals, privately and publicly held businesses, governmental
units, pension and profit sharing plans and other institutions and
organizations. As of December 31, 1995, Boatmen's and its affiliates managed
$77 billion in assets ($44 billion over which they had investment discretion
and $33 billion over which they did not have investment discretion).

Boatmen's Bancshares, Inc., Boatmen's parent, is a registered bank holding
company which owns substantially all of the outstanding capital stock of
numerous commercial banks Boatmen's, and more than fifty banks and trust
companies located in Arkansas, Illinois, Iowa, Kansas, Missouri, New Mexico,
Oklahoma, Tennessee and Texas; a mortgage banking company, a credit life
insurance company and a credit card bank.

<PAGE> 64

fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. In addition, because the Pilot Diversified Bond
Income Fund is actively managed, its investments will vary from time to time
and will not be identical to those investments held by the Commingled Fund.

PERFORMANCE FOR THE COMMINGLED FUND(1)
SHOWING AVERAGE ANNUAL TOTAL RETURNS(2) FOR VARIOUS
PERIODS ENDED ________ __, 199_

<TABLE>
<CAPTION>
AS ADJUSTED
TO REFLECT
PILOT SHARES
EXPENSES
--------
<S> <C>
One Year . %
-----
Five Years . %
-----
Ten Years . %
-----
</TABLE>

1. The Commingled Fund consists of the Active Core Bond Fund, a
collective investment trust, for which Boatmen's Trust Company serves
as trustee.

2. The average annual total returns are calculated in conformity with
Securities and Exchange Commission guidelines. In addition, these
returns are adjusted to reflect the performance that the Commingled
Fund would have experienced if estimated operating expenses applicable
to the Pilot Shares had been incurred during the periods shown.

Boatmen's utilizes a team approach in managing the Pilot Growth Fund.

Mr. Michael E. Kenneally, CFA, Senior Vice President and Director of Research
for Boatmen's, is part of the team responsible for the day to day management of
the Pilot Growth Fund's investment activities. Mr. Kenneally currently
oversees Boatmen's fundamental and quantitative research efforts as well as
passive and quantitative investment management. His additional
responsibilities include investment product development, international equity
investment, and equity derivative strategies. Mr. Kenneally holds both a
bachelor's degree in economics and an MBA in finance from the University of
Missouri. He joined Boatmen's in 1983 as an equity analyst, later became a
quantitative analyst, and subsequently worked as both a fixed-income portfolio
manager and an equity portfolio manager. Mr. Kenneally is also a member of the
Association for Investment Management and Research (AIMR), the St. Louis
Society of Financial Analysts, the Chicago Quantitative Alliance, and the
Society of Quantitative Analysts.

Mr. Daniel N. Ginsparg, Senior Portfolio Manager & Manager of Quantitative
Research, is part of the team responsible for the day to day management of the
Pilot Growth Fund's investment activities. Mr. Ginsparg is responsible for
quantitative research applications and is involved in the management of
Boatmen's Small-Capitalization Equity Fund. Mr. Ginsparg received both his
bachelor's degree and MBA from the University of Missouri. He joined Boatmen's
in 1989 and is a member of the Chicago Quantitative Alliance, the Society of
Quantitative Analysts, and the St. Louis Society of Financial Analysts.

<PAGE> 65

Mr. Joseph A. Bybee, CFA, Senior Portfolio Manager & Research Analyst, is part
of the team responsible for the day to day management of the Pilot Growth
Fund's investment activities. Mr. Bybee is the research analyst and portfolio
manager for Boatmen's growth equity portfolios, including the Eagle Growth
Equity Fund. He joined Boatmen's Trust Company of Texas, formerly Eagle
Management & Trust, in 1988. Mr. Bybee earned his bachelor's degree with
honors from the University of the South and his MBA with honors from the
University of Chicago. A Chartered Financial Analyst, Mr. Bybee is also a
member of the Houston Society of Financial Analysts.

The Fixed Income Committee of Boatmen's is primarily responsible for the
day-to-day management of the investment portfolio of the Pilot Diversified Bond
Income Fund.

<PAGE> 66

and legal expenses; costs of preparing and printing prospectuses for regulatory
purposes and for distribution to shareholders; costs of shareholder reports and
meetings; and any extraordinary expenses. Each Fund also pays any brokerage
fees, commissions and other transaction charges (if any) incurred in connection
with the purchase and sale of its portfolio securities.

TAX IMPLICATIONS

YOU WILL BE ADVISED AT LEAST ANNUALLY REGARDING THE FEDERAL INCOME TAX
TREATMENT OF DIVIDENDS AND DISTRIBUTIONS MADE TO YOU.

Federal Taxes. Each Fund intends to qualify as a "regulated investment company"
under the Internal Revenue Code (called the "Code"), meaning that to the extent
a Fund's earnings are passed on to shareholders as required by the Code, the
Fund itself generally will not be required to pay federal income taxes.

Before you purchase shares of a Fund, you should consider the effect of any
capital gain distributions (or if you are purchasing shares of the Pilot Growth
Fund, you should consider both dividends and capital gain distributions) that
are expected to be declared or that have been declared, but not yet paid. When
a Fund makes these payments, its share price will be reduced by the amount of
the payment, so that you will in effect have paid full price for the shares and
then received a portion of your price back as a taxable distribution or
dividend.

<PAGE> 67

Further information relating to tax consequences is contained in the Statement
of Additional Information.

MEASURING PERFORMANCE

Understanding performance measures:

Performance comparisons:

<PAGE> 68

The performance of the Funds may also be compared to data prepared by Lipper
Analytical Services, Inc., Mutual Fund Forecaster, Wiesenberger Investment
Companies Services, Morningstar or CDA Investment Technologies, Inc., and total
returns for these Funds may be compared to indices such as the Dow Jones
Industrial Average, the Standard & Poor's 500 Stock Index, the Lehman Brothers
Bond Index, the Merrill Lynch Bond Index, the Wilshire 5000 Equity Index or the
Consumer Price Index.

INQUIRIES REGARDING THE FUNDS MAY BE DIRECTED TO THE DISTRIBUTOR AT 3435
STELZER ROAD, COLUMBUS, OHIO 43219-3035.

<PAGE> 69
THE PILOT FUNDS

----------

FORM N-1A

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL
ITEM NUMBER IN PART B INFORMATION CAPTION
--------------------- -----------------------
<S> <C> <C>
10. Cover Page...................................... Cover Page

11. Table of Contents............................... Table of Contents

12. General Information and History................. Organization and Capitalization

13. Investment Objectives and Policies.............. Investment Policies and Practices of the Fund; Investment
Restrictions

14. Management of the Fund.......................... Trustees and Officers

15. Control Persons and Principal Holders
of Securities................................... Trustees and Officers; Organization and Capitalization

16. Investment Advisory and Other Services.......... Investment Adviser, Administrator, Distributor and Transfer
Agent; Matters Relating to Class A Shares and Class B
Shares; Portfolio Transactions; Custodian and Subcustodian;
Independent Accountants and Counsel

17. Brokerage Allocation............................ Portfolio Transactions

18. Capital Stock and Other Securities.............. Organization and Capitalization; Matters Relating to Class A
Shares and Class B Shares

19. Purchase, Redemption and Pricing of
Securities Being Offered........................ Net Asset Value; Matters Relating to Class A Shares and
Class B Shares; Additional Purchase and Redemption
Information

20. Tax Status...................................... Tax Information

21. Underwriters.................................... Investment Adviser, Administrator, Distributor and Transfer
Agent

22. Calculation of Performance Data................. Calculation of Performance Quotations

23. Financial Statements............................ Financial Statements
</TABLE>

3
<PAGE> 70

THE PILOT FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219

STATEMENT OF ADDITIONAL INFORMATION
May ___, 1996
PILOT SHARES, CLASS A SHARES AND CLASS B SHARES

THE PILOT FUNDS (THE "TRUST") IS AN OPEN-END, MANAGEMENT INVESTMENT
COMPANY (OR MUTUAL FUND) CONSISTING OF FOURTEEN PORTFOLIOS, TWO OF WHICH
PORTFOLIOS (THE "FUNDS") ARE OFFERED HEREBY. THE FUNDS ARE:

PILOT GROWTH FUND; AND

PILOT DIVERSIFIED BOND INCOME FUND;

BOATMEN'S TRUST COMPANY ("BOATMEN'S") SERVES AS THE INVESTMENT ADVISER
TO EACH FUND. PILOT FUNDS DISTRIBUTORS, INC. SERVES AS EACH FUND'S DISTRIBUTOR,
AND ITS PARENT, CONCORD HOLDING CORPORATION ("CONCORD"), SERVES AS EACH FUND'S
ADMINISTRATOR.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUSES DATED MAY __, 1996 WITH RESPECT TO
PILOT SHARES, CLASS A SHARES AND CLASS B SHARES OF THE FUNDS AND IS
INCORPORATED BY REFERENCE IN ITS ENTIRETY INTO SUCH PROSPECTUSES. BECAUSE THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT ITSELF A PROSPECTUS, NO INVESTMENT
IN PILOT SHARES, CLASS A SHARES OR CLASS B SHARES OF THE FUNDS SHOULD BE MADE
SOLELY UPON THE INFORMATION CONTAINED HEREIN. COPIES OF THE PROSPECTUSES MAY BE
OBTAINED WITHOUT CHARGE BY WRITING TO PILOT FUNDS DISTRIBUTORS, INC., 3435
STELZER ROAD, COLUMBUS, OHIO 43219-3035.

B-1
<PAGE> 71
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Policies And Practices Of The Funds . . . . . . . . . . . . .

Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

Trustees And Officers . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment Adviser, Administrator, Distributor And Transfer Agent . . . .

Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .

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

Matters Relating to Class A Shares and Class B Shares . . . . . . . . . .

Additional Purchase and Redemption Information . . . . . . . . . . . . .

Calculation Of Performance Quotations . . . . . . . . . . . . . . . . . .

Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organization And Capitalization . . . . . . . . . . . . . . . . . . . . .

Custodian And Subcustodian . . . . . . . . . . . . . . . . . . . . . . .

Independent Accountants And Counsel . . . . . . . . . . . . . . . . . . .

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

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INVESTMENT POLICIES AND PRACTICES OF THE FUNDS

The following discussion elaborates on the description of each Fund's
investment policies and practices contained in the Prospectuses. Except as set
forth below, the investment policies and limitations described in this
Statement of Additional Information are not fundamental and may be changed
without Shareholder consent.

U.S. GOVERNMENT OBLIGATIONS

Each Fund may invest in U.S. Government obligations. Examples of the
types of U.S. Government obligations that may be held by the Funds include, in
addition to U.S. Treasury bonds, notes and bills, the obligations of the
Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Tennessee Valley Authority, Resolution Funding Corporation and
Maritime Administration. Obligations guaranteed as to principal or interest by
the U.S. Government, its agencies, authorities or instrumentalities are deemed
to include (a) securities for which the payment of principal and interest is
backed by an irrevocable letter of credit issued by the U.S. Government, its
agencies, authorities or instrumentalities and (b) participations in loans made
to foreign governments or their agencies that are so guaranteed. The secondary
market for certain of these participations is limited. If such participations
are illiquid they will not be purchased.

U.S. Government obligations include principal and interest components of
securities issued or guaranteed by the U.S. Treasury if the components are
traded independently under the Separate Trading of Registered Interest and
Principal of Securities program. Obligations issued or guaranteed as to
principal or interest by the U.S. Government, its agencies, authorities or
instrumentalities may also be acquired in the form of custodial receipts. These
receipts evidence ownership of future interest payments, principal payments or
both on certain notes or bonds issued by the U.S. Government, its agencies,
authorities or instrumentalities.

CUSTODIAL RECEIPTS

Each Fund may also acquire custodial receipts that evidence ownership of
future interest payments, principal payments or both on certain U.S. Government
notes or bonds. Such notes and bonds are held in custody by a bank on behalf of
the owners. These custodial receipts are known by various names, including
"Treasury Receipts," "Treasury Investors Growth Receipts" and "Certificates of
Accrual on Treasury Securities." Although custodial receipts are not considered
U.S. Government securities, they are indirectly issued or guaranteed as to
principal and interest by the U.S. Government, its agencies, authorities or
instrumentalities. The Pilot Intermediate Municipal Bond Fund and Pilot
Municipal Bond Fund (the "Municipal Bond Funds") may acquire custodial receipts
that evidence ownership of future interest payments, principal payments or both
on certain municipal notes and bonds. Custodial receipts will be treated as
illiquid securities.

CORPORATE DEBT SECURITIES

Each Fund may invest in corporate debt securities of domestic issuers of
all types and maturities, such as bonds, debentures, notes and commercial
paper. Corporate debt securities may involve equity features, such as
conversion or exchange rights or warrants for the acquisition of stock of the
same or a different issuer; participation based on revenue, sales or profits;
or the purchase of common stock or warrants in a unit transaction (where
corporate debt obligations and common stock are offered as a unit). Each Fund
may also invest in corporate debt securities of foreign issuers.

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U.S. AND FOREIGN BANK OBLIGATIONS

These obligations include negotiable certificates of deposit, banker's
acceptances and fixed time deposits. Each Fund limits its investments in
domestic bank obligations to banks having total assets in excess of $1 billion
and subject to regulation by the U.S. Government. Each Fund may also invest in
certificates of deposit issued by members of the Federal Deposit Insurance
Corporation ("FDIC") having total assets of less than $1 billion, provided that
the Fund will at no time own more than $100,000 principal amount of
certificates of deposit (or any higher principal amount which in the future may
be fully covered by FDIC insurance) of any one of those issuers. Fixed time
deposits are obligations which are payable at a stated maturity date and bear a
fixed rate of interest. Generally, fixed time deposits may be withdrawn on
demand by a Fund, but they may be subject to early withdrawal penalties which
vary depending upon market conditions and the remaining maturity of the
obligation. Although fixed time deposits do not have a market, there are no
contractual restrictions on a Fund's right to transfer a beneficial interest in
the deposit to a third party.

Each Fund limits its investments in foreign bank obligations (i.e.,
obligations of foreign branches and subsidiaries of domestic banks, and
domestic and foreign branches and agencies of foreign banks) to obligations of
banks which at the time of investment are branches or subsidiaries of domestic
banks which meet the criteria in the preceding paragraphs or are branches or
agencies of foreign banks which (i) have more than $10 billion, or the
equivalent in other currencies, in total assets; (ii) in terms of assets are
among the 75 largest foreign banks in the world; (iii) have branches or
agencies in the United States; and (iv) in the opinion of Boatmen's, pursuant
to criteria established by the Board of Trustees of the Trust, are of an
investment quality comparable to obligations of domestic banks which may be
purchased by a Fund. These obligations may be general obligations of the parent
bank in addition to the issuing branch or subsidiary, but the parent bank's
obligations may be limited by the terms of the specific obligation or by
governmental regulation. Each Fund also limits its investments in foreign bank
obligations to banks, branches and subsidiaries located in Western Europe
(United Kingdom, France, Germany, Belgium, The Netherlands, Italy and
Switzerland), Scandinavia (Denmark and Sweden), Australia, Japan, the Cayman
Islands, the Bahamas and Canada. Each Fund will limit its investment in
securities of foreign banks to not more than 20% of total assets at the time of
investment.

Each Fund may also make interest-bearing savings deposits in commercial
and savings banks in amounts not in excess of 5% of the total assets of the
Fund.

WHEN-ISSUED SECURITIES, FORWARD COMMITMENTS AND DELAYED SETTLEMENTS

Each Fund may purchase securities on a when-issued basis or purchase or
sell securities on a forward commitment or delayed settlement basis. These
transactions involve a commitment by a Fund to purchase or sell securities at a
future date. The price of the underlying securities (usually expressed in terms
of yield) and the date on which the securities will be delivered and paid for
(the settlement date) are fixed at the time the transaction is negotiated.
When-issued purchases and forward commitment and delayed settlement
transactions are negotiated directly with the other party, and such commitments
are not traded on exchanges.

A Fund will purchase securities on a when-issued basis or purchase or
sell securities on a forward commitment or delayed settlement basis only with
the intention of completing the transaction and actually purchasing or selling
the securities. If deemed advisable as a matter of investment strategy,
however, a Fund may dispose of or renegotiate a commitment after entering into
it. A Fund also may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. A Fund may
realize a capital gain or loss in connection with these transactions.

When a Fund purchases securities on a when-issued, forward commitment or
delayed settlement basis, the Fund's custodian or subcustodian will maintain in
a segregated account cash, U.S. Government securities or other high grade
liquid debt obligations having a value (determined daily) at least equal to the
amount of the Fund's purchase commitments. In the case of a forward commitment
or delayed settlement transaction to sell portfolio securities subject to such
commitment, the custodian or subcustodian will hold the portfolio securities
themselves in a segregated account while the commitment is outstanding. These
procedures are designed to

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<PAGE> 74

ensure that a Fund will maintain sufficient assets at all times to cover its
obligations under when-issued purchases, forward commitments and delayed
settlements.

CONVERTIBLE SECURITIES

Each Fund may invest in convertible securities, such as bonds, notes,
debentures, preferred stocks and other securities that may be converted into
common stock. All convertible securities purchased by the Pilot Growth Fund
will be rated at least AA by an NRSRO or, if unrated, determined by Boatmen's
to be of comparable quality. Similarly, all convertible securities purchased
by the Pilot Diversified Bond Income Fund will be rated at least A by an NRSRO
or, if unrated, determined by Boatmen's to be of comparable quality.
Investments in convertible securities can provide income through interest and
dividend payments as well as an opportunity for capital appreciation by virtue
of their conversion or exchange features.

The convertible securities in which the Fund may invest include
fixed-income and zero coupon debt securities, and preferred stock that may be
converted or exchanged at a stated or determinable exchange ratio into
underlying shares of common stock. The exchange ratio for any particular
convertible security may be adjusted from time to time due to stock splits,
dividends, spin-offs, other corporate distributions or scheduled changes in the
exchange ratio. Convertible debt securities and convertible preferred stocks,
until converted, have general characteristics similar to both debt and equity
securities. Although to a lesser extent than with debt securities generally,
the market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion or exchange feature, the market value of
convertible securities typically changes as the market value of the underlying
common stock changes, and, therefore, also tends to follow movements in the
general market for equity securities. A unique feature of convertible
securities is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and so may
not experience market value declines to the same extent as the underlying
common stock. When the market price of the underlying common stock increases,
the price of a convertible security tends to rise as a reflection of the value
of the underlying common stock, although typically not as much as the price of
the underlying common stock. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

As debt securities, convertible securities are investments which provide
for a stream of income or, in the case of zero coupon securities, accretion of
income with generally higher yields than common stocks. Of course, like all
debt securities, there can be no assurance of income or principal payments
because the issuers of the convertible securities may default on their
obligations. Convertible securities generally offer lower yields than
non-convertible securities of similar quality because of their conversion or
exchange features.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, are senior in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. However, convertible bonds and convertible preferred stock
typically have lower coupon rates than similar non-convertible securities.

Convertible securities may be issued as fixed income obligations that
pay current income or as zero coupon notes and bonds, including Liquid Yield
Option Notes ("LYONs"). Zero coupon securities pay no cash income and are sold
at substantial discounts from their value at maturity. When held to maturity,
their entire income, which consists of accretion of discount, comes from the
difference between the issue price and their value at maturity. Zero coupon
convertible securities offer the opportunity for capital appreciation because
increases (or decreases) in the market value of such securities closely follow
the movements in the market value of the underlying common stock. Zero coupon
convertible securities generally are expected to be less volatile than the
underlying common stocks because they usually are issued with short maturities
(15 years or less) and are issued with options and/or redemption features
exercisable by the holder of the obligation entitling the holder to redeem the
obligation and receive a defined cash payment.

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<PAGE> 75
FOREIGN SECURITIES

Both Funds may invest in foreign securities either directly or
indirectly through American Depository Receipts ("ADRs"), which are receipts
issued by an American bank or trust company evidencing ownership of underlying
securities issued by a foreign issuer, or through European Depository Receipts
("EDRs"), which are receipts issued by European financial institutions
evidencing ownership of underlying securities issued by a foreign issuer. ADRs
may be listed on a national securities exchange or may trade in the
over-the-counter market. ADR prices are denominated in United States dollars
while EDR prices are generally denominated in foreign currencies. The
securities underlying an ADR or EDR will normally be denominated in a foreign
currency. The underlying securities may be subject to foreign government taxes
which could reduce the yield on such securities.

Investors should recognize that investing in foreign securities involves
certain special considerations which are not typically associated with
investing in United States securities and which may favorably or unfavorably
affect a Fund's performance. Because foreign companies generally are not
subject to uniform accounting and auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic
companies, there may be less publicly available information about a foreign
company than about a domestic company. Many foreign stock markets, while
growing in volume of trading activity, have substantially less volume than the
New York Stock Exchange (the "Exchange"), and securities of some foreign
companies are less liquid and more volatile than securities of domestic
companies. Similarly, volume and liquidity in most foreign bond markets is less
than in United States markets and at times, volatility of price can be greater
than in United States markets. Further, foreign markets have different
clearance and settlement procedures and in certain markets there have been
times when settlements have not kept pace with the volume of securities
transactions making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of each Fund are
uninvested and no return is earned thereon. Also, delivery of securities before
payment may be required in some countries. The inability of a Fund to make
intended security purchases due to settlement problems could cause a Fund to
miss attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to a Fund
due to subsequent declines in value of the portfolio security or, if the Fund
has entered into a contract to sell the security, in possible liability to the
purchaser. Fixed commissions on some foreign stock exchanges are generally
higher than negotiated commissions on U.S. exchanges, although a Fund will
endeavor to achieve the most favorable net results on its portfolio
transactions. Further, a Fund may encounter difficulties or be unable to pursue
legal remedies and obtain judgments in foreign courts. There is generally less
government supervision and regulation of business and industry practices, stock
exchanges, brokers and listed companies in foreign countries than in the United
States. Communications between the United States and foreign countries may be
less reliable than within the United States, thus increasing the risk of
delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. In addition, with respect to certain foreign countries,
there is the possibility of expropriation or confiscatory taxation, political
or social instability, or diplomatic developments, which could affect United
States investments in those countries. Moreover, individual foreign economies
may differ favorably or unfavorably from the United States economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position. Each
Fund seeks to mitigate the risks associated with the foregoing considerations
through diversification and continuous professional management.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

The Funds may invest in forward foreign currency exchange contracts
("forward contracts") for hedging and to seek to increase total return. A
forward contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the
contract. These contracts are individually negotiated and privately traded in
the interbank market by currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and
no commissions are charged at any stage for trades.

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<PAGE> 76

The maturity date of a forward contract may be any fixed number of days
from the date of the contract agreed upon by the parties, rather than a
predetermined date in a given month, and forward contracts may be in any
amounts agreed upon by the parties rather than predetermined amounts. Closing
purchase transactions with respect to forward contracts are usually effected
with the currency trader who is a party to the original forward contract. A
Fund may be required to segregate assets, consisting of cash, U.S. government
securities or other high grade liquid debt securities to cover forward
contracts that require it to purchase foreign currency.

When the Adviser believes that the currency of a specific country may
deteriorate against another currency, it may enter into a forward contract to
sell the less attractive currency and buy the more attractive one. This
practice is referred to as "cross-hedging." The amount in question could be
less than or equal to the value of a Fund's securities denominated in the less
attractive currency.

A Fund may also enter into a forward contract to sell a currency that is
linked to a currency that Boatmen's believes to be less attractive and buy a
currency that Boatmen's believes to be more attractive (or a currency that is
linked to currency that Boatmen's believes to be more attractive). The amount
in question would not exceed the value of the Fund's securities denominated in
the less attractive currency. For example, if the Austrian Schilling is linked
to the German Deutsche Mark (the "D-mark"), the Fund holds securities
denominated in Austrian Schillings and Boatmen's believes that the value of
Schillings will decline against the British Pound, the Fund may enter into a
contract to sell D-marks and buy Pounds. This practice is referred to as "proxy
hedging." Proxy hedging involves the risk that the amount of currencies
involved may not equal the value of the Fund's securities denominated in the
currency expected to deteriorate and improperly anticipated currency movements
could result in losses to the Fund. Further, there is the risk that the linkage
between various currencies may change or be eliminated.

The Fund's activities involving forward contracts may be limited by the
requirements of Subchapter M of the Internal Revenue Code for qualification as
a regulated investment company.

ASSET-BACKED AND MORTGAGE-BACKED SECURITIES

Each Fund may invest in securities backed by installment contracts,
credit card receivables and other assets. These asset-backed securities
represent interests in pools of assets in which payment of both interest and
principal on the securities are made monthly, thus in effect passing through
(net of fees paid to the issuer or guarantor of the securities) the monthly
payments made by the individual borrowers on the assets that underlie the
asset-backed securities. Each Fund may also make significant investments in
U.S. Government securities that are backed by adjustable or fixed-rate mortgage
loans.

The average life of an asset-backed or mortgage-backed instrument varies
with the maturities of the underlying instruments. In the case of mortgages,
maturities may be a maximum of forty years. The average life of an
asset-backed or mortgage-backed instrument is likely to be substantially less
than the original maturity of the asset or mortgage pools underlying the
security as the result of scheduled principal payments and prepayments. This
may be particularly true for mortgage-backed securities.

