PILOT FUNDS, 485APOS, 1996-05-17

PILOT FUNDS
485APOS, 1996-05-17

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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 May 17, 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. 31 /x/

and

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

Amendment No. 32 /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)

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

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

/ / 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

PROSPECTUS

Financial
Direction July , 1996

[LOGO]

PILOT SMALL CAPITALIZATION
EQUITY FUND

PILOT SHARES

THE
PILOT
FUNDS
NOT PART OF PROSPECTUS
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EXPENSE SUMMARY................................................................................... 2
FINANCIAL HIGHLIGHTS.............................................................................. 3
INTRODUCTION...................................................................................... 4
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS.................................................. 4
DESCRIPTION OF SECURITIES AND INVESTMENT TECHNIQUES............................................. 4
SPECIAL RISK FACTORS............................................................................ 8
FUNDAMENTAL LIMITATIONS......................................................................... 8
INVESTING IN THE PILOT FUNDS...................................................................... 9
HOW TO BUY SHARES............................................................................... 9
HOW TO SELL SHARES.............................................................................. 10
DIVIDENDS AND DISTRIBUTIONS....................................................................... 10
EXCHANGE PRIVILEGE................................................................................ 11
THE PILOT FAMILY OF FUNDS......................................................................... 11
THE BUSINESS OF THE FUND.......................................................................... 11
FUND MANAGEMENT................................................................................. 11
TAX IMPLICATIONS................................................................................ 13
MEASURING PERFORMANCE........................................................................... 14
</TABLE>

<PAGE> 4

THE PILOT FUNDS

[LOGO]

PROSPECTUS FOR PILOT SHARES

OF THE

PILOT SMALL CAPITALIZATION EQUITY FUND

July , 1996

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

The Pilot Funds is an open-end, management investment company (a "mutual fund")
consisting of multiple portfolios. This prospectus relates solely to the
offering of Pilot Shares of the Pilot Small Capitalization Equity Fund (the
"Fund"). Boatmen's Trust Company serves as the Fund's investment adviser (the
"Adviser"). Pilot Funds Distributors, Inc. serves as the Fund's distributor, and
its BISYS Fund Services Limited Partnership serves as the Fund's administrator.

The Fund seeks to provide long-term capital growth by investing primarily in
equity securities of companies with market capitalizations of $1 billion or
less. The Fund is intended for investors seeking long-term capital growth which
are willing to accept the relative risks associated with small cap investments.

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 FUND INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. IN ADDITION, THE AMOUNT OF
DIVIDENDS PAID BY THE FUND WILL VARY. BOATMEN'S TRUST COMPANY SERVES AS
INVESTMENT ADVISER TO THE FUND, IS PAID A FEE FOR ITS SERVICES, AND IS NOT
AFFILIATED WITH PILOT FUNDS DISTRIBUTOR, INC., THE FUND'S DISTRIBUTOR.

THIS PROSPECTUS DESCRIBES CONCISELY THE INFORMATION ABOUT THE FUND THAT YOU
SHOULD KNOW BEFORE INVESTING. PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE.

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN A STATEMENT OF ADDITIONAL
INFORMATION THAT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
STATEMENT OF ADDITIONAL INFORMATION DATED JULY , 1996 CAN BE OBTAINED FREE
UPON REQUEST BY CALLING 800/71-PILOT, BY CALLING YOUR INSTITUTION OR BY WRITING
PILOT FUNDS DISTRIBUTORS, INC., 125 WEST 55TH STREET, NEW YORK, NEW YORK 10019.
THE STATEMENT OF ADDITIONAL INFORMATION, AS IT MAY BE REVISED FROM TIME TO TIME,
IS INCORPORATED BY REFERENCE INTO, AND 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> 5

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 Fund's shareholder transaction expenses and
the operating expenses which the Fund expects to incur during the current fiscal
year on its Pilot Shares. Examples based on this information are also provided.

<TABLE>
<CAPTION>
PILOT
SHARES
----
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Front End Sales Charge Imposed on Purchases (as a percentage of offering price)....... None
Sales Charge Imposed on Reinvested Dividends.......................................... None
Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, whichever is lower)........................................................ None
Exchange Fee.......................................................................... None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets):
Management Fee (after waivers)(1)..................................................... 0.75%
Rule 12b-1/Distribution Payments...................................................... 0.00%
Other Expenses(2)..................................................................... 0.25%
----
Total Fund Operating Expenses(1)...................................................... 1.00%
=====
<FN>
- ------------
(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 the Fund.
Without waivers by the Adviser, investment management fees as a percentage
of net assets would be 1.00%. The Adviser and Administrator also expect to
reimburse a portion of the operating expenses of Pilot Shares of the Fund
during the current fiscal year. Absent waivers and expense reimbursements,
the total operating expenses for Pilot Shares of the Fund would be 1.77%.
These waivers and reimbursements are voluntary and may be terminated at any
time with respect to any Fund at the discretion of the Adviser or
Administrator and without the consent of the Fund. You should note that any
fees that are charged by the Fund's Adviser, its affiliates or any other
institutions directly to their customer accounts for services related to an
investment in the Fund are in addition to and not reflected in the fees and
expenses described above.
(2) Other Expenses are based on estimated amounts incurred during the current
fiscal year. The table does not reflect the allocation of any miscellaneous
"class expenses" (i.e. certain printing and registration expenses).
</TABLE>

EXAMPLE: Assume that the annual return on the Fund is 5%, and that its 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 3
YEAR YEARS
AFTER AFTER
PURCHASE PURCHASE
---- ----
<S> <C> <C>
Pilot Shares........................................................... $ 10 $ 32
</TABLE>

THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
INVESTMENT RETURNS OR OPERATING EXPENSES. THE FUND IS NEW AND ACTUAL INVESTMENT
RETURNS AND OPERATING EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.

2
<PAGE> 6

THE PILOT FUNDS
FINANCIAL HIGHLIGHTS

The following data with respect to a Share of the Pilot Small Capitalization
Equity Fund outstanding during the periods indicated have not been audited and
should be read in conjunction with the financial statements and related notes
incorporated by reference and attached to the Statement of Additional
Information.

<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 12, 1995
THROUGH
FEBRUARY 29, 1996(A)
-------------------------------
PILOT CLASS A CLASS B
SHARES SHARES SHARES
------- ------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..................................... $ 10.00 $ 10.00 $ 10.00
------- ------- -------
Investment Activities
Net investment income.................................................. 0.04 0.01 0.01
Net realized and unrealized gains from investments and futures......... 0.18 0.18 0.20
------- ------- -------
Total from Investment Activities....................................... 0.22 0.19 0.21
Distributions
From net investment income............................................. (0.04) (0.01) (0.01)
From net realized gains................................................ -- -- --
------- ------- -------
Total distributions.................................................... (0.04) (0.01) (0.01)
------- ------- -------
Net Asset Value, End of Period........................................... $ 10.18 $ 10.18 $ 10.20
======== ======== ========
Total Return(b).......................................................... 2.17% 1.95% 2.05%
Ratios/Supplemental Data:
Net Assets at end of period (000)...................................... $28,679 $ 349 $ 408
Ratio of expenses to average net assets................................ 0.97%(c) 1.23%(c) 2.01%(c)
Ratio of net investment income to average net assets................... 1.75%(c) 1.07%(c) 0.25%(c)
Ratio of expenses to average net assets assuming no waiver or expense
reimbursement....................................................... 2.05%(c) 2.13%(c) 2.91%(c)
Ratio of net investment income (loss) to average net assets assuming no
waiver or expense reimbursement..................................... 0.67%(c) 0.17%(c) (0.65%)(c)
Portfolio turnover rate(d)............................................. 2.27% 2.27% 2.27%
</TABLE>

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

a) Period from commencement of operations.

b) Total return from date of inception excludes sales charge of Class A Shares
and Class B Shares, would have been lower had certain expenses not been
reduced during the periods presented, and is not annualized.

c) Annualized.

d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing among the classes of shares issued.

3
<PAGE> 7

INTRODUCTION

The Pilot Small Capitalization Equity Fund uses a variety of different
investments and investment techniques in seeking to achieve the Fund's
investment objective. The Fund may not use all of the investments and investment
techniques described in the following sections. The Fund is not designed to be a
complete investment program but can be appropriate as part of a complete
investment strategy. You should consider whether the Fund meets your investment
goal. Although the Fund attempts 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 THE
FUND. HOWEVER, SHAREHOLDERS WILL BE GIVEN AT LEAST 30 DAYS' PRIOR WRITTEN NOTICE
IN THE EVENT OF A CHANGE IN THE FUND'S OBJECTIVE. UNLESS OTHERWISE STATED, EACH
INVESTMENT POLICY DESCRIBED BELOW MAY BE CHANGED AT ANY TIME BY THE PILOT FUNDS.

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

The investment objective of the 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 addition, under normal
circumstances, the Fund will invest at least 65% of its total assets in
companies with a market capitalization of $1 billion or less.

In making investment decisions for the Fund, the Adviser on a quarterly basis,
classifies approximately 6,000 companies by market value and eliminates the
largest 20%. The remaining companies constitute the Fund's small-capitalization
universe and generally represents only one-tenth of the aggregate U.S. equity
market capitalization. Due to the large number of small stocks to choose from,
the Adviser's selection process uses advanced quantitative techniques to
identify buy and sell candidates in a timely and objective manner. The strategy
is to own those investments offering both attractive fundamental valuation and
relative earnings improvement. Typically, two types of companies are purchased:
(i) mature companies which may have fallen from a larger market value due to
business difficulties, but which now exhibit improving prospects; and (ii)
smaller or younger companies which are experiencing strong trends in earnings
growth, but remain reasonably valued and therefore offer premium growth at a
discount in comparison to other companies.

The Adviser's internally designed investment approach uses a sophisticated
valuation process which measures changes in current earnings estimates and
longer-term growth trends, compares recent earnings results with market
expectations, and evaluates a company's earnings power relative to its stock
price. Companies become purchase candidates based upon a composite ranking of
these factors, and the top 20% are further evaluated on additional criteria.
Candidates for investment must also possess a sound financial structure and
demonstrate consistent factor rankings before being added to the Fund's
portfolio.

The Fund's weighted median capitalization generally is not expected to exceed
125% of the weighted median capitalization of the Russell 2000 as measured on a
quarterly basis, although this may vary from time to time. Furthermore, a stock
may be sold if the composite rank falls into the bottom 20% of the universe,
financial quality weakens significantly, or if individual factors demonstrate
patterns of deterioration.

The Fund may invest up to 35% of its assets in securities of issuers with a
market capitalization greater than $1 billion and in debt securities. However,
the Fund will not invest more than 10% of its total assets in debt securities,
unless the Fund assumes a temporary defensive position as discussed below. Debt
securities, if any, purchased by the Fund will be rated AA or above by Standard
and Poor's Corporation ("S & P") or Aa or above by Moody's Investor Services,
Inc. ("Moody's") or, if unrated, determined by the Adviser to be of comparable
quality. For temporary defensive purposes, the Fund may invest up to 100% of its
assets in debt securities. Debt securities in which the Fund may invest include
short-term and intermediate-term obligations of corporations, the U.S. and
foreign governments and international organizations (such as the International
Bank for Reconstruction and Development (the "World Bank")), including money
market instruments.

Investments and investment techniques in which the Fund may invest include
common stocks (including securities convertible into common stocks) of foreign
issuers and rights to purchase common stock, options and futures contracts on
securities, securities indexes and foreign currencies, securities lending and
repurchase agreements. These and other securities in which the Fund may invest
are further described below.

DESCRIPTION OF SECURITIES AND
INVESTMENT TECHNIQUES

- --Equity Securities. Equity securities evidence an ownership interest in the
issuer and include common stocks, preferred stocks and convertible securities.

4
<PAGE> 8

- --Convertible Securities. The Fund may invest in convertible securities, which
may offer higher income than the common stocks into which they may be
converted. All convertible securities purchased by the Fund will be rated AA or
above by S & P or Aa or above by Moody's or, if unrated by S & P and Moody's,
determined by the Adviser to be of comparable quality. Convertible securities
(which may be current or zero coupon securities) are bonds, notes, debentures,
preferred stocks or other securities which may be converted or exchanged at a
stated or determinable exchange ratio into shares of common stock. Prior to
their conversion, convertible securities have general characteristics similar
to non- convertible securities. While convertible securities generally offer
lower interest or dividend yields than non-convertible securities of similar
quality, they may reflect changes in the value of the underlying common stock.
Convertible securities generally entail less credit risk than the issuer's
common stock because they rank senior to common stock.

- --Foreign Securities. The Fund may invest in foreign securities which are
denominated in foreign currencies. Investment in foreign securities may present
a greater degree of risk than investment in domestic securities because of less
publicly-available financial and other information, less securities regulation,
different accounting standards, lower trading volume and market volatility,
difficulties in enforcing obligations, potential imposition of foreign
withholding and other taxes (including withholding on dividends or interest paid
to the Fund), war, expropriation or other adverse governmental or economic
actions. Furthermore, the settlement period of securities transactions may be
longer in foreign markets than in domestic markets, delivery of securities
without payment therefor may be required and transactions may involve
non-negotiable brokerage commissions. Purchases of foreign securities by the
Fund will usually be made in foreign currencies and, as a result, the Fund may
incur currency conversion costs and may be affected favorably or unfavorably by
changes in the value of foreign currencies against the U.S. dollar. In addition,
the Fund's performance may be favorably or unfavorably affected by changes in
exchange rates or exchange rate controls, which may include suspension of the
ability to transfer currency from a given country. These risks generally are of
greater concern in developing countries. The Fund may acquire U.S. dollar
denominated obligations of the World Bank. Obligations of the World Bank are
supported by subscribed but unpaid commitments of its member countries; there is
no assurance that these commitments will be fulfilled in the future.

- --American/European Depository Receipts. The Fund may invest indirectly in the
securities of foreign issuers through sponsored or unsponsored ADRs and EDRs or
other securities representing securities of companies based in countries other
than the United States. Transactions in these securities may not necessarily be
settled in the same currency as the underlying securities which they represent.
Ownership of unsponsored ADRs and EDRs may not entitle the Fund to financial or
other reports from the issuer, to which it would be entitled as the owner of
sponsored ADRs or EDRs. Generally, ADRs, in registered form, are designed for
use in the U.S. securities markets, and EDRs, in bearer form, are designed for
use in European securities markets. ADRs and EDRs also involve certain risks of
other investments in foreign securities.

- --Options Transactions. The Fund may purchase and sell (write) call and put
options on securities. Such options are agreements by the Fund in exchange for a
premium to sell or purchase securities at a specified price if the option is
exercised on or before a set date. Put options on securities will be written
only when the underlying securities are ones which the Fund could otherwise
purchase. Risks associated with writing covered options include the possible
inability to effect closing transactions at favorable prices and an appreciation
limit on the securities set aside for settlement. Call options will be sold
(written) only when the underlying securities are ones which the Fund holds.

The Fund may purchase and sell (write) call and put options on securities to
hedge against the risk of unfavorable price movements adversely affecting the
value of the securities the Fund holds or intends to buy.

The Fund may also purchase and sell (write) call and put options on securities
indexes to hedge against the risk of unfavorable price movements in securities.
Options on securities indexes are similar to options on securities except that
the holder of an option on an index has the right, in return for the premium
paid, to buy from (in the case of a call) or sell (in the case of a put) the
writer of the option the cash value of the index (rather than the security
underlying the option) at a specified exercise price at any time during the term
of the option.

The Fund is required to segregate assets, consisting of cash, U.S. Government
securities or other high grade liquid debt obligations in an amount equal to the
value of its obligations unless offsetting positions are maintained.

- --Futures Contracts and Options on Futures Contracts. For bona fide hedging or
other permissible risk

5
<PAGE> 9

management purposes, such as protecting the price or interest rate of a security
it holds or intends to buy, the Fund may enter into futures contracts on
securities and securities indexes and may purchase and sell (write) call and put
options on these futures contracts. The Fund may also enter into futures
contracts and related options for purposes consistent with the regulations of
the Commodities Futures Trading Commission.

Hedging and other risk-management transactions are undertaken to reduce or
eliminate any of several kinds of price fluctuation risk. For example, put
options on securities futures might be purchased to protect against declines in
the market values of debt securities occasioned by higher interest rates and
securities-index futures might be sold to protect against a general decline in
the value of securities of the type that comprise the index. If these hedging
transactions are successful, the futures or options positions taken by the Fund
will rise in value by an amount which approximately offsets the decline in the
value of the portion of a portfolio that is being hedged. Such decline in value
might be caused by a decline in the market value of portfolio securities.

The Fund may lose the expected benefit of futures transactions if securities
prices move in an unanticipated manner. Such unanticipated changes may also
result in poorer overall performance for the Fund than that performance it would
have had had it not entered into any futures transactions. In addition, changes
in the value of the Fund's futures and options positions may not prove to be
perfectly or even highly correlated with changes in the value of its portfolio
securities. This could limit the Fund's ability to hedge effectively against
interest rate or market risk or both and give rise to additional risks. There is
no assurance of market liquidity for purposes of closing out positions in
futures contracts and options on futures contracts; if such positions cannot be
closed, the Fund may incur losses in excess of its initial margin deposits.

The Fund will incur brokerage costs and will be required to post and maintain
"margin" as a good-faith deposit against performance of its obligations under
futures contracts and options thereon. In addition, the Fund is required to
segregate assets, consisting of cash, U.S. Government securities or other high
grade liquid debt obligations in an amount equal to the value of the instruments
underlying futures contracts and options thereon.

- --Forward Commitments and When-Issued Securities. The Fund may purchase
when-issued securities and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. The Fund is
required to hold and maintain in a segregated account with the Funds' custodian
or subcustodian until the settlement date, cash, U.S. Government securities or
other high grade liquid debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the Fund may enter into offsetting contracts for
the forward sale of other securities that it owns. Securities purchased or sold
on a when-issued or forward commitment basis involve a risk of loss if the value
of the security to be purchased decreases prior to the settlement date or if the
value of the security to be sold increases prior to the settlement date.
Although the Fund would generally purchase securities on a when-issued or
forward commitment basis with the intention of acquiring securities for its
portfolio, the Fund may dispose of a when-issued security or forward commitment
prior to settlement if the Adviser deems it appropriate to do so and such
disposition may give rise to a capital gain and loss.

- --Forward Foreign Currency Exchange Contracts. The Fund may enter into forward
foreign currency exchange contracts ("forward contracts") for hedging and to
purchase or sell currency in connection with purchases and sales of foreign
securities. A forward contract is individually negotiated and privately traded
by currency traders and their customers. 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. A forward contract may be for a single price or for a range of prices.
The Fund may be required to segregate assets, consisting of cash, U.S.
Government securities or other high grade liquid debt obligations to cover
forward contracts that require it to purchase foreign currency.

The purpose of entering into these contracts is to minimize the risk to the Fund
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. 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
("cross-hedging"). The amount in question could be less than or equal to the
value of the Fund's securities denominated in the less attractive currency. The
use of currency transactions can result in the 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 the Fund than that performance it would have had had it not
engaged in forward contracts.

6
<PAGE> 10

- --U.S. Government Securities. The Fund may purchase obligations of the U.S.
Government. These obligations are issued or guaranteed as to principal or
interest by the U.S. Government, its agencies, authorities or instrumentalities
("U.S. Government Securities"). Some U.S. Government securities, such as
Treasury bills, notes and bonds, which differ only in their interest rates,
maturities and times of issuance, are supported by the full faith and credit of
the United States. Others, such as obligations issued or guaranteed by U.S.
Government agencies, authorities or instrumentalities, are supported by (a) the
full faith and credit of the U.S. Government (such as securities of the Small
Business Administration), (b) the right of the issuer to borrow from the
Treasury (such as securities of the Federal Home Loan Banks), (c) the
discretionary authority of the U.S. Government to purchase the agency's
obligations (such as securities of the Federal National Mortgage Association),
or (d) only the credit of the issuer. No assurance can be given that the U.S.
Government will continue to provide financial support to U.S. Government
agencies, authorities or instrumentalities.

- --U.S. and Foreign Bank Obligations. The Fund may invest in domestic bank
obligations of banks that have total assets in excess of $1 billion and are
subject to U.S. Government regulation, and in certificates of deposit issued by
Federal Deposit Insurance Corporation (FDIC) members that have total assets less
than $1 billion, provided that the principal amounts of such certificates are
fully covered by FDIC insurance. The Fund may invest in U.S. dollar-denominated
foreign bank obligations of foreign banks that have total assets in excess of
$10 billion, are among the 75 largest foreign banks in total assets, have
branches or agencies in the U.S. and meet other criteria established by the
Fund's Trustees. The Fund may also invest in other bank obligations.

- --Lending of Portfolio Securities. The Fund may seek to increase its total
return by lending portfolio securities. Under present regulatory policies, such
loans may be made to institutions, such as broker-dealers, and are required to
be secured continuously by collateral in cash, U.S. Government securities or
other high grade liquid debt obligations maintained on a current basis at an
amount at least equal to the market value of the securities loaned. As with
other extensions of credit there are risks of delay in recovering, or even loss
of rights in, the collateral should the borrower of the securities fail
financially. However, the loans will be made only to firms deemed by the Adviser
to be of good standing, and when, in the judgment of the Adviser, the
consideration which may be earned currently from securities loans of this type
justifies the attendant risk. If securities loans are made, it is intended that
the value of the securities loaned would not exceed 30% of the value of the
total assets of the Fund.

- --Repurchase Agreements. The Fund may enter into repurchase agreements with
banks and selected broker-dealers. A repurchase agreement is an agreement under
which the Fund purchases securities and the seller agrees to repurchase the
securities within a particular time at a specified price. The repurchase price
will exceed the original purchase price, the difference being income to the
Fund, and will be unrelated to the interest rate on the purchased securities.
The Fund's custodian or subcustodian will maintain custody of the purchased
securities for the duration of the agreement. The value of the purchased
securities, including accrued interest, will at all times exceed the value of
the repurchase agreement. In the event of bankruptcy of the seller or failure of
the seller to repurchase the securities as agreed, the Fund could suffer losses,
including loss of interest on or principal of the security and costs associated
with delay and enforcement of the repurchase agreement.

- --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 the 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 the Fund will not
knowingly 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 the Fund to terminate them after seven days notice,
and securities that are not registered under the securities laws. Certain
securities that might otherwise be considered illiquid, however, such as
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. The Fund may engage in short-term trading to achieve its
investment objective. The annual portfolio turnover rate for the Fund is not
expected to exceed 125% 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 the Fund that constitutes taxable capital gains. To the extent capital gains
are realized, distributions from the gains may

7
<PAGE> 11

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 the 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 the 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 the Fund's assets which may be invested in
any single offering. Because of the active role which may be played by
affiliated brokers in the underwriting of securities, the Fund's ability to
purchase securities in the primary market may from time to time be limited.

SPECIAL RISK FACTORS

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

- --Small Capitalization Companies. The Fund invests primarily in smaller,
lesser-known companies which the Adviser believes offer greater growth potential
than larger, more mature, better-known firms. Investing in the securities of
such companies, however, may also involve greater risk and the possibility of
greater portfolio price volatility. Among the reasons for the greater price
volatility of these small company and unseasoned stocks are the less certain
growth prospects of smaller firms, the lower degree of liquidity in the markets
for such stocks, and the greater sensitivity of small companies to changing
economic conditions. For example, these companies are associated with higher
investment risk than that normally associated with larger firms due to the
greater business risks of small size and limited product lines, markets,
distribution channels and financial and managerial resources.

- --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.

- --Convertible Securities. In general, the market value of a convertible security
is the higher of its "investment value" (i.e., its value as a fixed-income
security) or its "conversion value" (i.e., the value of the underlying shares of
common stock if the security is converted). As a fixed-income security, the
market value of a convertible security generally increases when interest rates
decline and generally decreases when interest rates rise. However, the price of
a convertible security also is influenced by the market value of the security's
underlying common stock. Thus, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines.

FUNDAMENTAL LIMITATIONS

Certain investment policies of the 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 summarized below and are set out in full in the Statement of
Additional Information, which is available upon request.

1. The Fund may not invest 25% or more of its total assets in one or more
issuers conducting their principal

8
<PAGE> 12

business activities in the same industry (with certain limited exceptions).

2. The 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 the Fund can be invested without regard to the 5%
limitation. The Fund may not purchase more than 10% of the outstanding voting
securities of any issuer subject, however, to the foregoing 25% exception.

3. The 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. The 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
the Fund's portfolio securities does not mean that the limitation has been
violated.

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 Fund 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 investment in the 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 Fund's 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 1995 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 Fund's 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 Fund 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
the Fund may, at the discretion of the Adviser, be made in the form of
securities that are permissible investments for the 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

9
<PAGE> 13

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 shareholders records of the Fund, 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 Fund 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 Fund's 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 may incur
brokerage costs in converting securities to cash. The Fund 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 the Fund 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 the Fund.

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

DIVIDENDS AND DISTRIBUTIONS

Where do your dividends and distributions come from?

Dividends for the Fund are derived from its net investment income which 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 the portfolios.

The Fund realizes capital gains when it sells a security for more than its cost.
The 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.
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.

Your election is effective for dividends and distributions with record dates
after the date the Transfer Agent receives the election. Dividends and
distributions are declared and paid monthly.

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

Explanation of Sales Price

Pilot Shares of the Fund 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 the 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

10
<PAGE> 14

those shares, and then dividing the result by the number of Pilot Shares in the
Fund that are outstanding. The assets of the 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 the Fund 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
Fund Statement of Additional Information, which is available upon request.

EXCHANGE PRIVILEGE

If you wish, Pilot Shares of the 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 Fund
if the shares are to be held in such a qualified trust, agency or custodial
account. Pilot Shares of the 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

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, eleven 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.

The Fund offers 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 Fund, except certain payments under the Funds' Distribution
Plans applicable only to Class A or Class B Shares. Class A and Class B Shares
of the Fund are described in another prospectus.

Persons selling or servicing different classes of shares of the Fund 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 the 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.

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 the Fund, selecting the investments and
making purchase and sale orders. Its principal offices are located at 100 North
Broadway, St. Louis, Missouri 63178-4737.

11
<PAGE> 15
125 West 55th Street, New York, New York 10019. Concord is a wholly-owned
subsidiary of The BISYS Group, Inc.

Distributor: The 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 125 West 55th Street, New York, New York 10019.

Custodian: STATE STREET BANK AND TRUST COMPANY (referred to as "State Street")
is responsible for holding the investments purchased by the Fund. State Street
is located at 225 Franklin Street, Boston, Massachusetts 02110.

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

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 June 30, 1995, Boatmen's and its affiliates managed nearly
$83 billion in assets ($45 billion over which they had investment discretion and
$38 billion over which they did not have investment discretion).

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 Fund.

THE PERFORMANCE INFORMATION SET FORTH BELOW REFLECTS PAST PERFORMANCE AND IS NOT
NECESSARILY INDICATIVE OF THE FUTURE PERFORMANCE OF THE 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 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 Fund's quoted performance data will include the performance of the
Commingled Fund for periods prior to the Fund's effective date. 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.

COMPOSITE PERFORMANCE FOR THE COMMINGLED FUND(1)
SHOWING AVERAGE ANNUAL TOTAL RETURNS(2) FOR VARIOUS
PERIODS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
PILOT
SHARES
------
<S> <C>
One Year................................ 31.52%
Since Inception November 30, 1991....... 22.68%
<FN>
- ---------------
1. The Commingled Fund consists of the Small Capitalization Equity Collective
Employee Benefit Trust Fund of Boatmen's Trust Company.

2. The average annual total return is calculated in conformity with Securities
and Exchange Commission guidelines and includes reinvestment of all net
investment income and capital gain distributions and reflect projected annual
fund operating expenses of 1.00% for the Pilot Shares.
</TABLE>

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.