Non-mortgage asset-backed securities involve certain risks that are not
presented by mortgage-backed securities. Primarily, these securities do not
have the benefit of the same security interest in the underlying collateral.
Credit card receivables are generally unsecured and the debtors are entitled to
the protection of a number of state and federal consumer credit laws, many of
which have given debtors the right to set off certain amounts owed on the
credit cards, thereby reducing the balance due. Most issuers of automobile
receivables permit the servicers to retain possession of the underlying
obligations. If the servicer were to sell these obligations to another party,
there is a risk that the purchaser would acquire an interest superior to that
of the holders of the related automobile receivables. In addition, because of
the large number of vehicles involved in a typical issuance and technical
requirements under state laws, the trustee for the holders of the automobile
receivables may not have an effective security interest in all of the
obligations backing such receivables. Therefore, there is a possibility that
recoveries on repossessed collateral may not, in some cases, be able to support
payments on these securities.

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<PAGE> 77

Presently there are several types of mortgage-backed securities issued
or guaranteed by U.S. Government agencies, including guaranteed mortgage
pass-through certificates, which provide the holder with a pro rata interest in
the underlying mortgages, and collateralized mortgage obligations ("CMOs"),
which provide the holder with a specified interest in the cash flow of a pool
of underlying mortgages or other mortgage-backed securities. Issuers of CMOs
frequently elect to be taxed as a pass-through entity known as real estate
mortgage investment conduits, or REMICs. CMOs are issued in multiple classes,
each with a specified fixed or floating interest rate and a final distribution
date. Although the relative payment rights of these classes can be structured
in a number of different ways, most often payments of principal are applied to
the CMO classes in the order of their respective stated maturities.

CMO classes may include accrual certificates (also known as "Z-Bonds"),
which only accrue interest at a specified rate until other specified classes
have been retired and are converted thereafter to interest-paying securities.
They may also include planned amortization classes ("PAC") which generally
require, within certain limits, that specified amounts of principal be applied
on each payment date, and generally exhibit less yield and market volatility
than other classes. The Funds will not purchase "residual" CMO interests, which
normally exhibit the greatest price volatility.

CMOs can expose a Fund to more volatility and interest rate risk than
other types of mortgage-backed obligations.

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with selected
brokers-dealers, banks or other financial institutions. A repurchase agreement
is an arrangement under which the purchaser (i.e., a Fund) purchases a U.S.
Government or other high quality short-term debt obligation (the "Obligation")
and the seller agrees at the time of sale to repurchase the Obligation at a
specified time and price.

Custody of the Obligation will be maintained by the Fund's custodian or
subcustodian. The repurchase price may be higher than the purchase price, the
difference being income to the Fund, or the purchase and repurchase prices may
be the same, with interest at a stated rate due to the Fund together with the
repurchase price on repurchase. In either case, the income to the Fund is
unrelated to the interest rate on the Obligation subject to the repurchase
agreement.

Repurchase agreements pose certain risks for all entities, including the
Funds, that utilize them. Such risks are not unique to the Funds but are
inherent in repurchase agreements. The Funds seek to minimize such risks by,
among others, the means indicated below, but because of the inherent legal
uncertainties involved in repurchase agreements, such risks cannot be
eliminated.

For purposes of the Investment Company Act of 1940 (the "1940 Act"), a
repurchase agreement is deemed to be a loan from the Fund to the seller of the
Obligation. It is not clear whether for other purposes a court would consider
the Obligation purchased by the Fund subject to a repurchase agreement as being
owned by the Fund or as being collateral for a loan by the Fund to the seller.

If in the event of bankruptcy or insolvency proceedings against the
seller of the Obligation, a court holds that the Fund does not have a perfected
security interest in the Obligation, the Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of
the seller. As an unsecured creditor, a Fund would be at risk of losing some or
all of the principal and income involved in the transaction. To minimize this
risk, the Funds utilize custodians and subcustodians that Boatmen's believes
follow customary securities industry practice with respect to repurchase
agreements, and Boatmen's analyzes the creditworthiness of the obligor, in
this case the seller of the Obligation. But because of the legal uncertainties,
this risk, like others associated with repurchase agreements, cannot be
eliminated.

Also, in the event of commencement of bankruptcy or insolvency
proceedings with respect to the seller of the Obligation before repurchase of
the Obligation under a repurchase agreement, the Fund may encounter

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<PAGE> 78

delay and incur costs before being able to sell the security. Such a delay may
involve loss of interest or a decline in price of the Obligation.

Apart from risks associated with bankruptcy or insolvency proceedings,
there is also the risk that the seller may fail to repurchase the security.
However, if the market value of the Obligation subject to the repurchase
agreement becomes less than the repurchase price (including accrued interest),
the Fund will direct the seller of the Obligation to deliver additional
securities so that the market value of all securities subject to the repurchase
agreement equals or exceeds the repurchase price.

Certain repurchase agreements which provide for settlement in more than
seven days can be liquidated before the nominal fixed term on seven days or
less notice. Such repurchase agreements will be regarded as illiquid
instruments.

Each Fund may also enter into repurchase agreements with any party
deemed creditworthy by Boatmen's including foreign banks and broker-dealers, if
the transaction is entered into for investment purposes and the counterparty's
creditworthiness is at least equal to that of issuers of securities which a
Fund may purchase.

REVERSE REPURCHASE AGREEMENTS

At the time a Fund enters into a reverse repurchase agreement (an
agreement under which a Fund sells portfolio securities and agrees to
repurchase them at an agreed-upon date and price), it will place in a
segregated custodial account liquid assets such as U.S. Government securities
or other liquid high-grade debt securities having a value equal to or greater
than the repurchase price (including accrued interest) and will subsequently
monitor the account to ensure that such value is maintained. Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
Fund may decline below the price of the securities it is obligated to
repurchase. Reverse repurchase agreements are considered to be borrowings under
the 1940 Act.

VARIABLE AND FLOATING RATE INSTRUMENTS

With respect to the variable and floating rate instruments that may be
acquired by the Funds as described in the Prospectuses, Boatmen's will consider
the earning power, cash flows and other liquidity ratios of the issuers and
guarantors of such instruments and, if the instrument is subject to a demand
feature, will monitor their financial status to meet payment on demand.

In determining a Fund's average weighted portfolio maturity, an
instrument will usually be deemed to have a maturity equal to the longer of the
period remaining until the next regularly scheduled interest rate adjustment or
the time the Fund involved can recover payment of principal as specified in the
instrument. Such instruments which are U.S. Government obligations and certain
variable rate instruments having a nominal maturity of 397 days or less when
purchased by the Fund involved, however, will be deemed to have maturities
equal to the period remaining until the next interest rate adjustment.

LENDING OF PORTFOLIO SECURITIES

When a Fund lends its securities, it continues to receive interest (and
dividends with respect to the Growth Fund) on the securities loaned and may
simultaneously earn interest on the investment of the cash loan collateral
which will be invested in readily marketable, high-quality, short-term
obligations. Although voting rights, or rights to consent, attendant to
securities on loan pass to the borrower, such loans will be called so that the
securities may be voted by a Fund if a material event affecting the investment
is to occur. Portfolio loans will be continuously secured by collateral equal
at all times in value to at least the market value of the securities loaned
plus accrued interest. Collateral for such loans may include cash, U.S.
Government securities, securities of U.S. Government agencies and
instrumentalities or an irrevocable letter of credit issued by a bank which
meets the investment standards of a Fund for short-term instruments. There may
be risks of delay in receiving additional collateral or in recovering the
securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially.

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OTHER INVESTMENT COMPANIES

In seeking to attain their investment objectives, the Funds may invest
in securities issued by other investment companies within the limits prescribed
by the 1940 Act. Each Fund currently intends to limit its investments so that,
as determined immediately after a securities purchase is made: (a) not more
than 5% of the value of its total assets will be invested in the securities of
any one investment company; (b) not more than 10% of the value of its total
assets will be invested in the aggregate in securities of investment companies
as a group; and (c) not more than 3% of the outstanding voting stock of any one
investment company will be owned by the Fund or by the Trust as a whole. As a
shareholder of another investment company, a Fund would bear, along with other
shareholders, its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the advisory
and other expenses that a Fund bears in connection with its own operations.
The Investment Adviser has agreed to remit to the respective investing fund
fees payable to it under its respective investment advisory agreement with an
affiliated money market fund to the extent such fees are based upon the
investing fund's assets invested in shares of the affiliated money market fund.

"STRIPPED SECURITIES"

As stated in the Prospectuses, each Fund may purchase stripped
securities issued or guaranteed by the U.S. Government, where the principal and
interest components are traded independently under the Separate Trading of
Registered Interest and Principal of Securities program ("STRIPS"). Under
STRIPS, the principal and interest components are individually numbered and
separately issued by the U.S. Treasury at the request of depository financial
institutions, which then trade the component parts independently.

In addition, each Fund may purchase stripped mortgage-backed securities
("SMBS") issued by the U.S. Government (or a U.S. Government agency or
instrumentality) or by private issuers such as banks and other institutions.
If the underlying obligations experience greater than anticipated prepayments
of principal, a Fund may fail to fully recover its initial investment. The
market value of the class consisting entirely of principal payments can be
extremely volatile in response to changes in interest rates. The yields on a
class of SMBS that receives all or most of the interest are generally higher
than prevailing market yields on other mortgage-backed obligations because
their cash flow patterns are also volatile and there is a greater risk that the
initial investment will not be full recovered. SMBS issued by the U.S.
Government (or a U.S. Government agency or instrumentality) may be considered
liquid under guidelines established by the Trust's Board of Trustees if they
can be disposed of promptly in the ordinary course of business at a value
reasonably close to that used in the calculation of a Fund's per share net
asset value.

Although "stripped" securities may not pay interest to holders prior to
maturity, federal income tax regulations require a Fund to recognize as
interest income a portion of the bond's discount each year. This income must
then be distributed to shareholders along with other income earned by the Fund.
To the extent that any shareholders in a Fund elect to receive their dividends
in cash rather than reinvest such dividends in additional Fund shares, cash to
make these distributions will have to be provided from the assets of the Fund
or other sources such as proceeds of sales of Fund shares and/or sales of
portfolio securities. In such cases, the Fund will not be able to purchase
additional income producing securities with cash used to make such
distributions and its current income may ultimately be reduced as a result.

PARTICIPATION INTERESTS AND TRUST RECEIPTS

As stated in the Prospectuses, each Fund may purchase from domestic
financial institutions and trusts created by such institutions participation
interests and trust receipts in high quality debt securities. A participation
interest or receipt gives a Fund an undivided interest in the security in the
proportion that a Fund's participation interest or receipt bears to the total
principal amount of the security. As to certain instruments for which a Fund
will be able to demand payment, a Fund intends to exercise its right to do so
only upon a default under the terms of the security, as needed to provide
liquidity, or to maintain or improve the quality of its

B-10
<PAGE> 80

investment portfolio. It is possible that a participation interest or trust
receipt may be deemed to be an extension of credit by a Fund to the issuing
financial institution rather than to the obligor of the underlying security and
may not be directly entitled to the protection of any collateral security
provided by the obligor. In such event, the ability of a Fund to obtain
repayment could depend on the issuing financial institution.

Participation interests and trust receipts may have fixed, floating or
variable rates of interest, and will have remaining maturities of thirteen
months or less (as defined by the Securities and Exchange Commission). If a
participation interest or trust receipt is unrated, Boatmen's will have
determined that the interest or receipt is of comparable quality to those
instruments in which the Fund involved may invest pursuant to guidelines
approved by the Board of Trustees. For certain participation interests or trust
receipts a Fund will have the right to demand payment, on not more than 30
days' notice, for all or any part of the Fund's participation interest or trust
receipt in the securities involved, plus accrued interest.

WARRANTS

Warrants are privileges issued by corporations enabling the owner to
subscribe to and purchase a specified number of shares of the corporation at a
specified price during a specified period of time. The prices of warrants do
not necessarily correlate with the prices of the underlying securities. The
purchase of warrants involves the risk that the purchaser could lose the
purchase value of the warrant if the right to subscribe to additional shares is
not exercised prior to the warrant's expiration. Also, the purchase of warrants
involves the risk that the effective price paid for the warrant added to the
subscription price of the related security may exceed the value of the
subscribed security's market price such as when there is no movement in the
level of the underlying security.

OPTIONS ON SECURITIES AND INDICES

Each Fund may purchase and sell (write) both call and put options listed
on securities exchanges as well as over-the-counter options (options not traded
on exchanges). Such options may relate to particular securities or to various
indices.

An option on a security (or index) is a contract that gives the holder
of the option, in return for a premium paid, the right to buy from (in the case
of a call) or sell to (in the case of a put) the seller ("writer") of the
option the security underlying the option (or the cash value of the index) at a
specified exercise price at any time during the term of the option. The writer
of an option on a security has the obligation upon exercise of the option to
deliver the underlying security upon payment of the exercise price or to pay
the exercise price upon delivery of the underlying security. Upon exercise, the
writer of an option on an index is obligated to pay the difference between the
closing price of the index and the exercise price of the option, expressed in
dollars, times a specified multiple (the "multiplier"). (An index is designed
to reflect specified facets of a particular financial or securities market, a
specified group of financial instruments or securities, or certain economic
indicators.) Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter ("OTC") options generally are
established through negotiation with the other party to the option contract.
Although this type of arrangement allows a Fund greater flexibility to tailor
an option to its needs, OTC options generally involve greater credit risk than
exchange-traded options, which are guaranteed by the clearing organization of
the exchanges where they are traded.

If an option written by a Fund expires, the Fund realizes a capital gain
equal to the premium received at the time the option was written. If an option
purchased by a Fund expires unexercised, the Fund realizes a capital loss equal
to the premium paid.

Prior to the earlier of exercise or expiration, an option may be closed
out by an offsetting purchase or sale of an option of the same series (type,
exchange, underlying security or index, exercise price and expiration) or, in
the case of some OTC options, by fulfilling the terms of any agreement with the
counterparty permitting

B-11
<PAGE> 81

a Fund to close out the option. There can be no assurance, however, that a
closing purchase or sale transaction can be effected when a Fund desires.

A Fund will realize a capital gain from a closing purchase transaction
if the cost of the closing option is less than the premium received from
writing the option and will realize a capital loss if it is more. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain, or if it is less,
the Fund will realize a capital loss. The principal factors affecting the
market value of a put or a call option include supply and demand, interest
rates, the current market price of the underlying security or index in relation
to the exercise price of the option, the volatility of the underlying security
or index, and the time remaining until the expiration date.

There are several risks associated with transactions in options on
securities and on indices. For example, there are significant differences
between the securities and options markets that could result in an imperfect
correlation between these markets, causing a given transaction not to achieve
its objectives.

There can be no assurance that a liquid market will exist when a Fund
seeks to close out an option position. If the Fund were unable to close out an
option it had purchased on a security, it would have to exercise the option to
realize any profit or the option may expire worthless. If a Fund were unable to
close out a covered call option it had written on a security, it would not be
able to sell the underlying security unless the option expired without
exercise. As a writer of a covered call option, the Fund foregoes, during the
option's life, the opportunity to profit from increases in the market value of
the security covering the call option above the sum of the premium and the
exercise price of the call.

If trading were suspended in an option purchased by a Fund, the Fund
would not be able to close out the option. If restrictions on exercise were
imposed, the Fund might be unable to exercise an option it had purchased.
Except to the extent that a call option on an index written by a Fund is
covered by an option on the same index purchased by the Fund, movements in the
index may result in a loss to the Fund; however, such losses may be mitigated
by changes in the value of the Fund's securities during the period the option
was outstanding.

FUTURES CONTRACTS

Each Fund may enter into futures contracts on securities and futures
contracts based on securities indices and securities, which futures are traded
on exchanges that are licensed and regulated by the Commodity Futures Trading
Commission ("CFTC"). Each Fund will do so to hedge against anticipated changes
in securities values that would otherwise have an adverse effect upon the value
of portfolio securities or upon securities to be acquired. Futures contracts
and related options entered into by the Funds will be entered into consistent
with CFTC regulations.

Each Fund may take a "short" position in the futures markets by selling
contracts for the future delivery of securities in order to hedge against an
anticipated decline in stock prices. Such futures contracts may include
contracts for the future delivery of securities held by a Fund or securities
with price-fluctuation characteristics similar to those of its portfolio
securities. If, in the opinion of Boatmen's, there is a sufficient degree of
correlation between price trends for a Fund's securities and futures contracts
based on indices, a Fund may also enter into such futures contracts as part of
its hedging strategy. When hedging of this character is successful, any
depreciation in the value of a Fund's securities will substantially be offset
by appreciation in the value of the futures position. On other occasions a Fund
may take a "long" position by purchasing futures contracts. This would be done,
for example, when a Fund anticipates the purchase of particular securities in
the future, but expects the price then available in the securities market to be
less favorable than prices that are currently available in the futures markets.
Each Fund expects that, in the normal course, it will terminate the long
futures position when it makes the anticipated purchase; under unusual market
conditions, however, a long futures position may be terminated without the
corresponding purchase of securities.

B-12
<PAGE> 82

Futures contracts involve brokerage costs, which may be less than 1% of
the contract price, and require parties to the contract to make "margin"
deposits to secure performance of the contract. Each Fund will be required to
deposit as margin into a segregated custodial account (held subject to the
claims of the Fund's futures broker) an amount of cash or liquid securities
equal to approximately 2% to 5% of the value of each futures contract. This
initial margin is in the nature of a performance bond or good faith deposit on
the contract. Each Fund's position in the futures market will be
marked-to-market on a daily basis; the Funds may subsequently be required to
make "variation" margin payments depending upon whether its futures position
declines or rises in value.

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

Futures contracts on securities indices do not require the physical
delivery of securities, but merely provide for profits and losses resulting
from changes in the market value of a contract to be credited or debited at the
close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date a final cash settlement occurs and
the futures positions are simply closed out. Changes in the market value of a
particular futures contract reflect changes in the value of the securities
comprising the index on which the futures contract is based. Futures contracts
based on securities indices currently are actively traded on the Chicago Board
of Trade, the Chicago Mercantile Exchange, the New York Futures Exchange and
the Kansas City Board of Trade.

OPTIONS ON FUTURES CONTRACTS

Each Fund may also purchase and sell (write) call and put options on
futures contracts, which options are traded on exchanges that are licensed and
regulated by the CFTC. A "call" option on a futures contract gives the
purchaser the right, in return for the premium paid, to buy a futures contract
(assume a long position) at a specified exercise price, by exercising the
option at any time before the option expires. A "put" option gives the
purchaser the right, in return for the premium paid, to sell a futures contract
(assume a "short" position), for a specified exercise price, by exercising the
option at any time before the option expires.

Upon the exercise of a call, the writer of the option is obligated to
sell the futures contract (to deliver a "long" position to the option holder)
at the option exercise price, which will presumably be lower than the then
current market price of the contract in the futures market. Upon exercise of a
put, the writer of the option is obligated to purchase the futures contract
(deliver a "short" position to the option holder) at the option exercise price,
which will presumably be higher than the then current market price of the
contract in the futures market. When a person exercises an option and assumes a
long futures position, in the case of a call, or a short futures position, in
the case of a put, his gain will be credited to his futures margin account,
while the loss suffered by the writer of the option will be debited to his
account. However, as with the trading of futures contracts, most participants
in the options markets do not seek to realize their gains or losses by
exercising their option rights. Instead, the holder of an option will usually
realize a gain or loss by buying or selling an offsetting option at a market
price that will reflect an increase or a decrease from the premium originally
paid.

Options on futures contracts can be used by the Fund to hedge the same
risks as might be addressed by the direct purchase or sale of the underlying
futures contracts. If the Fund purchases an option on a futures contract, it
may obtain benefits similar to those that would result if it held the futures
position itself. But, in contrast to a futures transaction in which only
transaction costs are involved, benefits received in an option transaction in
the event of a favorable market movement will be reduced by the amount of the
premium paid as well as by transaction costs. In the event of an adverse market
movement, however, in contrast to the full market risk of a futures position,
the Fund will not be subject to a risk of loss on the option transaction beyond
the amount of the premium it paid plus its transaction costs. Consequently, the
Fund may benefit from an

B-13
<PAGE> 83

increase in the value of its portfolio that would have been more completely
offset if the hedge had been effected through the use of a futures contract.

If the Fund writes options on futures contracts, it will receive a
premium but will assume a risk of adverse movement in the price of the
underlying futures contract comparable to that involved in holding a futures
position. If the option is not exercised, the Fund will gain the amount of the
premium, which may partially offset unfavorable changes in the value of its
portfolio securities held in, or to be acquired for, the Fund. If the option is
exercised, the Fund will incur a loss in the option transaction, which will be
reduced by the amount of the premium it has received. Such loss may partially
offset favorable changes in the value of its portfolio securities.

A Fund will not purchase or sell (write) options on futures contracts
unless, in the opinion of Boatmen's, the market for such options has sufficient
liquidity that the risks associated with such options transactions are at
acceptable levels.

LIMITATIONS ON USE OF FUTURES TRANSACTIONS AND RISK CONSIDERATIONS

Each Fund will incur brokerage fees in connection with its futures
transactions, and each will be required to deposit and maintain funds with its
broker as margin to guarantee performance of its futures obligations. In
addition, while futures contracts will be traded to reduce certain risks,
futures trading itself entails certain other risks. Thus, while a Fund may
benefit from the use of such contracts, unanticipated changes in securities
prices may result in a poorer overall performance from the Fund than if it had
not entered into any futures contracts. Some futures contracts may not have a
broad and liquid market, in which case the contracts may not be able to be
closed at a fair price and a Fund may lose in excess of the initial margin
deposit. Moreover, in the event of an imperfect correlation between the futures
contract and the portfolio position that is intended to be protected, the
desired protection may not be obtained and a Fund may be exposed to risk of
loss.

Tax-related requirements may limit the extent to which a Fund may engage
in futures and related options transactions.(See "Tax Information.")

RESTRICTED AND OTHER ILLIQUID SECURITIES

A Fund may purchase securities that are not registered under the
Securities Act of 1933 or have some other legal or contractual restrictions on
resale in the principal market where the security is traded ("restricted
securities"), but can be offered and sold to "qualified institutional buyers"
under Rule 144A under the Securities Act of 1933. However, as stated in the
Prospectuses, a Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including restricted securities, unless the
Trust's Board of Trustees determines, based upon a continuing review of the
trading markets for the specific Rule 144A security, that such restricted
security is liquid. The Trustees may adopt guidelines and delegate to Boatmen's
the daily function of determining and monitoring liquidity of securities. The
Trustees may also delegate to its Valuation Committee valuation decisions. The
Trustees, however, will retain sufficient oversight and be ultimately
responsible for the determinations. Because it is not possible to predict with
assurance exactly how this market for restricted securities sold and offered
under Rule 144A will develop, the Trustees will carefully monitor each Fund's
investments in these securities, focusing on such important factors, among
others, as valuation, liquidity and availability of information. This
investment practice could have the effect of increasing the level of
illiquidity in a Fund to the extent that qualified institutional buyers become
for a time uninterested in purchasing these restricted securities.

COMBINED TRANSACTIONS

A Fund may enter into multiple transactions, including multiple options
transactions, multiple futures transactions, multiple forward foreign currency
exchange contracts and any combination of futures, options and forward foreign
currency exchange contracts ("component" transactions), instead of a single
transaction, as part of a single hedging strategy when, in the opinion of
Boatmen's, it is in the best interest of a Fund to do so and

B-14
<PAGE> 84

where underlying hedging strategies are permitted by a Fund's investment
policies. A combined transaction, while part of a single hedging strategy, may
contain elements of risk that are present in each of its component
transactions. (See above for the risk characteristics of certain transactions.)

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

Options, futures and forward foreign currency contracts that obligate a
Fund to provide cash, securities or currencies to complete such transactions
will entail that Fund's either segregating assets in an account with, or on the
books of, the Trust's custodian, or otherwise "covering" the transaction as
described below. For example, a call option written by a Fund will require the
Fund to hold the securities subject to the call (or securities convertible into
the needed securities without additional consideration) or liquid assets
sufficient to meet the obligation by purchasing and delivering the securities
if the call is exercised. A call option written on an index will require that
Fund to have portfolio securities that correlate with the index. A put option
written by a Fund also will require that Fund to have available assets
sufficient to purchase the securities the Fund would be obligated to buy if the
put is exercised.

A forward foreign currency contract that obligates a Fund to provide
currencies will require the Fund to hold currencies or liquid securities
denominated in a foreign currency which will equal the Fund's obligations. Such
a contract requiring the purchase of currencies also requires segregation.

Unless a segregated account consists of the securities, cash or
currencies that are the subject of the obligation, a Fund will hold cash, U.S.
Government securities and other high grade liquid debt obligations in a
segregated account. These assets cannot be transferred while the obligation is
outstanding unless replaced with other suitable assets. In the case of an
index-based transaction, a Fund could own securities substantially replicating
the movement of the particular index.

In the case of a futures contract, a Fund must deposit initial margin
and variation margin, as often as daily if the position moves adversely,
sufficient to meet its obligation to purchase or provide securities or
currencies, or to pay the amount owed at the expiration of an index-based
futures contract. Similarly, options on futures contracts require a Fund to
deposit margin to the extent necessary to meet the Fund's commitments.

In lieu of such assets, such transactions may be covered by other means
consistent with applicable regulatory policies. A Fund may enter into
offsetting transactions so that its combined position, coupled with any
segregated assets, equals its net outstanding obligation in related options and
hedging transactions. For example, a Fund could purchase a put option if the
strike price of that option is the same or higher than the strike price of a
put option sold by that Fund. Moreover, instead of segregating assets if a Fund
held a futures or forward contract, it could purchase a put option on the same
futures or forward contract with a strike price as high or higher than the
price of the contract held. Of course, the offsetting transaction must
terminate at the time of or after the primary transaction.

INVESTMENT RESTRICTIONS

The Trust, on behalf of each Fund, has adopted fundamental investment
restrictions numbered 1 through 10 which may not be changed with respect to a
Fund without the approval of the holders of a majority of that Fund's
outstanding voting shares. Investment restrictions numbered i through ix are
not fundamental policies and may be changed at any time by vote of a majority
of the Trustees of the Trust.

As used in this Statement of Additional Information, with respect to
matters required by the provisions of the 1940 Act to be submitted to
shareholders, the term "majority of the outstanding shares" of either the Trust
or the Fund means the vote of the lesser of: (i) 67% or more of the shares of
the Trust or Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Trust or Fund are present or represented by proxy, or
(ii) more than 50% of the outstanding shares of the Trust or Fund.

B-15
<PAGE> 85

As a matter of fundamental policy, each Fund may not:

1) Purchase or sell real estate, except that each Fund may
purchase securities of issuers which deal in real estate and may
purchase securities which are secured by interests in real estate
and except that each Fund reserves freedom of action to hold and
to sell real estate acquired as a result of the Fund's ownership
of securities.

2) Acquire any other investment company or investment company
security except in connection with a merger, consolidation,
reorganization or acquisition of assets or where otherwise
permitted by the 1940 Act.

3) Act as an underwriter of securities within the meaning of
the Securities Act of 1933 except to the extent that the purchase
of obligations directly from the issuer thereof in accordance
with the Fund's investment objective(s), policies and limitations
may be deemed to be underwriting and except to the extent that it
may be deemed an underwriter in connection with the disposition
of the Fund's portfolio securities.

4) Borrow money, except as a temporary measure for
extraordinary or emergency purposes or except in connection with
reverse repurchase agreements and mortgage rolls; provided that
the Fund maintains asset coverage of 300% for all borrowings.

5) Issue senior securities, except as appropriate to evidence
indebtedness which it is permitted to incur and except for shares
of the separate classes or series of the Fund provided that
collateral arrangements with respect to currency-related
contracts, futures contracts, options or other permitted
investments, including deposits of initial and variation margin,
are not considered to be the issuance of senior securities for
purposes of this restriction.

6) Purchase or sell commodity contracts.

7) Make loans, except that each Fund may purchase and hold
debt instruments and enter into repurchase agreements in
accordance with its investment objective(s) and policies and may
lend portfolio securities.

8) Purchase securities of any one issuer (other than
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalists or certificates of deposit for any
such securities) if, immediately after such purchase, more than
5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the issuer's
outstanding voting securities would be owned by the Fund or the
Trust; except that up to 25% of the value of a Fund's total
assets may be invested without regard to the foregoing
limitations. For purposes of this limitation, (a) a security is
considered to be issued by the entity (or entities) whose assets
and revenues back the security, and (b) a guarantee of a security
shall not be deemed to be a security issued by the guarantor when
the value of securities issued and guaranteed by the guarantor,
and owned by the Fund, does not exceed 10% of the value of the
Fund's total assets.

9) Purchase any securities which would cause 25% or more of
the value of the Fund's total assets at the time of purchase to
be invested in the securities of one or more issuers conducting
their principal business activities in the same industry,
provided that (a) there is no limitation with respect to (i)
instruments issued (as defined with respect to fundamental policy
No. 10 above) or guaranteed by the United States, any state,
territory or possession of the United States, the District of
Columbia or any of their authorities, agencies, instrumentalities
or political subdivisions and (ii) repurchase agreements secured
by the instruments described in clause (i); (b) wholly-owned
finance companies will be considered to be in the industries of
their parents if their activities are primarily related to
financing the activities of the parents; and (c) utilities will
be divided

B-16
<PAGE> 86

according to their services, for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a
separate industry.

As a matter of non-fundamental policy, each Fund may not:

(i) Purchase, write or sell put options, call options,
straddles, spreads, or any combination thereof, except for
transactions in options on securities, securities indices,
futures contracts and options on futures contracts.

(ii) Purchase securities on margin, make short sales of
securities or maintain a short position, except that (a)
this investment limitation shall not apply to a Fund's
transactions in futures contracts and related options, and
(b) a Fund may obtain short-term credit as may be necessary
for the clearance of purchases and sales of portfolio
securities.

(iii) Invest in oil, gas or mineral exploration or
development programs, or related leases.

(iv) Purchase securities of unseasoned issuers, at which
time, including predecessors, at the time of purchase have
been in operation for less than three years if the value of
a Fund's aggregate investment in such securities will
exceed 5% of its total assets.

(v) Purchase equity securities of issuers that are not
readily marketable if the value of a Fund's aggregate
investment in such securities will exceed 5% of its total
assets.

(vi) Lend its securities if collateral values are not
continuously maintained at no less than 100% by market to
market daily.

(vii) Invest more than 5% of its net assets in warrants,
valued at lower of cost or market. In addition the Trust
on behalf of each Fund, will not invest more than 2% of its
net assets in warrants not listed on the New York or
American Stock Exchange.

(viii) Purchase or sell real estate, or real estate limited
partnership interests.

(ix) Purchase securities of issuers restricted as to
disposition if the value of its aggregate investment in
such classes of securities will exceed 10% of its total
assets.

(x) Purchase securities of companies for the purpose of
exercising control.

For purposes of the foregoing limitations, any limitation that involves
a maximum percentage shall not be considered violated unless an excess over the
percentage occurs immediately after, and is caused by, an acquisition or
encumbrance of securities or assets of, or borrowings on behalf of, a Fund.

Investment limitation (6) above does not prevent a Fund from purchasing
and selling financial futures contracts, options on financial futures
contracts, or any other similar financial instruments to the extent such
activities are otherwise permitted by that Fund's investment limitations and
policies.

TRUSTEES AND OFFICERS

Information pertaining to the Trustees and officers of the Trust is set
forth below. Trustees and officers deemed to be "interested persons" of the
Trust for purposes of the 1940 Act are indicated by an asterisk.

B-17
<PAGE> 87

<TABLE>
<CAPTION>
Principal Occupation(s)
Name and Address Position(s) with Trust During Past 5 Years
- ----------------------------------------- ---------------------------- ----------------------------------------------
<S> <C> <C>
J. Hord Armstrong, III (54) Trustee Chairman and CEO, D&K Wholesale Drug, Inc., a
8000 Maryland Avenue distributor of pharmaceutical products, since 1987.
Suite 1190
St. Louis, Missouri 63105

David Holford Benson* (57) Trustee Chairman, Kleinwort Charter Investment Trust plc.
Kleinwort Benson Limited since March 1992. Non-Executive Director of Kleinwort
P.O. Box 560 Benson Group plc. (formerly Vice Chairman).
20 Fenchurch Street
London, EC3 P3DB

Lee F. Fetter (42) Chairman Chief Operating and Financial Officer of Washington
660 S. Euclid, Box 8003 University School of Medicine since 1983.
St. Louis, Missouri 63110

Henry O. Johnston* (58) Trustee President of Fordyce Four, Incorporated, a corporation
9650 Clayton Road engaged in the acquisition and management of personal
St. Louis, Missouri 63124 investments.

L. White Matthews, III (49) Trustee Executive Vice President of Finance since 1987, Union
Eighth and Eaton Avenues Pacific Corporation, a company engaged in
Bethlehem, Pennsylvania 18018 transportation, exploration and refining of
hydrocarbons, mining and real estate.

Nicholas G. Penniman, IV (57) Trustee Publisher, St. Louis Post-Dispatch since 1986. Senior
900 N. Tucker Boulevard Vice President of Pulitzer Publishing Company since
St. Louis, Missouri 63101 1986.

William J. Tomko (37) President Vice President, BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219

Martin R. Dean (32) Treasurer Manager, Mutual Fund Accounting, BISYS Fund Services,
3435 Stelzer Road Inc. since May 1994. Prior thereto, Senior Manager,
Columbus, Ohio 43219 KPMG Peat Marwick

George O. Martinez (36) Secretary Senior Vice President and Director of Legal and
3435 Stelzer Road Compliance Services of BISYS Fund Services, Inc. since
Columbus, Ohio 43219 April 1995. Prior thereto, Vice President and
Associate General Counsel of Alliance Capital
Management, L.P.
Bruce Treff (29) Assistant Secretary [bio]
3435 Stelzer Road
Columbus, Ohio 43219
</TABLE>

B-18
<PAGE> 88

<TABLE>
<CAPTION>
Principal Occupation(s)
Name and Address Position(s) with Trust During Past 5 Years
- ----------------------------------------- ---------------------------- ----------------------------------------------
<S> <C> <C>
Sheldon A. Jones (57) Assistant Secretary Partner of the law firm of Dechert Price & Rhoads.
Ten Post Office Square South
Boston, Massachusettsd 02109
</TABLE>

The Agreement and Declaration of Trust of the Trust (the "Trust
Agreement") provides that, subject to its provisions, the business of the Trust
shall be managed by the Trustees. The Trust Agreement provides that: (a) the
Trustees may enter into agreements with other persons to provide for the
performance and assumption of various services and duties, including, subject
to their general supervision, advisory and administration services and duties,
and also including distribution, custodian, transfer and dividend disbursing
agency, shareholder servicing and accounting services and duties, (b) a Trustee
shall be liable for his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office, and for
nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law, and (c) subject to the preceding clause, the Trustees are not
responsible or liable for any neglect or wrongdoing of any officer or any
person referred to in clause (a).

Certain of the Trustees and officers and the organizations with which
they are associated have had in the past, and/or may have in the future,
transactions with Boatmen's, its parent, Boatmen's Bancshares Inc., Kleinwort
Benson Investment Management Americas Inc. (investment manager to the
International Equity Fund), Concord and their respective affiliates. The Trust
has been advised by such Trustees and officers that all such transactions have
been and are expected to be ordinary transactions, and that the terms of such
transactions, including all loans and loan commitments by such persons, have
been and are expected to be substantially the same as the prevailing terms of
comparable transactions with other customers.

Each officer holds comparable positions with certain other investment
companies for which Concord and its affiliates serve as administrator and/or
distributor.

The following table provides information relating to the aggregate
compensation to be received by the Trustees from the Registrant for the fiscal
year ended August 31, 1995.

COMPENSATION TABLE

<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)

Total Compensation
Aggregate Pension or Estimated From Registrant
Name of Compensation Retirement Benefits Annual Benefits and Fund Complex
Person, Position From Registrant Upon Retirement Upon Retirement Paid to Person
---------------- --------------- ------------------ --------------- ---------------------
<S> <C> <C> <C> <C>
J. Hord Armstrong, III $14,000 0 0 $14,000
David Holford Benson* $ 0 0 0 $ 0
Lee F. Fetter (Chairman) $11,500 0 0 $11,500
Henry O. Johnston* $13,750 0 0 $13,750
L. White Matthews, III $13,750 0 0 $13,750
Nicholas G. Penniman, IV $13,750 0 0 $13,750
</TABLE>

____________________
* "Interested person" of the Funds for purposes of the 1940 Act.

Each of the Trustees who is not an "interested person" of the Funds for
purposes of the 1940 Act (the "non-interested Trustees") is compensated by the
Funds for his services as such. The compensation paid to the non-interested
Trustees other than the Chairman is $13,000 per year and $2,000 for each
Trustee meeting

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<PAGE> 89

attended. Each of the non-interested Trustees is entitled to reimbursement for
out-of-pocket expenses. Compensation paid to the Trustees who are considered
interested persons is paid directly by the investment adviser. Trustees' fees
during the period ended August 31, 1995 distributed to or accrued for the
account of the non-interested Trustees (four persons) amounted to approximately
$53,000, which amount represented the total compensation paid by the Funds to
the Trustees during that year.

INVESTMENT ADVISER, ADMINISTRATOR, DISTRIBUTOR AND TRANSFER AGENT

THE ADVISER

Boatmen's Trust Company, a subsidiary of Boatmen's Bancshares, Inc.,
P.O. Box 14737, 100 North Broadway, St. Louis, Missouri 63178-4737, acts as
investment adviser to each Fund pursuant to separate Investment Advisory
Agreements (the "Advisory Agreements") between the Trust, on behalf of each
Fund, and Boatmen's. As adviser, Boatmen's is responsible for the management of
each Fund's assets, subject to the supervision of the Trustees of the Trust.

The Trust has no present intention of purchasing any securities issued
by Boatmen's, Boatmen's Bancshares, Inc. or any of its affiliates. Mr. Henry O.
Johnston, a Trustee of the Trust, owns shares amounting to less than one-tenth
of one percent (.001%) of the outstanding shares of common stock of Boatmen's
Bancshares, Inc.

Each Advisory Agreement provides that, subject to Section 36 of the 1940
Act, Boatmen's will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust, except liability to the Trust or its
Shareholders to which Boatmen's would otherwise be subject by reason of its
willful misfeasance, bad faith or gross negligence in the performance of, or
its reckless disregard of, its obligations and duties under the Agreement. Each
Agreement provides that the Trust will indemnify Boatmen's against certain
liabilities, including liabilities under the Federal securities laws, or, in
lieu thereof, contribute to resulting losses.

As compensation for the services rendered to the Trust by Boatmen's as
investment adviser, and the assumption by Boatmen's of the expenses related
thereto, Boatmen's is entitled to a fee, computed daily and payable monthly, at
an annual rate equal to .___ of 1% of the average daily net assets of the Pilot
Growth Fund and .__ of 1% of the average daily net assets of the Pilot
Diversified Bond Income Fund.

In connection with the foregoing services, Boatmen's bears all costs
incurred by it in connection with the performance of its duties, other than the
cost (including taxes and brokerage commission, if any) of securities purchased
for each Fund.

The Trust is responsible for all expenses incurred by the Funds, other
than those expressly borne by Boatmen's, the Distributor, Concord and BISYS
under the Advisory, Distribution, Administration or Transfer Agency Agreements.
Such expenses include, without limitation, the fees payable to Boatmen's,
Concord and the Transfer Agent, fees and expenses incurred in connection with
membership in investment company organizations, the fees and expenses of the
Trust's custodian and fund accounting agent, brokerage fees and commissions,
any portfolio losses, filing fees for the registration or qualification of
Trust Shares under federal or state securities laws, expenses of the
organization of the Trust, taxes, interest, costs of liability insurance,
fidelity bonds, indemnification or contribution, any costs, expenses or losses
arising out of any liability of, or claim for damages or other relief asserted
against, the Trust for violation of any law, legal and auditing and tax fees
and expenses, expenses of preparing and setting in type prospectuses,
statements of additional information, proxy material, reports and notices and
the printing and distributing of the same to the Trust's Shareholders and
regulatory authorities, compensation and expenses of its Trustees and
extraordinary expenses incurred by the Trust. If, however, in any fiscal year,
the sum of a Fund's expenses (excluding taxes, interest, brokerage and
extraordinary expenses such as for litigation) exceeds the expense limitations
applicable to such Fund imposed by state securities administrators, as such
limitations may be lowered or raised from time to time, the Trust's agreements
with Boatmen's provide that the respective Fund is entitled to be reimbursed by
Boatmen's to the

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<PAGE> 90

extent required by these expense limitations. As of the date hereof, the most
restrictive expense limitation imposed by state securities administrators of
which the Trust is aware provides that annual expenses (as defined) may not
exceed 2-1/2% of the first $30,000,000 of a Fund's average net assets, plus 2%
of the next $70,000,000 of such assets, plus 1-1/2% of such assets in excess of
$100,000,000, provided that (under the Missouri expense limitation) the
aggregate annual expenses of every type paid or incurred by the Trust, on
behalf of a Fund or its Shareholders, must be substantially comparable with the
aggregate annual operating and advisory expenses incurred by other investment
companies with similar objectives and operating policies.

The Advisory Agreements for the Funds were approved by the Trustees,
including the "non-interested" Trustees, on February 20, 1996. Each Advisory
Agreement will remain in effect until July 31, 1997 and will continue in effect
thereafter only if such continuance is specifically approved at least annually:
(1) by the vote of a majority of the outstanding shares of each Fund (as
defined under "Investment Restrictions") or by the Trustees of the Trust, and
by the vote of a majority of the "non-interested" Trustees. Each Advisory
Agreement will terminate automatically if assigned (as defined in the 1940
Act), and is terminable at any time without penalty by the Trustees of the
Trust or by vote of a majority of the outstanding Shares of the Fund affected
thereby (as defined under "Investment Restrictions") on 60 days' written notice
to Boatmen's, and by Boatmen's on 60 days' written notice to the Trust.

Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered open-end investment company
continuously engaged in the issuance of its shares, but such banking laws and
regulations do not prohibit such a holding company or affiliate or banks
generally from acting as investment adviser, transfer agent or custodian to
such an investment company, or from purchasing shares of such a company as
agent for and upon the order of customers. Boatmen's is a state-chartered trust
company. Boatmen's believes that it may perform the services contemplated by
its agreement with the Trust without violation of such banking laws or
regulations, which are applicable to it. It should be noted, however, that
future changes in either Federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as future judicial or administrative decisions or interpretations of
current and future statutes and regulations, could prevent Boatmen's from
continuing to perform such services for the Trust.

Should future legislative, judicial or administrative action prohibit or
restrict the activities of Boatmen's in connection with the provision of
services on behalf of the Trust, the Trust might be required to alter
materially or discontinue its arrangements with Boatmen's and change its method
of operations. It is not anticipated, however, that any change in the Trust's
method of operations would affect the net asset value per share of any Fund or
result in a financial loss to any shareholder. Moreover, if current
restrictions preventing a bank from legally sponsoring, organizing, controlling
or distributing shares of an open-end investment company were relaxed, the
Trust expects that Boatmen's would consider the possibility of offering to
provide some or all of the services now provided by Concord and the
Distributor. It is not possible, of course, to predict whether or in what form
such restrictions might be relaxed or the terms upon which Boatmen's might
offer to provide services for consideration by the Trustees.

THE ADMINISTRATOR

Concord Holding Corporation ("Concord"), with principal offices at 3435
Stelzer Road, Columbus, Ohio 43219, was organized in June of 1987. Concord also
serves as administrator to several other investment companies. Concord is a
wholly-owned subsidiary of the BISYS Group, Inc.

Concord provides administrative services for the Funds as described in
their Prospectuses pursuant to an Administration Agreement dated as of March
31, 1994. The Agreement will continue in effect with respect to each Fund until
May 31, 1998 and thereafter will be automatically extended as to a particular
Fund for successive periods of three years, provided that such continuance is
specifically approved: (a) by a vote of a majority of those members of the
Board of Trustees of the Trust who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such

B-21
<PAGE> 91

approval, and (b) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of such Fund (as defined under
"Investment Restrictions"). The Agreement is terminable by the Board of
Trustees of the Trust with regard to any Fund, without the payment of any
penalty, at any time if for cause. "Cause" shall mean a material breach by
Concord of its obligations under the Agreement which shall not have been cured
within 60 days after the date on which Concord shall have received written
notice setting forth in detail the facts alleged to give rise to the breach.

For its services under the Administration Agreement, Concord is entitled
to receive an administration fee from the Trust, which is calculated based on
the net assets of all investment portfolios of the Trust combined. Under the
Administration Agreement, each Fund pays its pro rata share of an annual fee to
Concord, computed daily and payable monthly, of .115 of 1% of the Trust's
average net assets up to $1.5 billion, .110 of 1% of the Trust's average net
assets on the next $1.5 billion, and .1075 of 1% of the Trust's average net
assets in excess of $3 billion. From time to time, Concord may waive fees or
reimburse the Trust for expenses, either voluntarily or as required by certain
state securities laws.

Concord will bear all expenses in connection with the performance of its
services under the Administration Agreement for the Trust with the exception of
fees charged by Boatmens Trust Company for certain fund accounting
services which are borne by the Funds.

The Administration Agreement provides that Concord shall not be liable
for any error of judgment or mistake of law or any loss suffered by any Fund in
connection with the matters to which the Agreement relates except a loss
resulting from willful misfeasance, bad faith or negligence in the performance
of Concord's duties or from the reckless disregard by Concord of its
obligations and duties thereunder.

THE DISTRIBUTOR

Pilot Funds Distributors Inc. (referred to as the "Distributor"), is a
registered broker-dealer and a wholly-owned subsidiary of Concord, located at
3435 Stelzer Road, Columbus, Ohio 43219. Pending the registration of Pilot
Funds Distributors, Inc. in all states, Concord Financial Group, Inc. will act
as the Fund's distributor in those states in which Pilot Funds Distributors,
Inc. is not currently registered to sell Fund shares.

The Distribution Agreement with the Distributor will continue in effect
with respect to each Fund until May 31, 1996 and thereafter will be
automatically extended for successive terms of one year, provided that such
continuance is specifically approved: (a) by a majority of those members of the
Board of Trustees who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of any plan that has
been adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act ("Plan") or
in any agreement entered into in connection with such plans ("Disinterested
Trustees"), pursuant to a vote cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
Trust (as defined under "Investment Restrictions"). The Agreement is terminable
by the Trust at any time with regard to any class of its shares, without the
payment of any penalty, by vote of a majority of the Disinterested Trustees or
by vote of a majority of the outstanding voting securities of such class (as
defined under "Investment Restrictions") on 60 days' written notice to the
Distributor, or by the Distributor at any time, without payment of any penalty,
on 60 days' written notice to the Trust.

THE TRANSFER AGENT

BISYS Fund Services, Inc. (the "Transfer Agent"), located at 3435
Stelzer Road, Columbus, Ohio 43219, serves as the Funds' transfer agent and
dividend disbursing agent. Under its Transfer Agency Agreement with the Trust,
the Transfer Agent, has undertaken with the Trust to: (i) record the issuance,
transfer and redemption of shares, (ii) provide confirmations of purchases and
redemptions, or monthly statements in lieu thereof, as well as certain other
statements, (iii) provide certain information to the Trust's custodian and the
relevant sub-custodian in connection with redemptions, (iv) provide dividend
crediting and certain disbursing

B-22
<PAGE> 92

agent services, (v) maintain shareholder accounts, (vi) provide certain state
Blue Sky and other information, (vii) provide shareholders and certain
regulatory authorities with tax related information, (viii) respond to
shareholder inquiries, and (ix) render certain other miscellaneous services.

PORTFOLIO TRANSACTIONS

As investment adviser, Boatmen's is responsible for decisions to buy and
sell securities for each Fund, the selection of brokers and dealers to effect
the transactions and the negotiation of brokerage commissions, if any.
Purchases and sales of securities on a securities exchange are effected through
brokers who charge a negotiated commission for their services. Orders may be
directed to any broker including, to the extent and in the manner permitted by
applicable law.

In the over-the-counter market, securities are generally traded on a
"net" basis with dealers acting as principal for their own accounts without
stated commissions, although the price of a security usually includes a profit
to the dealer. In underwritten offerings, securities are purchased at a fixed
price that includes an amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount. On occasion, certain
money market instruments may be purchased directly from an issuer, in which
case no commissions or discounts are paid.

In placing orders for portfolio securities of a Fund, Boatmen's is
required to give primary consideration to obtaining the most favorable price
and efficient execution. This means that Boatmen's will seek to execute each
transaction at a price and commission, if any, which provide the most favorable
total cost or proceeds reasonably attainable in the circumstances. In seeking
such execution, Boatmen's will use its best judgment in evaluating the terms of
a transaction, and will give consideration to various relevant factors,
including, without limitation, the size and type of the transaction, the nature
and character of the market for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the general
execution and operational capabilities of the broker-dealer, the reputation,
reliability, experience and financial condition of the firm, the value and
quality of the services rendered by the firm in this and other transactions,
and the reasonableness of the spread or commission, if any.

While Boatmen's generally seeks reasonably competitive spreads or
commissions, a Fund will not necessarily be paying the lowest spread or
commission available. Within the framework of this policy, Boatmen's will
consider research and investment services provided by brokers or dealers who
effect or are parties to portfolio transactions of a Fund, Boatmen's, or its
other clients. Such research and investment services are those which brokerage
houses customarily provide to institutional investors and include statistical
and economic data and research reports on particular companies and industries.
Such services are used by Boatmen's in connection with all of its investment
activities, and some of such services obtained in connection with the execution
of transactions for a Fund may be used in managing other investment accounts.
Conversely, brokers furnishing such services may be selected for the execution
of transactions of such other accounts, whose aggregate assets are far larger
than those of a Fund; and the services furnished by such brokers may be used by
Boatmen's in providing investment advisory and investment management services
for the Trust.

Commission rates are established pursuant to negotiations with the
broker based on the quality and quantity of execution services provided by the
broker in the light of generally prevailing rates. The allocation of orders
among brokers and the commission rates paid are reviewed periodically by the
Trustees of the Trust.