Michael E. Kenneally, CFA, Senior Vice President & Director of Research, is
primarily responsible for the day to day management of the Fund's investment
activities. Mike 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 products, and equity derivative strategies. 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/balanced portfolio manager.

Mr. Daniel N. Ginsparg, Senior Portfolio Manager and Manager of Quantitative
Research, is part of the team responsible for the day to day management of the
Pilot Small-Capitalization Equity Fund's investment activities. Mr. Ginsparg is
responsible for quantitative research and has been a Senior Small-Capitalization
portfolio manager at Boatmen's since December 1991. Mr. Ginsparg received both
his bachelor's degree and MBA in Finance and Operations Research from the
University of Missouri. He joined Boatmen's in 1989 and is member of the Chicago
Quantitative Alliance, the Society of

12
<PAGE> 16

Quantitative Analysts, and the St. Louis Society of Financial Analysts.

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. Concord has entered into an agreement with State
Street to perform certain services, such as the calculation of net asset value
of the Funds' shares and dividend and capital gains distributions to
shareholders, and maintaining the Funds' books and records. The Funds bear all
fees and expenses charged by State Street for these services. Certain officers
of The Pilot Funds, namely Messrs. West, Tomko, Dean, Lay and Martinez are also
employees and/or officers of Concord and the Distributor.

EXPENSES. In order to support the services described above, as well as other
matters essential to the operation of the Fund, the Fund incurs certain
expenses. Expenses are paid out of the 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 1.00% of the 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, the 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.

Operating expenses borne by the Fund 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. The 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 the Fund for such amounts prior
to fiscal year end. These waivers and reimbursements would increase the total
return to investors when made but would decrease total return if the 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 Fund. The following is only a short summary of the important
tax considerations generally affecting the Fund 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. The 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.

13
<PAGE> 17

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
the Fund will be taxable to you as ordinary income. Also, to the extent that the
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 the Fund, you should consider the effect of any
dividends and capital gain distributions that are expected to be declared or
that have been declared, but not yet paid. When the 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 the 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 Fund may realize a taxable gain or loss when redeeming,
transferring or exchanging shares of the 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.

The 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.

MEASURING PERFORMANCE

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

Understanding performance measures:

TOTAL RETURN for the 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.

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

Performance comparisons:

The Fund may compare its total returns to that of mutual funds with similar
investment objectives and to 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 is 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 Fund 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 the Fund 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.

14
<PAGE> 18

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 FUND WILL NOT BE INCLUDED IN THE FUNDS' CALCULATIONS OF TOTAL RETURN.

INQUIRIES REGARDING THE FUND MAY BE DIRECTED TO THE DISTRIBUTOR AT 125 WEST 55TH
STREET, NEW YORK, NEW YORK 10019.

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 FUND 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 FUND OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE FUND OR BY ITS DISTRIBUTOR IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.

15
<PAGE> 19

PILSMCPPS95P
<PAGE> 20

PROSPECTUS

Financial
Direction July ___ , 1996

[LOGO] PILOT SMALL CAPITALIZATION
EQUITY FUND

CLASS A SHARES AND
CLASS B SHARES

THE
PILOT
FUNDS

NOT PART OF PROSPECTUS
<PAGE> 21

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EXPENSE SUMMARY................................................................................... 2
FINANCIAL HIGHLIGHTS.............................................................................. 3
INTRODUCTION...................................................................................... 4
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS.................................................. 4
DESCRIPTION OF SECURITIES AND INVESTMENT TECHNIQUES............................................. 4
SPECIAL RISK FACTORS............................................................................ 8
FUNDAMENTAL LIMITATIONS......................................................................... 8
INVESTING IN THE PILOT FUNDS...................................................................... 9
HOW TO BUY SHARES............................................................................... 11
HOW TO SELL SHARES.............................................................................. 13
TRANSACTION RULES............................................................................... 14
YOUR PILOT FUND ACCOUNT........................................................................... 16
DIVIDENDS AND DISTRIBUTIONS....................................................................... 19
DISTRIBUTION AND SERVICE ARRANGEMENTS............................................................. 19
THE PILOT FAMILY OF FUNDS......................................................................... 20
THE BUSINESS OF THE FUND.......................................................................... 21
FUND MANAGEMENT................................................................................. 21
TAX IMPLICATIONS................................................................................ 23
MEASURING PERFORMANCE........................................................................... 24
</TABLE>

<PAGE> 22

THE PILOT FUNDS

[LOGO]

PROSPECTUS FOR CLASS A SHARES AND CLASS B SHARES

OF THE

PILOT SMALL CAPITALIZATION EQUITY FUND

July ___ , 1996

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

The Pilot Funds is an open-end, management investment company (a "mutual fund")
consisting of multiple portfolios. This prospectus relates solely to the
offering of Class A and Class B Shares of the Pilot Small Capitalization Equity
Fund (the "Fund"). Boatmen's Trust Company serves as the Fund's investment
adviser (the "Adviser"). Pilot Funds Distributors, Inc. serves as the Fund's
distributor, and BISYS Fund Services Limited Partnership serves as the Fund's
administrator.

THIS PROSPECTUS DESCRIBES CONCISELY THE INFORMATION ABOUT THE FUND THAT YOU
SHOULD KNOW BEFORE INVESTING. PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE.

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN A STATEMENT OF ADDITIONAL
INFORMATION THAT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
STATEMENT OF ADDITIONAL INFORMATION DATED JULY ___ , 1996 CAN BE OBTAINED FREE
UPON REQUEST BY CALLING 800/71-PILOT, BY CALLING YOUR INSTITUTION OR BY WRITING
PILOT FUNDS DISTRIBUTORS, INC., 125 WEST 55TH STREET, NEW YORK, NEW YORK 10019.
THE STATEMENT OF ADDITIONAL INFORMATION, AS IT MAY BE REVISED FROM TIME TO TIME,
IS INCORPORATED BY REFERENCE INTO, AND CONSIDERED A PART OF, THE PROSPECTUS.

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

1
<PAGE> 23

EXPENSE SUMMARY

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

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

<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Front End Sales Charge Imposed on Purchases (as a percentage of offering
price).................................................................... 4.50%(1) None
Sales Charge Imposed on Reinvested Dividends............................... None None
Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, whichever is lower).................................. None 4.50%(2)
Exchange Fee............................................................... None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets):
Management Fee (after waiver)(3)........................................... 0.75% 0.75%
Rule 12b-1/Distribution Payments........................................... 0.25% 1.00%
Other Expenses(4).......................................................... 0.25% 0.25%
---- ----
Total Fund Operating Expenses(3)........................................... 1.25% 2.00%
===== =====
<FN>
- ------------
(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."
(3) 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 the Fund.
Without waivers by the Adviser, investment management fees as a percentage
of net assets would be 1.00%. The Adviser and Administrator also expect to
reimburse a portion of the operating expenses of Class A Shares and Class B
Shares of the Fund during the current fiscal year. Absent waivers and
expense reimbursements, the total operating expenses for the Fund would be
2.02% and 2.77% for Class A Shares and Class B Shares, respectively. You
should note that any fees that are charged by the Fund's Adviser, its
affiliates or any other institutions directly to their customer accounts for
services related to an investment in the Fund are in addition to and not
reflected in the fees and expenses described above.
(4) Other Expenses are based on estimated amounts incurred during the current
fiscal year. The table does not reflect the allocation of any miscellaneous
"class expenses" (i.e. certain printing and registration expenses).
</TABLE>

BECAUSE OF THE DISTRIBUTION PAYMENTS PAID BY THE FUND 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.

<TABLE>
<CAPTION>
1 3
YEAR YEARS
AFTER AFTER
PURCHASE PURCHASE
-------- --------
<S> <C> <C>
Class A Shares(1)......................................................... $ 57 $ 83
Class B Shares
Assuming complete redemption at end of period(2)..................... $ 65 $ 98
Assuming no redemption............................................... $ 20 $ 63

<FN>
- ------------
(1) Assumes deduction at time of purchase of maximum applicable front-end sales
charge.
(2) Assumes deduction of maximum applicable contingent deferred sales charge.
</TABLE>

2
<PAGE> 24

THE PILOT FUNDS

FINANCIAL HIGHLIGHTS

<FN>
- ------------

a) Period from commencement of operations.

c) Annualized.

d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing among the classes of shares issued.

</TABLE>

3
<PAGE> 25

INTRODUCTION

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

DESCRIPTION OF SECURITIES AND
INVESTMENT TECHNIQUES

- --Equity Securities. Equity securities evidence an ownership interest in the
issuer and include common stocks, preferred stocks and convertible securities.

4
<PAGE> 26

- --Convertible Securities. The Fund may invest in convertible securities, which
may offer higher income than the common stocks into which they may be
converted. All convertible securities purchased by the Fund will be rated AA or
above by S & P or Aa or above by Moody's or, if unrated by S & P and Moody's,
determined by the Adviser to be of comparable quality. Convertible
securities (which may be current or zero coupon securities) are bonds, notes,
debentures, preferred stocks or other securities which may be converted or
exchanged at a stated or determinable exchange ratio into shares of common
stock. Prior to their conversion, convertible securities have general
characteristics similar to non- convertible securities. While convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality, they may reflect changes in the
value of the underlying common stock. Convertible securities generally entail
less credit risk than the issuer's common stock because they rank senior to
common stock.

- --Futures Contracts and Options on Futures Contracts. For bona fide hedging or
other permissible risk

5
<PAGE> 27

6
<PAGE> 28

7
<PAGE> 29

be ordinary income for federal tax purposes (see "The Business of the Fund--Tax
Implications").

SPECIAL RISK FACTORS

FUNDAMENTAL LIMITATIONS

8
<PAGE> 30

1. The 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. The 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

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 125 West 55th Street,
New York, New York 10019.

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 institution and the Fund 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.

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
Fund 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.

9
<PAGE> 31

Class A Shares: Class A Shares are sold at their net asset value plus a
front-end sales charge of up to 4.50%. (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 the 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 the 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.

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 the 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 the 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

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

10
<PAGE> 32
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>
<CAPTION>
CALL FOR INFORMATION
- ---- ---------------
<S> <C>
800/71-PILOT Regarding the Funds' investment
8:00 am to objectives and policies or for
7:00 pm information about opening an account
Central time (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 To obtain your account balance or to
7:30 am to request a telephone transaction.
4:00 pm
Central time
- ----------------------------------------------------
</TABLE>

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>

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".

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>
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
- ---------------
<FN>
*Applies to employees of the Adviser and its affiliates.
</TABLE>
11
<PAGE> 33

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
DIRECTLY WITH THE PILOT FUNDS HELD DIRECTLY WITH THE PILOT FUNDS
------------------------------------------- -------------------------------------------
<S> <C> <C>
By Mail to: -- Complete an Account Application and mail -- Make your check payable to the Fund in
The Pilot Funds, it, along with a check payable to the which you are investing and mail it to
c/o BISYS Fund Services Fund in which you are investing, to the the address on the left.
Dept. L-1709 address on the left. -- Please include your account number on
Columbus, OH 43260-1709 your check.
-- Or use the convenient form attached to
your regular Fund statement.
- -----------------------------------------------------------------------------------------------------------------------
In Person to: -- Deliver the Account Application and your -- Deliver your check payable to the Fund
BISYS Fund Services check payable to the Fund in which you in which you are investing to the address
3435 Stelzer Rd. are investing to the address on the left. on the left.
Columbus, OH 43219 -- Please include your account number on
your check.
- -----------------------------------------------------------------------------------------------------------------------
By Wire to: -- Call 800/227-3654 for instructions. -- Ask your bank to wire immediately
State Street Bank and available funds as described at left,
Trust Company except that the wire should note that it
Boston, MA is to make a subsequent purchase rather
ABA No. 011000028 than to open a new account.
F/B/O Pilot Funds Incoming -- Please include your Fund account number.
Wire Account
DDA No. 52165420
For further credit to:
Fund and account number
Consult your bank for information on remitting funds by wire and associated bank charges.
- -----------------------------------------------------------------------------------------------------------------------
Automatic Investment (allows -- You must first complete an Account -- Call 800/71-PILOT to find out how to set
regular investment without Application and select the Automatic up this service.
ongoing paperwork) Investment Plan option. -- Additional purchases will then
-- Call 800/71-PILOT for more information. automatically 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 the 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 the 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 the 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.

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 1995 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 Fund begins at 4.50% and may decrease as the amount
you

12
<PAGE> 34

invest in Class A Shares increases, as shown in the following chart:

<TABLE>
<CAPTION>
PER SHARE DEALERS
AS A REALLOWANCE
PERCENTAGE OF AS A
------------- PERCENTAGE
NET OF
OFFERING ASSET OFFERING
AMOUNT OF TRANSACTION PRICE VALUE 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 .90
$2,500,000 and over........ 0.00 0.00 0.00
</TABLE>

It is possible that the dealers reallowance shown in the table 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 chart 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.

<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>

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%, 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 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.

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<PAGE> 35
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
HOW TO REDEEM SHARES ADDITIONAL LIMITATIONS
------------------------------------ ------------------------------------
<S> <C> <C>
By Mail to: -- Send a signed request (each -- Requests greater than $50,000 per
The Pilot Funds, owner, including each joint owner, day must be signature guaranteed.
c/o BISYS Fund Services must sign) to the Transfer Agent
Department L-1709 at the address on the left. -- You should refer to "Transaction
Columbus OH 43260-1709 Rules" below for additional
-- Be sure to include both the name limitations.
of the Fund whose shares you are
selling and your account number.
- -----------------------------------------------------------------------------------------------------------
By Wire to: -- After you have signed up for wire -- The Transfer Agent may act upon
redemption privileges on the such a request from any person
Account Application, you may representing himself or herself to
instruct the Transfer Agent to be you and reasonably believed by
wire your redemption proceeds to the Transfer Agent to be genuine.
your bank account by sending a
request in writing or by phone -- The transaction amount must be a
(800/227-3654). $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 by each
BISYS Fund Services directly to the Transfer Agent at owner, including each joint owner.
3435 Stelzer Road the address on the left.
Columbus, OH 43219 -- Requests greater than $50,000 per
day must be signature guaranteed.
- -----------------------------------------------------------------------------------------------------------
Automatic Withdrawal -- Withdrawals begin after you have -- Your account must have a total
(permits automatic signed up for this service (either net asset value of at least $5,000.
withdrawal on the account application or in a
of pre-arranged amount) subsequent letter to the Transfer -- The transaction amount must be at
Agent). least a $50 minimum.