In certain instances there may be securities which are suitable for more
than one portfolio of the Trust as well as for one or more of the other clients
of Boatmen's. Investment decisions for each Fund and for Boatmen's other
clients are made with a view toward achieving their respective investment
objectives. It may happen that a particular security is bought or sold for only
one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more client
when one or more other clients are selling that same security. Some
simultaneous transactions are inevitable when several clients receive
investment advice from the same investment adviser, particularly when the same
security is

B-23
<PAGE> 93

suitable for the investment objectives of more than one client. When two or
more clients are simultaneously engaged in the purchase or sale of the same
security, the securities are allocated among clients in a manner believed to be
equitable to each. It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security in a particular
transaction as far as a Fund is concerned. The Trust believes that over time
its ability to participate in volume transactions will produce superior
executions for the Funds.

The portfolio turnover rate for each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the reporting period
by the monthly average value of the portfolio securities owned during the
reporting period. The calculation excludes all securities, including options,
whose maturities or expiration dates at the time of acquisition are one year or
less. Portfolio turnover may vary greatly from year to year as well as within
a particular year, and may be affected by cash requirements for redemption of
shares and by requirements which enable the Funds to receive favorable tax
treatment. Portfolio turnover will not be a limiting factor in making portfolio
decisions.

NET ASSET VALUE

The net asset value per Share of each Fund is determined by the Funds'
custodian at 3:00 p.m., Central time (4:00 p.m., Eastern time), on each
Business Day as defined in the Prospectuses. In the event that the New York
Stock Exchange or the national securities exchange on which stock options are
traded adopt different trading hours on either a permanent or temporary basis,
the Trustees of the Trust will reconsider the time at which net asset value is
computed. In addition, each Trust may compute its net asset value as of any
time permitted pursuant to any exemption, order or statement of the Securities
and Exchange Commission or its staff.

Portfolio securities of each Fund are valued as follows: (a) securities
that are traded on any U.S. or foreign stock exchange or the National
Association of Securities Dealers NASDAQ System ("NASDAQ") are valued at the
last sale price on that exchange or NASDAQ prior to the Trust's valuation time;
if no sale occurs, securities traded on a U.S. exchange or NASDAQ are valued at
the mean between the closing bid and closing asked price and securities traded
on a foreign exchange will be valued at the official bid price; (b)
over-the-counter stocks not quoted on NASDAQ are valued at the last sale price
prior to the Trust's valuation time or, if no sale occurs, at the mean between
the last bid and asked price; (c) debt securities are valued by a pricing
service selected by Boatmen's and approved by the Trustees of the Trust, which
prices reflect broker/dealer supplied valuations and electronic data processing
techniques if those prices are deemed by Boatmen's to be representative of
market values at the Trust's valuation time; (d) options and futures contracts
are valued at the last sale price on the market prior to the Trust's valuation
time where any such option or futures contract is principally traded; (e)
forward foreign currency exchange contracts are valued at their respective
current fair market values supplied by a dealer in such contracts prior to the
Trust's valuation time determined on the basis of prices supplied by a dealer
in such contracts; and (f) all other securities and other assets, including
debt securities, for which prices are supplied by a pricing agent but are not
deemed by Boatmen's to be representative of market values, but excluding money
market instruments with a remaining maturity of sixty days or less and
including restricted securities and securities for which no market quotation is
available, are valued at fair value as determined in good faith pursuant to
procedures established by the Trustees of the Trust, including use of a
Valuation Committee. Money market instruments held by a Fund with a remaining
maturity of sixty days or less will be valued by the amortized cost method.

Portfolio securities traded on more than one United States national
securities exchange or foreign securities exchange are valued at the last sale
price on each business day prior to the Trust's valuation time on the exchange
representing the principal market for such securities. The value of all assets
and liabilities expressed in foreign currencies will be converted into U.S.
dollar values at the rates of such currencies against U.S. dollars last quoted
by any major bank between the buying and selling rates of such currencies
against U.S. dollars last quoted by any major bank. If such quotations are not
available, the rate of exchange will be determined in good faith by or under
procedures established by the Trustees of the Trust.

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<PAGE> 94

Trading in securities on European and Far Eastern securities exchanges
and on over-the-counter markets is normally completed well before the close of
business on each business day of the Trust. In addition, European or Far
Eastern securities trading generally or in a particular country or countries
may not take place on all business days in the United States. Furthermore,
trading takes place in various foreign markets on days which are not business
days in the United States and on days on which a Fund's net asset value is not
calculated. Such calculation does not take place contemporaneously with the
determination of the prices of the majority of the portfolio securities used in
such calculation. Events affecting the values of portfolio securities that
occur between the time their prices are determined and the Trust's valuation
time will not be reflected in a Fund's calculation of net asset values unless
Boatmen's deems that the particular event would materially affect net asset
value, in which case an adjustment will be made.

The proceeds received by the Funds and each additional portfolio
established by the Trustees of the Trust for each issue or sale of its shares,
and all net investment income, realized and unrealized gain and proceeds
thereof, subject only to the rights of creditors, will be specifically
allocated to such Fund and constitute the underlying assets of that Fund. The
underlying assets of each Fund will be segregated on the books of account, and
will be charged with the liabilities of such Fund and a share of the general
liabilities of the Trust. Expenses with respect to the Funds are generally
allocated in proportion to the net asset values of the respective portfolios
except where allocations of direct expenses can otherwise be fairly made. In
addition, certain distribution and service fees will be borne exclusively by
the class to which they relate.

MATTERS RELATING TO CLASS A SHARES AND CLASS B SHARES

As distributor, the Distributor pays the cost of printing and
distributing prospectuses to persons who are not shareholders of the Funds
(excluding preparation and printing expenses necessary for the continued
registration of the Funds' shares) and of printing and distributing all sales
literature. The Distributor is entitled to the payment of a front-end sales
charge on the sale of Class A Shares of the Funds as described in the
Prospectus for such Shares. The Distributor is also entitled to the payment of
a contingent deferred sales charge upon redemption of Class B Shares of the
Funds as described in the Prospectus for such Shares.

The Distributor is also entitled to payment by the Trust for
distribution in addition to the sales charges described in the Prospectuses.
Under the Trust's Distribution Plan for Class A Shares, the Trust pays fees for
the provision of services by Service Organizations (which may include the
Distributor itself), persons ("Clients") for whom the Service Organization is
the dealer of record or holder of record or with whom the Service Organization
has a servicing relationship. Under the Trust's Distribution Plan for Class B
Shares of the Funds, the Trust may pay the Distributor for (a) expenses
incurred in connection with advertising and marketing shares of the Funds,
including but not limited to any advertising or marketing via radio,
television, newspapers, magazines, telemarketing or direct mail solicitations;
(b) fees for services rendered with respect to Class B Shares similar to those
services described above with respect to Class A Shares; (c) expenses incurred
in preparing, printing and distributing Prospectuses (except those used for
regulatory purposes or for distribution to existing shareholders) and in
implementing and operating the Distribution Plan; and (d) interest on amounts
expended by the Distributor that are not immediately repaid by the Trust (to
the extent approved by the Board of Trustees and permitted by published
positions of the Securities and Exchange Commission).

Services provided by Service Organizations pursuant to the Distribution
Plans may include, among other things: (i) establishing and maintaining
accounts and records relating to Clients that beneficially own Class A or Class
B Shares; (ii) processing dividend and distribution payments on behalf of
Clients; (iii) providing information periodically to Clients regarding their
Share positions; (iv) arranging for bank wires; (v) responding to Client
inquiries concerning their investments in Shares; (vi) providing the
information to the Funds necessary for accounting or subaccounting; (vii) if
required by law, forwarding shareholder communications from the Funds (such as
proxies, shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) to Clients; (viii) assisting in
processing exchange and redemption requests from Clients; (ix) assisting
Clients in changing dividend options, account designations and addresses; and
(x) providing other similar services.

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The Distribution Plan for Class A Shares provides that the Distributor
is entitled to receive distribution payments on a monthly basis at an annual
rate not exceeding .25% of the average daily net assets during such month of
the outstanding Shares to which a particular Plan relates. If in any month the
Distributor expends or is due more monies than can be immediately paid due to
this percentage limitation, the unpaid amount is carried forward from month to
month while the Distribution Plan is in effect until such time, if ever, when
it can be paid in accordance with such percentage limitation. Conversely, if in
any month the Distributor does not expend the entire amount then available
under a Plan, and assuming that no unpaid amounts have been carried forward and
remain unpaid, then the amount not expended will be a credit to be drawn upon
by the Distributor to permit future payment. However, any unpaid amounts or
credits due under a Distribution Plan may not be "carried forward" beyond the
end of the fiscal year in which such amounts or credits due are accrued.

The Distribution Plan for Class B Shares provides that the Distributor
is entitled to receive distribution payments on a monthly basis at an annual
rate not exceeding 1.00% of the average daily net assets during such month of
the outstanding Shares to which such Plan relates. Not more than 0.25% of such
net assets will be used to compensate Service Organizations for personal
services provided to Class B Shareholders and/or the maintenance of such
shareholders' accounts and not more than .75% of such net assets will be used
for promotional and other primary distribution activities.

Payments made out of or charged against the assets of a particular class
of Shares of a particular Fund must be in payment for expenses incurred on
behalf of that class. (The Distribution Plans permit, however, joint
distribution financing by the Funds or other investment portfolios or companies
that are affiliated persons of the Funds, affiliated persons of such a person,
or affiliated persons of the Distributor, in accordance with applicable
regulations of the Securities and Exchange Commission.)

Payments for distribution expenses under a particular Distribution Plan
are subject to Rule 12b-1 (the "Rule") under the 1940 Act. Payments under the
Distribution Plans are also subject to the conditions imposed by Rule 18f-3
under the 1940 Act and a Rule 18f-3 Multiple Class Plan which has been adopted
by the Trustees of the Trust for the benefit of the Funds. The Rule defines
distribution expenses to include the cost of "any activity which is primarily
intended to result in the sale of [Trust] shares." The Rule provides, among
other things, that an investment company may bear such expenses only pursuant to
a plan adopted in accordance with the Rule. In accordance with the Rule, the
Plans provide that a report of the amounts expended under the respective Plans,
and the purposes for which such expenditures were incurred, will be made to the
Board of Trustees for its review at least quarterly. The Distribution Plans for
Class A Shares and Class B Shares provide that they may not be amended to
increase materially the costs which Class A or Class B Shares of a Fund may bear
for distribution pursuant to the respective Distribution Plans without
shareholder approval, and both Plans provide that any other type of material
amendment must be approved by a majority of the Board of Trustees, and by a
majority of the Trustees who are neither "interested persons" (as defined in the
1940 Act) of the Trust nor have any direct or indirect financial interest in the
operation of the Plan being amended or in any related agreements, by vote cast
in person at a meeting called for the purpose of considering such amendments
(the "Disinterested Trustees"). In addition, as long as the Distribution Plans
for the respective Share classes are in effect, the nomination of the Trustees
who are not interested persons of the Trust (as defined in the 1940 Act) must be
committed to the non-interested Trustees.

The Board of Trustees of the Trust has concluded that there is a
reasonable likelihood that the respective Plans will benefit the Funds and
Class A and Class B Shareholders, respectively. The Plans are subject to annual
re-approval by a majority of the Disinterested Trustees of the Trust and are
terminable at any time with respect to any Fund by a vote of a majority of such
Trustees or, with respect to the Distribution Plans, by vote of the holders of
a majority of the applicable Shares of the Fund involved. Any agreement
entered into pursuant to the respective Distribution Plans with a Service
Organization is terminable with respect to any Fund without penalty, at any
time, by vote of a majority of the Disinterested Trustees, by vote of the
holders of a majority of the applicable Shares of such Fund, by the Distributor
or by the Service Organization. An agreement will also terminate automatically
in the event of its assignment.

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Banks may act as Service Organizations and receive payments under the
Distribution Plans as described. The Glass-Steagall Act and other applicable
laws, among other things, prohibit banks from engaging in the business of
underwriting securities. If a bank were prohibited from acting as a Service
Organization, changes in the operation of the Funds might occur and a
shareholder serviced by such bank might no longer be able to avail himself or
herself of any automatic investment or other services than being provided by
the bank. It is not expected that shareholders would suffer any adverse
financial consequences as a result of these occurrences.

The Trust understands that Boatmen's and its affiliates and/or some
Service Organizations may charge their clients a direct fee for services in
connection with their investments in the Funds. These fees would be in addition
to any amounts which might be received under the respective Plans. Small,
inactive long-term accounts involving such additional charges may not be in the
best interest of shareholders.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

As described in the Prospectuses for such Shares, Class A Shares and
Class B Shares may be purchased directly from the Distributor or by Clients of
certain financial institutions such as broker-dealers that have entered into
selling and/or servicing agreements with the Distributor ("Service
Organizations"). Pilot Shares may be purchased by Boatmen's and its affiliates
acting on behalf of themselves and persons maintaining qualified accounts at
such institutions, as described in the Prospectus for such Shares. Individuals
may not purchase Pilot Shares directly. Boatmen's and its affiliates and
Service Organizations may impose minimum customer account and other
requirements in addition to those imposed by the Trust and described in the
Prospectuses. Depending on the terms of the particular account, these entities
may charge their customers fees for automatic investment, redemption and other
services. Such fees may include, for example, account maintenance fees,
compensating balance requirements or fees based upon account transactions,
assets or income. Boatmen's and its affiliates and Service Organizations are
responsible for providing information concerning these services and any charges
to any customer who must authorize the purchase of shares prior to such
purchase.

Purchase orders will be effected only on business days. Persons wishing
to purchase shares through their accounts at a Service Organization (for Class
A Shares and Class B Shares, or at Boatmen's or its affiliates (for Pilot
Shares), should contact such entity directly for appropriate instructions.

An investor desiring to purchase Class A Shares or Class B Shares
directly from the Trust by wire should request his or her bank to transmit
immediately available funds by wire to Boatmen's Trust Company, St. Louis, MO,
ABA # ___________, Re: PFTC, f/b/o Pilot Funds Incoming Wire Account DDA No.
_________, for purchase of shares in the investor's name. It is important that
the wire include the investor's name, address, and taxpayer identification
number, indicate whether a new account is being established or a subsequent
payment is being made to an established account and indicate the name of the
Fund and the class of shares being purchased. If a subsequent payment is being
made, the investor's Fund account number should be included. An investor in
Class A Shares or Class B Shares must have completed and forwarded to the
Transfer Agent an Account Application including any required signature
guarantees, before any redemptions of shares purchased by wire may be
processed.

Class A Shares of each Fund are sold with a front-end sales charge. As
described in the Prospectus for Class A Shares of the Funds, a front-end sales
charge will not be imposed on certain types of transactions and/or investors
(provided the status of the investment is explained at the time of investment).
These exemptions to the imposition of a front-end sales charge are due to the
nature of the investors and/or the reduced sales efforts that will be needed in
obtaining such investments.

Class B Shares of the Funds are sold without a front-end sales charge,
but are subject to a contingent deferred sales charge. As described in the
Prospectus for Class B Shares, the contingent deferred sales charge is not
charged on certain types of redemptions. You must explain the status of your
redemption at the time you redeem your shares in order to receive the sales
charge exemption.

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Boatmen's and/or the Distributor may charge certain fees for acting as
Custodian for IRAs or 401k retirement plans, payment of which could require the
liquidation of shares. Consult the appropriate form for a description of these
fees. Purchases for IRA accounts or 401k retirement plans will be effective
only when payments received by the Transfer Agent are converted into federal
funds. Purchases for these plans may not be made in advance of receipt of
funds.

SUPPLEMENTARY REDEMPTION INFORMATION

An investor whose shares are purchased through accounts at Boatmen's or
its affiliates or a Service Organization may redeem all or part of his or her
shares in accordance with instructions pertaining to such accounts. Shares in a
Fund for which orders placed by Boatmen's or its affiliates, a Service
Organization or individual investor for wire redemption are received on a
business day before the close of regular trading hours on the New York Stock
Exchange (currently 3:00 p.m. Central time) will be redeemed as of the close of
regular trading on such Exchange and the proceeds of redemption (less any
applicable contingent deferred sales charge) will normally be wired in federal
funds on the next business day to the commercial bank specified by the
individual investor on the Account Application (or other bank of record on the
investor's file with the Transfer Agent), or to the Service Organization
through which the investment was made. To qualify to use the wire redemption
privilege with the Trust, the payment for shares must be drawn on, and
redemption proceeds paid to, the same bank and account as designated on the
Account Application (or other bank of record as described above). If the
proceeds of a particular redemption are to be wired to another bank, the
request must be in writing and signature guaranteed. Shares in the Funds for
which orders for wire redemption are received by the Trust after the close of
regular trading hours on the New York Stock Exchange or on a non-business day
will be redeemed as of the close of regular trading on such Exchange on the
next day on which shares of the particular Fund are priced and the proceeds
(less any applicable contingent deferred sales charge) will normally be wired
in federal funds on the next business day thereafter. Redemption proceeds (less
any applicable contingent deferred sales charge) will be wired to a
correspondent member bank if the investor's designated bank is not a member of
the Federal Reserve System. Immediate notification by the correspondent bank to
the investor's bank is necessary to avoid a delay in crediting the funds to the
investor's bank account. Proceeds of less than $1,000 will be mailed to the
investor's address.

To change the commercial bank or account designated to receive
redemption proceeds from Class A Shares or Class B Shares a written request
must be sent to The Pilot Funds, c/o BISYS Fund Services, Inc., 3435 Stelzer
Road, Columbus, Ohio 43219. Such request must be signed by each shareholder,
with each signature guaranteed as described in the Funds' Prospectuses.
Guarantees must be signed by an authorized signatory and "signature guaranteed"
must appear with the signature.

For processing redemptions or to change wiring instructions with the
Trust, the Transfer Agent may request further documentation from corporations,
executors, administrators, trustees or guardians. The Transfer Agent will
accept other suitable verification arrangements from foreign investors, such as
consular verification.

EXCHANGE PRIVILEGE

The Trust offers an exchange privilege whereby investors may exchange
all or part of their Class A Shares for Class A Shares of the other Funds;
Class B Shares for Class B Shares of the other Funds; and Pilot Shares for
Pilot Shares of the other Funds and the other investment portfolios of the
Trust. By use of this exchange privilege, the investor authorizes the Transfer
Agent to act on telephonic or written exchange instructions from any person
representing himself or herself to be the investor and believed by the Transfer
Agent to be genuine. The Transfer Agent's records of such instructions are
binding. The exchange privilege may be modified or terminated at any time upon
notice to shareholders. For federal income tax purposes, exchange transactions
are treated as sales on which a purchaser will realize a capital gain or loss
depending on whether the value of the shares exchanged is more or less than his
or her basis in such shares at the time of the transaction.

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Exchange transactions described in Paragraphs A, B and C below will be
made on the basis of the relative net asset values per share of the investment
portfolios involved in the transaction. Paragraphs A, B and C relate only to
whether a front-end sales charge will be imposed, not to whether a particular
exchange transaction is permissible or impermissible.

(a) Class A Shares, as well as additional shares acquired through
reinvestment of dividends or distributions on such shares, may be
exchanged without a front-end sales charge for Class A Shares of
any non-money market investment portfolio of the Trust.

(b) Shares of any investment portfolio of the Trust acquired by a
previous exchange transaction involving shares on which a
front-end sales charge has directly or indirectly been paid
(e.g., Class A Shares issued in connection with an exchange
transaction involving Class A Shares), as well as additional
shares acquired through reinvestment of dividends or
distributions on such shares, may be exchanged without a
front-end sales charge for Class A Shares of any other non-money
market investment portfolio of the Trust. To accomplish an
exchange transaction under the provisions of this Paragraph,
investors must notify the Transfer Agent of their prior ownership
of shares and their account number.

(c) Class A Shares of any non-money market portfolio acquired in
connection with the distribution of assets held in a qualified
trust, agency or custodial account maintained with Boatmen's or
its affiliates may be exchanged without a front-end sales charge
for Class A Shares of any non-money market investment portfolio
of the Trust.

Class B Shares acquired pursuant to an exchange transaction will
continue to be subject to a contingent deferred sales charge. However, Class B
Shares may be exchanged for other Class B Shares without the payment of a
contingent deferred sales charge at the time of exchange. In determining the
holding period for calculating the contingent deferred sales charge payable on
redemption of Class B Shares, the holding period of the shares originally held
will be added to the holding period of the shares acquired through exchange.

In addition, as described in the Prospectuses, under certain
circumstances exchange transactions between Class A Shares and Pilot Shares in
the same Fund may be permitted without the payment of a front-end sales charge.

Except as stated above, a front-end sales charge will be imposed when
shares of any investment portfolio of the Trust that were purchased or
otherwise acquired without a front-end sales charge are exchanged for shares of
a non-money market investment portfolio of the Trust subject to such a
front-end charge.

Exchange requests received on a business day prior to the time shares of
the investment portfolios involved in the request are priced will be processed
on the date of receipt. "Processing" a request means that shares in the
investment portfolios from which the shareholder is withdrawing an investment
will be redeemed at the net asset value per share next determined on the date
of receipt. Shares of the new investment portfolio into which the shareholder
is investing will also normally be purchased at the net asset value per share
next determined coincident to or after the time of redemption. Exchange
requests received on a business day after the time shares of the investment
portfolios involved in the request are priced will be processed on the next
business day in the manner described above.

RIGHT OF ACCUMULATION AND STATEMENT OF INTENTION

For the purpose of applying the Right of Accumulation or Statement of
Intention privileges available to certain Class A Share investors in the Funds
as described in the Prospectus, the scale of sales charges applies to purchases
of Class A Shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children; or a trustee or other fiduciary account
(including a pension, profit-sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code)
although more than one beneficiary is

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<PAGE> 99

involved; or "a qualified group" which has been organized for the
purpose of buying redeemable securities of a registered investment
company at a discount, provided that the purchases are made through a
central administrator or a single dealer, or by other means which result
in economy of sales effort or expense. A "qualified group" must have
more than 10 members, must be available to arrange for group meetings
between representatives of the Funds and the members, and must be able
to arrange for mailings to members at reduced or no cost to the
Distributor.

MISCELLANEOUS

Certificates for shares will not be issued.

With respect to the Funds, a "business day" is a day on which the New
York Stock Exchange is open for trading, and includes Martin Luther King, Jr.
Day, Columbus Day and Veterans Day. The scheduled 1996 holidays on which the
New York Stock Exchange is closed are: New Year's Day (observed), President's
Day, Good Friday, Memorial Day, Independence Day (observed), Labor Day,
Thanksgiving Day and Christmas Day (observed).

The Trust may suspend the right of redemption or postpone the date of
payment for shares during any period when (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities Exchange Commission; (b) the Exchange is closed for other than
customary weekend and holiday closings; (c) the Securities and Exchange
Commission has by order permitted such suspension; or (d) an emergency exists
as determined by the Securities and Exchange Commission. (The Trust may also
suspend or postpone the recordation of the transfer of its shares upon the
occurrence of any of the foregoing conditions.)

The Trust reserves the right to require a shareholder to redeem
involuntarily shares in an account (other than an IRA or Qualified Retirement
Plan account) if the balance held of record by the shareholder drops below
$1,000 and such shareholder does not increase such balance to $1,000 or more
upon 30 days' notice. The Trust will not require a shareholder to redeem shares
of a Fund if the balance held of record by the shareholder is less than $1,000
solely because of a decline in the net asset value of the Fund's shares or
because the shareholder has made an initial investment in a lower amount as
provided for in the Funds' Prospectuses. The Trust may also redeem shares
involuntarily if such redemption is appropriate to carry out the Trust's
responsibilities under the 1940 Act.

The Trust may redeem shares involuntarily to reimburse a Fund for any
loss sustained by reason of the failure of a shareholder to make full payment
for shares purchased by the shareholder or to collect any charge relating to a
transaction effected for the benefit of a shareholder which is applicable to
Fund shares as provided in the Funds' Prospectuses from time to time.

IN KIND PURCHASES

Payment for shares of a Fund may, in the discretion of Boatmen's, be
made in the form of securities that are permissible investments for the Fund as
described in the Prospectuses. For further information about this form of
payment, contact Boatmen's. In connection with an in-kind securities payment, a
Fund will require, among other things, that the securities be valued on the day
of purchase in accordance with the pricing methods used by the Fund and that
the Fund receive satisfactory assurances that it will have good and marketable
title to the securities received by it; that the securities be in proper form
for transfer to the Fund; and that adequate information be provided concerning
the basis and other tax matters relating to the securities.

REDEMPTIONS IN KIND

If the Board of Trustees determines that conditions exist which make
payment of redemptions proceeds wholly in cash unwise or undesirable, the Trust
may make payment wholly or partly in securities or other property. Such
redemptions will only be made in "readily marketable" securities. In such an
event, a

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shareholder would incur transaction costs in selling the securities or other
property. Each Fund may commit that it will pay all redemption requests by a
shareholder of record in cash, limited in amount with respect to each
shareholder during any ninety-day period to the lesser of $250,000 or 1% of the
net asset value of the Fund at the beginning of such period.

CALCULATION OF PERFORMANCE QUOTATIONS

From time to time, the yields and the total returns of the Funds may be
quoted in advertisements, shareholder reports or other communications to
shareholders. Performance information with respect to the Funds is generally
available by calling (800) 71-PILOT. Yields and total returns as reported in
the following publications may be used to compare the performance of the Funds
or any one of them to that of other mutual funds with similar investment
objectives and to stock and other relevant indices or to rankings prepared by
independent services or other financial or industry publications that monitor
the performance of mutual funds: Lipper Analytical Services, Incorporated,
Weisenberger Investment Companies Service, Donoghue's Money Fund Report,
Barron's, Business Week, Changing Times, Financial World, Forbes, Money,
Personal Investor, Sylvia Porter's Personal Finance and The Wall Street
Journal.

From time to time, the Funds may include general comparative
information, such as statistical data regarding inflation, securities indices
or the features or performance of alternative investments, in advertisements,
sales literature and reports to shareholders. The Funds may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of any Fund.

In addition, in such communication, Boatmen's may offer opinions on
current economic conditions.

YIELD CALCULATIONS

The yields for the respective share classes of a Fund are calculated
separately by dividing the net investment income per share (as described below)
earned by the Fund during a 30-day (or one month) period by the maximum
offering price per share (including the maximum front-end sales charge of 4.50%
for Class A Shares of the Growth Fund or 4.0% for the Diversified Bond Income
Fund on the last day of the period and annualizing the result on a semi-annual
basis by adding one to the quotient, raising the sum to the power of six,
subtracting one from the result and then doubling the difference. The Fund's
net investment income per share earned during the period with respect to a
particular class is based on the average daily number of shares outstanding in
the class during the period entitled to receive dividends and includes
dividends and interest earned during the period attributable to that class
minus expenses accrued for the period attributable to the class, net of
reimbursements. This calculation can be expressed as follows:

Yield equals 2/(a-b/cd plus 1)6 minus 1

Where: a = dividends and interest earned during the period.

b = expenses accrued for the period (net of
reimbursements).

c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends.

d = maximum offering price per share on the last day
of the period.

For the purpose of determining net investment income earned during the
period (variable "a" in the formula), dividend income on equity securities held
by a Fund is recognized by accruing 1/360 of the stated

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dividend rate of the security each day that the security is in the Fund. Except
as noted below, interest earned on debt obligations held by a Fund is calculated
by computing the yield to maturity of each obligation held by the Fund based on
the market value of the obligation (including actual accrued interest) at the
close of business on the last business day of each month, or, with respect to
obligations purchased during the month, the purchase price (plus actual accrued
interest), and dividing the result by 360 and multiplying the quotient by the
market value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is held by the Fund. For purposes of this
calculation, it is assumed that each month contains 30 days. The maturity of an
obligation with a call provision is the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. With
respect to debt obligations purchased at a discount or premium, the formula
generally calls for amortization of the discount or premium. The amortization
schedule will be adjusted monthly to reflect changes in the market values of
such debt obligations.

With respect to mortgage or other receivables-backed obligations which
are expected to be subject to monthly payments of principal and interest ("pay
downs"), (a) gain or loss attributable to actual monthly pay downs are
accounted for as an increase or decrease to interest income during the period;
and (b) a Fund may elect either (i) to amortize the discount and premium on the
remaining security, based on the cost of the security, to the weighted average
maturity date, if such information is available, or to the remaining term of
the security, if any, if the weighted average maturity date is not available,
or (ii) not to amortize discount or premium on the remaining security.

Undeclared earned income will be subtracted from the maximum offering
price per share (variable "d" in the formula). Undeclared earned income is the
net investment income which, at the end of the base period, has not been
declared as a dividend, but is reasonably expected to be and is declared and
paid as a dividend shortly thereafter.

TOTAL RETURN CALCULATIONS

Each Fund computes its average annual total return separately for its
separate share classes by determining the average annual compounded rates of
return during specified periods that equate the initial amount invested in a
particular share class to the ending redeemable value of such investment in the
class. This is done by dividing the ending redeemable value of a hypothetical
$1,000 initial payment by $1,000 and raising the quotient to a power equal to
one divided by the number of years (or fractional portion thereof) covered by
the computation and subtracting one from the result. This calculation can be
expressed as follows:

T equals (ERV/P) 1/n minus 1

Where: T = average annual total return.

ERV = ending redeemable value at the end of the
period covered by the computation of a
hypothetical $1,000 payment made at the
beginning of the period.

P = hypothetical initial payment of $1,000.

n = period covered by the computation, expressed in
terms of years.

Each Fund computes its aggregate total returns separately for its
separate share classes by determining the aggregate rates of return during
specified periods that likewise equate the initial amount invested in a
particular share class to the ending redeemable value of such investment in the
class. The formula for calculating aggregate total return is as follows:

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<PAGE> 102

aggregate total return = ERV/P minus 1

The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete redemption
of the hypothetical investment and the deduction of all nonrecurring charges at
the end of the period covered by the computations. In addition, a Fund's
average annual total return and aggregate total return quotations reflect the
deduction of the maximum front-end sales charge in connection with the purchase
of Class A Shares and the deduction of any applicable contingent deferred sales
charge with respect to Class B Shares.

Each Fund may also advertise total return data without reflecting sales
charges in accordance with the rules of the Securities and Exchange Commission.
Quotations that do not reflect such sales charges will, of course, be higher
than quotations that do.

Unlike bank deposits or other investments that pay a fixed yield or
return for a stated period of time, the return for a Fund will fluctuate from
time to time and does not provide a basis for determining future returns.
Return is a function of portfolio quality, composition, maturity and market
conditions, as well as the expenses allocated to each Fund. The return of a
Fund may not be readily comparable to other investment alternatives because of
differences in the foregoing variables and the methods used to value portfolio
securities, compute expenses and calculate return.

Average annual total return, aggregate total return and yield are
calculated separately for Pilot Shares, Class A Shares and Class B Shares.
Pilot Shares, Class A Shares and Class B Shares are subject to different fees
and expenses and may have different performance for the same period.

TAX INFORMATION

Each Fund intends to elect to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Such qualification does not involve supervision of management or
investment practices by any governmental agency or bureau.

In order to qualify as a regulated investment company, each Fund must,
among other things: (a) derive at least 90% of its annual gross income from
dividends, interest, payments with respect to securities loans and gains from
the sale or other disposition of stock or securities or foreign currencies, or
other income (such as gains from options, futures or forward contracts) derived
with respect to its business of investing in such stock, securities or
currencies; (b) derive less than 30% of its annual gross income from the sale
or other disposition of: (i) stock or securities, (ii) options, futures or
forward contracts (other than options, futures or forward contracts on foreign
currencies), or (iii) foreign currencies (or foreign currency options, futures
or forward contracts) not directly related to the Fund's principal business of
investing in stock or securities (or options and futures with respect to stocks
or securities), held less than three months (the "30% Limitation"); and (c)
diversify its holdings so that, at the end of each quarter of its taxable year:
(i) at least 50% of the market value of the Fund's total assets is represented
by cash and (ii) not more than 25% of the value of the Fund's total assets is
invested in the securities (other than U.S. Government securities and
securities of other regulated investment companies) of any one issuer.

Each Fund, as a regulated investment company, generally should not be
subject to federal income tax on its investment company taxable income (which
includes, among other items, dividends, interest and net short-term capital
gains in excess of net long-term capital losses) and net capital gains (the
excess of net long-term capital gains over net short-term capital losses) which
are distributed to Shareholders in any taxable

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<PAGE> 103

year, provided that the Fund distributes at least 90% of its investment company
taxable income and its net tax-exempt interest income, if any, each taxable
year. In order to avoid a 4% federal excise tax, each Fund must distribute (or
be deemed to have distributed) by December 31 of each calendar year at least
98% of its ordinary income (not taking into account any capital gains or loss)
for such year, at least 98% of the excess of its capital gains over its capital
losses (adjusted for certain ordinary losses) computed on the basis of the
one-year period ending on October 31 of such year, and any ordinary income and
capital gains for previous years that were not distributed during those years.
A distribution, including an "exempt-interest dividend," will be treated as
having been paid on December 31 of the current calendar year if it is declared
by a Fund in October, November or December with a record date in such a month
and paid during January of the following calendar year. Such distributions will
be taxable to Shareholders in the calendar year in which the distributions are
declared.

Dividends paid out of a Fund's investment company taxable income will be
treated as ordinary income in the hands of Shareholders. If a portion of a
Fund's income consists of dividends paid by U.S. corporations, a portion of the
dividends paid by the Fund may qualify for the corporate dividends-received
deduction. Distributions of net capital gains, if any, which are designated as
capital gain dividends are taxable to Shareholders as long-term capital gain,
regardless of the length of time the Shares of a Fund have been held by such
Shareholders, and are not eligible for the corporate dividends-received
deduction. Net capital gains for a taxable year are computed by taking into
account any capital loss carry-forward of a Fund.

Distributions of investment company taxable income and net capital gains
will be taxable as described above, whether received in additional Shares or in
cash. Shareholders electing to receive distributions in the form of additional
Shares will have a cost basis in each Share so received equal to the net asset
value of such Share on the reinvestment date.

Investments by a Fund in zero coupon securities (other than tax-exempt
zero coupon securities) will result in income to the Fund equal to a portion of
the excess of the face value of the securities over their issue price (the
"original issue discount") each year that the securities are held, even though
the Fund receives no cash interest payments. This income is included in
determining the amount of income which a Fund must distribute to maintain its
status as a regulated investment company and to avoid the payment of federal
income tax and the 4% excise tax. Similarly, investments in tax-exempt zero
coupon securities will result in a Fund accruing tax-exempt income each year
that the securities are held, even though the Fund receives no cash payments of
tax-exempt interest. This tax-exempt income is included in determining the
amount of net tax-exempt interest income which a Fund must distribute to
maintain its status as a regulated investment company.

Gain derived by a Fund from the disposition of any market discount bonds
(i.e., bonds purchased other than at original issue, where the face value of
the bonds exceeds their purchase price), including tax-exempt market discount
bonds, held by the Fund will be taxed as ordinary income to the extent of the
accrued market discount on the bonds, unless the Fund elects to include the
market discount in income as it accrues.

The taxation of equity options and over-the-counter options on debt
securities is governed by Code Section 1234. Pursuant to Code Section 1234, the
premium received by a Fund for selling a put or call option is not included in
income at the time of receipt. If the option expires, the premium is
short-term capital gain to the Fund. If the Fund enters into a closing
transaction, the difference between the amount paid to close out its position
and the premium received is short-term capital gain or loss. If a call option
written by a Fund is exercised, thereby requiring the Fund to sell the
underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If
the option is exercised, the cost of the option, in the case of a call option,
is added to the basis of the purchased security and, in the case of a put
option, reduces the amount realized on the underlying security in determining
gain or loss.

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Certain options, futures contracts and forward contracts in which a Fund
may invest are "section 1256 contracts." Gains or losses on section 1256
contracts generally are considered 60% long-term and 40% short-term capital
gains or losses ("60/40"); however, foreign currency gains or losses (as
discussed below) arising from certain section 1256 contracts may be treated as
ordinary income or loss. Also, section 1256 contracts held by a Fund at the end
of each taxable year (and, generally, for purposes of the 4% excise tax, on
October 31 of each year) are "marked-to-market" (that is, treated as sold at
fair market value), resulting in unrealized gains or losses being treated as
though they were realized.

Generally, the hedging transactions undertaken by a Fund may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by a Fund. In addition, losses
realized by a Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which the losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences to the Funds of engaging in hedging
transactions are not entirely clear. Hedging transactions may increase the
amount of short-term capital gain realized by a Fund which is taxed as ordinary
income when distributed to its Shareholders.

Each Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections
may operate to accelerate the recognition of gains or losses from the affected
straddle position.

Because the straddle rules may affect the character of gains or losses,
defer losses and/or accelerate the recognition of gains or losses from the
affected straddle positions, the amount which may be distributed to
Shareholders, and which will be taxed to them as ordinary income or long-term
capital gain, may be increased or decreased as compared to a Fund that did not
engage in such hedging transactions.

The 30% Limitation and the diversification requirements applicable to
each Fund's assets may limit the extent to which the Fund will be able to
engage in transactions in options, futures contracts and forward contracts.

Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time a Fund accrues receivables, or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain futures contracts, forward
contracts and options, gains or losses attributable to fluctuations in the
value of foreign currency between the date of acquisition of the security or
contract and the date of disposition also are treated as ordinary gain or loss.
These gains or losses, referred to under the Code as "section 988" gains or
losses, may increase or decrease the amount of a Fund's investment company
taxable income to be distributed to its Shareholders as ordinary income.

If a Fund invests in stock of certain foreign investment companies, the
Fund may be subject to U.S. federal income taxation on a portion of any "excess
distribution" with respect to, or gain from the disposition of, such stock. The
tax would be determined by allocating such distribution or gain ratably to each
day of the Fund's holding period for the stock. The distribution or gain so
allocated to any taxable year of the Fund, other than the taxable year of the
excess distribution or disposition, would be taxed to the Fund at the highest
ordinary income rate in effect for such year, and the tax would be further
increased by an interest charge to reflect the value of the tax deferral deemed
to have resulted from the ownership of the foreign company's stock. Any amount
of distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the Fund's investment company taxable income
and, accordingly, would not be taxable to the Fund to the extent distributed by
the Fund as a dividend to its Shareholders.

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Each Fund which invests in foreign equity securities may be able to make
an election, in lieu of being taxable in the manner described above, to include
annually in income its pro rata share of the ordinary earnings and net capital
gain of the foreign investment company, regardless of whether it actually
received any distributions from the foreign company. These amounts would be
included in the Fund's investment company taxable income and net capital gain
which, to the extent distributed by the Fund as ordinary or capital gain
dividends, as the case may be, would not be taxable to the Fund. In order to
make this election, the Fund would be required to obtain certain annual
information from the foreign investment companies in which it invests, which in
many cases may be difficult to obtain. Alternatively, a Fund may be able to
elect to mark to market its foreign investment company stock, resulting in the
stock being treated as sold at fair market value on the last business day of
each taxable year. Any resulting gain would be reported as ordinary income, and
any resulting loss would not be recognized.

Any gain or loss realized by a Shareholder upon the sale or other
disposition of Shares, or upon receipt of a distribution in complete
liquidation of a Fund, generally will be a capital gain or loss which will be
long-term or short-term, generally depending upon the Shareholder's holding
period for the Shares. Any loss realized on a sale or exchange will be
disallowed to the extent the Shares disposed of are replaced (including Shares
acquired pursuant to a dividend reinvestment plan) within a period of 61 days
beginning 30 days before and ending 30 days after disposition of the Shares. In
such a case, the basis of the Shares acquired will be adjusted to reflect the
disallowed loss. Any loss realized by a Shareholder on a disposition of Shares
held by the Shareholder for six months or less will be treated as a long-term
capital loss to the extent of any distributions of net capital gains received
by the Shareholder with respect to such Shares.

Each Fund which invests in foreign securities may be subject to foreign
withholding taxes on its investments in such securities. These taxes may be
reduced under the terms of applicable tax treaties, and each Fund intends to
satisfy any procedural requirements to qualify for benefits under these
treaties. In the unlikely event that more than 50% of the value of its total
assets at the close of a taxable year is composed of stock or securities of
foreign corporations, a Fund may make an election under Code Section 853 to
permit its Shareholders (subject to limitations) to claim a credit or deduction
on their federal income tax returns for their pro rata portion of qualified
taxes paid by that Fund in foreign countries. In the event such an election is
made, Shareholders would be required to include their pro rata portion of such
taxes in gross income and may be entitled to claim a foreign tax credit or
deduction for the taxes, subject to certain limitations under the Code.
Shareholders who are precluded from taking such credits or deductions will
nevertheless be taxed on their pro rata share of the foreign taxes included in
their gross income, unless they are otherwise exempt from federal income taxes.
It is not expected, however, that more than 50% of any Fund's total assets will
consist of stock or securities of foreign corporations and, consequently, it is
not expected that Shareholders will be eligible to claim a foreign tax credit
or deduction with respect to foreign taxes paid by any Fund.

Each Fund will be required to report to the Internal Revenue Services
(the "IRS") all taxable distributions (except in the case of certain exempt
Shareholders). Under the backup withholding provisions of Code Section 3406,
all such distributions may be subject to withholding of federal income tax at
the rate of 31%. This tax generally would be withheld if: (a) the payee fails
to furnish a Fund with the payee's taxpayer identification number ("TIN") under
penalties of perjury, (b) the IRS notifies a Fund that the TIN furnished by the
payee is incorrect, (c) the IRS notifies a Fund that the payee has failed to
properly report interest or dividend income to the IRS, or (d) when required to
do so, the payee fails to certify under penalties of perjury that it is not
subject to backup withholding. An individual's TIN is his or her social
security number. The Trust may refuse to accept an application that does not
contain any required TIN or certification that the number provided is correct.
If the withholding provisions are applicable, any distributions, whether taken
in cash or reinvested in Shares, will be reduced by the amounts required to be
withheld. Backup withholding is not an additional tax. Any amounts withheld may
be credited against the Shareholder's U.S. federal income tax liability.
Investors may wish to consult their tax advisors about the applicability of the
backup withholding provisions.

All distributions, whether received in Shares or cash, must be reported
by each Shareholder on his or her federal income tax return. Each Shareholder
should consult his or her own tax adviser to determine the state and local tax
consequences of an investment in a Fund.

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<PAGE> 106

The foregoing discussion relates solely to U.S. federal income tax law
as it applies to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Each Shareholder who is not a
U.S. person should consult his or her tax adviser regarding the U.S. and
non-U.S. tax consequences of ownership of Shares of a Fund, including the
possibility that such a Shareholder may be subject to a U.S. withholding tax at
a rate of 30% (or a lower rate under an applicable U.S. income tax treaty) on
certain distributions.

STATE AND LOCAL

The Funds may be subject to state or local taxes in jurisdictions in
which the Funds may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust and
its Shareholders under such laws may differ from their treatment under Federal
income tax laws. Also, an investment in the Funds may have different tax
consequences for Shareholders than would a direct investment in the securities
held by the Funds. Shareholders should consult their own tax advisers
concerning these matters. For example, in such states or localities, it may be
appropriate for Shareholders to review with their tax advisers the state income
tax consequences of investment by the Funds in securities issued or guaranteed
as to principal and interest by the U.S. Government or its various agencies or
instrumentalities, portfolio repurchase agreements, and securities loans.

Shareholders are advised to consult their own tax advisers with respect
to the particular tax consequences to them of an investment in a Fund.

ORGANIZATION AND CAPITALIZATION

The Trust is a Massachusetts business trust established under the laws
of the Commonwealth of Massachusetts by an Agreement and Declaration of Trust
dated July 15, 1982, as amended (the "Declaration of Trust") under the name
Centerland Fund. On June 1, 1994, the name of the Trust was changed to The
Pilot Funds. Each Shareholder is deemed to have expressly assented and agreed
to the terms of the Declaration of Trust and is deemed to be a party thereto.
The authorized capital of the Trust consists of an unlimited number of units of
beneficial interest which are referred to as "Shares" in this Statement of
Additional Information. The Trustees have authority under the Declaration of
Trust to create and classify Shares of beneficial interest in separate series
("Funds") without further action by Shareholders. The Trustees have established
fourteen Funds, two of which are offered herein and known as the Pilot Growth
Fund and the Pilot Diversified Bond Income Fund. Each Share of each Fund has a
par value of $.001. It represents an equal proportionate interest in that Fund
with each other Share, and is entitled to such distributions out of the income
belonging to the Fund as are declared by the Trustees. Upon the liquidation of
a Fund, Shareholders thereof are entitled to share pro rata in the net assets
belonging to that Fund available for distribution. The Declaration of Trust
further authorizes the Trustees to classify or reclassify any series or Fund of
Shares into one or more classes. The Trustees have authorized the issuance of
three classes of each of the Funds: Pilot Shares, Class A Shares and Class B
Shares.

Except as noted above with respect to the Distribution Plans for Class A
Shares and Class B Shares, shares of the Funds bear the same types of ongoing
expenses with respect to the Fund to which they belong. In addition, Class A
Shares are subject to a front-end sales charge and Class B Shares are subject
to a contingent deferred sales charge as described in the Prospectuses. The
Classes also have different exchange privileges, and Class B Shares are subject
to conversion as described in the Prospectus for those Shares. In the event of
a liquidation or dissolution of the Trust or an individual Fund, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based
upon the relative net asset values of the Trust's respective investment
portfolios, of any general assets not belonging to any particular portfolio
which are available for distribution. Shareholders of a Fund are entitled to
participate in the net distributable assets of the particular Fund involved on
liquidation, based on the number of shares of the Fund that are held by each
shareholder, except that Class A Shares of a particular Fund will be solely
responsible for that Fund's payments pursuant to the Distribution Plan for
those Shares and Class B

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<PAGE> 107

Shares of a particular Fund will be solely responsible for that Fund's payments
pursuant to the Distribution Plan for those Shares.

Each Pilot Share, Class A Share and Class B Share is entitled to one
vote. Fractional shares are entitled to proportionate fractional votes. Holders
of all outstanding shares of a particular Fund will vote together in the
aggregate and not by class on all matters, except that only Class A Shares of a
Fund will be entitled to vote on matters submitted to a vote of shareholders
pertaining to such Fund's Distribution Plan for Class A Shares and only Class B
Shares of a Fund will be entitled to vote on matters submitted to a vote of
shareholders pertaining to such Fund's Distribution Plan for Class B Shares.
Further, shareholders of all of the Funds, as well as those of any other
investment portfolio now or hereafter offered by the Trust, will vote together
in the aggregate and not separately on a Fund-by-Fund basis, except as
otherwise required by law or when permitted by the Board of Trustees. Rule
18f-2 under the 1940 Act provides that any matter required to be submitted to
the holders of the outstanding voting securities of an investment company such
as the Trust shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of each Fund
affected by the matter. A Fund is affected by a matter unless it is clear that
the interests of each Fund in the matter are substantially identical or that
the matter does not affect any interest of the Fund. Under the Rule, the
approval of an investment advisory agreement or change in a fundamental
investment policy would be effectively acted upon with respect to a Fund only
if approved by a majority of the outstanding shares of such Fund. However, the
Rule also provides that the ratification of the appointment of independent
accountants, the approval of principal underwriting contracts and the election
of Trustees may be effectively acted upon by shareholders of the Trust voting
together in the aggregate without regard to particular investment portfolios.

Shares have neither cumulative voting rights nor any preemptive rights
and only such conversion and exchange rights as the Board of Trustees may grant
in its discretion. When issued for payment as described in the Prospectuses,
shares will be fully paid and nonassessable, except as expressly set forth
below.

The Trust Agreement provides for Shareholder voting only for the
election or removal of one or more Trustees, if a meeting is called for that
purpose, and for certain other designated matters. Each Trustee serves until
the next meeting of Shareholders, if any, called for the purpose of considering
the election or reelection of the Trustee or successor thereto, and until the
election and qualification of his successor, if any, elected at that meeting,
or until the Trustee sooner dies, resigns, retires or is removed by the
Shareholders or two-thirds of the Trustees.

As of the date of this Statement of Additional Information, the Trustees
and officers of the Trust owned beneficially less than 1% of the outstanding
shares of the Funds.

SHAREHOLDER AND TRUSTEE LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts
business trust," which is the form in which many mutual funds are organized.
Shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for the obligations of the trust. The Declaration
of Trust contains an express disclaimer of Shareholder liability for acts or
obligations of the Trust. Notice of such disclaimer will normally be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Declaration of Trust provides for indemnification by the
relevant Fund for any loss suffered by a Shareholder as a result of an
obligation of the Fund. The Declaration of Trust also provides that the Trust
shall, upon request, assume the defense of any claim made against a Shareholder
for any act or obligation of the Trust, and satisfy any judgment thereon.
Thus, the risk of a Shareholder incurring financial loss on account of
Shareholder liability is limited to circumstances in which a Fund is unable to
meet its obligations. The Trustees believe that, in view of the above, the risk
of personal liability of Shareholders is not material.

The Declaration of Trust provides that the Trustees of the Trust shall
not be liable for any action taken by them in good faith, and that they shall
be fully protected in relying in good faith upon the records of the Trust and
upon reports made to the Trust by persons selected in good faith by the
Trustees as qualified to make such reports. The Declaration of Trust further
provides that the Trustees will not be liable for errors of

B-38
<PAGE> 108

judgment or mistakes of fact or law. The Declaration of Trust provides that the
Trust will indemnify Trustees and officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their positions with the Trust, unless it is determined, in
the manner provided in the Declaration of Trust, that they have not acted in
good faith in the reasonable belief that, in the case of conduct in their
official capacity with the Trust, their conduct was in the best interests of
the Trust and that, in all other cases, their conduct was at least not opposed
to the best interest of the Trust (and that, in the case of any criminal
proceeding, they had no reasonable cause to believe that the conduct was
unlawful). However, nothing in the Declaration of Trust or the By-Laws
protects or indemnifies Trustees or officers against any liability to which
they would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
their office.

No series of the Trust is liable for the liabilities or obligations of
any other series of the Trust.

CUSTODIAN AND SUBCUSTODIAN

Boatmen's Trust Company ("Boatmen's"), 100 North Broadway, St. Louis,
Missouri 63178 is the custodian of the Funds' assets. Boatmen's has retained
Bankers Trust Company ("Bankers Trust") as subcustodian to maintain custody of
certain domestic assets. Bankers Trust also makes available its network of
foreign subcustodians to hold certain foreign securities purchased by the
Funds.

INDEPENDENT ACCOUNTANTS AND COUNSEL

Arthur Andersen LLP, independent public accountants, One International
Place, Boston, Massachusetts 02110, have been selected as auditors of the
Funds. In addition to providing audit services, Arthur Andersen LLP prepares
the Trust's federal and state tax returns and provides consultation and
assistance on accounting, internal control and related matters.

Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts 02109,
serves as general counsel to the Trust.

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<PAGE> 109

APPENDIX A

DESCRIPTION OF SECURITIES RATINGS(1)

MOODY'S INVESTORS SERVICE, INC.

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

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

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

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

Moody's applies numerical modifiers, 1, 2, and 3 in the Aa, A and Baa
categories. The modifier 1 indicates that the security ranks in the higher end
of the applicable category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of the category.

Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade ("MIG"). The distinction is in
recognition of the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower are upper most in
importance in short-term borrowing, while various factors of the first
importance in long-term borrowing risk are of lesser importance in the short
run. Symbols used will be as follows:

MIG-1--Notes bearing this designation are of the best quality enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.

MIG-2--Notes bearing this designation are of favorable quality, with all
security elements accounted for, but lacking the undeniable strength of the
preceding grade. Market access for refinancing, in particular, is likely to be
less well-established.

A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG to reflect such
characteristics as payment upon periodic demand rather than fixed maturity

____________________

(1) The ratings indicated herein are believed to be the most recent
ratings available at the date of this Statement of Additional Information for
the securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the Funds taxable year ends.

A-1
<PAGE> 110

dates and payment relying on external liquidity. Additionally, investors should
be alert to the fact that the source of payment may be limited to the external
liquidity with no or limited legal recourse to the issuer in the event the
demand is not met. VMIG-1, VMIG-2 and VMIG-3 ratings carry the same definitions
as MIG-1, MIG-2 and MIG-3, respectively.

STANDARD & POOR'S CORPORATION(2)

AAA: Debt rated AAA has the highest rating assigned by Standard &
Poor's. This rating indicates an extremely strong capacity to pay and interest
and repay principal.

AA: Debt rated AA also has a very strong capacity to pay interest and
repay principal, and in the majority of instances it differs from AAA issues
only in small degree. The ratings in AA may be modified by the addition of a
plus ("+") or minus ("-") sign to show relative standing within the major
rating categories.

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

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

Municipal notes issued since July 29, 1984 are rated "SP-1," "SP-2," and
"SP-3." The designation SP-1 indicates a very strong capacity to pay principal
and interest. A plus ("+") sign is added to those issues determined to possess
overwhelming safe characteristics. An SP-2 designation indicates a satisfactory
capacity to pay principal and interest, while an SP-3 designation indicates
speculative capacity to pay principal and interest.

DUFF & PHELPS

AAA: Instruments rated AAA are of the highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

AA+, AA, AA-: Instruments bearing these designations are of high credit
quality. Protection factors are strong. Risk is modest but may vary slightly
from time to time because of economic conditions.

A+, A, A-: Protection factors for instruments bearing these designations
are average but adequate. However, risk factors are more variable and greater
in period of economic stress.

BBB+, BBB, BBB-: Protection factors for instruments bearing these
designations are below average but still considered sufficient for prudent
investment. There is considerable variability in risk during economic cycles.

Preferred stocks are rated on the same scale as bonds but the preferred
rating gives weight to its more junior position in the capital structure.
Structured Financings are also rated on this scale.

____________________

(2) Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.

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<PAGE> 111

FITCH INVESTORS SERVICE, INC.

AAA: Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.

AA: Bonds rated AA are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated "AAA." Because
bonds rated in the "AAA" and "AA" categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated "F-1+."

A: Bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB: Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefor impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Plus ("+") and minus ("-") signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used within the "AAA" category. Ratings are
placed on FitchAlert to notify investors of an occurrence that is likely to
result in a rating change and the likely direction of such change. These are
designated as "Positive," indicating a potential upgrade, "Negative," for
potential downgrade, or "Evaluating," where ratings may be raised or lowered.
FitchAlert is relatively short-term and should be resolved within 12 months.

IBCA, INC.

AAA: Obligations rated AAA are obligations for which there is the lowest
expectation of investment risk. Capacity for timely repayment of principal and
interest is substantial such that adverse changes in business, economic, or
financial conditions are likely to increase investment risk significantly.

AA: Obligations rated AA are obligations for which there is a very low
expectation of investment risk. Capacity for timely repayment of principal and
interest is substantial. Adverse changes in business, economic, or financial
conditions may increase investment risk albeit not very significantly.

A: Obligations rated A are obligations for which there is a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is strong, although adverse changes in business, economic, or
financial conditions may lead to increased investment risk.

BBB: Obligations rated BBB are obligations for which there is currently
a low expectation of investment risk. Capacity for timely repayment of
principal and interest is adequate, although adverse changes in business,
economic or financial conditions are more likely to lead to increased
investment risk than for obligations in higher categories.

"+" or "-" may be appended to denote relative status within major rating
categories. Rating Watch highlights an emerging situation which may materially
affect the profile of a rated corporation.

A-3
<PAGE> 112

DESCRIPTION OF COMMERCIAL PAPER RATINGS

MOODY'S INVESTORS SERVICES, INC.

P-1: Issuers have a superior capacity for repayment of short-term
promissory obligations. Prime-1 or P-1 repayment capacity will normally be
evidenced by the following characteristics:

Leading market positions in well-established industries.

High rates of return on funds employed.

Conservative capitalization structures with moderate reliance on debt
and ample asset protection.

Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

Well-established access to a range of financial markets and assured
sources of alternate liquidity.

P-2: Issuers have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

P-3: Issuers have an acceptable ability for repayment of senior
short-term obligations. The effect of industry characteristics and market
compositions may be more pronounced. Variability in earnings and profitability
may result in changes in the level of debt protection measurements and may
require relatively high financial leverage. Adequate alternate liquidity is
maintained.

STANDARD & POOR'S CORPORATION

A-1: Standard & Poor's Commercial Paper ratings are current assessments
of the likelihood of timely payment of debts having an original maturity of no
more than 365 days. The A-1 designation indicates the degree of safety
regarding timely payment is very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus ("+") sign
designation.

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

DUFF & PHELPS

DUFF 1 PLUS: These instruments bear the highest certainty of timely
payment. Short-term liquidity including internal operating factors and/or ready
access to alternative sources of funds, is clearly outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.

DUFF 1: These instruments bear very high certainty of timely payment.
Liquidity factors are excellent and supported by strong fundamental protection
factors. Risk factors are minor.

DUFF 1 MINUS: These instruments bear high certainty of timely payment.
Liquidity factors are strong and supported by good fundamental protection
factors. Risk factors are very small.

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

A-4
<PAGE> 113

DUFF 3: These instruments bear satisfactory liquidity and other
protection factors which qualify an issue as to investment grade. Risk factors
are larger and subject to more variation. Nevertheless, timely payment is
expected.

No ratings are issued for companies whose paper is not deemed to be of
investment grade.

FITCH INVESTORS SERVICE, INC.

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+."

F-2: Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the margin of safety
is not as great as for issues assigned "F-1+" and "F-1" ratings.

F-3: Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for timely payment is
adequate, however, near-term adverse changes could cause these securities to be
rated below investment grade.

LOC: The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.

IBCA, INC.

A1+: Obligations supported by the highest capacity for timely repayment.

A1: Obligations supported by a very strong capacity for timely
repayment.

A2: Obligations supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in business,
economic, or financial conditions.

B1: Obligations supported by an adequate capacity for timely repayment.
Such capacity is more susceptible to adverse changes in business, economic, or
financial conditions than for obligations in higher categories.

"+" or "-" may be appended to denote relative status within major rating
categories. Rating Watch highlights an emerging situation which may materially
affect the profile of a rated corporation.

A-5
<PAGE> 114
PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS

The Financial Statements filed as part of this Registration
Statement are as follows:

- Not applicable.

(B) EXHIBITS

The following exhibits are incorporated herein by reference
unless otherwise noted or are not required to be filed:

1(a). Agreement and Declaration of Trust, dated July 15, 1982,
filed as Exhibit 1 to Registrar's Registration Statement on
Form N-1A.

1(b). Amendment to Agreement and Declaration of Trust, dated
August 4, 1982, filed as Exhibit 1(b) to Post-Effective
Amendment No. 29 to Registrant's Registration Statement on
Form N-1A.

1(c). Amendment to Agreement and Declaration of Trust, dated
October 27, 1989, filed as Exhibit 1(b) to Post-Effective
Amendment No. 10 to Registrant's Registration Statement on
Form N-1A.

1(d). Amendment to Agreement and Declaration of Trust, dated
January 2, 1991, filed as Exhibit 1(d) to Post-Effective
Amendment No. 29 to Registrant's Registration Statement on
Form N-1A.

1(e). Amendment to Agreement and Declaration of Trust to
Establish and Designate Shares of the Short-Term Tax-Exempt
Portfolio, filed as Exhibit 1(f) to Post-Effective Amendment
No. 15 to Registrant's Registration Statement on Form N-1A.

1(f). Amendment to Agreement and Declaration of Trust to
Permit Trustees to Establish a Mandatory Retirement Age for
Trustees, dated July 2, 1991, filed as Exhibit 1(f) to
Post-Effective Amendment No. 29 to Registrant's Registration
Statement on Form N-1A.

1(g). Amendment to Agreement and Declaration of Trust to
Establish and Designate Units of the Taxable Bond Portfolio,
Intermediate-Term Tax-Exempt Portfolio, Tax-Exempt Portfolio,
Equity Income Portfolio and International Equity Portfolio,
filed as Exhibit 1(g) to Post-Effective Amendment No. 29 to
Registrant's Registration Statement on Form N-1A.

1(h). Amendment to Agreement and Declaration of Trust to
Redesignate Units of the Taxable Bond Portfolio,
Intermediate-Term Tax-Exempt Portfolio, Tax-Exempt Portfolio,
filed as Exhibit 1(h) to Post-Effective Amendment No. 18 to
Registrant's Registration Statement on Form N-1A.

1(i). Amendment to Agreement and Declaration of Trust to
Establish and Designate Shares of the Short-Term Tax-Exempt
Diversified Portfolio, filed as Exhibit 1(i) to Post-Effective
Amendment No. 18 to Registrant's Registration Statement on
Form N-1A.

1(j). Amendment to Agreement and Declaration of Trust to
Redesignate Shares of the International Equity Portfolio,
filed as Exhibit 1(j) to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A.

1(k). Amendment to Agreement and Declaration of Trust, dated
May 27, 1994, to Change the Name of the Trust and to
Redesignate Shares and Classes, filed as Exhibit 1(k) to
Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A.

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

4
<PAGE> 115
1(m). Redesignation of Series, Designation of New Series and
Designation of New Classes, Filed as Exhibit 1(m) to
Post-Effective Amendment No. 23 to Registrant's Registration
Statement on Form N-1A.

1(n) Amendment to Agreement and Declaration of Trust to
Redesignate Shares of the Pilot Short-Term Tax-Exempt Fund to
be known as Shares of the Pilot Missouri Short-Term Tax-Exempt
Fund - filed as Exhibit 1(n) to Post-Effective Amendment No.
29 to Registrant's Registration Statement on Form N-1A.

1(o). Amendment to Agreement and Declaration of Trust to
designate Shares of Small Capitalization Equity Fund, filed as
Exhibit 1(o) to Post-Effective Amendment No. 29 to
Registrant's Registration Statement on Form N-1A.

2(a). By-Laws, filed as Exhibit 2 to Registrant's Registration
Statement on Form N-1A.

2(b). Amendment to Section 6.3 of the By-Laws, filed as
Exhibit 2(a) to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A.

2(c). Amendment to Section 3.7 of the By-Laws, filed as
Exhibit 2(b) to Post-Effective Amendment No. 8 to Registrant's
Registration Statement on Form N-1A.

2(d). Amendment to the By-Laws adding Section 3.10, filed as
Exhibit 2(d) to Post-Effective Amendment No. 29 to
Registrant's Registration Statement on Form N-1A.

3. Not applicable.

5(a). Investment Advisory Agreement dated June 1, 1994 between
Registrant, on behalf of the Short-Term Diversified Assets
Portfolio, and Boatmen's Trust Company, filed as Exhibit 5(a)
to Post-Effective Amendment No. 22 to Registrant's
Registration Statement on Form N-1A.

5(b). Investment Advisory Agreement dated June 1, 1994 between
Registrant, on behalf of the Short-Term U.S. Treasury
Portfolio, and Boatmen's Trust Company, filed as Exhibit 5(b)
to Post-Effective Amendment No. 22 to Registrant's
Registration Statement on Form N-1A.

5(c). Advisory Agreement between Registrant, on behalf of the
Centerland Kleinwort Benson International Equity Portfolio,
and Boatmen's Trust Company, filed as Exhibit 5(h) to
Post-Effective Amendment No. 21 to Registrant's Registration
Statement on Form N-1A.

5(d). Investment Management Agreement among Registrant, on
behalf of the Centerland Kleinwort Benson International Equity
Portfolio, Boatmen's Trust Company and Kleinwort Benson
International Investment Limited, filed as Exhibit 5(i) to
Post-Effective Amendment No. 21 to Registrant's Registration
Statement on Form N-1A.

5(e). Investment Advisory Agreement between Registrant on
behalf of the Pilot Small Capitalization Equity Fund, and
Boatmen's Trust Company - to be filed by Amendment.

5(f). Form of Investment Advisory Agreement between Registrant
on behalf of the Pilot Growth Fund, and Boatmen's Trust
Company - Filed herewith.

5(g). Form of Investment Advisory Agreement between Registrant
on behalf of the Pilot Diversified Bond Income Fund, and
Boatmen's Trust Company - Filed herewith.

6. Distribution Agreement dated as of March 31, 1994
between Registrant and Concord Financial Group, Inc.,
filed as Exhibit 6 to Post-Effective Amendment No. 22
to Registrant's Registration Statement on Form N-1A.

7. Not applicable.

8(a). Custodian Agreement dated November 24, 1982 between
Registrant and State Street Bank and Trust Company, filed as
Exhibit 8 to Post-effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A.

5
<PAGE> 116
8(b). Letter agreement dated November 24, 1982 between
Registrant and State Street bank and Trust Company pertaining
to fees payable by Registrant pursuant to the Custodian
Agreement, filed as Exhibit 8(a) to Post-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A.

8(c). Letter Agreement dated April 4, 1983 between Registrant
and State Street Bank & Trust Company pertaining to the
latter's designation of Bank of America, N.t. and S.A. as its
sub-custodian and certain other matters, filed as Exhibit 8(b)
to Post-Effective Amendment No. 1 to Registrant's Statement on
Form N-1A.

8(d). Form of Amendment No. 1 dated January 1, 1985 to the
Custodian Agreement between Registrant and State Street Bank
and Trust Company, filed as Exhibit 8(d) to Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form
N-1A.

8(e). Form of Amendment No. 2 dated March 21, 1985 to the
Custodian Agreement between Registrant and State Street Bank
and Trust Company, filed as Exhibit 8(e) to Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form
N-1A.

8(f). Letter Agreement dated August 19, 1986 between
Registrant and State Street Bank and Trust Company pertaining
to fees payable by Registrant pursuant to the Custodian
Agreement between Registrant and State Street Bank and Trust
Company, filed as Exhibit 8(e) to Post-Effective Amendment No.
7 to Registrant's Registration Statement on Form N-1A.

8(g). Writing Agreement dated June 20, 1987 among State Street
Bank and Trust Company, the Northern Trust Company, and
Goldman, Sachs & Co., filed as Exhibit 8(f) to Post-Effective
Amendment No. 8 to Registrant's Registration Statement on Form
N-1A.

8(h). Form of Letter Agreement between Registrant and State
Street Bank and Trust Company pertaining to the latter's
designation of Security Pacific National Bank as its
subcustodian and certain other matters, filed as Exhibit 8(g)
to Post-Effective Amendment No. 9 to Registrant's Registration
Statement on Form N-1A.

8(i). Amendment dated October 20, 1988 to the Custodian
Agreement between Registrant and State Street Bank and Trust
Company relating to the use of securities depositories, filed
as Exhibit 8(h) to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A.

8(j). Amendment dated December 6, 1988 to the Custodian
Agreement between Registrant and State Street Bank and Trust
Company pertaining to the appointment of foreign
sub-custodians and certain other matters, filed as Exhibit
8(i) to Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A.

8(k). Amendment dated April 19, 1989 to the Custodian
Agreement between Registrant and State Street Bank and Trust
Company relating to so-called "street delivery" custom, filed
as Exhibit 8(j) to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A.

8(l). Amendment dated September 1, 1989 to the Custodian
Agreement between Registrant and State Street Bank and Trust
Company relating to the indemnification of The Northern Trust
Company, filed as Exhibit 8(k) to Post-Effective Amendment No.
10 to Registrant's Registration Statement on Form N-1A.

8(m). Amendment dated September 1, 1989 to the Wiring
Agreement among State Street Bank and Trust Company, Goldman,
Sachs & Co. and The Northern Trust Company, filed as Exhibit
8(l) to Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A.

6
<PAGE> 117
8(n). Subcustody Contracts on behalf of the Short-Term
Tax-Exempt Portfolio between (a) State Street Bank and Trust
Company and Manufacturers Hanover Trust Company; and (b) State
Street Bank and Trust Company and Security Pacific National
Bank, filed as Exhibit 8 to Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form N-1A.

9(a). Sub-Administration Agreement dated March 31, 1994
between Concord Holding Corporation and Goldman, Sachs & Co.,
filed as Exhibit 9(b) to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A.

9(b). Transfer Agency Agreement dated as of June 1, 1994
between Registrant and Concord Financial Services, Inc., filed
as Exhibit 9(c) to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A.

9(c). Form of Transfer Agency Agreement dated as of December
18, 1995 between Registrant and BISYS Fund Services, Inc. -
Filed herewith.

9(d). Administration Plan of Registrant with respect to the
Administration Class of shares dated May 19, 1991, as revised
October 13, 1992, as further revised March 4, 1994 to be
effective March 31, 1994, filed as Exhibit 9(e) to
Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A.

9(e). Form of Agreement between Registrant and Service
Organizations with respect to the Administration Plan, filed
as Exhibit 9(f) to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A.

9(f). Form of Agreement and Plan of Reorganization between
Registrant, Kleinwort Benson Investment Strategies Fund and
Kleinwort Benson International Investment Limited, filed as
Exhibit 9(e) to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A.

10(a).Opinion of Dechert Price & Rhoads, Counsel to
Registrant, filed with Registrant's Notice pursuant to Rule
24f-2 on October 30, 1995.

10(b).Opinion of Goodwin Procter & Hoar - filed herewith.

11. Consents of Arthur Andersen LLP - Not applicable.

12. Not applicable.

13. Not applicable.

15(a).Service Plan of Registrant with respect to the Service
Class of Shares dated May 1, 1991, as revised effective July
1, 1993, as further revised March 4, 1994 to be effective
March 31, 1994, filed as Exhibit 15(a) to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on
Form N-1A.

15(b).Form of Agreement between Registrant and Service
Organizations with respect to the Service Plan, filed as
Exhibit 15(b) to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A.

15(c).Distribution Plan for Class A Shares adopted July 25,
1994, filed as Exhibit 15(c) to Post-Effective Amendment No.
22 to Registrant's Registration Statement on Form N-1A.

15(d).Agreement between Concord Financial Group, Inc. and
Service Organizations with respect to the Distribution Plan
for Class A Shares, filed as Exhibit 15(d) to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on
Form N-1A.

15(e).Distribution Plan for Class B Shares adopted July 25,
1994, filed as Exhibit 15(e) to Post-Effective Amendment No.
22 to Registrant's Registration Statement on Form N-1A.

15(f).Form of Agreement between Concord Financial Group, Inc.
and Service Organizations with respect to the Distribution
Plan for Class B Shares, filed as Exhibit 15(f) to
Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A.

7
<PAGE> 118
17. Financial Data Schedule for Registrant's fiscal year ended
August 31, 1995 - Not applicable.

18. Rule 18f-3 Multiple Class Plan - filed as Exhibit 6(b) to
Post-Effective Amendment No. 25 to Registrant's Registration
Statement on Form N-1A.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF DECEMBER 14, 1995

<TABLE>
<CAPTION>
Fund Name Total Active Shareholders
--------- -------------------------
<S> <C>
Municipal Bond
Pilot Shares 21
Class A Shares 27
Class B Shares 19

Intermediate Municipal Bond
Pilot Shares 3
Class A Shares 6
Class B Shares N/A

U.S. Government Securities
Pilot Shares 4
Class A Shares 14
Class B Shares 18

Intermediate U.S. Government Securities
Pilot Shares 13
Class A Shares 27
Class B Shares N/A

Equity Income
Pilot Shares 3
Class A Shares 53
Class B Shares 74

Growth & Income
Pilot Shares 15
Class A Shares 181
Class B Shares 90

Pilot Short Term Diversified Assets Fund
Pilot Shares 5
Administrative Shares 420
Investor Shares 272

Pilot Short Term U.S. Treasury Fund
Pilot Shares 6
Administration Shares 351
Investor Shares 645

Pilot Missouri Tax Exempt Fund
Pilot Shares 352
Administration Shares 15
Investor Shares 48

Pilot Short Term Tax Exempt Diversified Fund
Pilot Shares 1
Administration Shares 23
Investor Shares 1
</TABLE>

8
<PAGE> 119
<TABLE>
<S> <C>
Pilot International Equity Fund
Pilot Shares 17
Class A Shares 1,160

Total: 3,884
</TABLE>

ITEM 27. INDEMNIFICATION.

Article VI of the Registrant's Agreement and Declaration of Trust
provides for indemnification of the Registrant's Trustees and officers under
certain circumstances. A copy of such Agreement and Declaration of Trust was
filed as Exhibit 1 to Registrant's Statement on Form N-1A.

Paragraph 8 of each Investment Advisory Agreement between the
Registrant and Boatmen's Trust Company (other than the Advisory Agreement with
respect to the Pilot International Equity Fund) provides for indemnification of
Boatmen's Trust Company or, in lieu thereof, contribution by the Registrant,
under certain circumstances. Copies of the Advisory Agreements for the
Short-Term Diversified Assets, Short-Term U.S. Treasury, Short-Term Tax Exempt
Diversified, and Short-Term Tax Exempt were filed as Exhibits 5(a), 5(b), 5(c),
5(d), to Post-Effective Amendment No. 22 to the Registrant's Registration
Statement on Form N-1A. A copy of the Investment Advisory Agreement for the
Growth and Income, Equity Income, Intermediate U.S. Government Securities, U.S.
Government Securities, Intermediate Municipal Bond and Municpal Bond Portfolios
are to be filed in a Post-Effective Amendment to the Registrant's Registration
Statement on Form N-1A. A form of the Investment Advisory Agreements for the
Growth Fund and Diversified Bond Income Fund are filed herewith.

Paragraph 7 of the Advisory Agreement between the Registrant and
Boatmen's Trust Company with respect to the Pilot Kleinwort Benson International
Equity Fund provides for indemnification of Boatmen's Trust Company or, in lieu
thereof, contribution by the Registrant, under certain circumstances. A copy of
the Advisory Agreement was filed as Exhibit 5(h) to Post-Effective Amendment No.
21 to the Registrant's Registration Statement on Form N-1A.

Kleinwort Benson International Equity Fund, Boatmen's Trust Company and
Kleinwort Benson Investment Management Americas Inc. (formerly Kleinwort Benson
International Investment Limited) provides for indemnification of Kleinwort
Benson Investment Management Americas Inc. or, in lieu thereof, contribution by
the Registrant, under certain circumstances. A copy of the Investment Management
Agreement was filed as Exhibit 5(i) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A.

Article V, Section 3, of the Distribution Agreement between Registrant
and Pilot Funds Distributors, Inc. or its affiliate Concord Financial Group,
Inc. provides for the indemnification of Pilot Funds Distributors, Inc. or its
affiliate Concord Financial Group under certain circumstances. A copy of the
Distribution Agreement was filed as Exhibit 6 to Post-Effective Amendment No. 22
to Registrant's Registration Statement on Form N-1A.

Investment Company Professional Liability Policy purchased jointly by
Registrant, Concord Holding Corporation and Pilot Funds Distributors, Inc. or
its affiliate Concord Financial Group, Inc. insure such entities and their
respective trustees, directors, officers and employees, subject to the policies'
coverage limits and exclusions and varying deductibles, against loss under
certain circumstances.

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

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.

The business and other connections of the directors and officers of
Kleinwort Benson Investment Management Americas Inc. formerly Kleinwort Benson
International Investment Limited ("KBI") are listed in the Form ADV of Kleinwort
Benson Investment Management Americas, Inc. as currently on file with the
Commission (File No. 801-15027), the text of which is hereby incorporated by
reference.