-- Call 800/71-PILOT for more
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).

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).

14
<PAGE> 36

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 seven (three Business Days after June 7, 1995)
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 Fund, 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 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 THE 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

15
<PAGE> 37

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 the trust department
of Boatmen's or its affiliates, (11) any purchase of Fund shares by a
shareholder who purchased Pilot Administration Shares of the Pilot Kleinwort
Benson 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 Kleinwort Benson 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 Kleinwort
Benson 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 701/2; (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. 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 Department L-1709 Columbus, OH 43260-1709. Specifically, Class
A Shares of the Fund may be exchanged for Class A Shares of any other Fund and
Class B Shares of the 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.

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 the 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

16
<PAGE> 38

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 $500. 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 Pilot Administration Shares of the Pilot Kleinwort
Benson International Equity Fund (the "International Equity Fund") as part of a
wrap fee program and who has continuously held shares of the International
Equity Fund, may exchange Pilot Administration 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 Pilot Administration Shares of the 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 the Fund, may exchange Pilot Administration 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 become directly or indirectly a beneficial owner of shares
of the Pilot Kleinwort Benson International Equity Fund (the "Fund") as a result
of a reorganization between the two funds, and who has continuously held shares
of the Fund, may exchange Pilot Administration Shares or Class A shares of any
fund in the Pilot Family of Funds for Pilot Administration Shares or 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.

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 initial and 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 Department
L-1709 Columbus, OH 43260-1709. You may also implement

17
<PAGE> 39

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 Fund account you are
withdrawing from has a minimum current balance of at least $5,000. There is no
minimum withdrawal amount required for automatic withdrawals by employees of
Boatmen's or its affiliates. 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 (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 Fund or Pilot Administration
Shares of the Pilot Kleinwort Benson International Equity Fund 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 the Pilot U.S.
Government Securities Fund with a current value of $10,000, you would pay a
front-end sales charge of 3.75% (the charge applicable to a $100,000 purchase)
on your $10,000 purchase.

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

18
<PAGE> 40

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

You may want to have your dividends received from the 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 the Fund, you may reinvest all or any
portion of your redemption proceeds in Class A shares of any other Fund or in
Pilot Administration Shares of the Pilot Kleinwort Benson International Equity
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?

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 the Fund for which the dividend or distribution was
declared, unless you specifically elect to receive payments in cash or elect the
Cross-Reinvestment Privilege 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, Department L-1709 Columbus, OH 43260-1709.

Your election is effective for dividends and distributions with record dates
after the date the Transfer Agent receives the election. Dividends and
distributions are declared and paid monthly.

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

The dividends and distributions paid by the 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

19
<PAGE> 41

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 .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.

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 the 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.

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 Fund 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.

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 Fund 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

20
<PAGE> 42

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 Fund are described in this prospectus. The
Fund also offers 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 Fund, 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 Fund may receive
different compensation with respect to one particular class of shares as opposed
to another in the same Fund.

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

Administrator: CONCORD HOLDING CORPORATION (referred to as "Concord"), is
responsible for coordinating the Fund's efforts and generally overseeing the
operation of the Funds' business. Concord's principal offices are located at 125
West 55th Street, New York, New York 10019. Concord is a wholly-owned subsidiary
of The BISYS Group, Inc.

Transfer Agent: BISYS FUND SERVICES OHIO, 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.

The Fund's quoted performance data will include the performance of the
Commingled Fund for periods prior to

21
<PAGE> 43

the Fund's effective date. 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.

COMPOSITE PERFORMANCE FOR THE COMMINGLED FUND(1)
SHOWING AVERAGE ANNUAL TOTAL RETURNS(2) FOR VARIOUS
PERIODS ENDED SEPTEMBER 30, 1995

<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
One Year............................. 25.30% 25.74%
Since Inception (November 30,
1991).............................. 20.92% 21.02%
<FN>
- ---------------
1. The Commingled Fund consists of the Small Capitalization Equity Collective
Employee Benefit Trust Fund of Boatmen's Trust Company.

</TABLE>

Michael E. Kenneally, CFA Senior Vice President & Director of Research, is
primarily responsible for the day to day management of the Fund's investment
activities. Mike 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 products, and equity derivative strategies. 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/balanced portfolio manager.

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. Concord has entered into an agreement with State
Street to perform certain services, such as the calculation of net asset value
of the Funds' shares and dividend and capital gains distributions to
shareholders, and maintaining the Funds' books and records. The Funds bear all
fees and expenses charged by State Street for these services. Certain officers
of The Pilot Funds, namely Messrs. West, Tomko, Dean, Lay and Martinez, are also
employees and/or officers of Concord and the Distributor.

Boatmen's is entitled to advisory fees that are calculated daily and payable
monthly at the annual rate of 1.00% of the Fund's average daily net assets.

22
<PAGE> 44

on the next $1.5 billion and .1075 of 1% of The Pilot Funds' average net assets
in excess of $3 billion.

TAX IMPLICATIONS

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

In order to so qualify, the 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 the Fund will
be taxable to you as ordinary income. Also, to the extent that the 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.

23
<PAGE> 45

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.

MEASURING PERFORMANCE

Understanding performance measures:

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

Performance comparisons:

INQUIRIES REGARDING THE FUND MAY BE DIRECTED TO THE DISTRIBUTOR AT 125 WEST 55TH
STREET, NEW YORK, NEW YORK 10019.

24
<PAGE> 46

PILSMCPAB95P
<PAGE> 47

THE PILOT FUNDS
125 West 55th Street
New York, New York 10019

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

STATEMENT OF ADDITIONAL INFORMATION

JULY ____, 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 twelve portfolios, one of which, the
Pilot Small Capitalization Equity Fund (the "Fund"), is offered hereby.

Boatmen's Trust Company ("Boatmen's") serves as the investment adviser
to the Fund. Pilot Funds Distributors, Inc. serves as the Fund's distributor,
and its parent, Concord Holding Corporation ("Concord"), serves as the Trust's
administrator.

This Statement of Additional Information is not a Prospectus, should
be read in conjunction with the Prospectus dated July ___, 1996 with
respect to Pilot Shares, Class A Shares and Class B Shares of the Fund and is
incorporated by reference in its entirety into such Prospectus. 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 Fund should be made
solely upon the information contained herein. Copies of the Prospectus may be
obtained without charge by writing to Pilot Funds Distributors, Inc., 125 West
55th Street, New York, New York 10019.

SHARES OF THE FUND 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
FUND INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. IN
ADDITION, THE AMOUNT OF DIVIDENDS PAID BY THE FUND WILL GO UP AND DOWN.

B-1
<PAGE> 48
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Investment Policies And Practices Of The Fund . . . . . . . . . . . . . . . . . B-3
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13
Trustees And Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
Investment Adviser, Administrator, Distributor And Transfer Agent . . . . . . . B-19
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
Matters Relating to Class A Shares and Class B Shares . . . . . . . . . . . . . B-24
Additional Purchase and Redemption Information . . . . . . . . . . . . . . . . B-26
Calculation Of Performance Quotations . . . . . . . . . . . . . . . . . . . . . B-30
Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
Organization And Capitalization . . . . . . . . . . . . . . . . . . . . . . . . B-36
Custodian And Subcustodians . . . . . . . . . . . . . . . . . . . . . . . . . . B-38
Independent Accountants And Counsel . . . . . . . . . . . . . . . . . . . . . . B-38
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>

B-2
<PAGE> 49
INVESTMENT POLICIES AND PRACTICES OF THE FUND

The following discussion elaborates on the description of the Fund's
investment policies and practices contained in the Prospectus. 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.

SMALL CAPITALIZATION COMPANIES

The Fund invests primarily in smaller, lesser-known companies which
the Adviser believes offer greater growth potential than larger, more mature,
better-known firms. Investing in the securities of such companies, however, may
also involve greater risk and the possibility of greater portfolio price
volatility. Among the reasons for the greater price volatility of these small
company and unseasoned stocks are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for such stocks, and the
greater sensitivity of small companies to changing economic conditions. For
example, these companies are associated with higher investment risk than that
normally associated with larger firms due to the greater business risks of
small size and limited product lines, markets, distribution channels and
financial and managerial resources.

CONVERTIBLE SECURITIES

The 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 Equity Funds will be
rated AA or above by S&P or Aa or above by Moody's or, if unrated by S&P and
Moody's, 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.

B-3
<PAGE> 50
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.

FOREIGN SECURITIES

The Fund 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 the 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 the Fund are
uninvested and no return is earned thereon. Also, delivery of securities
before payment may be required in some countries. The inability of the Fund to
make intended security purchases due to settlement problems could cause the
Fund to miss attractive investment opportunities. Inability to dispose of
portfolio securities due to settlement problems could result either in losses
to the 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
the Fund will endeavor to achieve the most favorable net results on its
portfolio transactions. Further, the 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

B-4
<PAGE> 51
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. The Fund seeks to mitigate
the risks associated with the foregoing considerations through diversification
and continuous professional management.

U.S. GOVERNMENT OBLIGATIONS

The Fund may invest in U.S. Government obligations. Examples of the
types of U.S. Government obligations that may be held by the Fund 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.

CORPORATE DEBT SECURITIES

The 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). The Fund
may also invest in corporate debt securities of foreign issuers.

The corporate debt securities in which the Fund may invest will be
rated AA or above by Standard & Poor's Corporation ("S&P") or Aa or above by
Moody's Investors Services, Inc. ("Moody's") or if unrated by S&P and
Moody's, determined by the Adviser to be of comparable quality. Commercial
paper purchased by the Fund will be rated A-2/P-2 or above. Corporate debt
securities that are not rated may be purchased by the Fund if they are
determined by Boatmen's to be of comparable quality under the direction of the
Board of Trustees of the Trust. If the rating of any corporate debt security
held by the Fund falls below such ratings or if Boatmen's determines that an
unrated corporate debt security is no longer of comparable quality, then such
security shall be disposed of in an orderly manner as quickly as possible. A
description of these ratings is attached in an Appendix to this Statement of
Additional Information.

B-5
<PAGE> 52
U.S. AND FOREIGN BANK OBLIGATIONS

These obligations include negotiable certificates of deposit, banker's
acceptances and fixed time deposits. The 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. The 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 the 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 the Fund's right to transfer a beneficial interest
in the deposit to a third party.

The 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 the 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. The 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. The Fund will limit its investment in
securities of foreign banks to not more than 20 % of total assets at the time
of investment. The 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

The 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 the 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.

The 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, the Fund may dispose of or renegotiate a commitment after entering
into it. The Fund also may sell securities it has committed to purchase before
those securities are delivered to the Fund on the settlement date. The Fund may
realize a capital gain or loss in connection with these transactions.

When the 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

B-6
<PAGE> 53
subcustodian will hold the portfolio securities themselves in a segregated
account while the commitment is outstanding. These procedures are designed to
ensure that the Fund will maintain sufficient assets at all times to cover its
obligations under when-issued purchases, forward commitments and delayed
settlements.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

The Fund may invest in forward foreign currency exchange contracts
("forward contracts") for hedging purposes. 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.

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. The
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 the Fund's securities denominated in the
less attractive currency.

The 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.

REPURCHASE AGREEMENTS

The 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., the 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.

B-7
<PAGE> 54
Repurchase agreements pose certain risks for all entities, including
the Fund, that utilize them. Such risks are not unique to the Fund but are
inherent in repurchase agreements. The Fund seeks 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, the Fund would be at risk of losing some
or all of the principal and income involved in the transaction. To minimize
this risk, the Fund utilizes 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 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.

The 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 the Fund may purchase.

LENDING OF PORTFOLIO SECURITIES

When the Fund lends its securities, it continues to receive interest
and dividends 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 the 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 the 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.

B-8
<PAGE> 55
OTHER INVESTMENT COMPANIES

In seeking to attain its investment objectives, the Fund may invest in
securities issued by other investment companies within the limits prescribed by
the 1940 Act. The 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, the 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 the Fund bears in connection with its own
operations.

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

The Fund may purchase and sell (write) both listed and
over-the-counter call and put options. 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.)

If an option written by the 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 the 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).
There can be no assurance, however, that a closing purchase or sale transaction
can be effected when the Fund desires.

The 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

B-9
<PAGE> 56
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 the
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 the 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 the 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 the 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

The Fund may enter into futures contracts on securities and futures
contracts based on securities indices, which futures are traded on exchanges
that are licensed and regulated by the Commodity Futures Trading Commission
("CFTC"). The 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.

The 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 the 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 the Fund's securities and futures
contracts based on indices, the 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 the Fund's securities will substantially be
offset by appreciation in the value of the futures position. On other occasions
the Fund may take a "long" position by purchasing futures contracts. This would
be done, for example, when the 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. The 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.

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. The 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. The Fund's position in the futures market will be
marked-to-market on a daily basis; the Fund may subsequently be required to
make "variation" margin payments depending upon whether its futures position
declines or rises in value.

B-10
<PAGE> 57
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,
the 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

The 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 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

B-11
<PAGE> 58
by the amount of the premium it has received. Such loss may partially offset
favorable changes in the value of its portfolio securities.

The 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

The 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 the Fund may
benefit from the use of such contracts, unanticipated changes in securities 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 the 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 the Fund may be exposed to risk of loss.

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

RESTRICTED AND OTHER ILLIQUID SECURITIES

The 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, the 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, 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 the 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 the Fund to the extent that qualified institutional buyers
become for a time uninterested in purchasing these restricted securities.

COMBINED TRANSACTIONS

The 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 the Fund to do so and where
underlying hedging strategies are permitted by the 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.)

B-12
<PAGE> 59
USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

Options, futures and forward foreign currency contracts that obligate
the Fund to provide cash, securities or currencies to complete such
transactions will entail the Fund 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 the 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 the Fund to have portfolio securities that correlate with the index. A
put option written by the Fund also will require the 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 the 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, the 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, the Fund could own securities substantially
replicating the movement of the particular index.

In the case of a futures contract, the 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 the 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. The 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, the 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 the Fund. Moreover, instead of segregating assets if the
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 the Fund, has adopted the fundamental
investment restrictions numbered 1 through 10 which may not be changed with
respect to the Fund without the approval of the holders of a majority of the
Fund's outstanding voting shares. Investment restrictions numbered 11 through
18 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-13
<PAGE> 60
As a matter of fundamental policy, the Trust, on behalf of the Fund, may not:

(1) Purchase or sell real estate, except that the 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 the 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 (except to the extent
permitted by the Fund's investment objective and policies).

(7) Make loans, except that the 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 companies for the purpose of exercising
control.

(9) 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 the
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.

(10) 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 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

B-14
<PAGE> 61
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 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, the Trust, on behalf of the
Fund, may not:

(11) 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.

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

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

(14) 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 the Fund's
aggregate investment in such securities will exceed 5% of its
total assets.

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

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

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

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, the
Fund.

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.

<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
8000 Maryland Avenue Wholesale Drug, Inc., a
Suite 1190 distributor of pharmaceutical
St. Louis, Missouri 63105 products, since 1987, Vice
President/Treasurer, Chief
Financial Officer, Arch Mineral
Corporation, a miner of
bituminous coal, prior thereto.
</TABLE>

B-15
<PAGE> 62
<TABLE>
<CAPTION> Principal Occupation(s)
Name and Address Position(s) with Trust During Past 5 Years
- ---------------- ------------------------ ------------------------
<S> <C> <C>
David Holford Benson* (57) Trustee Non-Executive Director of
Kleinwort Benson Limited Kleinwort Benson Group plc.
P.O. Box 560 (formerly Vice Chairman). Non-
20 Fenchurch Street Executive Director for the past 5
London, EC3 P3DB, England years of the following: British Gas
plc., a U.K. gas company;
Marshall Cavendish Limited, a
U.K. printing company; The
Rouse Company, a U.S. real
estate company; Harrow
Corporation, a U.S. household
security products corporation;
and Leach International, a U.S.
medical diagnostic/aerospace
company. Chairman, Kleinwort
Charter Investment Trust plc.
since March 1992.

Lee F. Fetter (42) Chairman Chief Operating and Financial
660 S. Euclid, Box 8003 Officer of Washington University
St. Louis, Missouri 63110 School of Medicine since 1983.
Advisory Director, Field Inversion
Technologies Co. since 1986.
Director, Southern Medical
Center Insurance Company since
1988. Director, Medical Center
HMO Insurance Company (d/b/a/
Partners HMO) since 1990.
Trustee, Locust Street Fund
1987-1991.

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

B-16
<PAGE> 63
<TABLE>
<CAPTION>
Principal Occupation(s)
Name and Address Position(s) with Trust During Past 5 Years
- ---------------- ---------------------- -------------------------
<S> <C> <C>
L. White Matthews, III (49) Trustee Executive Vice President of
Eighth and Eaton Avenues Finance since 1987 and Vice
Bethlehem, Pennsylvania 18018 President and Treasurer from
1982 through 1987, Union Pacific
Corporation, a company engaged
in transportation, exploration and
refining of hydrocarbons, mining
and real estate. Prior thereto,
Treasurer and Chief Accounting
Officer of Missouri Pacific
Corporation and Vice President-
Finance of Missouri Pacific
Railroad Company. Director of
First American Bank of New
York; Trustee of Moravian
College and Moravian Academy.

Nicholas G. Penniman, IV (57) Trustee Publisher, St. Louis Post-
900 N. Tucker Boulevard Dispatch since 1986. Senior Vice
St. Louis, Missouri 63101 President, Pulitzer Publishing
Company since 1986. Director,
Pulitzer Publishing Company.
Director and Chairman of the
Board of Penniman & Browne,
Inc., an environmental testing
laboratory, since 1982. Member
of the Board, Joseph Pulitzer
Pension Plan. Trustee, Locust
Street Fund, 1987 to 1991.

William J. Tomko (36) President Vice President, BISYS Fund
3435 Stelzer Road Services, Inc.
Columbus, Ohio 43219

Martin Dean (31) Treasurer Manager, Mutual Fund
3435 Stelzer Road Accounting, BISYS Fund
Columbus, Ohio 43219 Services, Inc. since May 1994.
Prior thereto, Senior Manager,
KPMG Peat Marwick.

W. Eugene Spurbeck (40) Vice President Manager, BISYS
3435 Stelzer Road Fund Services, Inc.
Columbus, Ohio 43219

</TABLE>

B-17
<PAGE> 64
<TABLE>
<CAPTION>
Principal Occupation(s)
Name and Address Position(s) with Trust During Past 5 Years
- ---------------- ---------------------- -----------------------
<S> <C> <C>
George O. Martinez (36) Secretary Senior Vice President and
3435 Stelzer Road Director of Legal and Compliance
Columbus, Ohio 43219 Services of BISYS Fund
Services, Inc. since April 1995.
Prior thereto, Vice President and
Associate General Counsel of
Alliance Capital Management
L.P.

Sheldon A. Jones (57) Assistant Secretary Partner of the law firm of Dechert
Ten Post Office Square South Price and Rhoads.
Boston, Massachusetts 02109

Bruce Treff (29) Assistant Secretary Counsel, BISYS Fund Services, Inc.
3435 Stelzer Road Since September 1995. Prior thereto,
Columbus, Ohio 43219 Manager, Alliance Capital
Management L.P.

</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 Pilot
Kleinwort Benson 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 BISYS, Concord, and their affiliates serve as administrator
and/or distributor.

The following table provides information relating to the aggregate
compensation received by the Trustees from the Registrant for the period
January 1, 1995 through August 31, 1995.

B-18
<PAGE> 65

COMPENSATION TABLE

<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Pension or Total Compensation
Aggregate Retirement Estimated Annual From Registrant
Compensation Benefits Upon Benefits Upon and Fund Complex
Name of Person From Registrant Retirement Retirement Paid to Persons
<S> <C> <C> <C> <C>

J. Hord Armstrong, III $10,000 0 0 $10,000
David Hartford Benson $0 0 0 $0
Lee F. Fetter (Chairman) $10,000 0 0 $10,000
Henry O. Johnston $11,500 0 0 $11,500
L. White Matthews, III $11,500 0 0 $11,500
Nicholas G. Penniman, IV $11,500 0 0 $11,500
</TABLE>

Each of the Trustees who is not an "interested person" of the Trust for
purposes of the 1940 Act (the "non-interested Trustees") is compensated by the
Trust for his services as such. The compensation paid to the non-interested
Trustees other than the Chairman is $7,000 per year and $750 for each meeting
attended by such Trustee. The compensation paid to the Chairman is $9,500 and
$750 for each Trustee meeting attended. Each of the non-interested Trustees is
entitled to reimbursement for out-of-pocket expenses. The aggregate of the
Trustees' fees, plus out-of-pocket expenses, during the period ended August 31,
1995 distributed to or accrued for the account of the non-interested Trustees
(six persons) amounted to approximately $62,727, which amount represented the
total compensation paid by the Trust 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 the Fund pursuant to an Investment Advisory Agreement
(the "Advisory Agreement") between the Trust, on behalf of the Fund, and
Boatmen's. As adviser, Boatmen's is responsible for the management of the
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.

The 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. The
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 1% of the average daily net assets of the Fund.

B-19
<PAGE> 66
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 the Fund.

The Trust is responsible for all expenses incurred by the Fund, other
than those expressly borne by Boatmen's, the Distributor, Concord and the
Transfer Agent 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 the Fund's expenses (excluding taxes, interest, brokerage and
extraordinary expenses such as for litigation) exceeds the expense limitations
applicable to the 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 Fund is entitled to be reimbursed by Boatmen's
to the 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 the Fund's average
net assets, plus 2% of the next $70,000,000 of such assets, plus 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 the Fund or its Shareholders, must be substantially
comparable with the aggregate annual operating and advisory expenses incurred
by other investment companieswith similar objectives and operating policies.

The Advisory Agreement for the Fund was approved by the Trustees,
including the "non-interested" Trustees, on November 1, 1995. The
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 the 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. The 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.

B-20
<PAGE> 67
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 the 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

BISYS Fund Services Limited Partnership ("BISYS"), with principal
offices at 125 West 55th Street, New York, New York 10019, was organized in
June of 1987. BISYS also serves as administrator to several other
investment companies. BISYS is a wholly-owned subsidiary of The BISYS
Group, Inc.

BISYS provides administrative services for the Fund as described in
the Prospectus pursuant to an Administration Agreement with the Trust dated as
of June 1, 1996. The Agreement will continue in effect with respect to the
Fund until June 1, 19__ and thereafter will be automatically extended as to the
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 approval, and (b) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Fund
(as defined under "Investment Restrictions"). The Agreement is terminable by
the Board of Trustees of the Trust with regard to the Fund, without the payment
of any penalty, at any time if for cause. "Cause" shall mean a material breach
by BISYS of its obligations under the Agreement which shall not have been
cured within 60 days after the date on which BISYS 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, the Fund pays its pro rata share of an
annual fee to BISYS, 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, BISYS may
waive fees or reimburse the Trust for expenses, either voluntarily or as
required by certain state securities laws.

BISYS 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 for certain fund accounting services which are
borne by the Fund.

The Administration Agreement provides that BISYS shall not be liable
for any error of judgment or mistake of law or any loss suffered by the 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 BISYS's duties or from the reckless disregard by BISYS of its
obligations and duties thereunder.

THE DISTRIBUTOR

Pilot Funds Distributors Inc. (the "Distributor"), is a registered
broker-dealer and a wholly-owned subsidiary of Concord, located at 125 West
55th Street, New York, New York 10019. 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.

B-21
<PAGE> 68
The Distribution Agreement with the Distributor will continue in
effect with respect to the 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 Ohio, Inc. (the "Transfer Agent"), located at 3435
Stelzer Road, Columbus, Ohio 43219 serves as the Fund's 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 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 the 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.

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 the 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, the Fund will not necessarily be paying the lowest spread or
commission available. Within the framework of this policy,

B-22
<PAGE> 69
Boatmen's will consider research and investment services provided by brokers or
dealers who effect or are parties to portfolio transactions of the 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 the 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 the 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 fund as well as for one or more of the other clients of
Boatmen's. Investment decisions for the 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 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 the Fund is concerned. The Trust believes that over time its ability to
participate in volume transactions will produce superior executions for the
Fund.

The portfolio turnover rate for the 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 Fund 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 the Fund is determined by the Fund's
custodian at 3:00 p.m., Central time (4:00 p.m., New York time), on each
Business Day as defined in the Prospectus. 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, the Fund 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 the 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

B-23
<PAGE> 70
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 the 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.

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 the 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 the 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 Fund 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 the Fund and constitute the underlying assets of the Fund. The
underlying assets of the Fund will be segregated on the books of account, and
will be charged with the liabilities of the Fund and a share of the general
liabilities of the Trust. Expenses with respect to the Trust 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 Fund
(excluding preparation and printing expenses necessary for the continued
registration of the Fund's 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 Fund as described in the Prospectus
for such Shares. The Distributor is also entitled to the payment of a

B-24
<PAGE> 71
contingent deferred sales charge upon redemption of Class B Shares of the Fund
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 Prospectus.
Under the Trust's Distribution Plan for Class A Shares of the Fund, the Trust
pays fees for the provision of services by Service Organizations (which may
include the Distributor itself). These payments are based on the average daily
value of the Class A Shares beneficially owned by 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 Fund, the Trust may pay the
Distributor for (a) expenses incurred in connection with advertising and
marketing shares of the Fund, 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 Fund necessary for accounting or subaccounting; (vii) if
required by law, forwarding shareholder communications from the Fund (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.

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

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<PAGE> 72
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 Fund. 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 the 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 Plan will benefit the Fund and Class A and Class
B Shareholders, respectively. The Plan is subject to annual re-approval by a
majority of the Disinterested Trustees of the Trust and are terminable at any
time with respect to the 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. Any agreement entered into pursuant to the
respective Distribution Plans with a Service Organization is terminable with
respect to the 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 the Fund, by the Distributor or by the Service Organization. An
agreement will also terminate automatically in the event of its assignment.

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 Fund 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 Fund. These fees would be in addition
to any amounts which might be received under the respective Plan. 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 Prospectus 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

B-26
<PAGE> 73
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 State Street Bank and Trust Company,
Boston, MA, ABA # 011000028, Re: PFTC, f/b/o Pilot Funds Incoming Wire Account
DDA No. 52165420, 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 the Fund are sold with a front-end sales charge. As
described in the Prospectus for Class A Shares of the Fund, 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 Fund 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.

Boatmen's and/or the Distributor may charge certain fees for acting as
Custodian for IRAs or 401(k) 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 401(k) 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 the 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 Fund 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 Fund are priced and

B - 27
<PAGE> 74
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 Primary Funds Service Corp., P.O. Box
9742, Providence, RI 029040-9742. Such request must be signed by each
shareholder, with each signature guaranteed as described in the Fund's
Prospectus. 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 Pilot
Funds; Class B Shares for Class B Shares of the other Pilot Funds; and Pilot
Shares for Pilot Shares of the other Pilot 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.

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.

B - 28
<PAGE> 75
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 Prospectus, 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 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 Fund 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 Fund, 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 1995 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

B - 29
<PAGE> 76
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 the 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 Fund's Prospectus. 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 the 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 Fund's Prospectus from time to
time.

IN KIND PURCHASES

Payment for shares of the 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 Prospectus. For further information about this form of
payment, contact Boatmen's. In connection with an in-kind securities payment,
the 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 shareholder would incur transaction costs in selling the securities or
other property. The 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 Fund may be
quoted in advertisements, shareholder reports or other communications to
shareholders. Performance information with respect to the Fund 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 Fund
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 Fund 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 Fund may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such

B - 30
<PAGE> 77
communications. Such performance examples will be based on an express set of
assumptions and are not indicative of the performance of the Fund.

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

TOTAL RETURN CALCULATIONS

The 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:

ERV
T = [( - - - - ) 1/n - 1]
P

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.

The 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:

ERV
aggregate total return = [( - - - - - 1 )].
P

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, the 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.

The 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 the 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 the Fund. The return of the
Fund may not be readily comparable to other

B - 31
<PAGE> 78
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, yield and tax
equivalent 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

The 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, the 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 assets is represented by
cash and (ii) not more than 25% of the value of the Fund's assets is invested
in the securities (other than U.S. Government securities and securities of
other regulated investment companies) of any one issuer.

The 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 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, the 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 the 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 the Fund's investment company taxable income

will be treated as ordinary income in the hands of Shareholders. If a portion
of the 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 the 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 the Fund.

B - 32
<PAGE> 79
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.

Gain derived by the 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 the 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 the 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 the
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.

Certain options, futures contracts and forward contracts in which the
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 the 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 the 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 the Fund. In addition,
losses realized by the 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 Fund of engaging in hedging
transactions are not entirely clear. Hedging transactions may increase the
amount of short-term capital gain realized by the Fund which is taxed as
ordinary income when distributed to its Shareholders.

The Fund may make one or more of the elections available under the
Code which are applicable to straddles. If the 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 the Fund that did
not engage in such hedging transactions.

B - 33
<PAGE> 80
The 30% Limitation and the diversification requirements applicable to
the 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 the 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 the
Fund's investment company taxable income to be distributed to its Shareholders
as ordinary income.

If the 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 taxableyear 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.

If the Fund invests in foreign equity securities, it 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, the 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 the 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.

Under the Code, a Shareholder may not deduct that portion of interest
on indebtedness incurred or continued to purchase or carry shares of an
investment company paying exempt-interest dividends which bears the same ratio
to the total of such interest as the exempt-interest dividends bear to the
total dividends (excluding net capital gain dividends) received by the
Shareholder. In addition, under rules issued by the Internal Revenue Service
for determining when borrowed funds are considered to be used

B - 34
<PAGE> 81
to purchase or carry particular assets, the purchase of Shares may be
considered to have been made with borrowed funds even though the borrowed funds
are not directly traceable to such purchase.

If the Fund invests in foreign securities, it 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 the 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, the 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 the 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 the Fund's 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 the Fund.

The 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 the Fund with the payee's taxpayer identification number ("TIN")
under penalties of perjury, (b) the IRS notifies the Fund that the TIN
furnished by the payee is incorrect, (c) the IRS notifies the 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 the Fund.

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 the 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 Fund may be subject to state or local taxes in jurisdictions in
which the Fund 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 Fund may have different tax
consequences for Shareholders than would a direct investment in the securities
held by the Fund. 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 Fund in

B - 35
<PAGE> 82
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 the
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
twelve Funds. 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 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

B - 36
<PAGE> 83
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 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.

B - 37
<PAGE> 84
CUSTODIAN AND SUBCUSTODIANS

State Street Bank and Trust Company ("State Street"), 225 Franklin
Street, Boston, Massachusetts 02110 is the custodian of the Fund's assets and
also maintains the Trust's accounting records. State Street has established a
network of foreign subcustodians to hold certain foreign securities purchased
by the Fund, and The Northern Trust Company, 50 South LaSalle Street, Chicago,
Illinois 60675, as subcustodian to hold cash and handle certain wire receipts
and transfers of funds.

INDEPENDENT ACCOUNTANTS AND COUNSEL

Arthur Andersen, independent public accountants, One International
Place, Boston, Massachusetts 02110, have been selected as auditors of the Fund.
In addition to providing audit services, Price Waterhouse 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 Funds.

B - 38
<PAGE> 85
APPENDIX

DESCRIPTION OF SECURITIES RATINGS1

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.

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

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
secruities 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 securites on the date of the Fund's
taxable year end.

A - 1
<PAGE> 86
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
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 CORPORATION2

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.

A - 2
<PAGE> 87
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> 88
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.

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.

A - 4
<PAGE> 89
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> 90

PILOT SMALL CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 29, 1996

CONSUMER CYCLICAL--7.4%

AUTOMOTIVE--1.0%
10,000 Champion Enterprises, Inc.* $ 302,500
------------
HOUSING & FURNISHING--5.9%
6,400 Blount International, Inc. 195,200
12,100 Bush Industries, Inc. 266,200
7,100 Continental Homes Holding Corp. 146,437
15,400 Kaufman & Broad Home Corp. 236,775
11,500 NCI Building Systems, Inc.* 333,500
7,300 Oakwood Homes Corp. 325,762
7,500 Pulte Corp. 224,062
------------
1,727,936
------------
MEDIA--0.5%
2,625 International Family
Entertainment-- Class B* 40,031
2,400 Pulitzer Publishing Co. 121,200
------------
161,231
------------
CONSUMER GOODS & STAPLES--2.8%

BEAUTY & HEALTH PRODUCTS--0.7%
2,900 Alberto Culver Co.--Class B 102,587
4,700 Church & Dwight, Inc. 95,175
------------
197,762
------------
BEVERAGE & TOBACCO--0.9%
8,500 Robert Mondavi Corp.* 250,750
------------
FOOD PRODUCTS & PROCESSING--1.2%
15,600 Ben & Jerry's Homemade, Inc.--
Class A* 243,750
2,900 Eskimo Pie Corp. 54,194
8,500 John B. Sanfilippo & Sons, Inc. 63,750
------------
361,694
------------
ENERGY--6.2%

DRILLING--1.7%
33,200 Parker Drilling Co.* 199,200
15,600 Reading & Bates Corp. 298,350
------------
497,550
------------
GEOTHERMAL--1.2%
15,300 California Energy, Inc.* 340,425
------------

<CAPTION>
Value
Shares (Note 2)
- -------------------------------------------------------------
<S> <C>
INTEGRATED OIL & GAS--3.3%
20,900 Tom Brown, Inc.* $ 271,700
45,150 Comstock Resources, Inc.* 214,462
9,100 Diamond Shamrock, Inc. 277,550
2,646 Forest Oil Corp.* 29,767
14,800 Texas Meridian Resources Corp. 183,150
------------
976,629
------------
FINANCE--12.5%

BANKING--3.7%
4,900 Brenton Banks, Inc. 112,700
6,900 Commercial Federal Corp. 259,612
5,400 Deposit Guarantee Corp. 255,150
19,300 National City Corp. 265,375
5,900 ONBANCorp, Inc. 199,125
------------
1,091,962
------------
BROKERAGE--1.1%
4,700 Morgan Keegan, Inc. 57,575
24,500 Southwest Securities Group, Inc. 272,562
------------
330,137
------------
FINANCIAL SERVICES--4.1%
8,300 Aames Financial Corp. 272,862
7,200 Advanta Corp.--Class A 343,800
7,300 Capstead Mortgage Corp.--REIT* 166,988
10,900 Downey Financial Corp. 238,438
9,400 North American Mortgage Co. 193,875
------------
1,215,963
------------
INSURANCE--3.6%
4,600 Berkley W.R. Corp. 208,150
5,600 Equitable Iowa Cos. 216,300
10,600 First American Financial Corp. 299,450
2,100 Frontier Insurance Group, Inc. 64,575
6,600 Arthur J. Gallagher & Co. 258,225
------------
1,046,700
------------

HEALTH CARE--5.2%

MEDICAL SUPPLIES & SERVICES--3.6%
6,000 Ballard Medical Products 99,000
11,100 Bergen Brunswig Corp. 267,787
5,000 Bio-Rad Laboratories, Inc.* 193,125
4,800 Coherent, Inc.* 218,400
9,100 Vital Signs, Inc. 268,450
------------
1,046,762
------------
</TABLE>

- -------------------------------------------------------------
See Notes to Financial Statements.

F-1

<PAGE> 91

PILOT SMALL CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (continued)
February 29, 1996

- ----------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
<S> <C>
- -------------------------------------------------------------
PHARMACEUTICALS--1.6%
18,800 Chronimed, Inc.* $ 392,450
12,000 Syncor International Corp. 76,500
------------
468,950
------------
INDUSTRIAL GOODS & SERVICES--12.8%

CHEMICALS--1.3%
26,600 International Specialty Products,
Inc.* 329,175
4,100 NL Industries, Inc. 56,887
------------
386,062
------------
COMMERCIAL SERVICES--1.1%
14,400 Applied Bioscience International,
Inc.* 102,600
20,600 Calgon Carbon Corp.* 231,750
------------
334,350
------------
CONSTRUCTION--0.6%
6,500 Granite Construction, Inc. 180,375
------------
ELECTRONICS--7.6%
13,600 Core Industries, Inc. 188,700
3,600 Electro Scientific Industries,
Inc.* 77,400
9,700 Komag, Inc.* 304,337
10,600 Logicon, Inc. 336,550
21,300 Nu Horizon Electronics Corp.* 332,812
13,300 Pioneer Standard Electronics, Inc. 186,200
9,930 Sterling Electronics Corp. 156,397
17,500 TNP Enterprise, Inc. 365,313
7,900 Watkins Johnson Co.* 290,325
------------
2,238,034
------------
ENVIRONMENT--1.1%
14,700 Zurn Industries, Inc. 317,888
------------
METAL & PLASTIC--1.1%
17,760 Wyman-Gordon Co.* 315,240
------------
LEISURE--0.3%

GAMING RESORTS & HOTELS--0.3%
3,900 Rio Hotel & Casino, Inc. 53,625
2,300 WMS Industries, Inc.* 41,400
------------
95,025
------------

<CAPTION>
Value
Shares (Note 2)
- -------------------------------------------------------------
<S> <C>
MANUFACTURING--11.1%

COMMUNICATIONS EQUIPMENTS--1.1%
4,700 Communications Systems, Inc. $ 70,500
8,000 Network Equipment Technologies* 238,000
------------
308,500
------------
CONSUMER PRODUCTS--1.3%
15,200 Paragon Trade Brands, Inc.* 383,800
------------
MACHINERY--2.8%
10,900 Credence Systems Corp.* 207,100
4,200 DT Industries, Inc.* 64,050
12,200 Gardner Denver Machinery, Inc.* 247,050
15,200 Standard Products Co. 315,400
------------
833,600
------------
MANUFACTURING--MISC.--5.6%
4,200 Amsco International, Inc.* 65,625
3,700 Applied Power, Inc. 112,388
5,400 Charter Power Systems, Inc. 157,275
5,400 Dionex Corp.* 202,500
12,900 Esterline Technologies Corp.* 287,025
10,300 Photronic, Inc.* 226,600
17,900 Proxim, Inc.* 333,388
9,400 Tuscarora, Inc. 225,600
6,500 Worldtex, Inc.* 30,875
------------
1,641,276
------------
TEXTILE--0.3%
4,400 Culp, Inc. 47,300
1,100 Springs Industries, Inc. 47,575
------------
94,875
------------
MATERIALS & PROCESSING--0.7%

PAPER & FOREST PRODUCTS--0.7%
4,200 Albany International Corp.-- Class
A* 81,375
2,300 Chesapeake Corp. 59,225
3,900 Glatfelter P. H. Co. 64,838
------------
205,438
------------
RETAILING--7.2%

DEPARTMENT STORES--0.7%
7,000 Neiman Marcus Group, Inc.* 139,125
3,000 Proffitt's, Inc.* 78,750
------------
217,875
------------
</TABLE>

- -------------------------------------------------------------
See Notes to Financial Statements.

F-2

<PAGE> 92

PILOT SMALL CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (continued)
February 29, 1996
- ----------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
<S> <C>
- --------------------------------------------------------------
GROCERY STORES--0.5%
8,600 Riser Foods, Inc. $ 154,800
------------
SPECIALTY STORES--5.1%
8,100 Catherine's Stores Corp.* 59,738
31,770 Eagle Hardware & Garden, Inc.* 324,650
6,400 Fabri Centers of America, Inc.* 78,400
18,700 Inacom Corp.* 338,938
9,000 Pacific Sunwear of California* 74,250
11,400 Quiksilver, Inc. 330,600
11,900 Ross Stores, Inc. 291,550
------------
1,498,126
------------
WAREHOUSE--0.9%
11,400 Waban, Inc.* 256,500
------------
SERVICES--4.6%

AIRLINES--1.1%
19,200 USAir Group, Inc.* 324,000
------------
RESTAURANT--1.3%
15,300 Sbarro, Inc.* 380,588
------------
SERVICES--MISC.--2.0%
5,300 Corrections Corp. of America* 251,750
5,100 Filenet Corp.* 323,850
------------
575,600
------------
WHOLESALING--0.2%
2,600 Custom Chrome, Inc.* 65,000
------------
TECHNOLOGY--2.2%

COMPUTERS & OFFICE EQUIPMENT--0.5%
6,600 American Business Products, Inc.* 155,100
------------
<CAPTION>
Value
Shares (Note 2)
- -----------
<S> <C>
SEMICONDUCTOR--1.0%
14,200 International Semiconductor Co.* $ 291,100
------------
SOFTWARE & SERVICES--0.7%
5,750 Marcam Corp.* 74,031
1,900 Sterling Commerce* 126,588
------------
200,619
------------
UTILITIES--6.3%

ELECTRIC POWER--4.6%
5,400 Central Hudson Gas & Electric Co. 157,950
11,900 Central Maine Power Co. 174,038
17,800 Central Vermont Public Services 255,875
3,700 Commonwealth Energy Systems 174,825
2,000 IES Industries, Inc.* 58,000
10,100 Northwestern Public Service Co. 301,738
3,600 St. Joseph Light & Power Co. 117,000
35,000 Tuscon Electric Power Co.* 113,750
------------
1,353,176
------------
NATURAL GAS--1.7%
15,100 Connecticut Natural Gas Corp. 356,738
2,700 Piedmont Natural Gas, Inc. 60,750
2,200 Southeastern Michigan Gas 37,950
2,200 Washington Energy Co. 44,000
------------
499,438
- -------------------------------------------------------------
TOTAL COMMON STOCKS (cost $22,951,582) 23,323,336
- -------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------
See Notes to Financial Statements.

F-3

<PAGE> 93

PILOT SMALL CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (continued)
February 29, 1996

- ----------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
(000) (Note 2)
- -------------------------------------------------------------
<S> <C>
U.S. TREASURY BILLS--1.3%
$ 200 U.S. Treasury Bill, 4.76%,
12/12/96** $ 192,437
200 U.S. Treasury Bill, 5.06%,
12/12/96** 192,023
- -------------------------------------------------------------
TOTAL U.S. TREASURY BILLS (cost $384,460) 384,460
- -------------------------------------------------------------
REPURCHASE AGREEMENT--18.9%
$ 5,571 Repurchase agreement with State
Street Bank and Trust, 5.35%,
dated 2/29/96, due 3/1/96 (cost
$5,571,000) (see Footnote A) 5,571,000
- -------------------------------------------------------------
TOTAL INVESTMENTS--99.5% (cost $28,907,042) 29,278,796
OTHER ASSETS IN EXCESS OF LIABILITIES--0.5% 157,301
- -------------------------------------------------------------
NET ASSETS--100.0% $ 29,436,097
- -------------------------------------------------------------
</TABLE>

Footnote A
Collateralized by $5,720,000 U.S. Treasury Note, 5.13%, due 2/28/98 with a
value of $5,684,250.
* Non-income producing security.
** Securities deposited into a segregated custodial account for futures margin
requirements.

<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS SETTLEMENT UNREALIZED
TYPE LONG(B) MONTH GAIN
<S> <C> <C> <C>
- --------------------------------------------------------------
FUTURES CONTRACTS
S & P MIDCAP 400 46 Mar-96 $189,734
S & P MIDCAP 400 10 Jun-96 --
- -------------------------------------------------------------
$189,734
- -------------------------------------------------------------
</TABLE>

(b) Each S&P MIDCAP Contract represents $50,000 in notional par value. The total
net notional amount and net market value for the futures contracts shown
above are $2,800,000 and $6,372,700, respectively. The determination of
notional amounts does not consider market risk factors and therefore
notional amounts as presented here are indicative only of volume of activity
and not a measure of market risk.

- ----------------------------------------------------------
See Notes to Financial Statements.

F-4

<PAGE> 94

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Statements of Assets and Liabilities
February 29, 1996

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

<TABLE>
<CAPTION>
SMALL
CAPITALIZATION
EQUITY FUND
-------------------
<S> <C>
ASSETS:
Investment in securities, at value (cost
$23,336,042) .......................................................... $23,707,796
Repurchase agreements, at cost.......................................... 5,571,000
- ----------------------------------------------------------------------------------------------
29,278,796
Cash.................................................................... 366
Dividends receivable.................................................... 9,866
Interest receivable..................................................... 828
Receivable for Portfolio shares issued.................................. 194,040
Receivable from investment advisor...................................... 30,471
Deferred organization costs and other assets............................ 39,174
- ----------------------------------------------------------------------------------------------
TOTAL ASSETS............................................................ 29,553,541
- ----------------------------------------------------------------------------------------------
LIABILITIES:
Advisory fees payable................................................... 30,323
Distribution expenses payable (Class A Shares).......................... 49
Distribution expenses payable (Class B Shares).......................... 206
Dividends payable....................................................... 10,839
Net variation margin on open futures contracts.......................... 59,800
Other accrued expenses.................................................. 16,227
- ----------------------------------------------------------------------------------------------
TOTAL LIABILITIES....................................................... 117,444
- ----------------------------------------------------------------------------------------------
NET ASSETS.............................................................. $29,436,097
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE: ($1.00
PAR VALUE PER SHARE, UNLIMITED NUMBER OF SHARES AUTHORIZED)
PILOT SHARES:
Net assets.............................................................. $28,678,786
Shares of beneficial interest issued and outstanding.................... 2,817,098
Net asset value......................................................... $10.18
- ----------------------------------------------------------------------------------------------
CLASS A SHARES:
Net assets.............................................................. $ 349,484
Shares of beneficial interest issued and outstanding.................... 34,332
Net asset value......................................................... $10.18
- ----------------------------------------------------------------------------------------------
Sales charge--4.50% of offering
price.................................................................. 0.48
- ----------------------------------------------------------------------------------------------
Maximum offering price.................................................. $10.66
- ----------------------------------------------------------------------------------------------
CLASS B SHARES:
Net assets.............................................................. $ 407,827
Shares of beneficial interest issued and outstanding.................... 39,998
Net asset value......................................................... $10.20
- ----------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................... $ 2,891,428
Additional paid-in capital.............................................. 25,840,545
Accumulated undistributed net realized gains from investment and futures
transactions........................................................... 142,636
Net unrealized appreciation from investments and futures................ 561,488
- ----------------------------------------------------------------------------------------------
NET ASSETS, FEBRUARY 29, 1996........................................... $29,436,097
- ----------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------
See Notes to Financial Statements.

</TABLE>

F-5

<PAGE> 95

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Statements of Operations
For the six months ended February 29, 1996

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

SMALL CAPITALIZATION
EQUITY FUND(A)
--------------------
<S> <C>
INVESTMENT INCOME:
Dividends ............................................................. $ 37,155
Interest............................................................... 76,010
- -------------------------------------------------------------------------------------------------
TOTAL INCOME........................................................... 113,165
- -------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees.......................................................... 40,431
Administration fees.................................................... 4,460
Distribution expenses (Class A Shares)................................. 68
Distribution expenses (Class B Shares)................................. 277
Audit fees............................................................. 3,600
Transfer agent fees and expenses....................................... 419
Custodian fees and expenses............................................ 12,880
Reports to shareholders................................................ 3,120
Registration fees...................................................... 17,840
Amortization of organization expenses.................................. 880
Legal fees............................................................. 1,600
Other expenses......................................................... 240
- -------------------------------------------------------------------------------------------------
TOTAL EXPENSES......................................................... 85,815
- -------------------------------------------------------------------------------------------------
Less: Fee waivers and expense reimbursements by advisor, administrator,
and distributor...................................................... (45,039)
- -------------------------------------------------------------------------------------------------
NET EXPENSES........................................................... 40,776
- -------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME.................................................. 72,389
- -------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS FROM INVESTMENTS:
Net realized gains from investment and futures transactions............ 142,636
Net change in unrealized appreciation from investments and futures..... 561,488
- -------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENTS..................... 704,124
- -------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $776,513
- -------------------------------------------------------------------------------------------------

(a) For the period from December 12, 1995 (commencement of operations)
through February 29, 1996.

- -------------------------------------------------------------------------------------------------
See Notes to Financial Statements.

</TABLE>

F-6

<PAGE> 96

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Statements of Changes in Net Assets

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAPITALIZATION
EQUITY FUND
--------------------
FOR THE PERIOD
DECEMBER 12, 1995
THROUGH FEBRUARY 29,
1996(a)
--------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income....................... $ 72,389
Net realized gains from investment and
futures transactions...................... 142,636
Net change in unrealized appreciation from
investments and futures................... 561,488
- ------------------------------------------------------------------------
Net increase in net assets resulting from
operations.................................... 776,513
- ------------------------------------------------------------------------
Dividends to shareholders from net investment
income:
Pilot Shares................................ (72,029)
Class A Shares.............................. (291)
Class B Shares.............................. (69)
- ------------------------------------------------------------------------
Total dividends to shareholders from net
investment income............................. (72,389)
- ------------------------------------------------------------------------
Portfolio share transactions:
Proceeds from shares issued................. 28,873,041
Dividends reinvested........................ 45,037
Cost of shares redeemed..................... (186,105)
- ------------------------------------------------------------------------
Net increase in net assets from Portfolio share
transactions.................................. 28,731,973
- ------------------------------------------------------------------------
Total increase................................. 29,436,097
- ------------------------------------------------------------------------
NET ASSETS
Beginning of period............................ --
- ------------------------------------------------------------------------
End of period.................................. $ 29,436,097
- ------------------------------------------------------------------------
<FN>
(a) Period from commencement of operations.

- ------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements.

F-7

<PAGE> 97

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements
February 29, 1996

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

1. GENERAL

The Pilot Small Capitalization Equity Fund is a separate portfolio (a
"Portfolio") of The Pilot Funds (the "Fund"). The Fund is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as an open-end management investment company. All of the
Portfolios are diversified. The Fund currently offers twelve portfolios. The
accompanying financial statements are those of the Small Capitalization
Equity Fund only.

The Portfolio offers three classes of shares: Pilot Shares, Class A Shares,
and Class B Shares. Each class of shares is substantially the same, except that
Class A Shares and Class B Shares bear the fees payable under the Fund's
Distribution Plan.

The Small Capitalization Equity Fund commenced operations on December 12, 1995,
by offering Pilot Shares, Class A Shares, and Class B Shares.

The Small Capitalization Equity Fund seeks long-term capital growth by
investing primarily in equity securities of companies with market
capitalizations of $1 billion or less.

Boatmen's Trust Company ("Boatmen's") serves as the Fund's investment adviser.
Concord Holding Corporation ("Concord") serves as the Fund's administrator and
Pilot Funds Distributor Inc. (the "Distributor"), a wholly-owned subsidiary of
Concord, serves as the distributor of the Fund's shares. Concord is a
wholly-owned subsidiary of The BISYS Group, Inc.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies followed by
the Portfolio in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.

A. Investment Valuation

Portfolio securities are valued as follows: (a) securities that are traded on
any U.S. or foreign stock exchange or the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") are valued at the last sale price
on that exchange or NASDAQ prior to the Portfolio's valuation time; if no sale
occurs, securities traded on a U.S. exchange or NASDAQ are valued at the mean
between

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

F-8

<PAGE> 98

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements (continued)
February 29, 1996

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

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 Portfolio'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 Fund; these 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 Portfolio's
valuation time; and (d) all other securities and assets, for which quotations
supplied are not representative of current market values or for which quotations
are not readily available, are valued at fair value as determined in good faith
pursuant to procedures established by the Trustees of the Fund. Money market
instruments held by a Portfolio with a remaining maturity of sixty days or less
are valued at amortized cost which approximates market value.

B. Securities Transactions and Investment Income

Securities transactions are recorded on the trade date. Realized gains and
losses on sales of investments are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, including
accretion of discounts and amortization of premiums on investments, is accrued
daily.

The investment income of each Portfolio is allocated to the separate classes of
shares based upon their relative net asset values.

C. Repurchase Agreements

The custodian for the Portfolio and other banks acting in a subcustodian
capacity take possession of the collateral pledged for investments in repurchase
agreements. The underlying collateral is valued daily on a mark-to-market basis
to determine that the value, including accrued interest, is not less than 102%
of the repurchase price, including accrued interest. In the event of the
seller's default of the obligation to repurchase, the Portfolio has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.

D. Futures Contracts

The Small Capitalization Equity Fund may enter into futures contracts on
securities and futures based on securities indices. The Portfolio 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 involve brokerage costs, which may be less than 1% of the
contract price, and require the Portfolio to deposit as margin into a segregated
custodial account an amount of cash or liquid securities equal to approximately
2% to 5% of the value of each futures contract. The Portfolio's position in the
futures market will be marked-to-market on a daily basis; the Portfolio 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, the
Portfolio may instead make or take delivery of the underlying securities
whenever it appears economically advantageous for it to do so.

Futures contracts on securities indices do not require the physical delivery of
securities, but merely provide for gains and losses resulting from changes in
the market value of a 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

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

F-9

<PAGE> 99

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements (continued)
February 29, 1996

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

comprising the index on which the futures contract is based.

E. Dividends to Shareholders

Dividends of the Small Capitalization Equity Fund are declared and paid monthly
to shareholders of record at the close of business on the day of declaration.
Distributions of net realized gains, if any, will be paid at least annually.
However, to the extent that net realized gains of a Portfolio can be offset by
capital loss carryovers, such gains will not be distributed. Dividends and
distributions are recorded by the Portfolios on the ex-dividend date.

F. Federal Taxes

It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
each year substantially all of its investment company taxable and tax-exempt
income to its shareholders. Accordingly, no federal tax provisions are
required.

G. Organizational Expenses

Costs incurred by the Fund in connection with its organization and registration
of shares have been deferred and are amortized using the straight line method
over a period not to exceed five years from the commencement of the public
offering of shares of the Portfolio.

H. Expenses

Expenses incurred by the Fund that do not specifically relate to an individual
portfolio are allocated to the portfolios based on each portfolio's relative net
assets.

The expenses (other than expenses incurred under the Distribution Plans) of each
Portfolio are allocated to the separate classes of shares based upon their
relative net asset values.

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES

A. Advisory Agreement

Boatmen's is the investment adviser for the Portfolio pursuant to an
Investment Advisory Agreement and is responsible for managing the investment
operations of the Portfolio. For its services, Boatmen's is entitled to a fee,
accrued daily and paid monthly, at an annual rate equal to 1.00% of the average
daily net assets of the Portfolio.

Boatmen's has voluntarily agreed to limit the fees it receives from the
Portfolio to 0.75% of the average daily net assets.

Additionally, Boatmen's has voluntarily agreed to reimburse the Portfolio's
expenses to the extent that such expenses exceed limits as percentages of
average daily net assets (excluding distribution fees for Class A Shares and
Class B Shares) of 1.00% of the Small Capitalization Equity Fund.

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

F-10

<PAGE> 100

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements (continued)
February 29, 1996

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

For the period ended February 29, 1996, Boatmen's waived fees and/or
reimbursed expenses in the following amounts:

<TABLE>
<S> <C>
Small Capitalization Equity Fund................ $ 40,579
</TABLE>

B. ADMINISTRATION AGREEMENT

The Portfolio has entered into an Administration Agreement with Concord.
Pursuant to the terms of this agreement, Concord is responsible for assisting
in all aspects of the operations of the Portfolio. For its services, Concord
is entitled to a fee, accrued daily and paid monthly, at an annual rate of
0.115% of the first $1.5 billion of the aggregate average net assets of all of
the portfolios constituting the Fund, plus 0.11% of the next $1.5 billion of
such assets, plus 0.1075% of such assets in excess of $3.0 billion. For the
period ended February 29, 1996, Concord voluntarily waived a portion of its
fees as administrator. The fee waivers were equal to the following amounts:

<TABLE>
<S> <C>
Small Capitalization Equity Fund................. $ 4,460
</TABLE>

C. Transfer Agent Agreement

Concord Financial Services ("CFS"), a wholly-owned subsidiary of Concord, is
the transfer agent for the Pilot Share Class of the Portfolio. The Portfolio
incurred fees and expenses of $419 for the transfer agent services provided.

D. Distribution Agreements

The Portfolio adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940
Act for its Class A and Class B Shares. Under this Plan, 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 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.

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 as well as expenses related to other promotional and
distribution activities.

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

F-11

<PAGE> 101

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements (continued)
February 29, 1996

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

may be reimbursed by a Portfolio 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.

4. SECURITIES TRANSACTIONS

For the period ended February 29, 1996, the cost of purchases and the proceeds
from sales of portfolio securities (excluding short-term investments) were as
follows:

<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
Small Capitalization Equity
Fund......................... $ 23,302,355 $ 310,550
</TABLE>

At February 29, 1996, the cost of the Portfolio's securities for federal income
tax purposes was substantially the same as for financial reporting purposes.
Accordingly, the Portfolio had the following amounts of net unrealized
appreciation and depreciation:

<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION NET
------------ ----------- ------------
<S> <C> <C> <C>
Small Capitalization
Equity Fund......... $ 1,144,279 $ 772,525 $ 371,754
</TABLE>

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

F-12

<PAGE> 102

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Notes to Financial Statements (continued)
February 29, 1996

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

5. CAPITAL SHARE TRANSACTIONS

Transactions in shares of the Portfolio are as follows (000 omitted):
<TABLE>
<CAPTION>
SMALL
CAPITALIZATION
EQUITY FUND
-----------------
DECEMBER 12, 1995
THROUGH
FEBRUARY 29,
1996(a)
-----------------
<S> <C>
CAPITAL TRANSACTIONS:
Pilot Shares:
Proceeds from shares issued........................... $28,130
Dividends reinvested.................................. 45
Cost of shares redeemed............................... (186)
-------
Change in net assets from Pilot share transactions.... $27,989
=======
Class A Shares:
Proceeds from shares issued........................... $ 342
Dividends reinvested.................................. --
Cost of shares redeemed............................... --
-------
Change in net assets from Class A share
transactions........................................ $ 342
=======
Class B Shares:
Proceeds from shares issued........................... $ 401
Dividends reinvested.................................. --
Cost of shares redeemed............................... --
-------
Change in net assets from Class B share
transactions........................................ $ 401
=======
SHARE TRANSACTIONS:
Pilot Shares:
Issued................................................ 2,832
Reinvested............................................ 4
Redeemed.............................................. (19)
-------
Change in Pilot Shares................................ 2,817
=======
Class A Shares:
Issued................................................ 34
Reinvested............................................ --
Redeemed.............................................. --
-------
Change in Class A Shares.............................. 34
=======
Class B Shares:
Issued................................................ 40
Reinvested............................................ --
Redeemed.............................................. --
-------
Change in Class B Shares.............................. 40
=======
<FN>

- ---------------
(a) Period from commencement of operations.

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

</TABLE>

F-13

<PAGE> 103

THE PILOT FUNDS
- --------------------------------------------------------------------------------

Financial Highlights
- --------------------------------------------------------------------------------
Pilot Small Capitalization Equity Fund
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 12, 1995 THROUGH
FEBRUARY 29, 1996(a)
--------------------------------------
PILOT CLASS A CLASS B
SHARES SHARES SHARES
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.................................... $ 10.00 $10.00 $10.00
--------- ------ ------
Investment Activities
Net investment income............................................... 0.04 0.01 0.01
Net realized and unrealized gains from investments and futures...... 0.18 0.18 0.20
--------- ------ ------
Total from Investment Activities.................................... 0.22 0.19 0.21
Distributions
From net investment income.......................................... (0.04) (0.01) (0.01)
From net realized gains............................................. -- -- --
--------- ------ ------
Total distributions................................................. (0.04) (0.01) (0.01)
--------- ------ ------
Net Asset Value, End of Period.......................................... $ 10.18 $10.18 $10.20
========= ====== ======
Total Return(b)......................................................... 2.17% 1.95% 2.05%
Ratios/Supplemental Data:
Net Assets at end of period (000)................................... $ 28,679 $ 349 $ 408
Ratio of expenses to average net assets............................. 0.97%(c) 1.23%(c) 2.01%(c)
Ratio of net investment income to average net assets................ 1.75%(c) 1.07%(c) 0.25%(c)
Ratio of expenses to average net assets assuming no waiver or
expense reimbursement............................................. 2.05%(c) 2.13%(c) 2.91%(c)
Ratio of net investment income (loss) to average net assets assuming
no waiver or expense reimbursement................................ 0.67%(c) 0.17%(c) (0.65%)(c)
Portfolio turnover rate(d).......................................... 2.27% 2.27% 2.27%

<FN>
- ---------------
(a) Period from commencement of operations.
(b) Total return from date of inception excludes sales charge of Class A Shares
and Class B Shares, would have been lower had certain expenses not been
reduced during the periods presented, and is not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing among the classes of shares issued.

- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.

F-15

<PAGE> 104
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 for the Small Capitalization Equity
Fund:

Included in the Prospectus:

- Financial Highlights

Included in the Statements of Additional Information:

- Portfolio of Investments for the period ended
February 29, 1996

- Statements of Assets and Liabilities for the period
ended February 29, 1996

- Statements of Operations for the period ended
February 29, 1996

- Statements of Changes in Net Assets for the period
ended February 29, 1996

- Notes to Financial Statements for the period ended
February 29, 1996

(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.

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

C-1

<PAGE> 105
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.

1(p). Amendment to Agreement and Declaration of Trust to
Designate and Establish the Class B Shares of Pilot Kleinwort
Benson International Equity Fund etc. - Filed herewith.

1(q). Amendment to Agreement and Declaration of Trust to
Redesignate Shares of Pilot Kleinwort Benson Interational
Equity Fund as Pilot International Equity Fund etc. -
Filed herewith.

1(r). Amendment to Agreement and Declaration of Trust to
Designate and Establish Shares and Classes of Pilot
Diversified Bond Income Fund and Pilot Growth Fund etc. -
Filed herewith.

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 as Exhibit 5(f) to Post-Effective Amendment
No. 30 to Registrant's Registration Statement on Form N-1A.

5(g). Form of Investment Advisory Agreement between Registrant
on behalf of the Pilot Diversified Bond Income Fund, and
Boatmen's Trust Company, filed as Exhibit 5(g) to
Post-Effective Amendment No. 30 to Registrant's Registration
Statement on Form N-1A.

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.

C-2

<PAGE> 106
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.

C-3

<PAGE> 107
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.

C-4

<PAGE> 108
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 MAY 1, 1996

<TABLE>
<CAPTION>
Fund Name Total Active Shareholders
--------- -------------------------
<S> <C>
Municipal Bond
Pilot Shares 4
Class A Shares 34
Class B Shares 28

Intermediate Municipal Bond
Pilot Shares 5
Class A Shares 9
Class B Shares N/A

U.S. Government Securities
Pilot Shares 5
Class A Shares 28
Class B Shares 41

Intermediate U.S. Government Securities
Pilot Shares 15
Class A Shares 41
Class B Shares N/A

Equity Income
Pilot Shares 5
Class A Shares 134
Class B Shares 145

Growth & Income
Pilot Shares 15
Class A Shares 395
Class B Shares 224

Short Term Diversified Assets Fund
Pilot Shares 4
Administrative Shares 442
Investor Shares 315

Short Term U.S. Treasury Fund
Pilot Shares 4
Administration Shares 425
Investor Shares 758

Missouri Tax Exempt Fund
Pilot Shares 324
Administration Shares 18
Investor Shares 66

Short Term Tax Exempt Diversified Fund
Pilot Shares 2
Administration Shares 19
Investor Shares 13

International Equity Fund
Pilot Shares 18
Class A Shares 1,138
Class B Shares N/A

Small Capitalization Equity Fund
Pilot Shares 16
Class A Shares 258
Class B Shares 114
</TABLE>

C-5

<PAGE> 109
<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.

C-6

<PAGE> 110
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>

C-7

<PAGE> 111
<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>

C-8

<PAGE> 112
<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>

C-9

<PAGE> 113

<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.

C-10

<PAGE> 114
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 17th day of May, 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 May 17, 1996
- ------------------------------------ (Principal Executive Officer)
William J. Tomko

/s/ Martin R. Dean Treasurer May 17, 1996
- ------------------------------------ (Principal Accounting Officer and
Martin R. Dean Principal Financial Officer)

J. HORD ARMSTRONG, III* Trustee May 17, 1996
- ------------------------------------
J. Hord Armstrong, III

LEE F. FETTER* Trustee May 17, 1996
- ------------------------------------
Lee F. Fetter

HENRY O. JOHNSTON* Trustee May 17, 1996
- ------------------------------------
Henry O. Johnston

L. WHITE MATTHEWS, III* Trustee May 17, 1996
- ------------------------------------
L. White Matthews, III

NICHOLAS G. PENNIMAN* Trustee May 17, 1996
- ------------------------------------
Nicholas G. Penniman

/s/ William J. Tomko
- ------------------------------------
William J. Tomko, Attorney-in-fact
</TABLE>

C-11

<PAGE> 115
EXHIBITS

Exhibit 1(p) Amendment to Agreement and Declaration of Trust to
Designate and Establish the Class B Shares of Pilot
Kleinwort Benson International Equity Fund etc.

Exhibit 1(q) Amendment to Agreement and Declaration of Trust to
Redesignate Shares of Pilot Kleinwort Benson International
Equity Fund as Pilot International Equity Fund etc.

Exhibit 1(r) Amendment to Agreement and Declaration of Trust to
Designate and Establish Shares and Classes of Pilot
Diversified Bond Income Fund and Pilot Growth Fund etc.

<PAGE> 1

EXHIBIT 1(p)

THE PILOT FUNDS
DESIGNATION AND ESTABLISHMENT OF NEW CLASS

WHEREAS, Section 4.1 of the Agreement and Declaration of Trust dated
July 15, 1982, as amended (the "Declaration"), of The Pilot Funds, formerly
Centerland Fund, (the "Trust") provides that the Declaration may be amended to
establish and designate a new class of units for an existing series of units of
beneficial interest by an instrument in writing executed by an officer of the
Trust pursuant to the vote of a majority of the Trustees of the Trust and
setting forth such amendment;
NOW THEREFORE, the undersigned, being a duly elected and qualified
officer of the Trust, certifies that a majority of the Trustees of the Trust at
a meeting held on August 21, 1995 approved an Amendment to the Agreement and
Declaration of Trust to designate and establish an additional class of the
authorized but unissued units of the Pilot Kleinwort Benson International
Equity Fund, to be known as Class B, such new class to bear the expenses
incurred pursuant to the Distribution Plan adopted for such class and other
expenses attributable to it and otherwise to have the relative rights and
preferences set forth in Subsections (a) through (k) of Section 4.2 of the
Declaration.

Dated: February 20, 1996 /s/ William J. Tomko
---------------------- -------------------------------
William J. Tomko
Vice President

<PAGE> 1

EXHIBIT 1(q)

THE PILOT FUNDS
REDESIGNATION OF SERIES

WHEREAS, Section 7.3 of the Agreement and Declaration of Trust dated
July 15, 1982, as amended, (the "Declaration") of The Pilot Funds, formerly
Centerland Fund, (the "Trust") provides that the Declaration may be amended to
redesignate a series by an instrument in writing executed by an officer of the
Trust pursuant to the vote of a majority of the Trustees of the Trust and
setting forth such amendment;
NOW THEREFORE, the undersigned, being a duly elected and qualified
officer of the Trust, certifies that a majority of the Trustees of the Trust at
a meeting held on November 1, 1995 approved an Amendment to the Agreement and
Declaration of Trust to redesignate the "Shares of the Pilot Kleinwort Benson
International Equity Fund" to be known as "Shares of the Pilot International
Equity Fund."

Dated: February 14, 1996 /s/ William J. Tomko
----------------------------- ----------------------------
William J. Tomko
Vice President

<PAGE> 1

EXHIBIT 1(r)

THE PILOT FUNDS
DESIGNATION AND ESTABLISHMENT OF NEW SERIES
AND NEW CLASSES

WHEREAS, Section 4.1 of the Agreement and Declaration of Trust dated
July 15, 1982, as amended (the "Declaration"), of The Pilot Funds, formerly
Centerland Fund, (the "Trust") provides that the Declaration may be amended to
establish and designate new series of units of beneficial interest and classes
of units by an instrument in writing executed by an officer of the Trust
pursuant to the vote of a majority of the Trustees of the Trust and setting
forth such amendment;
NOW THEREFORE, the undersigned, being a duly elected and qualified
officer of the Trust, certifies that a majority of the Trustees of the Trust at
a meeting held on February 20, 1996 approved an Amendment to the Agreement and
Declaration of Trust (1) to designate and establish two additional series of
units (each a "Fund") to be known as (i) "Shares of the Pilot Growth Fund" and
(ii) "Shares of the Pilot Diversified Bond Income Fund", each such new series
to have the relative rights and preferences set forth in Subsections (a)
through (k) of Section 4.2 of the Declaration; and (2) to designate and
establish three classes of the authorized but unissued units of each Fund above
designated and established, to be known as Pilot Shares, Class A and Class B,
each such new class to bear the expenses incurred pursuant to the Distribution
Plan, if any, adopted by the respective Fund for such class and other expenses
attributable to it and otherwise to have the relative rights and preferences
set forth in Subsections (a) through (k) of Section 4.2 of the Declaration.

Dated: February 20, 1996 /s/ William J. Tomko
-------------------------- ---------------------------
William J. Tomko
Vice President