9
<PAGE> 120
The business and other connections of the directors and certain senior
executive officers of Boatmen's Trust Company are:

<TABLE>
<CAPTION>
POSITION WITH
BOATMEN'S TRUST
NAME COMPANY POSITION AND NAME OF OTHER BUSINESS
- ---- ------- -----------------------------------
<S> <C> <C>
Howard F. Baer Director Retired
32 North Kings Highway, Suite 504
St. Louis, Missouri 63108

Clarence C. Barksdale Director Vice Chairman
Washington University
7425 Forsyth Boulevard
Campus Box 1227
St. Louis, Missouri 63105

Gerald D. Blatherwick Director Retired
26 Fordyce Lane
St. Louis, Missouri 63124

Stephen F. Brauer Director President
Hunter Engineering Company
11250 Hunter Drive
Bridgeton, Missouri 63004

Mary L. Burke, Ph.D. Director Head of School
Whitfield School
175 South Mason Road
St. Louis, Missouri 63141

George K. Conant Director Tri-Star Supply, Inc.
10435 Baur Boulevard
St. Louis, Missouri 63132

Andrew B. Craig, III Director Chairman and Chief Executive Officer
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
St. Louis, Missouri 63101

Donald Danforth, Jr. Director President
Danforth Agri-Resources Inc.
700 Corporate Park Drive, Suite 330
St. Louis, Missouri 63105-4209

Martin E. Galt, III Director and Chairman of the Board, President, and
President Chief Executive Officer
Boatmen's Trust Company
100 North Broadway
St. Louis, Missouri 63102

A. William Hager Director Chairman of the Board
Hager Hinge Company
139 Victor Street
St. Louis, Missouri 63104

Samuel B. Hayes, III Director President, Boatmen's Bancshares, Inc.
The Boatmen's National Bank of St. Louis
One Boatmen's Plaza
St. Louis, Missouri 63101
</TABLE>

10
<PAGE> 121
<TABLE>
<S> <C> <C>
Robert E. Kresko Director Pierre Laclede Center
7701 Forsyth, Suite 680
St. Louis, Missouri 63105

John Peters McCarthy Director Retired
6 Robin Hill Lane
St. Louis, Missouri 63124

James S. McDonnell, III Director Retired
40 Glens Eagles Drive
St. Louis, Missouri 63124

John B. McKinney Director President, Chief Executive Officer
Laclede Steel Company
One Metropolitan Square, 15th Floor
St. Louis, Missouri 63102

Reuben M. Morriss, III Director Retired
10048 Litzsinger Road
St. Louis, Missouri 63124

William C. Nelson Director Chairman, President and Chief Executive Officer
Boatmen's First National Bank of Kansas City
10th & Baltimore
P.O. Box 419038
Kansas City, Missouri 64183

William A. Peck, M.D. Director Executive Vice Chancellor and Dean
Washington University School of Medicine
660 South Euclid Avenue, Box 8106
St. Louis, Missouri 63110

W. R. Persons Director 200 South Bemiston Avenue
Suite 308
St. Louis, Missouri 63105

Jerry E. Ritter Director Executive Vice President, Chief Financial Officer
and Chief Administrative Officer
Anheuser-Busch Companies, Inc.
One Busch Place
St. Louis, Missouri 63118

Louis S. Sachs Director Chairman
Sachs Properties, Inc.
P.O. Box 7104
St. Louis, Missouri 63177

Hugh Scott, III Director Chairman and Chief Executive Officer
Western Diesel Services, Inc.
101 South Hauley, Suite 1910
St. Louis, Missouri 63105

Richard W. Shomaker Director Retired
14181 Woods Mill Cove
Chesterfield, Missouri 63017

Brice R. Smith, Jr. Director Chairman of the Board
Sverdrup Corporation
13723 Riverport Drive
Maryland Heights, Missouri 63043
</TABLE>

11
<PAGE> 122
<TABLE>
<S> <C> <C>
William D. Stamper Director President
William D. Stamper Company
7777 Bonhomme, Suite 1006
St. Louis, Missouri 63105

Janet M. Weakley Director President
Janet McAfee Inc. Real Estate
9889 Clayton Road
St. Louis, Missouri 63124

Gordon E. Wells Director Retired
3121 West 67th Terrace
Shawnee Mission, Kansas 66208

Eugene F. Williams, Jr. Director Retired
515 Olive Street, Suite 1505
St. Louis, Missouri 63101
</TABLE>

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Pilot Funds Distributors, Inc., which is located at 3435 Stelzer
Road, Columbus, Ohio 43219-3035, will act as exclusive distributor
for the Registrant. The distributor is registered with the
Securities and Exchange Commission as a broker-dealer and is a
member of the National Association of Securities Dealers.

(b) To the best of Registrant's knowledge, the directors and officers
of PFD are as follows:

<TABLE>
<CAPTION>
NAMES POSITIONS AND OFFICES WITH POSITIONS AND
PRINCIPAL BUSINESS ADDRESSES CONCORD FINANCIAL GROUP, INC. OFFICES WITH REGISTRANT
- ---------------------------- ----------------------------- -----------------------
<S> <C> <C>
Richard E. Stierwalt Chairman and None
125 West 55th Street Chief Executive Officer
New York, New York 10019

William B. Blundin Director and Vice Chairman None
125 West 55th Street
New York, New York 10019

Richard E. Dickinson Director None
235 Montgomery Street
San Francisco, CA 94104

Standish O'Grady Director None
One Bush Street
San Francisco, CA 94104

Timothy M. Spicer Managing Director None
235 Montgomery Street
San Francisco, CA 94104

Mary Mugurdichian Managing Director None
125 West 55th Street
New York, NY 10019

Susan L. West Chief Operating Officer President
125 West 55th Street
New York, New York 10019

Ann Bergin Vice President Vice President
125 West 55th Street
New York, New York 10019
</TABLE>

12
<PAGE> 123
<TABLE>
<S> <C> <C>
Irimga McKay Senior Vice President None
1230 Columbia Street
Fifth Floor, Suite 500
San Diego, CA 92101
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

(1) Concord Holding Corporation, 3435 Stelzer Road, Columbus, Ohio
43219-3035 (Registrant's Declaration of Trust, By-Laws and minute
books and records relating to the Administrator).

(2) Pilot Funds Distributors, Inc., 3435 Stelzer Road, Columbus, Ohio
43219-3035 (records relating to the Distributor).

(3) Boatmen's Trust Company, 100 North Broadway, St. Louis, Missouri
63102 (records relating to Adviser and Subadviser).

(4) Kleinwort Benson Investment Management Americas Inc. 200 Park
Avenue, New York, New York 10166 (records relating to Investment
Manager).

(5) State Street Bank and Trust Company, 1776 Heritage Drive, North
Quincy, Massachusetts 02171 (records relating to Custodian and Fund
Accounting Agent).

(6) BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219
(records relating to Transfer Agent).

ITEM 31. MANAGEMENT SERVICES.

Not applicable.

Item 32. Undertakings

Registrant hereby undertakes to furnish each person to whom a
prospectus for the Registrant is delivered with a copy of the
most recent annual report to shareholders for the series of the
Registrant offered by that prospectus upon request and without
charge.

Registrant hereby undertakes to file a Post-Effective Amendment for
the Pilot Growth Fund and Pilot Diversified Bond Income Fund,
using financials which need not be certified, within four to six
months from the effective date of this Registration Statement.

13
<PAGE> 124
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Columbus and
State of Ohio on the 23rd day of February, 1996.

THE PILOT FUNDS

By: /s/ William J. Tomko
-------------------------------
William J. Tomko, President

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

<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ William J. Tomko President February 23, 1996
- ------------------------------------ (Principal Executive Officer)
William J. Tomko

/s/ Martin R. Dean Treasurer February 23, 1996
- ------------------------------------ (Principal Accounting Officer and
Martin R. Dean Principal Financial Officer)

J. HORD ARMSTRONG, III* Trustee February 23, 1996
- ------------------------------------
J. Hord Armstrong, III

LEE F. FETTER* Trustee February 23, 1996
- ------------------------------------
Lee F. Fetter

HENRY O. JOHNSTON* Trustee February 23, 1996
- ------------------------------------
Henry O. Johnston

L. WHITE MATTHEWS, III* Trustee February 23, 1996
- ------------------------------------
L. White Matthews, III

NICHOLAS G. PENNIMAN* Trustee February 23, 1996
- ------------------------------------
Nicholas G. Penniman

/s/ William J. Tomko
- ------------------------------------
William J. Tomko, Attorney-in-fact
</TABLE>

14
<PAGE> 125
EXHIBITS

Exhibit 5(f) Form of Investment Advisory Agreement between Registrant on
behalf of the Pilot Growth Fund, and Boatmen's Trust
Company

Exhibit 5(g) Form of Investment Advisory Agreement between Registrant
on behalf of the Pilot Diversified Bond Income Fund, and
Boatmen's Trust Company

Exhibit 9(c) Form of Transfer Agency Agreement dated as of December 18,
1995 between Registrant and BISYS Fund Services, Inc.

Exhibit 10(b) Opinion of Goodwin Procter & Hoar

<PAGE> 1
Exhibit 5(f)

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this ___ day of __________, 1996 between THE PILOT FUNDS, a
Massachusetts business trust (the "Trust"), on behalf of the Pilot Growth Fund,
and BOATMEN'S TRUST COMPANY, a Trust Company organized under the laws of
Missouri (the "Adviser").

W I T N E S S E T H:

WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Trust is authorized to issue Units of beneficial interest
(hereafter referred to as "Shares") in separate series with each such series
representing the interests in a separate portfolio of securities and other
assets;

WHEREAS, the Trust has established and presently offers (or intends to offer)
Shares of beneficial interest in a portfolio currently known as the Pilot Growth
Fund (the "Fund"); and

WHEREAS, the Trust desires to retain the Adviser to render investment advisory
services to the Trust with respect to the Fund as indicated herein and the
Adviser is willing to so render such services;

NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

1. Appointment of Adviser. The Trust hereby appoints the Adviser
to act as investment adviser to the Trust and the Fund for the
periods and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set
forth, for the compensation herein provided.

2. Delivery of Documents. The Trust has delivered (or will
deliver as soon as is possible) to the Adviser copies of each
of the following documents:

(a) Agreement and Declaration of Trust of the Trust dated
as of July 15, 1982 (such Agreement and Declaration
of Trust, as presently in effect and as amended from
time to time, is herein called the "Trust
Agreement"), copies of which are also on file with
the Secretary of the Commonwealth of Massachusetts;

(b) By-Laws of the Trust (such By-Laws, as presently in
effect and as amended from time to time, are herein
called the "By-Laws");

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<PAGE> 2
(c) Certified resolutions of the Shareholder(s) and the
Trustees of the Trust approving the terms of this
Agreement;

(d) Custodian Agreement (including related fee schedule)
dated May 4, 1996 between the Trust and State Street
Bank and Trust Company (such Agreement, as presently
in effect and as amended and/or superseded from time
to time, is herein called the "Custodian Agreement");

(e) Prospectus and Statement of Additional Information of
the Trust with respect to the Fund as currently in
effect (such Prospectus and Statement of Additional
Information, as currently in effect and as amended,
supplemented and/or superseded from time to time, is
herein called the "Prospectus"); and

(f) Registration Statement of the Trust under the
Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act on Form N-1 as filed with the
Securities and Exchange Commission (the "Commission")
on July 16, 1982, and as amended on Form N-1A (such
Registration Statement, as presently in effect and as
amended from time to time, is herein called the
"Registration Statement").

The Trust agrees to promptly furnish the Adviser from time to time with copies
of all amendments of or supplements to or otherwise current versions of any of
the foregoing documents not heretofore furnished.

3. Duties of Adviser.

(a) Subject to the general supervision of the Trustees of
the Trust, the Adviser shall manage the investment
operations of the Fund and the composition of the
Fund's assets, including the purchase, retention and
disposition thereof. In this regard, the Adviser:

(i) shall provide supervision of the Fund's
assets, furnish a continuous investment
program for the Fund, determine from time
to time what investments or securities
will be purchased, retained or sold by
the Fund, and what portion of the assets
will be invested or held uninvested as
cash;

(ii) shall place orders with broker-dealers,
foreign currency dealers, futures
commissions merchants or others pursuant
to the Adviser's determinations in
accordance with the Fund's policies as
expressed in the Registration Statement;
and

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<PAGE> 3
(iii) may, on occasions when it deems the
purchase or sale of a security to be in
the best interests of the Fund as well as
its other customers (including any other
Fund or any other investment company or
trust or advisory account for which the
Adviser acts as adviser), aggregate, to
the extent permitted by applicable laws
and regulations, the securities to be
sold or purchased in order to obtain the
best net price and the most favorable
execution. In such event, allocation of
the securities so purchased or sold, as
well as the expenses incurred in the
transaction, will be made by the Adviser
in the manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Fund and to
such other customers.

(b) The Adviser, in the performance of its duties
hereunder, shall act in conformity with the Trust
Agreement, By-Laws, Registration Statement and
Prospectus and with the instructions and directions
of the Trustees of the Trust, and will use its best
efforts to conform to the requirements of the 1940
Act, the Investment Advisers Act of 1940 (to the
extent applicable), the Internal Revenue Code of
1986, as amended, relating to regulated investment
companies and all rules and regulations thereunder,
the Insider Trading and Securities Fraud Enforcement
Act of 1988 (to the extent applicable) and all other
applicable federal and state laws, regulations and
rulings.

(c) The Adviser shall render to the Trustees of the Trust
such periodic and special reports as the Trustees may
reasonably request.

(d) The Adviser shall notify the Trust of any material
change in the management of the Adviser within a
reasonable time after such change.

(e) The Adviser shall immediately notify the Trust in the
event that the Adviser or any of its affiliates: (1)
becomes aware that it is subject to a statutory
disqualification that prevents the Adviser from
serving as investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the
subject of an administrative proceeding or
enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Adviser
further agrees to notify the Trust immediately of any
material fact known to the Adviser respecting or
relating to the Adviser that is not contained in the
Trust's Registration Statement regarding the Trust,
or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any
statement contained therein that becomes untrue in
any material respect.

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<PAGE> 4
(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render
similar services to others so long as its services
under this Agreement are not impaired thereby.

4. Expenses

(a) During the term of this Agreement, the Adviser will
pay all costs incurred by it in connection with the
performance of its duties under paragraph 3 hereof,
other than the cost (including taxes and brokerage
commissions, if any) of securities purchased for the
Fund.

(b) The Adviser agrees that its gross compensation for
any fiscal year shall not be greater than an amount
which, when added to the other expenses of the Fund,
shall cause the aggregate expenses of the Fund to
equal the maximum expenses under the lowest
applicable expense limitation established pursuant to
the statutes or regulations of any jurisdiction in
which the Shares of the Fund may be qualified for
offer and sale. Except to the extent that such amount
has been reflected in reduced payments to the
Adviser, the Adviser shall refund to the Fund the
amount of any payment received in excess of the
limitation pursuant to this section as promptly as
practicable after the end of such fiscal year,
provided that the Adviser shall not be required to
pay the Fund an amount greater than the fee paid to
the Adviser in respect of such year pursuant to this
Agreement. As used in this section, "expenses" shall
mean those expenses included in the applicable
expense limitation having the broadest specifications
thereof, and "expense limitation" means a limit of
the maximum annual expenses which may be incurred by
the Fnud determined (i) by multiplying a fixed
percentage by the average, or by multiplying more
than one such percentage by different specified
amounts of the average, of the values of the Fund's
net assets for a fiscal year or (ii) by multiplying a
fixed percentage by the Fund's net investment income
for a fiscal year. The words "lowest applicable
expense limitation" shall be construed to result in
the largest reduction of the Adviser's compensation
for any fiscal year of the Fund; provided, however,
that nothing in this Agreement shall limit the
Adviser's fees if not required by an applicable
statute or regulation referred to above in this
section.

The Adviser may waive all or a portion of its fees
provided for hereunder and such waiver shall be
treated as a reduction in purchase price of the
Adviser's services. The Adviser shall be
contractually bound hereunder by the terms of any
publicly announced waiver of its fee, or any
limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.

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<PAGE> 5
5. Compensation

(a) For the services provided and the expenses assumed by
the Adviser pursuant to this Agreement, the Trust
will pay to the Adviser as full compensation therefor
a fee at an annual rate of .75% of the Fund's average
net assets.

(b) The fee will be computed based on net assets on each
day and will be paid to the Adviser monthly.

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<PAGE> 6
6. Books and Records. The Adviser shall maintain all of the
Trust's records relating to the Adviser's duties with respect
to the Fund. The Adviser agrees that all records so maintained
are the property of the Trust and it will surrender promptly
to the Trust any of such records upon the Trust's request. The
Adviser further agrees to preserve for the periods, and in the
manner, prescribed by the Rules of the Commission under the
1940 Act any such records as are required to be maintained by
such Rules. To the extent required by law, the Adviser shall
furnish to regulatory authorities having the requisite
authority such records which may be requested in order to
ascertain whether the operations of the Trust with respect to
the Fund are being conducted in a manner consistent with
applicable laws and regulations.

7. Indemnification

(a) Subject to Section 36 of the 1940 Act to the extent
applicable, the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters
to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or
gross negligence in the performance of its
obligations and duties, or by reason of its reckless
disregard of its obligations and duties, under this
Agreement.

(b) The Trust, on behalf of the Fund, hereby agrees to
indemnify and hold harmless the Adviser, its
directors, officers and employees and each person, if
any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses,
claims, damages or liabilities, joint or several,
relating to the Fund, to which any such Indemnified
Party may become subject under the 1933 Act, the
Securities Exchange Act of 1934, the Advisers Act,
the 1940 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
upon

(i) any untrue statement or alleged untrue
statement of a material fact or any
omission or alleged omission to state a
material fact required to be stated or
necessary to make the statements made not
misleading in (x) the Registration
Statement or the Prospectus, (y) any
advertisement or sales literature
authorized by the Trust for use in the
offer and sale of Shares of the Fund, or
(z) any application or other document
filed in connection with the qualification
of the Trust or Shares of the Fund under
the Blue Sky or securities laws of any
jurisdiction, except insofar as such
losses,

256
<PAGE> 7
claims, damages or liabilities (or actions
in respect thereof) arise out of or are
based upon any such untrue statement or
omission or alleged untrue statement or
omission (1) in a document prepared by the
Adviser, or (2) made in reliance upon and
in conformity with information furnished
to the Trust by or on behalf of the
Adviser pertaining to or originating with
the Adviser for use in connection with any
document referred to in clauses (x), (y)
or (z), or

(ii) subject in each case to clause (i) above,
the Adviser acting as investment adviser
to the Trust with respect to the Fund;

and the Trust, from the assets of the Fund, will
reimburse each Indemnified Party for any legal or
other expenses incurred by such Indemnified Party in
connection with investigating or defending any such
loss, claim, damage, liability or action.

(c) If the indemnification provided for in paragraph 7(b)
is available in accordance with the terms of such
paragraph but is for any reason held by a court in a
final adjudication to be unavailable from the Trust,
then the Trust, from the assets of the Fund, shall
contribute to the aggregate amount paid or payable by
the Trust and such Indemnified Party as a result of
such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits
received by the Fund and such Indemnified Party in
connection with the operations of the Fund, (ii) the
relative fault of the Trust with respect to the Fund
and such Indemnified Party, and (iii) any other
relevant equitable considerations. The Trust and the
Adviser agree that it would not be just and equitable
if contribution pursuant to this subparagraph (c)
were determined by pro rata allocation or any other
method of allocation which does not take account of
the equitable considerations referred to above in
this subparagraph (c). The amount paid or payable as
a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred
to above in this subparagraph (c) shall be deemed to
include any legal or other expenses incurred by the
Trust and the Indemnified Party in connection with
investigating or defending any such loss, claim,
damage, liability or action. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of
such fraudulent misrepresentation.

(d) It is understood, however, that nothing in this
paragraph 7 shall protect any Indemnified Party
against, or entitle any Indemnified Party to
indemnification against, or contribution with respect
to, any liability to the Trust or its Shareholders to
which such Indemnified Party is subject, by

257
<PAGE> 8
reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by
reason of any reckless disregard of its obligations
and duties, under this Agreement or otherwise to an
extent or in a manner inconsistent with Section 17(i)
of the 1940 Act.

8. Duration and Termination. This Agreement, shall continue,
unless sooner terminated as provided herein, until May 31,
1997, and thereafter shall continue automatically for periods
of one year so long as each such latter continuance is
approved at least annually (a) by the vote of a majority of
the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined by the 1940 Act)
of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees of
the Trust or by vote of a majority of the outstanding Shares
(as defined with respect to voting securities in the 1940 Act)
representing the interests in the Fund; provided, however,
that this Agreement may be terminated by the Trust at any
time, without the payment of any penalty, by vote of a
majority of the Trustees of the Trust or by vote of a majority
of the outstanding Shares (as so defined) representing the
interests in the Fund affected thereby on 60 days' written
notice to the Adviser, or by the Adviser at any time, without
the payment of any penalty, on 60 days' written notice to the
Trust. This Agreement will automatically and immediately
terminate in the event of its assignment (as defined by the
1940 Act).

9. Status of Adviser as Independent Contractor. The Adviser shall
for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided
herein or authorized by the Trustees of the Trust from time to
time, have no authority to act for or represent the Trust or
Fund in any way or otherwise be deemed an agent of the Trust
or Fund.

10. Amendment of Agreement. This Agreement may be amended, changed
or waived only by an instrument in writing and by mutual
consent, but the consent of the Trust must be approved (a) by
vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons (as defined in
the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by
vote of a majority of the outstanding Shares (as defined with
respect to voting securities by the 1940 Act) representing the
interests in the Fund.

11. Limitation of Liability. The name "The Pilot Funds" refers to
the Trustees under the Declaration collectively as trustees
and not as individuals. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office
of the Secretary of the Commonwealth of Massachusetts,
provides that no shareholder, Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or
obligations of the Trust to any extent whatsoever, but that
the Trust estate only shall be liable.

258
<PAGE> 9
The Adviser is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration and
agrees that the obligations assumed by the Trust pursuant to
this Agreement shall be limited in all cases to the Fund's
assets, and the Adviser shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of
the Trust or Fund or any other series of the Trust, or from
any Trustee, officer, employee or agent of the Trust. The
Adviser understands that the rights and obligations of each
series under the Declaration are separate and distinct from
those of any and all other series.

12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement
shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be construed in
accordance with applicable federal law and the laws of the
Commonwealth of Massachusetts and shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors subject to the last sentence of
paragraph 8, and, to the extent provided in paragraph 7
hereof, each Indemnified Party. Anything herein to the
contrary notwithstanding, this Agreement shall not be
construed in a manner inconsistent with the 1940 Act, or in a
manner which would cause the Trust to fail to comply with the
requirements of Subchapter M of the Internal Revenue Code of
1986, as amended, nor shall this Agreement be construed to
require, or to impose any duty upon, either of the parties to
do anything in violation of any applicable laws or
regulations. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original,
but both of which together shall constitute one and the same
instrument. This Agreement shall supersede all prior
investment advisory or management agreements entered into
between the parties. This Agreement shall not apply to the
management of assets allocated to any series of the Trust
other than the Fund.

259
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

THE PILOT FUNDS

Attest:

- --------------------- By:
------------------------------

Title:

BOATMEN'S TRUST COMPANY

Attest:

- --------------------- By:
------------------------------

Title:

260

<PAGE> 1
Exhibit 5(g)

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this ___ day of __________, 1996 between THE PILOT FUNDS, a
Massachusetts business trust (the "Trust"), on behalf of the Pilot Diversified
Bond Income Fund, and BOATMEN'S TRUST COMPANY, a Trust Company organized under
the laws of Missouri (the "Adviser").

W I T N E S S E T H:

WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Trust has established and presently offers (or intends to offer)
Shares of beneficial interest in a portfolio currently known as the Pilot
Diversified Bond Income Fund (the "Fund"); and

NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

2. Delivery of Documents. The Trust has delivered (or will
deliver as soon as is possible) to the Adviser copies of each
of the following documents:

(b) By-Laws of the Trust (such By-Laws, as presently in
effect and as amended from time to time, are herein
called the "By-Laws");

261
<PAGE> 2
(c) Certified resolutions of the Shareholder(s) and the
Trustees of the Trust approving the terms of this
Agreement;

3. Duties of Adviser.

262
<PAGE> 3
(iii) may, on occasions when it deems the
purchase or sale of a security to be in
the best interests of the Fund as well as
its other customers (including any other
Fund or any other investment company or
trust or advisory account for which the
Adviser acts as adviser), aggregate, to
the extent permitted by applicable laws
and regulations, the securities to be
sold or purchased in order to obtain the
best net price and the most favorable
execution. In such event, allocation of
the securities so purchased or sold, as
well as the expenses incurred in the
transaction, will be made by the Adviser
in the manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Fund and to
such other customers.

(c) The Adviser shall render to the Trustees of the Trust
such periodic and special reports as the Trustees may
reasonably request.

(d) The Adviser shall notify the Trust of any material
change in the management of the Adviser within a
reasonable time after such change.

263
<PAGE> 4
(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render
similar services to others so long as its services
under this Agreement are not impaired thereby.

4. Expenses

264
<PAGE> 5
5. Compensation

(b) The fee will be computed based on net assets on each
day and will be paid to the Adviser monthly.

265
<PAGE> 6
6. Books and Records. The Adviser shall maintain all of the
Trust's records relating to the Adviser's duties with respect
to the Fund. The Adviser agrees that all records so maintained
are the property of the Trust and it will surrender promptly
to the Trust any of such records upon the Trust's request. The
Adviser further agrees to preserve for the periods, and in the
manner, prescribed by the Rules of the Commission under the
1940 Act any such records as are required to be maintained by
such Rules. To the extent required by law, the Adviser shall
furnish to regulatory authorities having the requisite
authority such records which may be requested in order to
ascertain whether the operations of the Trust with respect to
the Fund are being conducted in a manner consistent with
applicable laws and regulations.

7. Indemnification

(i) any untrue statement or alleged untrue
statement of a material fact or any
omission or alleged omission to state a
material fact required to be stated or
necessary to make the statements made not
misleading in (x) the Registration
Statement or the Prospectus, (y) any
advertisement or sales literature
authorized by the Trust for use in the
offer and sale of Shares of the Fund, or
(z) any application or other document
filed in connection with the
qualification of the Trust or Shares of
the Fund under the Blue Sky or securities
laws of any jurisdiction, except insofar
as such losses,

266
<PAGE> 7
claims, damages or liabilities (or
actions in respect thereof) arise out of
or are based upon any such untrue
statement or omission or alleged untrue
statement or omission (1) in a document
prepared by the Adviser, or (2) made in
reliance upon and in conformity with
information furnished to the Trust by or
on behalf of the Adviser pertaining to or
originating with the Adviser for use in
connection with any document referred to
in clauses (x), (y) or (z), or

(ii) subject in each case to clause (i) above,
the Adviser acting as investment adviser
to the Trust with respect to the Fund;

267
<PAGE> 8
reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by
reason of any reckless disregard of its obligations
and duties, under this Agreement or otherwise to an
extent or in a manner inconsistent with Section 17(i)
of the 1940 Act.

268
<PAGE> 9
The Adviser is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration and
agrees that the obligations assumed by the Trust pursuant to
this Agreement shall be limited in all cases to the Fund's
assets, and the Adviser shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of
the Trust or Fund or any other series of the Trust, or from
any Trustee, officer, employee or agent of the Trust. The
Adviser understands that the rights and obligations of each
series under the Declaration are separate and distinct from
those of any and all other series.

269
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

THE PILOT FUNDS

Attest:

- ------------------------- By:
- --------- -----------------------------

Title:

BOATMEN'S TRUST COMPANY

Attest:

- ------------------------- By:
- --------- -----------------------------

Title:

270

<PAGE> 1
Exhibit 9(c)

TRANSFER AGENCY AGREEMENT

AGREEMENT made this 18th day of December, 1995, between THE PILOT FUNDS
(the "Trust"), a Massachusetts business trust having its principal place of
business at 3435 Stelzer Road, Columbus, Ohio 43219, and BISYS FUND SERVICES,
INC. ("BISYS"), a Delaware corporation having its principal place of business at
3435 Stelzer Road, Columbus, Ohio 43219.

WHEREAS, the Trust desires that BISYS perform certain services for
those series of the Trust set forth in Schedule A attached hereto, as such
Schedule may be amended from time to time (individually referred to herein as a
"Fund" and collectively as the "Funds"); and

WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:

1. Services.

BISYS shall perform for the Trust the transfer agent services
set forth in Schedule B hereto.

BISYS also agrees to perform for the Trust such special
services incidental to the performance of the services enumerated herein as
agreed to by the parties from time to time. BISYS shall perform such additional
services as are provided on an amendment to Schedule B hereof, in consideration
of such fees as the parties hereto may agree.

BISYS may, in its discretion and upon written notice to the
Trust, appoint in writing other parties qualified to perform transfer agency
services reasonably acceptable to the Trust (individually, a "Sub-transfer
Agent") to carry out some or all of its responsibilities under this Agreement
with respect to a Fund; provided, however, that the Sub-transfer Agent shall be
the agent of BISYS and not the agent of the Trust or such Fund, and that BISYS
shall be fully responsible for the acts of such Sub-transfer Agent and shall not
be relieved of any of its responsibilities hereunder by the appointment of such
Sub-transfer Agent.

2. Fees.

The Trust shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the manner set forth in,
Schedule C hereto. BISYS may increase the fees it charges pursuant to the fee
schedule; provided, however, that BISYS may not increase such fees until the
expiration of the Initial Term of this Agreement (as defined below),
<PAGE> 2
unless the Trust otherwise agrees to such change in writing. Fees for any
additional services to be provided by BISYS pursuant to an amendment to Schedule
B hereto shall be subject to mutual agreement at the time such amendment to
Schedule B is proposed.

3. Reimbursement of Expenses.

In addition to paying BISYS the fees described in Section 2
hereof, the Trust agrees to reimburse BISYS for BISYS' reasonable out-of-pocket
expenses in providing services hereunder, including without limitation, the
following:

(a) All freight and other delivery and bonding charges
incurred by BISYS in delivering materials to and from
the Trust and in delivering all materials to
shareholders;

(b) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred by BISYS in communication with the Trust,
the Trust's investment adviser or custodian, dealers,
shareholders or others as required for BISYS to
perform the services to be provided hereunder;

(c) Costs of postage, couriers, stock computer paper,
statements, labels, envelopes, checks, reports,
letters, tax forms, proxies, notices or other form of
printed material which shall be required by BISYS for
the performance of the services to be provided
hereunder;

(d) The cost of microfilm or microfiche of records or
other materials; and

(e) Any expenses BISYS shall incur at the written
direction of an officer of the Trust thereunto duly
authorized.

4. Effective Date.

This Agreement shall become effective as of the date first
written above (the "Effective Date").

5. Term.

This Agreement shall continue in effect with respect to a
Fund, unless earlier terminated by either party hereto as provided hereunder,
until June 1, 1997. Thereafter, it shall be renewed automatically for successive
one-year terms unless written notice not to renew is given by the non-renewing
party to the other party at least 60 days prior to the expiration of the
then-current term; provided, however, that after such termination, for so long
as BISYS, with the written consent of the Trust, in fact continues to perform
any one or more of the services contemplated by this Agreement or any Schedule
or exhibit hereto, the provisions of this Agreement, including without

2
<PAGE> 3
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Fees and reasonable out-of-pocket expenses incurred by BISYS
but unpaid by the Trust upon such termination shall be immediately due and
payable upon and notwithstanding such termination. BISYS shall be entitled to
collect from the Trust, in addition to the fees and disbursements provided by
Sections 2 and 3 hereof, the amount of all of BISYS' cash disbursements and a
reasonable fee (which fee shall be not less than one hundred and two percent
(102%) of the sum of the actual costs incurred by BISYS in performing such
service) for services in connection with BISYS' activities in effecting such
termination, including without limitation, the delivery to the Trust and/or its
distributor or investment adviser and/or other parties, of the Trust's property,
records, instruments and documents, or any copies thereof. To the extent that
BISYS may retain in its possession copies of any Trust documents or records
subsequent to such termination which copies had not been requested by or on
behalf of the Trust in connection with the termination process described above,
BISYS, for a reasonable fee, will provide the Trust with reasonable access to
such copies.

6. Uncontrollable Events.

BISYS assumes no responsibility hereunder, and shall not be
liable for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control.

7. Legal Advice.

BISYS shall notify the Trust at any time BISYS believes that
it is in need of the advice of counsel (other than counsel in the regular employ
of BISYS or any affiliated companies) with regard to BISYS' responsibilities and
duties pursuant to this Agreement; and after so notifying the Trust, BISYS, at
its discretion, shall be entitled to seek, receive and act upon advice of legal
counsel of its choosing, such advice to be at the expense of the Trust or Funds
unless relating to a matter involving BISYS' willful misfeasance, bad faith,
negligence or reckless disregard with respect to BISYS' responsibilities and
duties hereunder and BISYS shall in no event be liable to the Trust or any Fund
or any shareholder or beneficial owner of the Trust for any action reasonably
taken pursuant to such advice.

8. Instructions.

Whenever BISYS is requested or authorized to take action
hereunder pursuant to instructions from a shareholder, or a properly authorized
agent of a shareholder ("shareholder's agent"), concerning an account in a Fund,
BISYS shall be entitled to rely upon any certificate, letter or other instrument
or communication, believed by BISYS to be genuine and to have been properly
made, signed or authorized by an officer or other authorized agent of the Trust
or by the shareholder or shareholder's agent, as the case may be, and shall be
entitled to receive as conclusive proof of any fact or matter required to be
ascertained by it hereunder a certificate signed by an officer of the Trust or
any other person authorized by the Trust's Board of Trustees or by the
shareholder or shareholder's agent, as the case may be.

3
<PAGE> 4
As to the services to be provided hereunder, BISYS may rely
conclusively upon the terms of the Prospectuses and Statement of Additional
Information of the Trust relating to the Funds to the extent that such services
are described therein unless BISYS receives written instructions to the contrary
in a timely manner from the Trust.

9. Standard of Care; Reliance on Records and Instructions;
Indemnification.

BISYS shall use its best efforts to ensure the accuracy of all
services performed under this Agreement, but shall not be liable to the Trust
for any action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties. BISYS hereby agrees to indemnify and hold harmless the Trust, and its
series, for any action taken or omitted by BISYS, in the exercise of its
responsibilities under this Agreement in bad faith, willful misfeasance,
negligence, or from reckless disregard by it of its obligations and duties. The
Trust agrees to indemnify and hold harmless BISYS, its employees, agents,
directors, officers and nominees from and against any and all claims, demands,
actions and suits, whether groundless or otherwise, and from and against any and
all judgments, liabilities, losses, damages, costs, charges, counsel fees and
other reasonable expenses of every nature and character arising out of or in any
way relating to BISYS' actions taken or nonactions with respect to the
performance of services under this Agreement or based, if applicable, upon
reasonable reliance on information, records, instructions or requests given or
made to BISYS by the Trust, the investment adviser and on any records provided
by any fund accountant or custodian thereof; provided that this indemnification
shall not apply to actions or omissions of BISYS in cases of its own bad faith,
willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties; and further provided that prior to confessing any claim
against it which may be the subject of this indemnification, BISYS shall give
the Trust written notice of and reasonable opportunity to defend against said
claim in its own name or in the name of BISYS.

10. Record Retention and Confidentiality.

BISYS shall keep and maintain on behalf of the Trust all books
and records which the Trust or BISYS is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"), relating to the maintenance of books and
records in connection with the services to be provided hereunder. BISYS further
agrees that all such books and records shall be the property of the Trust and to
make such books and records available for inspection by the Trust or by the
Securities and Exchange Commission (the "Commission") at reasonable times and
otherwise to keep confidential all books and records and other information
relative to the Trust and its shareholders, except when requested to divulge
such information by duly-constituted authorities or court process, or requested
by a shareholder or shareholder's agent with respect to information concerning
an account as to which such shareholder has either a legal or beneficial
interest or when requested by the Trust, the shareholder, or shareholder's
agent, or the dealer of record as to such account.

4
<PAGE> 5
11. Reports.

BISYS will furnish to the Trust and to its properly-authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Trust in writing,
such reports at such times as are prescribed in Schedule D attached hereto, or
as subsequently agreed upon by the parties pursuant to an amendment to Schedule
D. The Trust agrees to examine each such report or copy promptly and will report
or cause to be reported any errors or discrepancies therein not later than ten
business days from the receipt thereof. In the event that errors or
discrepancies, except such errors and discrepancies as may not reasonably be
expected to be discovered by the recipient within ten days after conducting a
diligent examination, are not so reported within the aforesaid period of time, a
report will for all purposes be accepted by and be binding upon the Trust and
any other recipient, and BISYS shall have no liability for errors or
discrepancies therein and shall have no further responsibility with respect to
such report except to perform reasonable corrections of such errors and
discrepancies within a reasonable time after requested to do so by the Trust.

12. Rights of Ownership.

All computer programs and procedures developed to perform
services required to be provided by BISYS under this Agreement are the property
of BISYS. All records and other data except such computer programs and
procedures are the exclusive property of the Trust and all such other records
and data will be furnished to the Trust in appropriate usable form as soon as
practicable after termination of this Agreement for any reason.

13. Return of Records.

BISYS may at its option at any time, and shall promptly upon
the Trust's demand, turn over to the Trust and cease to retain BISYS' files,
records and documents created and maintained by BISYS pursuant to this Agreement
which are no longer needed by BISYS in the performance of its services or for
its legal protection. If not so turned over to the Trust, such documents and
records will be retained by BISYS for six years from the year of creation or
such longer period as may be required by law. At the end of such period, such
records and documents will be turned over to the Trust unless the Trust
authorizes in writing the destruction of such records and documents.

14. Bank Accounts.

The Trust and the Funds shall establish and maintain such bank
accounts with such bank or banks as are selected by the Trust, as are necessary
in order that BISYS may perform the services required to be performed hereunder.
To the extent that the performance of such services shall require BISYS directly
to disburse amounts for payment of dividends, redemption proceeds or other
purposes, the Trust and Funds shall provide such bank or banks with all
instructions and authorizations necessary for BISYS to effect such
disbursements.

5
<PAGE> 6
15. Representations of the Trust.

The Trust certifies to BISYS that: (a) as of the close of
business on the Effective Date, each Fund which is in existence as of the
Effective Date has authorized unlimited shares, and (b) by virtue of its
Declaration of Trust, shares of each Fund which are redeemed by the Trust may be
sold by the Trust from its treasury, and (c) this Agreement has been duly
authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.

16. Representations of BISYS.

BISYS represents and warrants that: (a) BISYS has been in, and
shall continue to be in, substantial compliance with all provisions of law,
including Section 17A(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), required in connection with the performance of its duties under
this Agreement; (b) the various procedures and systems which BISYS has
implemented with regard to safekeeping from loss or damage attributable to fire,
theft or any other cause of the blank checks, records, and other data of the
Trust and BISYS' records, data, equipment, facilities and other property used in
the performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as are required for the secure
performance of its obligations hereunder; and (c) this Agreement has been duly
authorized by BISYS and, when executed and delivered by BISYS, will constitute a
legal, valid and binding obligation of BISYS, enforceable against BISYS in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties.

BISYS maintains and shall continue to maintain insurance
coverage in such amount as is reasonably necessary and customary for the
performance of the transfer agency services required in connection with the
performance of the duties provided for in this Agreement.

17. Insurance.

BISYS shall notify the Trust should its insurance coverage
with respect to professional liability or errors and omissions coverage be
canceled or reduced. Such notification shall include the date of change and the
reasons therefor. BISYS shall notify the Trust of any material claims against it
with respect to services performed under this Agreement, whether or not they may
be covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by BISYS under its insurance
coverage.

18. Information to be Furnished by the Trust and Funds.

The Trust has furnished to BISYS the following:

6
<PAGE> 7
(a) Copies of the Declaration of Trust of the Trust and
of any amendments thereto.

(b) Copies of the following documents:

1. The Trust's By-Laws and any amendments
thereto;

2. Certified copies of resolutions of the Board
of Trustees covering the following matters:

A. Approval of this Agreement and
authorization of a specified officer
of the Trust to execute and deliver
this Agreement and authorization for
specified officers of the Trust to
instruct BISYS hereunder; and

B. Authorization of BISYS to act as
Transfer Agent for the Trust on behalf
of the Funds.

(c) A list of all officers of the Trust, together with
specimen signatures of those officers, who are
authorized to instruct BISYS in all matters.

(d) Two copies of the following (if such documents are
employed by the Trust):

1. Prospectuses and Statement of Additional
Information;

2. Distribution Agreement; and

3. All other forms commonly used by the Trust or
its Distributor with regard to their
relationships and transactions with
shareholders of the Funds.

(e) A certificate as to shares of beneficial interest of
the Trust authorized, issued, and outstanding as of
the Effective Date of BISYS' appointment as Transfer
Agent (or as of the date on which BISYS' services are
commenced, whichever is the later date) and as to
receipt of full consideration by the Trust for all
shares outstanding, such statement to be certified by
the Treasurer of the Trust.

19. Information Furnished by BISYS.

BISYS has furnished to the Trust the following:

(a) BISYS' Articles of Incorporation.

7
<PAGE> 8
(b) BISYS' Bylaws and any amendments thereto.

1. Approval of this Agreement, and authorization
of a specified officer of BISYS to execute and
deliver this Agreement;

2. Authorization of BISYS to act as Transfer
Agent for the Trust.

(d) A copy of the most recent independent accountants'
report relating to internal accounting control
systems as filed with the Commission pursuant to Rule
17Ad-13 under the Exchange Act.

20. Amendments to Documents.

The Trust shall furnish BISYS with written copies of any
amendments to, or changes in, any of the items referred to in Section 18 hereof
forthwith upon such amendments or changes becoming effective. Accordingly, BISYS
shall furnish the Trust with written copies of any amendments to, or changes in,
any of the items referred to in Section 19 hereof forthwith upon such amendments
or changes becoming effective. In addition, the Trust agrees that no amendments
will be made to the Prospectuses or Statement of Additional Information of the
Trust which might have the effect of changing the procedures employed by BISYS
in providing the services agreed to hereunder or which amendment might affect
the duties of BISYS hereunder unless the Trust first obtains BISYS' approval of
such amendments or changes.

21. Reliance on Amendments.

BISYS may rely on any amendments to or changes in any of the
documents and other items to be provided by the Trust pursuant to Sections 18
and 20 of this Agreement and the Trust hereby agrees to indemnify and hold
harmless BISYS from and against any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, counsel fees and other
reasonable expenses of every nature and character which may result from actions
or omissions on the part of BISYS in reasonable reliance upon such amendments
and/or changes. Although BISYS is authorized to rely on the above-mentioned
amendments to and changes in the documents and other items to be provided
pursuant to Sections 18 and 20 hereof, BISYS shall be under no duty to comply
with or take any action as a result of any of such amendments or changes unless
the Trust first obtains BISYS' written consent to and approval of such
amendments or changes. The Trust may rely on any amendments to or changes in any
of the documents and other items to be provided by BISYS pursuant to Sections 19
and 20 of this Agreement and BISYS hereby agrees to indemnify and hold harmless
the Trust from and against any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, counsel fees and other
reasonable expenses of every nature and character which may result from actions
or omissions on the part of the Trust in reasonable reliance upon such
amendments and/or changes.

8
<PAGE> 9
22. Compliance with Law.

Except for the obligations of BISYS set forth in Section 10
hereof, the Trust assumes full responsibility for the preparation, contents, and
distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction. BISYS shall have no obligation to take
cognizance of any laws relating to the sale of the Trust's shares. The Trust
represents and warrants that no shares of the Trust will be offered to the
public until the Trust's registration statement under the 1933 Act and the 1940
Act has been declared or becomes effective.

23. Notices.

Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice at the following address: 3435 Stelzer Road, Columbus, Ohio 43219,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.

24. Headings.

Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.

25. Assignment.

This Agreement and the rights and duties hereunder shall not
be assignable by either of the parties hereto except by the specific written
consent of the other party. This Section 25 shall not limit or in any way affect
BISYS' right to appoint a Sub-transfer Agent pursuant to Section 1 hereof.

26. Governing Law and Matters Relating to the Trust as a
Massachusetts Business Trust.

This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the Commonwealth of Massachusetts. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but shall bind only the trust property of the
Trust and that no series of the Trust shall be liable for the obligations of any
other series of the Trust. The execution and delivery of this Agreement have
been authorized by the Trustees, and this Agreement has been signed and
delivered by an authorized officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust.

9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.

THE PILOT FUNDS

By:
------------------------------------

BISYS FUND SERVICES, INC.

By:
------------------------------------

10
<PAGE> 11
Dated:
----------------

SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
THE PILOT FUNDS
AND
BISYS FUND SERVICES, INC.

NAME OF FUND
- ------------------------------------

Small Capitalization Equity Fund (P)
Small Capitalization Equity Fund (A)
Small Capitalization Equity Fund (B)
Short Term Diversified Assets (P)
Short Term Diversified Assets (A)
Short Term Diversified Assets (I)
Short Term U.S. Treasury (P)
Short Term U.S. Treasury (A)
Short Term U.S. Treasury (I)
Missouri Short Term Tax-Exempt (P)
Missouri Short Term Tax-Exempt (A)
Missouri Short Term Tax-Exempt (I)
Short Term Tax-Exempt Diversified (P)
Short Term Tax-Exempt Diversified (A)
Short Term Tax-Exempt Diversified (I)
International Equity (P)
International Equity (A)
International Equity (I)
Growth and Income (P)
Growth and Income (R-A)
Growth and Income (R-B)
Equity Income (P)
Equity Income (R-A)
Equity Income (R-B)
Int. U.S. Government Sec. (P)
Int. U.S. Government Sec. (R-A)
Int. U.S. Government Sec. (R-B)
U.S. Government Secs. (P)

A-1
<PAGE> 12
U.S. Government Secs. (R-A)
U.S. Government Secs. (R-B)
Int. Municipal Bond (P)
Int. Municipal Bond (R-A)
Int. Municipal Bond (R-B)
Municipal Bond (P)
Municipal Bond (R-A)
Municipal Bond (R-B)
Growth (P)
Growth (A)
Growth (B)
Diversified Bond Income (P)
Diversified Bond Income (A)
Diversified Bond Income (B)

THE PILOT FUNDS

By:
-----------------------------

BISYS FUND SERVICES, INC.

By:
-----------------------------

A-2
<PAGE> 13
SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
THE PILOT FUNDS
AND
BISYS FUND SERVICES, INC.

TRANSFER AGENCY SERVICES

1. Shareholder Transactions

a. Process shareholder purchase and redemption orders.

b. Set up account information, including address, dividend
option, taxpayer identification numbers and wire instructions.

c. Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.

d. Issue periodic statements for shareholders.

e. Process transfers and exchanges.

f. Process dividend payments, including the purchase of new
shares, through dividend reimbursement.

2. Shareholder Information Services

a. Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.

b. Produce detailed history of transactions through duplicate or
special order statements upon request.

c. Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to
current shareholders.

B-1
<PAGE> 14
3. Compliance Reporting

a. Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers and the States in
which the Fund is registered.

b. Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and
capital gains.

c. Issue tax withholding reports to the Internal Revenue Service.

4. Dealer/Load Processing (if applicable)

a. Provide reports for tracking rights of accumulation and
purchases made under a Letter of Intent.

b. Account for separation of shareholder investments from
transaction sale charges for purchase of Fund shares.

c. Calculate fees due under 12b-1 plans for distribution and
marketing expenses.

d. Track sales and commission statistics by dealer and provide
for payment of commissions on direct shareholder purchases in
a load Fund.

5. Shareholder Account Maintenance

a. Maintain all shareholder records for each account in the
Trust.

b. Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.

c. Record shareholder account information changes.

d. Maintain account documentation files for each shareholder.

B-2
<PAGE> 15
SCHEDULE C
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
THE PILOT FUNDS
AND
BISYS FUND SERVICES, INC.

TRANSFER AGENT FEES

ANNUAL FEES:

<TABLE>
<S> <C>
Annual per portfolio charge $27,000.00 (1)
Annual per shareholder account charge - retail $23.00
Annual per shareholder account charge - institutional $15.00

Asset Based Fees:
Classes under $1 Billion 1.0 BP Annual Fee
Classes over $1 Billion .75 BP Annual Fee

Maximum Complex Fee:
Number of active classes x $18,000 plus the annual per account charge
</TABLE>

Additional Services:

Additional services such as IRA processing are subject to additional fees which
will be quoted upon request. Programming costs or database management fees for
special reports or specialized processing will be quoted upon request.

Out-of-pocket Expenses:

BISYS shall be entitled to be reimbursed for all reasonable out-of-pocket
expenses including, but not limited to, the expenses set forth in Section 3 of
the Transfer Agency Agreement to which this Schedule C is attached.

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

(1) Assumes up to three classes. Additional classes are $16,000.00

C-1
<PAGE> 16
SCHEDULE D
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
THE PILOT FUNDS
AND
BISYS FUND SERVICES, INC.

REPORTS

1. Daily Shareholder Activity Journal

2. Daily Fund Activity Summary Report

a. Beginning Balance

b. Dealer Transactions

c. Shareholder Transactions

d. Reinvested Dividends

e. Exchanges

f. Adjustments

g. Ending Balance

3. Daily Wire and Check Registers

4. Monthly Dealer Processing Reports

5. Monthly Dividend Reports

6. Sales Data Reports for Blue Sky Registration

7. Annual report by independent public accountants concerning BISYS'
shareholder system and internal accounting control systems to be filed
with the Securities and Exchange Commission pursuant to Rule 17Ad-13 of
the Securities Exchange Act of 1934, as amended.

D-1

<PAGE> 1
Exhibit 10(b)

GOODWIN, PROCTER & HOAR
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881

February 22, 1996

The Pilot Funds
3435 Stelzer Road
Columbus, OH 43219

Ladies and Gentlemen:

Reference is made to Post-Effective Amendment No. 30 (the "Amendment")
to the Registration Statement on Form N-1A (Registration No. 2-78440) filed
with the Securities and Exchange Commission with respect to the proposed sale
of an indefinite number of Pilot Class, Class A and Class B shares of
beneficial interest, $.001 per share par value (the "Shares"), of the Pilot
Growth Fund and the Pilot Diversified Bond Income Fund, two series of The Pilot
Funds, a Massachusetts business trust (the "Trust").

In rendering the opinion set forth below, we have examined such
records, documents and other instruments and have made such other examinations
and inquiries as we have deemed necessary to enable us to express the opinion
set forth herein.

Based upon and subject to the foregoing, we are of the opinion that the
Shares, when issued and sold in accordance with the terms of the Prospectus and
Statement of Additional Information relating to the Shares in effect at the
time of such issuance and sale, will be validly issued, fully paid and
non-assessable by the Trust.

We hereby consent to the filing of this opinion as an Exhibit to the
Amendment and to the reference to this firm in the Statement of Additional
Information under the heading "Independent Accountants and Counsel."

Very truly yours,

/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR