PACIFICA FUNDS TRUST, 485APOS, 1995-11-21

PACIFICA FUNDS TRUST
485APOS, 1995-11-21

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<PAGE> 1

As filed with the Securities and Exchange Commission on November 21, 1995

File No. 2-92260
File No. 811-4068

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X/

POST-EFFECTIVE AMENDMENT NO. 46 / X/

AND

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

AMENDMENT NO. 49 / X/

PACIFICA FUNDS TRUST
-----------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

237 Park Avenue, New York, New York 10017
------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including area code: (212) 808-3900
--------------

Jeffrey L. Steele, Esq. Joan V. Fiore, Esq.
Dechert Price & Rhoads Furman Selz Incorporated
1500 K Street, N.W. 237 Park Avenue
Washington, D.C. 20005 New York, NY 10017

(Name and Address of Agent for Service)

It is proposed that this filing will become effective in accordance with Rule
485 (check appropriate box)

60 days after filing pursuant to paragraph (a)(1)
-----
on (date) pursuant to paragraph (a)(1)
-----
X 75 days after filing pursuant to paragraph (a)(2)
-----
on (date) pursuant to paragraph (a)(2)
-----
immediately upon filing pursuant to paragraph (b)
-----
on (date) pursuant to paragraph (b)
-----

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

* Registrant has registered an indefinite number of shares of beneficial
interest pursuant to Rule 24f-2 under the Investment Company Act of
1940. The Registrant filed the Notice required by Rule 24f-2 on
November 22, 1994.

<PAGE> 2

PACIFICA FUNDS TRUST
CROSS-REFERENCE SHEET
REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933

This Amendment to the Registration Statement relates solely to: (i)
the Prospectuses that describe the Investor Shares and the Institutional Shares
of the Registrant's following five new Funds: 100% U.S. Treasury Money Market
Fund; California Tax-Exempt Money Market Fund; National Tax-Exempt Money Market
Fund; Equity Index Fund and International Equity Fund (collectively, the "New
Funds"); and (ii) the Statement of Additional Information that describes the
New Funds and the Growth Fund; Equity Value Fund; Balanced Fund; Asset
Preservation Fund; Short-Term Government Bond Fund; Intermediate Government
Bond Fund; Government Income Fund; Intermediate Bond Fund; Oregon Tax-Exempt
Fund; Arizona Tax-Exempt Fund; California Short-Term Tax-Exempt Fund;
California Tax-Exempt Fund; National Tax-Exempt Fund; Government Money Market
Fund and Money Market Fund. The Prospectuses and Statements of Additional
Information that describe the Pacifica Prime Money Market Fund; Pacifica
Treasury Money Market Fund and the Pacifica Money Market Trust are not included
in this filing.

100% U.S. Treasury Money Market Fund; California Tax-Exempt
Money Market Fund; National Tax-Exempt Money Market Fund;
Equity Index Fund and International Equity Fund

(Investor Shares)

<TABLE>
<CAPTION>
ITEM NO. IN PART A HEADING IN INVESTOR SHARES PROSPECTUS
- ------------------ -------------------------------------
<S> <C> <C>
1. Cover Page Cover Page

2. Synopsis Highlights; Fund Expenses

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant The Funds: Investment Policies and Practices
of the Funds; Description of Securities and
Investment Practices; Investment Restrictions

5. Management of the Fund Management of the Funds

5A. Management's Discussion of Fund Information is contained in the
Performance Annual Reports of the Registrant
</TABLE>

<PAGE> 3
<TABLE>
<S> <C> <C>
6. Capital Stock and Other Securities Dividends, Distributions and Federal Income Tax;
Other Information

7. Purchase of Securities Being Offered Fund Share Valuation; Minimum Purchase Requirements;
Purchase of Investor Shares; Management of the Funds

8. Redemption or Repurchase Redemption of Investor Shares

9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE> 4
PACIFICA FUNDS TRUST
CROSS-REFERENCE SHEET

REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933

100% U.S. Treasury Money Market Fund; California Tax-Exempt
Money Market Fund; National Tax-Exempt Money Market Fund;
Equity Index Fund and International Equity Fund

(Institutional Shares)

<TABLE>
<CAPTION>
ITEM NO. IN PART A HEADING IN INSTITUTIONAL SHARES PROSPECTUS
- ------------------ ------------------------------------------
<S> <C> <C>

1. Cover Page Cover Page

2. Synopsis Highlights; Fund Expenses

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant The Funds: Investment Policies and Practices of the Funds;
Description of Securities and Investment Practices;
Investment Restrictions

5. Management of the Fund Management of the Funds

5A. Management's Discussion of Fund Information is contained in the
Performance Annual Reports of the Registrant

6. Capital Stock and Other Securities Dividends, Distributions and Federal Income Tax; Other
Information

7. Purchase of Securities Being Offered Fund Share Valuation; Purchase and Redemption of
Institutional Shares; Management of the Funds

8. Redemption or Repurchase Purchase and Redemption of Institutional Shares

9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE> 5
PACIFICA FUNDS TRUST
CROSS-REFERENCE SHEET

REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933

Growth Fund; Equity Value Fund; Balanced Fund; Asset Preservation Fund;
Short-Term Government Bond Fund; Intermediate Government Bond Fund;
Government Income Fund; Intermediate Bond Fund;
Oregon Tax-Exempt Fund; Arizona Tax-Exempt Fund; California
Short-Term Tax-Exempt Fund; California Tax-Exempt Fund; National
Tax-Exempt Fund; Government Money Market Fund; Money
Market Fund; 100% U.S. Treasury Money Market Fund;
California Tax-Exempt Money Market Fund; National Tax-Exempt
Money Market Fund; Equity Index Fund and
International Equity Fund

<TABLE>
<CAPTION>
ITEM NO. IN PART B HEADING IN STATEMENT OF
- ------------------ ADDITIONAL INFORMATION
-----------------------

<S> <C> <C>
10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History Not Applicable

13. Investment Objectives and Policies Investment Policies

14. Management of the Fund Management

15. Control Persons and Principal Other Information
Holders of Securities

16. Investment Advisory and Other Management
Services

17. Brokerage Allocation and Other Portfolio Transactions
Practices

18. Capital Stock and Other Securities Other Information

19. Purchase, Redemption and Pricing Additional Purchase and
of Securities Being Offered Redemption Information;
Determination of Net Asset Value

20. Tax Status Taxation

21. Underwriters Management
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
22. Calculation of Performance Data Other Information

23. Financial Statements Financial Statements
</TABLE>
<PAGE> 7

PACIFICA FUNDS TRUST
(INVESTOR SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Investor Shares of the following portfolio (the
"Fund"):

. Pacifica 100% U.S. Treasury Money Market Fund

This Prospectus sets forth concisely the information a prospective
investor should know before investing in the Fund and should be read and
retained for information about the Fund. A Statement of Additional Information
(the "SAI"), dated February __, 1996 (which may be revised from time to time),
containing additional and more detailed information about the Fund, has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Fund at the address or
information number printed above.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY FIRST INTERSTATE OR OTHER BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

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.

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.

<PAGE> 8
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

FEE TABLE - INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . 5

THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

INVESTMENT POLICIES AND PRACTICES OF THE FUND . . . . . . . . . . . 7

RISKS OF INVESTING IN THE FUND . . . . . . . . . . . . . . . . . . 7

MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . 8

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . . . . 11

MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . . . . . . 12

PURCHASE OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . 12

INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . . . . . 13

EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . 13

REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . 15

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . . . . 17

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . . . . 19

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . 20

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>

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<PAGE> 9
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUND

The investment objective of the 100% U.S. Treasury Securities Money
Market Fund is to seek as high a level of current income as is consistent with
liquidity and maximum safety of principal. The Fund pursues this objective by
investing exclusively in obligations of the U.S. Treasury which are backed by
the full faith and credit of the U.S. Government as to payment of principal and
interest and which have remaining maturities not exceeding 397 days.

For additional information concerning the investment policies,
practices and risk considerations of the Fund, see "The Fund," "Investment
Policies and Practices of the Fund" and "Risks of Investing in the Fund" in
this Prospectus.

RISKS OF INVESTING IN THE FUND

The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund may not achieve as high a level of current income
as other funds that do not limit their investments to the high quality U.S.
Treasury securities in which the Fund invests. The Fund's performance will
fluctuate based on many factors, including the quality of the instruments in
the Fund's investment portfolio, national and international economic
conditions, interest rate levels and general market conditions.

There is no assurance that the Fund will achieve its investment
objective.

MANAGEMENT OF THE FUND

First Interstate Capital Management, Inc. acts as investment advisor
to the Fund. For its services, the Advisor is entitled to receive a fee from
the Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Investor Shares" and "Management of the Fund" in this Prospectus.

Furman Selz acts as administrator and sponsor to the Fund. Furman
Selz provides certain management and administrative services to the Fund, and
is entitled to receive a fee from the Fund at an annual rate based on the
Fund's average daily net assets. PFD Inc. distributes the Fund's shares and
may be reimbursed for certain of its distribution-related expenses.

Fees and expenses charged to the Fund are outlined on page __ of this
Prospectus.

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<PAGE> 10
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

Purchase orders for the Fund received by your broker or Service
Organization in proper order by 4:15 p.m., Eastern time, and transmitted to the
Trust prior to 5:00 p.m. Eastern time will become effective that day.

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . . . . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . . . . . . . . . $ 50
</TABLE>

Investor Shares of the Fund are purchased at net asset value.

Shareholders may exchange Investor Shares between Funds by telephone
or mail.

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>

Shareholders may redeem Investor Shares by telephone, mail or wire.

- The Fund reserves the right upon not less than 30 days' notice
to redeem involuntarily all the Investor Shares in an
investor's account which have an aggregate value of $500 or
less for any particular Fund.

(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)

All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the Fund unless cash payment
is requested.

- Distributions for the Fund are paid monthly.

For additional information on how to purchase and redeem Investor
Shares of the Fund, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."

- 4 -
<PAGE> 11
FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of the Fund.
The information is based on estimated amounts for the initial fiscal year of
the Fund.

FEE TABLE - INVESTOR SHARES

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)...................... None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price)............ None
Deferred Sales Load (as a percentage of
redemption proceeds)..................................... None
Redemption Fees.............................................. None
Exchange Fee................................................. None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees.............................................. ____%
12b-1 Fees*.................................................. ____
Other Expenses (after waivers)**............................. ____
----
TOTAL FUND OPERATING EXPENSES:
(after waivers)***........................................... .55%
=====
</TABLE>

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

* Under rules of the National Association of Securities Dealers, Inc.
(the "NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 fee is an annual fee charged against the
assets of the Fund, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD. See
"Management of the Fund -- The Sponsor and Distributor."

** Other Expenses (before waivers) would be ____% and are estimated.

*** Total Fund Operating Expenses (before waivers) would be ____%.

The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Fund's Investor Shares
will bear. The table does not reflect any charges that may be imposed by a
First Interstate Bank or other institutions directly on their customer accounts
in connection with investments in the Fund.

- 5 -
<PAGE> 12

EXAMPLE:*

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

1 year 3 years
------ -------
$ $

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

* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.

- 6 -
<PAGE> 13
THE FUND

The Fund is a portfolio of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Fund and elects the officers of the
Fund.

INVESTMENT POLICIES AND PRACTICES OF THE FUND

The investment objective of the Fund is to provide investors with as
high a level of current income as is consistent with liquidity and maximum
safety of principal. The SAI contains the specific investment restrictions
which govern the Fund's investments. Those restrictions and the Fund's
investment objectives are fundamental policies, which means that they may not
be changed without a majority vote of shareholders of the Fund. Except for the
objectives and those restrictions specifically identified as fundamental all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental, which means that the Board of Trustees may change them
without shareholder approval. The Advisor selects investments and makes
investment decisions based on the investment objective and policies of the
Fund.

The Advisor selects only those U.S. dollar-denominated debt
instruments for the Fund which meet the high quality, credit risk standards
established by the Fund's Board of Trustees. The Fund will not maintain a
dollar-weighted average portfolio maturity that exceeds 90 days nor purchase
any instrument with a remaining maturity of greater than 397 calendar days.

The Fund restricts its investment to U.S. Treasury securities.
Securities issued by the U.S. Treasury have historically involved little risk
of loss of principal if held to maturity. It should be noted that neither the
United States Government, nor any agency or instrumentality thereof, has
guaranteed, sponsored or approved the Fund or its shares. Generally,
securities in which the Fund invests will not earn as high a yield as
securities of longer maturity and/or of lesser quality which are more subject
to market volatility.

The types of securities and investment practices used by the Fund are
described in greater detail under the section "Description of Securities and
Investment Practices" on pages _______ of this Prospectus.

RISKS OF INVESTING IN THE FUND

The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund's performance will fluctuate based on many factors,
including the quality of the instruments in the Fund's investment portfolio,
national and international economic conditions, interest rate levels and
general market conditions.

- 7 -
<PAGE> 14
MANAGEMENT OF THE FUND

The business and affairs of the Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N.
Hankin, John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer.
Information about the Trustees, as well as the Fund's executive officers, may
be found in the SAI under the heading "Management Trustees and Officers."

THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Fund and
continuously reviews, supervises and administers the Fund's investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion.

For the advisory services it provides to the Fund, FICM is entitled to
receive from the Fund fees, payable monthly, at the annual rate of 0.30% of the
first $500 million of the Fund's average daily net assets, 0.25% of the next
$500 million of the Fund's average daily net assets, and 0.20% of the Fund's
average daily net assets in excess of $1 billion.

THE SPONSOR AND DISTRIBUTOR

Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Fund. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.

Under the Distribution Plan (the "Plan") adopted by the Fund for its
Investor Shares, the Fund may pay directly or reimburse PFD Inc. monthly
(subject to a limit of 0.50% per annum of the average daily net asset value of
the outstanding Investor Shares of the Fund) for costs and expenses of PFD Inc.
in connection with the distribution of Investor Shares of the Fund. These
costs and expenses include (i) advertising by radio, television, newspapers,
magazines, brochures, sales literature, direct mail or any other form of
advertising; (ii) expenses of sales employees or agents of PFD Inc., including
salary, commissions, travel and

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<PAGE> 15
related expenses; (iii) payments to broker-dealers and financial institutions
for services in connection with the distribution of Investor Shares, including
promotional incentives and fees calculated with reference to the average daily
net asset value of Investor Shares held by shareholders who have a brokerage or
other service relationship with the broker-dealer or other institution
receiving such fees; (iv) costs of printing prospectuses and other materials to
be given or sent to prospective investors; and (v) such other similar services
as the Trustees determine to be reasonably calculated to result in the sale of
Investor Shares of the Fund. The Fund will pay all costs and expenses in
connection with the preparation, printing and distribution of prospectuses to
current shareholders and the operation of its Plan, including related legal and
accounting fees. The Fund will not be liable for distribution expenditures
made by PFD Inc. in any given year in excess of the maximum annual amount
payable under the Plan for that Fund. All payments made under the Plan for
Investor Shares are borne entirely by the Fund's Investor Shares.

PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Investor Shares of the Fund and/or other funds distributed by Furman
Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive will take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc. has established such a special
promotional incentive program with First Interstate Securities, Inc.

ADMINISTRATIVE SERVICES

The Fund has also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Fund's operations including: (i)
general supervision of the operation of the Fund including coordination of the
services performed by the Fund's investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Fund; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Fund's Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Fund. For these services, Furman Selz is entitled to receive a fee, payable
monthly, at the annual rate of 0.15% of the average daily net assets of the
Fund. Pursuant to a Services Agreement with the Trust, Furman Selz assists the
Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15.00 per account per year plus out-of-pocket expenses.
Pursuant to the Fund Accounting Agreement with the Trust, Furman Selz assists
the Trust in calculating net asset values and provides certain other accounting
services for the Fund for an annual fee of $30,000 per Fund plus out-of-pocket
expenses.

- 9 -
<PAGE> 16
SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Fund's Institutional
Shares, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which vary depending upon the services provided)
in amounts up to an annual rate of 0.25% of the average daily net asset value
of the outstanding Investor Shares of the Fund owned by shareholders with whom
a Service Organization has a servicing relationship. These fees will be home
entirely by the Fund's Investor Shares.

Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Fund or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Fund. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.

The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Fund and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.

OTHER EXPENSES

- 10 -
<PAGE> 17
See "Management" in the SAI for additional information on expenses borne by the
Fund. Trust expenses directly attributable to a particular Fund are charged to
that Fund, and expenses attributable to a particular class of shares of the
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Fund's
accounts with brokers or dealers selected by it in its discretion.

In effecting purchases and sales of portfolio securities for the
account of the Fund, the Advisor will seek the best execution of the Fund's
orders. Purchases and sales of debt securities are generally placed by the
Advisor with primary market makers for these securities on a net basis, i.e.,
without any brokerage commission being paid by the Fund. Trading does,
however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause the Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.

FUND SHARE VALUATION

The net asset value of each class of shares of the Fund is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of the Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the Advisor, Furman Selz
and PFD Inc., are accrued daily and taken into account for the purpose of
determining the net asset value.

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<PAGE> 18
regardless of the impact of fluctuating interest rates on the market value of
the security. See the SAI for a more complete description of the amortized
cost method.

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Fund is $500, except that the
minimum is $250 for an IRA. Any subsequent investments must be at least $50,
including an IRA investment. All initial investments should be accompanied by
a completed Purchase Application. A separate application is required for IRA
investments.

PURCHASE OF INVESTOR SHARES

The following purchase procedures do not apply to certain trust or
other accounts that are managed by First Interstate Bancorp, its subsidiaries
or affiliates. An account customer should consult his or her account officer
for proper instructions.

All funds received by the Trust are invested in full and fractional
Investor Shares of the Fund. Certificates for Investor Shares are not issued.
Furman Selz maintains records of each shareholder's holdings of Fund shares,
and each shareholder receives a statement of transactions, holdings and
dividends. The Fund reserves the right to reject any purchase.

An investment may be made using any of the following methods:

Through an Authorized Broker, Investment Advisor or Service
Organization. Investor Shares are available to new and existing shareholders
through authorized brokers, investment advisors and Service Organizations. To
make an investment using this method, simply complete a Purchase Application
and contact your broker, investment advisor or Service Organization with
instructions as to the amount you wish to invest. Your broker will then
contact the Fund to place the order on your behalf on that day.

Orders received by your broker or Service Organization for the Fund in
proper order prior to the determination of the Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.

By Wire. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the Fund. In most cases, your bank will either be a member of the
Federal Reserve Banking System or have a relationship with a bank that is.
Your bank will normally charge you a fee for handling the transaction. To
purchase Investor Shares by a Federal funds wire, please first contact Furman
Selz Mutual Funds Client Services. They will establish a record of information
for the wire to ensure its correct processing. You can reach the Wire Desk at
1-800-662-9417.

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<PAGE> 19
Have your bank wire funds using the following instructions: Fiduciary
Trust Company

Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name

As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way.
When new accounts are established by wire, the distribution options will be set
to reinvest and the social security or tax identification number ("TIN") will
not be certified until a signed application is received. Completed
applications should be forwarded immediately to the Fund. With the Purchase
Application, the shareholder can specify other distribution options and add any
special features offered by the Fund. Should any dividend distributions or
redemptions be paid before the TIN is certified, they will be subject to 31%
Federal tax withholding.

Automatic Investment Program. An eligible shareholder may also
participate in the Pacifica Automatic Investment Program, an investment plan
that automatically debits money from the shareholder's bank account and invests
it in the Fund through the use of electronic funds transfers or automatic bank
drafts. Shareholders may elect to make subsequent investments by transfers of
a minimum of $50 on either the fifth or twentieth day of each month into their
established Fund accounts. Contact the Trust at 1-800-662-8417 for more
information about the Pacifica Automatic Investment Program.

INDIVIDUAL RETIREMENT ACCOUNTS

The Fund may be used as a funding medium for IRAs. Investor Shares
may also be purchased for IRAs established with an affiliate of First
Interstate Bancorp or other authorized custodians. In addition, an IRA may be
established through a custodial account with Investors Fiduciary Trust Company.
Completion of a special application is required in order to create such an
account, and the minimum initial investment for an IRA is $250. Contributions
to IRAs are subject to prevailing amount limits set by the Internal Revenue
Service. A $5.00 establishment fee and an annual $12.00 maintenance and
custody fee is payable with respect to each IRA, and there will be a $10.00
termination fee when the account is closed. For more information, call the
Fund at 1-800-662-8417.

EXCHANGE OF INVESTOR SHARES

The Fund offers two convenient ways to exchange Investor Shares in the
Fund for Investor Shares in another investment portfolio of the Trust. Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may

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<PAGE> 20
not exchange Investor Shares of one portfolio for Investor Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The minimum amount for an initial exchange is $500.
No minimum is required in subsequent exchanges. The Trust may terminate or
amend the terms of the exchange privilege at any time.

A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by the Trust in good order, plus any applicable sales
charge.

An exchange is taxable as a sale of a security; however, if the Fund
maintains a net asset value of $1.00 per share, no gain or loss would be
realized upon an exchange of Fund shares. Shareholders should receive written
confirmation of the exchange within a few days of the completion of the
transaction.

In the case of transactions subject to a sales charge, the sales
charge will be assessed on an exchange of Investor Shares, equal to the excess
of the sales load applicable to the Investor Shares to be acquired over the
amount of any sales load previously paid on the Investor Shares to be
exchanged. No service fee is imposed. See "Dividends, Distributions and
Federal Income Tax" for an explanation of circumstances in which a sales load
paid to acquire Investor Shares of the Fund may not be taken into account in
determining gain or loss on the disposition of those Investor Shares.

In addition, Institutional Shares of the Fund may be exchanged for
Investor Shares of the Fund in connection with the distribution of assets held
in a qualified trust, agency or custodial account maintained with the trust
department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares of the Fund if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made without
a sales charge at the net asset value of the respective share classes.

Exchange by Mail. To exchange Investor Shares of the Fund by mail,
simply send a letter of instruction to Furman Selz. The letter of instruction
must include: (i) your account number, (ii) the Fund from and the Fund into
which you wish to exchange your investment; (iii) the dollar or share amount
you wish to exchange; and (iv) the signatures of all registered owners or
authorized parties. All signatures must be guaranteed by an eligible guarantor
institution including a member of a national securities exchange or by a
commercial bank or trust company, broker-dealers, credit unions and savings
associations.

Exchange by Telephone. To exchange Investor Shares of the Fund by
telephone, or if you have any questions, simply call the Trust at
1-800-662-8417. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the name of the portfolio from and the

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<PAGE> 21
portfolio into which you wish to transfer your investment; and (iii) the dollar
or share amount you wish to exchange. The conversation may be recorded to
protect you and the Fund. Telephone exchanges are available only if the
shareholder so indicates by checking the "yes" box on the Purchase Application.
See "Redemption of Investor Fund Shares -- By Telephone" for a discussion of
telephone transactions generally.

REDEMPTION OF INVESTOR SHARES

Shareholders may redeem their Investor Shares, in whole or in part, on
any Business Day. Investor Shares will be redeemed at the net asset value next
determined after a redemption request in good order has been received and
accepted by the Trust. See "Fund Share Valuation." A redemption may be a
taxable transaction on which gain or loss may be recognized. Generally,
however, gain or loss is not expected to be recognized on a redemption of
shares of the Fund because the Fund seeks to maintain a net asset value of
$1.00 per share.

Where the Investor Shares to be redeemed have been purchased by check,
the Trust may delay payment of the redemption proceeds until the purchasing
check has cleared, which may take up to 15 days. Shareholders may avoid this
delay by investing through wire transfers of Federal funds. During the period
prior to the time the Investor Shares are redeemed, dividends on the Investor
Shares will continue to accrue and be payable and the shareholder will be
entitled to exercise all other beneficial rights of ownership.

Once the Investor Shares are redeemed, the Fund will ordinarily send
the proceeds by check to the shareholder at the address of record on the next
Business Day. The Fund may, however, take up to seven days to make payment.
This will not be the customary practice. Also, if the New York Stock Exchange
is closed (or when trading is restricted) for any reason other than the
customary weekend or holiday closing or if an emergency condition as determined
by the SEC merits such action, the Fund may suspend redemptions or postpone
payment dates.

To ensure acceptance of your redemption request, it is important to
follow the procedures described below. Although the Trust has no present
intention to do so, it reserves the right to refuse or to limit the frequency
of any telephone or wire redemptions. Of course, it may be difficult to place
orders by telephone during periods of severe market or economic change, and a
shareholder should consider alternative methods of communications, such as
couriers or U.S. mail. The services offered by the Fund may be modified or
terminated at any time. If the Fund terminates any particular service, they
will do so only after giving written notice to shareholders.

You may redeem your Investor Shares using any of the following
methods:

Through an Authorized Broker, Investment Advisor or Service
Organization. You may redeem your Investor Shares by contacting your broker or
investment advisor and instructing

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<PAGE> 22
him or her to redeem your Investor Shares. He or she will then contact PFD
Inc. and place a redemption trade on your behalf. He or she may charge you a
fee for this service.

By Mail. You may redeem your Investor Shares by sending a letter
directly to the Fund. To be accepted, a letter requesting redemption must
include: (i) the Fund name and account registration from which you are
redeeming Investor Shares; (ii) your account number, (iii) the amount to be
redeemed; (iv) the signatures of all registered owners; and (v) a signature
guarantee by any eligible guarantor institution including a member of a
national securities exchange or a commercial bank or trust company,
broker-dealers, credit unions and savings associations. Corporations,
partnerships, trusts or other legal entities will be required to submit
additional documentation.

By Telephone. You may redeem your Investor Shams by calling the Fund
toll free at 1-800-662-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount to be redeemed. The
conversation may be recorded to protect you and the Fund. Telephone
redemptions are available only if the shareholder so indicates by checking the
"yes" box on the Purchase Application. The Fund employs reasonable procedures
to confirm that instructions communicated by telephone are genuine. If the
Fund fails to employ such reasonable procedures, they may be liable for any
loss, damage or expense arising out of any telephone transactions purporting to
be on a shareholder's behalf. In order to assure the accuracy of instructions
received by telephone, the Fund requires some form of personal identification
prior to acting upon instructions received by telephone, record telephone
instructions and provide written confirmation to investors of such
transactions.

By Wire. You may redeem your Investor Shares by contacting the Fund
by mail or telephone and instructing them to send a wire transmission to your
personal bank.

Your instructions should include: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount to be redeemed. Wire
redemptions can be made only if the "yes" box has been checked on your Purchase
Application, and a copy of a void check from the account where proceeds are to
be wired is attached to the Purchase Application. Your bank may charge you a
fee for receiving a wire payment on your behalf.

The above-mentioned services "By Telephone" and "By Wire" are not
available for IRAs and trust clients of an affiliate of First Interstate
Bancorp.

Systematic Withdrawal Plan. An owner of $10,000 or more of Investor
Shares of the Fund may elect to have periodic redemptions from his or her
account to be paid on a monthly, quarterly, semi-annual or annual basis. The
minimum periodic payment is $100. A sufficient number of Investor Shares to
make the scheduled redemption will normally be redeemed on the date selected by
the shareholder. Depending on the size of the payment

- 16 -
<PAGE> 23
requested and fluctuation in the net asset value, if any, of the Investor
Shares redeemed, redemptions for the purpose of making such payments may reduce
or even exhaust the account. A shareholder may request that these payments be
sent to a predesignated bank or other designated party. Capital gains and
dividend distributions paid to the account will automatically be reinvested at
net asset value on the distribution payment date.

Redemption of Small Accounts. Due to the disproportionately higher
cost of servicing small accounts, the Fund reserves the right to redeem, on not
less than 30 days' notice, an account in the Fund that has been reduced by a
shareholder to $500 or less. However, if during the 30-day notice period the
shareholder purchases sufficient Investor Shares to bring the value of the
account above $500, this restriction will not apply.

Redemption in Kind. All redemptions of Investor Shares of the Fund
shall be made in cash, except that the commitment to redeem Investor Shares in
cash extends only to redemption requests made by each shareholder of the Fund
during any 90-day period of up to the lesser of $250,000 or 1% of the net asset
value of that Fund at the beginning of such period. This commitment is
irrevocable without the prior approval of the SEC and is a fundamental policy
of the Fund that may not be changed without shareholder approval. In the case
of redemption requests by shareholders in excess of such amounts, the Board of
Trustees reserves the right to have the Fund make payment, in whole or in part,
in securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the securities of that Fund are valued. If the recipient were
to sell such securities, he or she would incur brokerage charges.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

The Fund intends to qualify annually and to elect to be treated as a
regulated investment company pursuant to the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). By so qualifying and
electing, the Fund generally will not be subject to Federal income tax to the
extent that it distributes investment company taxable income and net capital
gains in the manner required under the Code.

The Fund intends to distribute to its shareholders substantially all
of its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short-term capital gains
over net long-term capital losses). The Fund will declare distributions of
investment company income daily and pay those dividends monthly. The Fund
intends to distribute, at least annually, substantially all net capital gain
(the excess of net long-term capital gains over net short-term capital losses),
if any. In determining amounts of capital gains to be distributed, any capital
loss carryovers from prior years will first be applied against capital gains.

- 17 -
<PAGE> 24
Distributions will be paid in additional shares of the Fund based on
the net asset value at the close of business on the payment date of the
distribution, unless the shareholder elects in writing, which is received by
Furman Selz not less than five full business days prior to the record date, to
receive such distributions in cash. Dividends declared in, and attributable
to, the preceding month will be paid within five business days after the end of
each month.

Shares purchased will begin earning dividends on the day the purchase
order is executed and shares redeemed will earn dividends through the previous
day. Net investment income for a Saturday, Sunday or a holiday will be
declared as a dividend on the previous business day. Investors who redeem all
or a portion of Fund shares prior to a dividend payment date will be entitled
on the next dividend payment date to all dividends declared but unpaid on those
shares at the time of their redemption.

Distributions of investment company taxable income (regardless of
whether derived from dividends, interest or net short-term capital gains) will
be taxable to shareholders as ordinary income. Distributions of net long-term
capital gains designated by the Fund as capital gain dividends will be taxable
as long-term capital gains, regardless of how long a shareholder has held his
Fund shares. Distributions are taxable in the same manner whether received in
additional shares or in cash.

Earnings of the Fund not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To prevent imposition of this tax, the Fund intends to comply with
this distribution requirement.

A distribution will be treated as paid on December 31 of a calendar
year if it is declared by the Fund during October, November, or December of
that year to shareholders of record in such a month and paid by the Fund during
January of the following calendar year. Such distributions will be treated as
received by shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are
received.

The dividends paid by the Fund are not expected to qualify for the
dividends-received deduction available to corporations.

The Fund may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct taxpayer identification number or
to make required certifications, or where the Fund or shareholder has been
notified by the Internal Revenue Service that the shareholder is subject to
backup withholding. Most corporate shareholders and certain other shareholders
specified in the Code are exempt from backup withholding. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.

- 18 -
<PAGE> 25
Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund. Depending on the residence of
the shareholder for tax purposes, distributions also may be subject to state
and local taxes, including withholding taxes. Foreign shareholders may, for
example, be subject to special withholding requirements. Special tax
treatment, including a penalty on certain pre-retirement distributions, is
accorded to accounts maintained as IRAs. Shareholders should consult their own
tax advisors as to the Federal, state and local tax consequences of ownership
of shares of the Fund in their particular circumstances.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

U.S. Treasury Obligations. U.S. Treasury securities are obligations
issued by the U.S. Treasury. U.S. Treasury bills, which have a maturity of up
to one year, are direct obligations of the United States and are the most
frequently issued marketable U.S. Government security. The U.S. Treasury also
issues securities with longer maturities in the form of notes and bonds.

Stripped Obligations. The Fund may invest in U.S. Treasury
obligations offered under the STRIPS or CUBES programs. Such obligations may
represent future interest or principal payments. These stripped securities are
direct obligations of the U.S. Government and clear through the Federal
Reserve book-entry system. Stripped securities are issued at a discount to
their face value and may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.

Securities Issued by Other Investment Companies. 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; (c) not more than 3% of the outstanding voting stock of any one
investment company will be owned by the Fund; and (d) not more than 10% of the
outstanding voting stock of any one investment company will be owned in the
aggregate by the Fund and other investment companies advised by the Advisor or
any other affiliate of First Interstate Bancorp. As a shareholder of another
investment company, the Fund would bear, along with other shareholders, its pro
rata portion of the expenses of such other investment company, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that each Fund bears directly in connection with its own operations,
and may represent a duplication of fees to shareholders of the Fund. The Fund
may only invest in investment companies which restrict their portfolio
investments solely to the same investment instruments that are permissible
investments for the Fund.

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<PAGE> 26
INVESTMENT RESTRICTIONS

The Fund has adopted certain fundamental investment restrictions that
may be changed only with the approval of a majority of the Fund's outstanding
shares. The following description summarizes several of the Fund's fundamental
restrictions, which are set forth in full in the SAI.

The Fund may not:

1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of the Fund's total assets may be invested without regard
to this 5% limitation.

2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.

3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.

4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.

If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Fund will not at any time have more than
10% of its respective net assets invested in illiquid securities.

OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Fund are fully paid,
non-assessable and freely transferable.

The Board of Trustees has authorized the issuance of two classes of
shares in the Fund -- Investor Shares and Institutional Shares. Each share of
the Fund represents an equal proportionate interest in the Fund with other
shares of the same class and is entitled to cash dividends and distributions
earned on such shares as are declared in the discretion of the Board of
Trustees.

- 20 -
<PAGE> 27
The Fund's Institutional Shares and Investor Shares bear their pro
rata portion of all operating expenses paid by the Fund except for the
distribution payments, Service Organization fees and other "class" expenses
that are allocated to a particular share class. The Board of Trustees has not
approved a Distribution Plan with respect to Institutional Shares. The Fund
may pay fees to Service Organizations in amounts up to an annual rate of 0.25%
of the daily net asset value of the Fund's outstanding Institutional Shares
owned by shareholders with whom a Service Organization has a servicing
relationship. Because of the "class expenses," the performance of the Fund's
Institutional Shares is expected to be higher than the performance of its
Investor Shares. The Trust offers various services and privileges in
connection with its Investor Shares that are not offered in connection with its
Institutional Shares, including an automatic investment plan, automatic
withdrawal plan and, with respect to certain portfolios, checkwriting. For
information regarding the Fund's Institutional Shares, contact Furman Selz at
1-800-662-8417 or your Service Organization.

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust. The Declaration of
Trust also provides for indemnification out of the property of the Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder of the Fund. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations and should be considered remote.

VOTING

Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of the Fund's shares. Voting rights are not cumulative.

- 21 -
<PAGE> 28
to call a meeting for the purpose of considering the removal of a person
serving as Trustee if requested in writing to do so by the holders of not less
than 10% of the outstanding shares of the Trust and in connection with such
meeting to comply with the shareholders' communications provisions of Section
16 (c) of the 1940 Act.

Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of the Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of the Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of the Fund. For purposes of the 1940 Act, any person
who owns either directly or through one or more controlled companies more than
25 percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.

PERFORMANCE INFORMATION

The Fund may, from time to time, include yield data in advertisements
or reports to shareholders or prospective investors. The methods used to
calculate the yields of the Fund are mandated by the SEC.

Quotations of "yield" for the Fund will be based on the income
received by a hypothetical investment (less a pro-rata share of Fund expenses)
over a particular seven-day period, which is then "annualized" (i.e., assuming
that the seven-day yield would be received for 52 weeks, stated in terms of an
annual percentage return on the investment).

"Effective yield" for the Fund is calculated in a manner similar to
that used to calculate yield, but includes the compounding effect of earnings
on reinvested dividends.

Quotations of yield reflect only the performance of the Fund during
the particular period on which the calculations are based. Yield and effective
yield for the Fund will vary based on changes in market conditions, the level
of interest rates and the level of the expenses of the Fund and no reported
performance figure should be considered an indication of performance which may
be expected in the future.

- 22 -
<PAGE> 29
the Fund's investment objective and policies, characteristics and quality of
the Fund and the market conditions during the time period indicated, and should
not be considered to be representative of what may be achieved in the future.
For a description of the methods used to determine yield for the Fund, see
"Other Information -- Performance Information" in the SAI.

ACCOUNT SERVICES

All transactions in shares of the Fund will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its nominee is shareholder of record of shares purchased for its customer, the
Fund has been advised that the statement may be transmitted to the customer at
the discretion of the Service Organization.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN 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 ITS 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.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED,
ENDORSED OR OTHERWISE SUPPORTED BY FIRST INTERSTATE BANCORP OR ITS AFFILIATES,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

- 23 -
<PAGE> 30
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019

<PAGE> 31

PACIFICA FUNDS TRUST
(INSTITUTIONAL SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Institutional Shares of the following portfolio
(the "Fund"):

- Pacifica 100% U.S. Treasury Money Market Fund

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996

<PAGE> 32
TABLE OF CONTENTS

HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . 5

FEE TABLE - INSTITUTIONAL SHARES . . . . . . . . . . . . 5

THE FUND . . . . . . . . . . . . . . . . . . . . . . . . 7

INVESTMENT POLICIES AND PRACTICES OF THE FUND . . . . . . 7

RISKS OF INVESTING IN THE FUND . . . . . . . . . . . . . 7

MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . 8

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . 11

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES . . . . . 11

EXCHANGE OF INSTITUTIONAL SHARES . . . . . . . . . . . . 13

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . 14

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . 15

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . 16

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

- 2 -
<PAGE> 33
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUND

RISKS OF INVESTING IN THE FUND

There is no assurance that the Fund will achieve its investment
objective.

MANAGEMENT OF THE FUND

First Interstate Capital Management, Inc. acts as investment advisor
to the Fund. For its services, the Advisor is entitled to receive a fee from
the Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Institutional Shares" and "Management of the Fund" in this
Prospectus.

Fees and expenses charged to the Fund are outlined on page __ of this
Prospectus.

- 3 -
<PAGE> 34
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

Purchase orders for the Fund received in proper order by 4:15 p.m.,
Eastern time, will become effective that day.

Institutional Shares of the Fund are purchased at net asset value
without a sales charge.

Shareholders may purchase, redeem or exchange Institutional Shares by
telephone.

All dividends and distributions will be automatically reinvested at
net asset value in additional Institutional Shares of the Fund unless cash
payment is requested.

- Distributions for the Fund are paid monthly.

For additional information on how to purchase and redeem Institutional
Shares of the Fund, see "Purchase and Redemption of Institutional Shares" and
"Exchange of Institutional Shares."

- 4 -
<PAGE> 35
FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Institutional shareholder of the
Fund. The information is based on estimated amounts for the initial fiscal
year of the Fund.

FEE TABLE - INSTITUTIONAL SHARES

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............................ None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price).................. None
Deferred Sales Load (as a percentage of
redemption proceeds)........................................... None
Redemption Fees.................................................... None
Exchange Fee....................................................... None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees (after waivers)*................................... ____%
Other Expenses (after waivers)**................................... ____
TOTAL FUND OPERATING EXPENSES:
(after waivers)***................................................. 0.25%
=====
</TABLE>

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

* Management Fees (before waivers) would be .30%.

** Other Expenses (before waivers) would be ____% and are estimated.

*** Total Fund Operating Expenses (before waivers) would be ____%.

The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Fund's Institutional
Shares will bear. The table does not reflect any charges that may be imposed
by a First Interstate Bank or other institutions directly on their customer
accounts in connection with investments in the Fund.

- 5 -
<PAGE> 36

EXAMPLE:*

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

1 year 3 years
------- --------
$ $

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

*THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS
HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
ANNUAL RETURN; ACTUAL RETURN MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT.

- 6 -
<PAGE> 37
THE FUND

INVESTMENT POLICIES AND PRACTICES OF THE FUND

RISKS OF INVESTING IN THE FUND

- 7 -
<PAGE> 38
MANAGEMENT OF THE FUND

THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

THE SPONSOR AND DISTRIBUTOR

Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Fund. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust. However, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.

PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Institutional Shares of the Fund and/or other funds distributed by
Furman Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive will take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc.

- 8 -
<PAGE> 39
has established such a special promotional incentive program with First
Interstate Securities, Inc.

ADMINISTRATIVE SERVICES

The Fund has also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Fund's operations including: (i)
general supervision of the operation of the Fund including coordination of the
services performed by the Fund's investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Fund; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Fund's Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Fund. For these services, Furman Selz is entitled to receive a fee, payable
monthly, at the annual rate of 0.15% of the average daily net assets of the
Fund. Pursuant to a Services Agreement with the Trust, Furman Selz assists the
Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15.00 per account per year plus out-of-pocket expenses.
Pursuant to a Fund Accounting Agreement with the Trust, Furman Selz assists the
Trust in calculating net asset values and provides certain other accounting
services for the Fund for an annual fee of $30,000 plus out-of-pocket expenses.

SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Fund's Institutional
Shares, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which vary depending upon the services provided)
in amounts up to an annual rate of 0.25% of the average daily net asset value
of the outstanding Institutional Shares of the Fund owned by shareholders with
whom a Service Organization has a servicing relationship. These fees will be
borne entirely by the Fund's Institutional Shares.

The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is

- 9 -
<PAGE> 40
currently no precedent prohibiting banks from performing administrative and
shareholder servicing functions as Service Organizations. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either Federal or state regulations relating to the permissible activities of
banks and their subsidiaries or affiliates, could prevent a bank Service
Organization from continuing to perform all or a part of its servicing
activities. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders of the Fund and alternative means for
continuing the servicing of such shareholders would be sought. It is not
expected that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences.

OTHER EXPENSES

The Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz, PFD Inc. or the Advisor. The costs borne
by the Fund include legal and accounting expenses; Trustees' fees and expenses;
insurance premiums; custodian and transfer agent fees and expenses; expenses
incurred in acquiring or disposing of the Fund's portfolio securities; expenses
of registering and qualifying the Fund's shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Fund's portfolio securities and pricing of the Fund's shares; expenses of
maintaining the Fund's legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. The Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a
five-year period from the commencement of a Fund's operations. See
"Management" in the SAI for additional information on expenses borne by the
Fund. Trust expenses directly attributable to the Fund are charged to the
Fund, and expenses attributable to a particular class of shares of a Fund (such
as Service Organization fees) are charged to that class. Other expenses are
allocated proportionately among all of the investment portfolios in the Trust
in relation to the net assets of each portfolio or by other means deemed fair
and equitable by the Board of Trustees.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Fund's
account with brokers or dealers selected by it in its discretion.

- 10 -
<PAGE> 41
reputation, capital strength, size and difficulty of the order, sale of Fund
shares by the broker-dealer, and research provided to the Advisor by the
broker-dealer. The Advisor may cause a Fund to pay commissions higher than
another broker-dealer would have charged if the Advisor believes the commission
paid is reasonable in relation to the value of the brokerage and research
services received by the Advisor.

FUND SHARE VALUATION

The Fund uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant net asset value of $1.00 per share,
although there may be circumstances under which this goal cannot be achieved.
The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless
of the impact of fluctuating interest rates on the market value of the
security. See the SAI for a more complete description of the amortized cost
method.

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES

Institutional Shares of the Fund are sold without a sales load on a
continuous basis primarily to customers ("Customers") of affiliate, franchise
or correspondent banks of First Interstate Bancorp and other selected
institutions ("Institutions"). Customers may include individuals, trusts,
partnerships and corporations. 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
Institutional Shares acting on behalf of their Customers, and will reflect
their Customers' beneficial ownership of Institutional 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 an Institution.
Investors wishing to purchase Institutional Shares of the Fund should contact
their account representatives.

Shares of the Fund are sold at net asset value per share next
determined after a purchase order has become effective. Purchase orders by an
Institution for Institutional Shares in the Fund must be received by the Trust
by 4:15 p.m. (Eastern time) on any

- 11 -
<PAGE> 42
Business Day. Payment for such shares may be made by Institutions in Federal
funds or other funds immediately available to the Trust's custodian no later
than 4:15 p.m. (Eastern time) on the next Business Day following the receipt of
the purchase order.

It is the responsibility of Institutions to transmit orders for
purchases by their Customers and to deliver required funds on a timely basis.
If funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the Institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
an Institution. In addition, an Institution may receive fees from the Fund
with respect to the investments of its Customers as described above under
"Management of the Fund." Payments for Institutional Shares of the Fund may, in
the discretion of the Advisor, be made in the form of securities that are
permissible investments for the Fund. For further information see "Additional
Purchase and Redemption Information" in the SAI.

The Trust reserves the right to reject any purchase order. Payment
for orders which are not received will be returned after prompt inquiry. The
issuance of Institutional Shares is recorded on the books of the Fund, and
share certificates are not issued.

Neither the Trust, the Distributor nor Furman Selz will be responsible
for the authenticity of telephone instructions for the purchase or redemption
of Institutional Shares where such instructions are reasonably believed to be
genuine. Accordingly, the Institution will bear the risk of loss. The Trust
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable. To the extent that the Trust
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it or its service providers may be liable for any loss, damage or
expense arising from such instructions that prove to be fraudulent or
unauthorized.

Redemption requests are effected at the net asset value per share next
determined after receipt of a redemption request in good order by the Trust.
Institutional Shares held by an Institution on behalf of its Customers must be
redeemed in accordance with instructions and limitations pertaining to the
account at the Institution. The Trust intends to pay cash for all
Institutional Shares redeemed, but in unusual circumstances may make payment
wholly or partly in portfolio securities at their then market value equal to
the redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.

Share balances may be redeemed pursuant to arrangements between
Institutions and investors. It is the responsibility of an Institution to
transmit redemption requests to the Trust and to credit its Customers' accounts
with the redemption proceeds on a timely basis. The redemption proceeds for
Institutional Shares of the Fund are normally wired to the redeeming
Institution the following Business Day after receipt of the request by the
Trust. The Trust reserves the right to delay the wiring of redemption proceeds
for up to seven days after it receives a redemption order if, in the judgment
of the Advisor, an earlier payment could adversely affect the Fund.

- 12 -
<PAGE> 43
All redemptions of Institutional Shares of the Fund shall be made in
cash, except that the commitment to redeem Institutional Shares in cash extends
only to redemption requests made by each shareholder of a Fund during any
90-day period of up to the lesser of $250,000 or 1% of the net asset value of
the Fund at the beginning of such period. This commitment is irrevocable
without the prior approval of the SEC and is a fundamental policy of the Fund
that may not be changed without shareholder approval. In the case of
redemption requests by shareholders in excess of such amounts, the Board of
Trustees reserves the right to have the Fund make payment, in whole or in part,
in securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the securities of the Fund are valued. If the recipient were to
sell such securities, he or she would incur brokerage charges.

A redemption may be a taxable transaction on which gain or loss may be
recognized. Generally, however, gain or loss is not expected to be recognized
on a redemption of shares of the Fund because the Fund seeks to maintain a net
asset value of $1.00 per share.

EXCHANGE OF INSTITUTIONAL SHARES

The Fund offers a convenient way to exchange Institutional Shares in
the Fund for Institutional Shares in another investment portfolio of the Trust
(except the Prime Money Market Fund and Treasury Money Market Fund). Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department, 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Institutional Shares of one portfolio for Institutional Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The Trust may terminate or amend the terms of the
exchange privilege at any time.

To exchange Institutional Shares, or if you have any questions, simply
call the Trust at 1-800-622-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the name of the portfolio from
and the portfolio into which you wish to transfer your investment; and (iii)
the dollar or share amount you wish to exchange. The conversation

- 13 -
<PAGE> 44
may be recorded to protect you and the Fund. Telephone exchanges are available
only if the shareholder so indicates by checking the "yes" box on the Purchase
Application.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

Distributions will be paid in additional shares of the Fund based on
the net asset value at the close of business on the payment date of the
distribution, unless the shareholder elects in writing, which is received by
Furman Selz not less than five full business days prior to the record date, to
receive such distributions in cash. Dividends declared in, and attributable
to, the preceding month will be paid within five business days after the end of
each month.

Distributions of investment company taxable income (regardless of
whether derived from dividends, interest or net short-term capital gains) will
be taxable to shareholders as ordinary

- 14 -
<PAGE> 45
income. Distributions of net long-term capital gains designated by the Fund as
capital gain dividends will be taxable as long-term capital gains, regardless
of how long a shareholder has held his Fund shares. Distributions are taxable
in the same manner whether received in additional shares or in cash.

The dividends paid by the Fund are not expected to qualify for the
dividends-received deduction available to corporations.

Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund. Depending on the residence of
the shareholder for tax purposes, distributions also may be subject to state
and local taxes, including withholding taxes. Foreign shareholders may, for
example, be subject to special withholding requirements. Special tax
treatment, including a penalty on certain pre-retirement distributions, is
accorded to accounts maintained as IRAs. Shareholders should consult their own
tax advisors as to the Federal, state and local tax consequences of ownership
of shares of the Fund in their particular circumstances.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

- 15 -
<PAGE> 46

INVESTMENT RESTRICTIONS

The Fund may not:

2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.

3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.

- 16 -
<PAGE> 47
4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.

OTHER INFORMATION

CAPITALIZATION

The Board of Trustees has authorized the issuance of two classes of
shares in the Fund -- Institutional Shares and Investor Shares. Each share of
the Fund represents an equal proportionate interest in the Fund with other
shares of the same class and is entitled to cash dividends and distributions
earned on such shares as are declared in the discretion of the Board of
Trustees.

The Fund's Institutional Shares and Investor Shares bear their pro
rata portion of all operating expenses paid by the Fund except for the
distribution payments, Service Organization fees and other "class" expenses
that are allocated to a particular share class. The Board of Trustees has
approved a Distribution Plan with respect to Investor Shares of the Fund under
which the Trust may pay the Distributor in connection with the distribution of
Investor Shares at a rate or rates set from time to time by the Board of
Trustees, provided that no rate may exceed the annual rate of 0.50% of the
average daily net asset value of Investor Shares of the Fund. In addition, the
Fund may pay fees to Service Organizations in amounts up to an annual rate of
0.25% of the daily net asset value of the Fund's outstanding Investor Shares
owned by shareholders with whom a Service Organization has a servicing
relationship. Because of the "class expenses", the performance of the Fund's
Investor Shares is expected to be lower than the performance of its
Institutional Shares. The Trust offers various services and privileges in
connection with its Investor Shares that are not offered in connection with its
Institutional Shares, including an automatic investment plan, automatic
withdrawal plan and, with respect to certain portfolios, checkwriting. For
information regarding the Fund's Investor Shares, contact Furman Selz at
1-800-662-8417 or your Service Organization.

- 17 -
<PAGE> 48
of the Trust, which are binding only on the assets and property of the Trust.
The Declaration of Trust also provides for indemnification out of the property
of a Fund of any shareholder held personally liable solely by reason of being
or having been a shareholder of the Fund. The risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which a Fund itself would be unable to meet its obligations and should be
considered remote.

VOTING

The Declaration of Trust provides that the holders of not less than
two-thirds of the outstanding shares of the Trust may remove a person serving
as Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust and in connection with such meeting to comply with the shareholders'
communications provisions of Section 16 (c) of the 1940 Act.

- 18 -
<PAGE> 49
PERFORMANCE INFORMATION

"Effective yield" for the Fund is calculated in a manner similar to
that used to calculate yield, but includes the compounding effect of earnings
on reinvested dividends.

For purposes of comparison, the Fund may, from time to time, quote
performance information from IBC/Donoghue's MONEY FUND REPORT of Holliston,
Massachusetts 01746. IBC/Donoghue's MONEY MARKET AVERAGE is a widely
recognized index of money market fund performance. Figures reflect average
yields of all taxable money funds included in IBC/Donoghue's index.
IBC/Donoghue's 100% U.S. TREASURY MONEY FUND AVERAGE is a component of this
average and reflects average yields of all taxable U.S. Treasury money funds.
Any performance information should be considered in light of the Fund's
investment objective and policies, characteristics and quality of the Fund and
the market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future. For a
description of the methods used to determine yield for the Fund, see "Other
Information - - Performance Information" in the SAI.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

- 19 -
<PAGE> 50
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR ITS 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.

AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

- 20 -
<PAGE> 51
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019

<PAGE> 52
PACIFICA FUNDS TRUST
(INVESTOR SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

- Pacifica National Tax-Exempt Money Market Fund

- Pacifica California Tax-Exempt Money Market Fund

This Prospectus sets forth concisely the information a prospective
investor should know before investing in any of the Funds and should be read
and retained for information about each Fund. A Statement of Additional
Information (the "SAI"), dated February __, 1996 (which may be revised from
time to time), containing additional and more detailed information about the
Funds, has been filed with the Securities and Exchange Commission ("SEC") and
is hereby incorporated by reference into this Prospectus. It is available
without charge and can be obtained by writing or calling the Funds at the
address or information number printed above.

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.

<PAGE> 53
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . 6

FEE TABLE -- INVESTOR SHARES . . . . . . . . . . . . . . 6

THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . 8

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS . . . . . 8

RISKS OF INVESTING IN THE FUNDS . . . . . . . . . . . . . 9

MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . 10

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . 14

MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . 14

PURCHASE OF INVESTOR SHARES . . . . . . . . . . . . . . . 14

INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . 16

EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . 16

REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . 17

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . 20

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . 22

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . 25

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

- 2 -
<PAGE> 54
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

This Prospectus describes two investment portfolios managed by First
Interstate Capital Management, Inc. Each Fund has distinct investment
objectives and policies.

The California Tax-Exempt Money Market Fund. The investment objective
of the California Tax-Exempt Money Market Fund is to provide investors with as
high a level of current interest income exempt from both Federal and California
personal income taxes as is consistent with the preservation of capital and
liquidity. To achieve its objective, the California Tax-Exempt Money Market
Fund invests primarily in high quality, short-term California Municipal
Obligations which have remaining maturities not exceeding 397 days.

The National Tax-Exempt Money Market Fund. The investment objective
of the National Tax-Exempt Money Market Fund is to seek as high a level of
current income exempt from Federal income tax as is consistent with liquidity
and stability of principal. To achieve its objective, the National Tax-Exempt
Money Market Fund invests primarily in a diversified portfolio of high-quality,
short-term municipal obligations the interest on which is exempt from Federal
income tax and which have remaining maturities not exceeding 397 days.

For additional information concerning the investment policies,
practices and risk considerations of the Funds, see "The Funds," "Investment
Policies and Practices of the Funds" and "Risks of Investing in the Funds" in
this Prospectus.

RISKS OF INVESTING IN THE FUNDS

Each Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Funds will always
be able to do so. The Funds' performance will change daily based on many
factors, including the quality of the instruments in the Funds' investment
portfolios, national and international economic conditions, interest rate
levels and general market conditions. The policy of the California Tax-Exempt
Money Market Fund to invest primarily in California Municipal Obligations
presents certain risks because the Fund's performance will be closely tied to
the economic and political conditions of California and its municipalities.
Because each Fund is classified as non-diversified under the Investment Company
Act of 1940 (the "1940 Act"), each Fund may be more sensitive to factors
affecting a particular issuer.

There is no assurance that the Funds will achieve their investment
objectives.

- 3 -
<PAGE> 55
MANAGEMENT OF THE FUNDS

First Interstate Capital Management, Inc. acts as investment advisor
to the Funds. For its services, the Advisor is entitled to receive a fee from
each Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Investor Shares" and "Management of the Funds" in this
Prospectus.

Furman Selz acts as administrator and sponsor to the Funds. Furman
Selz provides certain management and administrative services to the Funds, and
is entitled to receive a fee from each Fund at an annual rate based on the
Fund's average daily net assets. PFD Inc. distributes the Funds' shares and
may be reimbursed for certain of its distribution-related expenses.

Fees and expenses charged to the Funds are outlined on page __ of this
Prospectus.

- 4 -
<PAGE> 56
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

Purchase orders for the Funds received by your broker or Service
Organization in proper order by 4:15 p.m., Eastern time, and transmitted to the
Trust prior to 5:00 p.m. Eastern time will become effective that day.

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . . $ 50
</TABLE>

Investor Shares of the Funds are purchased at net asset value.

Shareholders may exchange Investor Shares between Funds by telephone
or mail.

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>

Shareholders may redeem Investor Shares by telephone, mail or wire.

- The Funds reserve the right upon not less than 30 days' notice
to redeem involuntarily all the Investor Shares in an
investor's account which have an aggregate value of $500 or
less for any particular Fund.

(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)

All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the applicable Fund unless
cash payment is requested.

- Distributions for the Funds are paid monthly.

For additional information on how to purchase and redeem Investor
Shares of the Funds, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."

- 5 -
<PAGE> 57
FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of a Fund. The
information is based on estimated amounts for the initial fiscal year of each
Fund.

FEE TABLE -- INVESTOR SHARES

<TABLE>
<CAPTION>
National California
Tax-Exempt Tax-Exempt
Money Market Money Market
Fund Fund
--------------- ---------------

<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................... None None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price).......................... None None
Deferred Sales Load (as a percentage of
redemption proceeds)................................................... None None
Redemption Fees.......................................................... None None
Exchange Fees............................................................ None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after waivers)*....................................... ____% ____%
12b-1 Fees**........................................................... ____ ____
Other Expenses (after waivers)***...................................... ____ ____
---- ----
TOTAL FUND OPERATING EXPENSES
(after waivers)****.................................................... .65% .65%
===== =====

</TABLE>

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

* Management Fee (before waivers) would be .35% for the National
Tax-Exempt Money Market Fund and .35% for the California Tax-Exempt
Money Market Fund.

** Under rules of the National Association of Securities Dealers, Inc.
(the "NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 fee is an annual fee charged against the
assets of a Fund, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD. See
"Management of the Funds -- The Sponsor and Distributor."

*** Other Expenses (before waivers) would be __% for the National
Tax-Exempt Money market Fund and __% for the California Tax-Exempt
Fund, and are estimated.

**** Total Fund Operating Expenses (before waivers) would be _____% for the
National Tax-Exempt Money Market Fund and _____% for the California
Tax-Exempt Money Market Fund.

- 6 -
<PAGE> 58
The purpose of this table is to assist shareholders in understanding the
various costs and expenses that an investor in the Funds' Investor Shares will
bear. The table does not reflect any charges that may be imposed by a First
Interstate Bank or other institutions directly on their customer accounts in
connection with investments in the Funds.

EXAMPLE:*

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

<TABLE>
<CAPTION>
NATIONAL CALIFORNIA
TAX-EXEMPT TAX-EXEMPT
MONEY MARKET MONEY MARKET
FUND FUND
--------------- ----------------

<S> <C> <C>
1 year............................... $ $
3 years..............................
</TABLE>

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

* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN
IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE GREATER OR LESS THAN THE ASSUMED
AMOUNT.

- 7 -
<PAGE> 59
THE FUNDS

The Funds are portfolios of a Massachusetts business trust, Pacifica Funds
Trust, organized under the laws of the Commonwealth of Massachusetts as an
open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Funds and elects the officers of the
Funds.

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS

Each Fund follows its own investment policies and practices, including
certain investment restrictions. The SAI contains the specific investment
restrictions which govern the Funds' investments. The Funds' investment
objectives are fundamental policies, which means that they may not be changed
without a majority vote of shareholders of the affected Fund. Except for the
objectives and those restrictions specifically identified as fundamental, all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental. The Advisor selects investments and makes investment
decisions based on the investment objective and policies of each Fund.

The National Tax-Exempt Money Market Fund's investment objective is to seek
as high a level of current income exempt from Federal income tax as is
consistent with liquidity and stability of principal. To achieve its objective
the National Tax-Exempt Money Market Fund invests primarily in a diversified
portfolio of high-quality, short-term municipal obligations the interest on
which is exempt from Federal income tax.

The California Tax-Exempt Money Market Fund's investment objective is to
provide investors with as high a level of current interest income exempt from
both Federal and California personal income taxes as is consistent with the
preservation of capital and liquidity. To achieve its objective, the
California Tax-Exempt Money Market Fund invests primarily in high quality
short-term California Municipal Obligations.

Each Fund seeks to maintain a net asset value of $1.00 per share. Their
assets consist only of obligations with remaining maturities (as defined by the
Securities and Exchange Commission) of 397 days or less at the date of
acquisition, and the dollar-weighted average maturity of each Fund's
investments is 90 days or less. There can be no assurance that each Fund's
investment objective will be achieved or that the Funds will be able to
maintain a net asset value of $ 1.00 per share.

Municipal obligations acquired by the Funds must be rated at the time of
purchase in one of the two highest rating categories by at least two nationally
recognized statistical rating organizations ("NRSROs"), (or by only one in the
event only one rating service has rated the security) or, if unrated, must be
determined to be of comparable quality by the Advisor. Municipal obligations
are debt instruments issued by or on behalf of states, territories and
possessions of the United States, the District of Columbia and their respective
authorities, agencies,instrumentalities and political subdivisions ("municipal
obligations"). The California

- 8 -
<PAGE> 60

Tax-Exempt Money Market Fund invests primarily in municipal obligations of the
State of California and its respective authorities, agencies, instrumentalities
and political subdivisions ("California Municipal Obligations)). Under normal
market conditions, each Fund will invest at least 80% of its total assets in
obligations the interest on which is exempt from Federal income tax. For
purposes of this investment limitation, securities, the interest on which is
treated as a tax preference item under the Federal alternative minimum tax, are
considered taxable. In addition, under normal market conditions, the
California Tax-Exempt Money market Fund will invest at least 65% of its total
assets in California Municipal Obligations.

The types of securities and investment practices used by the Funds are
described in greater detail below under "Description of Securities and
Investment Practices."

RISKS OF INVESTING IN THE FUNDS

The Funds attempt to maintain the value of their shares at a constant $1.00
per share, although there can be no assurance that the Funds will always be
able to do so. The Funds' performance will fluctuate based on many factors,
including the quality of the instruments in each Funds' investment portfolio,
national and international economic conditions, interest rate levels and
general market conditions.

The California Tax-Exempt Money Market Fund is classified as a
non-diversified investment company under the 1940 Act. Investment return on a
non-diversified portfolio typically is dependent upon the performance of a
smaller number of securities relative to the number held in a diversified
portfolio. In addition, a non-diversified portfolio may be more susceptible to
economic, political and regulatory developments than a diversified investment
portfolio with a similar objective may be.

In seeking to achieve its investment objective, each Fund may invest in
municipal obligations that are private activity bonds the interest on which is
subject to the Federal alternative minimum tax. Investments in such
securities, however, will not exceed under normal market conditions 20% of each
Fund's total assets when added together with any taxable investments held by
the Fund.

The concentration of the California Tax-Exempt Money Market Fund in
California Municipal Obligations raises additional considerations. Payment of
the interest on and the principal of these obligations is dependent upon the
continuing ability of California issuers and/or obligors to meet their
obligations thereunder. Many of the California Tax-Exempt Money Market Fund's
investments are likely to be obligations of California governmental issuers
which rely in whole or in part, directly or indirectly, on real property taxes
as a source of revenue. "Proposition Thirteen" and similar California
constitutional and statutory amendments and initiatives in recent years have
restricted the ability of California taxing entities to increase real property
tax revenues. Other initiative measures approved by California voters in
recent years, through limiting various other taxes, have resulted in a
substantial reduction in state revenues. Decreased state revenues may result
in reductions in allocations of state revenues to local governments.

- 9 -
<PAGE> 61

Because of the complex nature of the various initiatives and restrictions
mentioned above, certain possible ambiguities and inconsistencies in their
terms and the scope of various exemptions and exceptions, as well as the
impossibility of predicting the level of future appropriations for state and
local governmental entities,it is not presently possible to determine the
impact of these initiatives and related measures on the ability of governmental
issuers in California to pay interest or repay principal on their obligations.
There have, however, been certain adverse developments with respect to
municipal obligations of governmental issuers in the state over the past
several years.

In addition to the various initiatives and restrictions discussed above,
economic factors such as the reduction in defense spending, a decline in
tourism and high levels of unemployment have had an adverse impact on the
economy of California. These economic factors have reduced revenues to the
state government at a time when expenses of state government such as education
costs, various welfare costs and other expenses have been rising. Such
economic factors have also adversely impacted the ability of state and local
California governmental entities to repay debt.

In addition to the risk of nonpayment of state and local California
governmental debt, if such debt declines in quality and is downgraded by the
NRSROs, it may become ineligible for purchase by the Fund. Since there are
large numbers of buyers of such debt that may be similarly restricted, the
supply of eligible securities could become inadequate at certain times.

A more detailed description of special factors affecting investment in
California municipal obligations is set forth in the Appendix to the SAI.

Because the National Tax-Exempt Money Market Fund invests primarily in
municipal obligations of issuers in various states and localities, it is
subject to many of the same risks and special considerations with respect to
its portfolio investments as discussed above relating to the State of
California and its municipalities.

MANAGEMENT OF THE FUNDS

The business and affairs of each Fund are managed under the direction of
the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N. Hankin,
John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer. Information
about the Trustees, as well as the Funds' executive officers, may be found in
the SAI under the heading "Management Trustees and Officers."

THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

- 10 -
<PAGE> 62
Funds' investments. The Advisor is responsible for placing orders for the
purchase and sale of the Funds' investments directly with brokers and dealers
selected by it in its discretion.

For the advisory services it provides to the Funds, FICM is entitled to
receive from each Fund fees, payable monthly, at the annual rate of 0.35% of
the first $500 million of a Fund's average daily net assets, 0.30% of the next
$500 million of a Fund's average daily net assets, and 0.25% of a Fund's
average daily net assets in excess of $1 billion.

THE SPONSOR AND DISTRIBUTOR

Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169, acts
as Sponsor of the Funds. Furman Selz is primarily an institutional brokerage
firm with memberships on the New York, American, Boston, Midwest, Pacific and
Philadelphia Stock Exchanges. Furman Selz also serves as administrator and
distributor of other mutual funds. Pacifica Funds Distributor Inc. is an
affiliate of Furman Selz and was organized specifically to distribute shares of
the Trust; however, offers and sales of shares of the Trust will be made only
through Furman Selz or other registered (or exempt) dealers.

Under the Distribution Plan (the "Plan") adopted by the Funds for their
Investor Shares, each Fund may pay directly or reimburse PFD Inc. monthly
(subject to a limit of 0.50% per annum of the average daily net asset value of
the outstanding Investor Shares of each Fund) for costs and expenses of PFD
Inc. in connection with the distribution of Investor Shares of the Funds.
These costs and expenses include (i) advertising by radio, television,
newspapers, magazines, brochures, sales literature, direct mail or any other
form of advertising; (ii) expenses of sales employees or agents of PFD Inc.,
including salary, commissions, travel and related expenses; (iii) payments to
broker-dealers and financial institutions for services in connection with the
distribution of Investor Shares, including promotional incentives and fees
calculated with reference to the average daily net asset value of Investor
Shares held by shareholders who have a brokerage or other service relationship
with the broker-dealer or other institution receiving such fees; (iv) costs of
printing prospectuses and other materials to be given or sent to prospective
investors; and (v) such other similar services as the Trustees determine to be
reasonably calculated to result in the sale of Investor Shares of the Funds.
Each Fund will pay all costs and expenses in connection with the preparation,
printing and distribution of prospectuses to current shareholders and the
operation of its Plan, including related legal and accounting fees. A Fund
will not be liable for distribution expenditures made by PFD Inc. in any given
year in excess of the maximum annual amount payable under the Plan for that
Fund. All payments made under the Plan for Investor Shares are borne entirely
by a Fund's Investor Shares.

- 11 -
<PAGE> 63
PFD Inc. may from time to time pay a bonus or other incentive to dealers
which employ registered representatives who sell a minimum dollar amount of
Investor Shares of the Funds and/or other funds distributed by Furman Selz or
PFD Inc. during a specific period of time. Such bonus or other incentive will
take the form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and
members of their families to places within or outside the United States, or
other bonuses, such as gift certificates or the cash equivalent of such
bonuses. PFD Inc. has established such a special promotional incentive program
with First Interstate Securities, Inc.

ADMINISTRATIVE SERVICES

The Funds have also entered into an Administrative Services Contract with
Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Funds' operations including: (i)
general supervision of the operation of the Funds including coordination of the
services performed by the Funds' investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Funds' Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Funds. For these services, Furman Selz is entitled to receive a fee, payable
monthly, at the annual rate of 0.15% of the average daily net assets of the
Funds. Pursuant to a Services Agreement with the Trust, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15.00 per account per year plus out-of-pocket expenses.
Pursuant to a Fund Accounting Agreement with the Trust, Furman Selz assists the
Trust in calculating net asset values and provides certain other accounting
services for each Fund for an annual fee of $30,000 per Fund plus out-of-pocket
expenses.

SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate Bancorp),
trust companies, broker-dealers (other than the Sponsor) or other financial
organizations (collectively, "Service Organizations") also may provide
administrative services with respect to the Funds' Institutional Shares, such
as maintaining shareholder accounts and records. The Funds may pay fees to
Service Organizations (which vary depending upon the services provided) in
amounts up to an annual rate of 0.25% of the average daily net asset value of
the outstanding Investor Shares of the Funds owned by shareholders with whom a
Service Organization has a servicing relationship. These fees will be home
entirely by the Funds' Investor Shares.

Some Service Organizations may impose additional or different conditions on
their clients, such as requiring their clients to invest a specified amount in
the Funds or charging a direct fee for servicing. If imposed, these fees would
be in addition to any amounts which might be paid to the Service Organization
by the Funds. Each Service Organization has agreed to transmit to

- 12 -
<PAGE> 64
its clients a schedule of any such fees. Shareholders using Service
Organizations are urged to consult with them regarding any such fees or
conditions.

The Glass-Steagall Act and other applicable laws provide that, among other
things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Funds and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.

OTHER EXPENSES

Each Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz, PFD Inc. or the Advisor. The costs borne
by the Funds include legal and accounting expenses; Trustees' fees and
expenses; insurance premiums; custodian and transfer agent fees and expenses;
expenses incurred in acquiring or disposing of the Funds' portfolio securities;
expenses of registering and qualifying the Funds' shares for sale with the SEC
and with various state securities commissions; expenses of obtaining quotations
on the Funds' portfolio securities and pricing of the Funds' shares; expenses
of maintaining the Funds' legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. Each Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a
five-year period from the commencement of a Fund's operations. See
"Management" in the SAI for additional information on expenses borne by the
Funds. Trust expenses directly attributable to a particular Fund are charged
to that Fund, and expenses attributable to a particular class of shares of a
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Contract, the Advisor places orders for
the purchase and sale of portfolio investments for the Funds' accounts with
brokers or dealers selected by it in its discretion.

- 13 -
<PAGE> 65
basis, i.e., without any brokerage commission being paid by the Funds. Trading
does, however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause a Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.

FUND SHARE VALUATION

The net asset value of each class of shares of the Funds is calculated at
4:15 p.m. (Eastern time), Monday through Friday, on each day the New York Stock
Exchange is open for trading (a "Business Day"), which excludes the following
business holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share for each class of shares is computed by dividing the value of a
Fund's assets allocable to a particular class, less the liabilities charged to
that class by the total number of the outstanding shares of that class. All
expenses, including fees paid to the Advisor, Furman Selz and PFD Inc., are
accrued daily and taken into account for the purpose of determining the net
asset value.

The Funds use the amortized cost method to value their portfolio securities
and seek to maintain a constant net asset value of $1.00 per share, although
there may be circumstances under which this goal cannot be achieved. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, regardless of the
impact of fluctuating interest rates on the market value of the security. See
the SAI for a more complete description of the amortized cost method.

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Funds is $500, except that the
minimum is $250 for an IRA. Any subsequent investments must be at least $50,
including an IRA investment. All initial investments should be accompanied by
a completed Purchase Application. A separate application is required for IRA
investments.

PURCHASE OF INVESTOR SHARES

The following purchase procedures do not apply to certain trust or other
accounts that are managed by First Interstate Bancorp, its subsidiaries or
affiliates. An account customer should consult his or her account officer for
proper instructions.

All funds received by the Trust are invested in full and fractional
Investor Shares of the appropriate Fund. Certificates for Investor Shares are
not issued. Furman Selz maintains

- 14 -
<PAGE> 66
records of each shareholder's holdings of Fund shares, and each shareholder
receives a statement of transactions, holdings and dividends. The Funds
reserve the right to reject any purchase.

An investment may be made using any of the following methods:

Through an Authorized Broker, Investment Advisor or Service Organization.
Investor Shares are available to new and existing shareholders through
authorized brokers, investment advisors and Service Organizations. To make an
investment using this method, simply complete a Purchase Application and
contact your broker, investment advisor or Service Organization with
instructions as to the amount you wish to invest. Your broker will then
contact the Fund to place the order on your behalf on that day.

Orders received by your broker or Service Organization for the Funds in
proper order prior to the determination of a Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.

By Wire. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the applicable Fund. In most cases, your bank will either be a member
of the Federal Reserve Banking System or have a relationship with a bank that
is. Your bank will normally charge you a fee for handling the transaction. To
purchase Investor Shares by a Federal funds wire, please first contact Furman
Selz Mutual Funds Client Services. They will establish a record of information
for the wire to ensure its correct processing. You can reach the Wire Desk at
1-800-662-9417.

Have your bank wire funds using the following instructions: Fiduciary Trust
Company

Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name

As long as you have read the Prospectus, you may establish a new regular
account through the Wire Desk; IRAs may not be opened in this way. When new
accounts are established by wire, the distribution options will be set to
reinvest and the social security or tax identification number ("TIN") will not
be certified until a signed application is received. Completed applications
should be forwarded immediately to the Funds. With the Purchase Application,
the shareholder can specify other distribution options and add any special
features offered by a Fund. Should any dividend distributions or redemptions
be paid before the TIN is certified, they will be subject to 31% Federal tax
withholding.

Automatic Investment Program. An eligible shareholder may also participate
in the Pacifica Automatic Investment Program, an investment plan that
automatically debits money from the

- 15 -
<PAGE> 67
shareholder's bank account and invests it in one or more of the Funds through
the use of electronic funds transfers or automatic bank drafts. Shareholders
may elect to make subsequent investments by transfers of a minimum of $50 on
either the fifth or twentieth day of each month into their established Fund
accounts. Contact the Trust at 1-800-662-8417 for more information about the
Pacifica Automatic Investment Program.

INDIVIDUAL RETIREMENT ACCOUNTS

The Funds may be used as a funding medium for IRAs. Investor Shares may
also be purchased for IRAs established with an affiliate of First Interstate
Bancorp or other authorized custodians. In addition, an IRA may be established
through a custodial account with Investors Fiduciary Trust Company. Completion
of a special application is required in order to create such an account, and
the minimum initial investment for an IRA is $250. Contributions to IRAs are
subject to prevailing amount limits set by the Internal Revenue Service. A
$5.00 establishment fee and an annual $12.00 maintenance and custody fee is
payable with respect to each IRA, and there will be a $10.00 termination fee
when the account is closed. For more information, call the Funds at
1-800-662-8417.

EXCHANGE OF INVESTOR SHARES

The Funds offer two convenient ways to exchange Investor Shares in a Fund
for Investor Shares in another investment portfolio of the Trust. Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Investor Shares of one portfolio for Investor Shares of another portfolio if
both or either are not qualified for sale in the state of the shareholder's
residence. The minimum amount for an initial exchange is $500. No minimum is
required in subsequent exchanges. The Trust may terminate or amend the terms
of the exchange privilege at any time.

A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the net asset value next determined following receipt of the
request by the Trust in good order, plus any applicable sales charge.

An exchange is taxable as a sale of a security; however, if a Fund
maintains a net asset value of $1.00 per share, no gain or loss would be
realized upon an exchange of Fund shares. Shareholders should receive written
confirmation of the exchange within a few days of the completion of the
transaction.

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<PAGE> 68
to be exchanged. No service fee is imposed. See "Dividends, Distributions and
Federal Income Tax" for an explanation of circumstances in which a sales load
paid to acquire Investor Shares of the Funds may not be taken into account in
determining gain or loss on the disposition of those Investor Shares.

In addition, Institutional Shares of a Fund may be exchanged for Investor
Shares of the same Fund in connection with the distribution of assets held in a
qualified trust, agency or custodial account maintained with the trust
department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares of the same Fund if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made without
a sales charge at the net asset value of the respective share classes.

Exchange by Mail. To exchange Investor Shares of a Fund by mail, simply
send a letter of instruction to Furman Selz. The letter of instruction must
include: (i) your account number, (ii) the Fund from and the Fund into which
you wish to exchange your investment; (iii) the dollar or share amount you wish
to exchange; and (iv) the signatures of all registered owners or authorized
parties. All signatures must be guaranteed by an eligible guarantor
institution including a member of a national securities exchange or by a
commercial bank or trust company, broker-dealers, credit unions and savings
associations.

Exchange by Telephone. To exchange Investor Shares of a Fund by telephone,
or if you have any questions, simply call the Trust at 1-800-662-8417. You
should be prepared to give the telephone representative the following
information: (i) your account number, social security number and account
registration; (ii) the name of the portfolio from and the portfolio into which
you wish to transfer your investment; and (iii) the dollar or share amount you
wish to exchange. The conversation may be recorded to protect you and the
Funds. Telephone exchanges are available only if the shareholder so indicates
by checking the "yes" box on the Purchase Application. See "Redemption of
Investor Fund Shares -- By Telephone" for a discussion of telephone
transactions generally.

REDEMPTION OF INVESTOR SHARES

Shareholders may redeem their Investor Shares, in whole or in part, on any
Business Day. Investor Shares will be redeemed at the net asset value next
determined after a redemption request in good order has been received and
accepted by the Trust. See "Fund Share Valuation." A redemption may be a
taxable transaction on which gain or loss may be recognized. Generally,
however, gain or loss is not expected to be recognized on a redemption of
shares of the Funds, both of which seek to maintain a net asset value of $1.00
per share.

Where the Investor Shares to be redeemed have been purchased by check, the
Trust may delay payment of the redemption proceeds until the purchasing check
has cleared, which may take up to 15 days. Shareholders may avoid this delay
by investing through wire transfers of Federal funds. During the period prior
to the time the Investor Shares are redeemed, dividends

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<PAGE> 69
on the Investor Shares will continue to accrue and be payable and the
shareholder will be entitled to exercise all other beneficial rights of
ownership.

Once the Investor Shares are redeemed, a Fund will ordinarily send the
proceeds by check to the shareholder at the address of record on the next
Business Day. The Funds may, however, take up to seven days to make payment.
This will not be the customary practice. Also, if the New York Stock Exchange
is closed (or when trading is restricted) for any reason other than the
customary weekend or holiday closing or if an emergency condition as determined
by the SEC merits such action, the Funds may suspend redemptions or postpone
payment dates.

To ensure acceptance of your redemption request, it is important to follow
the procedures described below. Although the Trust has no present intention to
do so, it reserves the right to refuse or to limit the frequency of any
telephone or wire redemptions. Of course, it may be difficult to place orders
by telephone during periods of severe market or economic change, and a
shareholder should consider alternative methods of communications, such as
couriers or U.S. mail. The services offered by the Funds may be modified or
terminated at any time. If the Funds terminate any particular service, they
will do so only after giving written notice to shareholders.

You may redeem your Investor Shares using any of the following methods:

Through an Authorized Broker, Investment Advisor or Service Organization.
You may redeem your Investor Shares by contacting your broker or investment
advisor and instructing him or her to redeem your Investor Shares. He or she
will then contact PFD Inc. and place a redemption trade on your behalf. He or
she may charge you a fee for this service.

By Mail. You may redeem your Investor Shares by sending a letter directly
to the Funds. To be accepted, a letter requesting redemption must include: (i)
the Fund name and account registration from which you are redeeming Investor
Shares; (ii) your account number, (iii) the amount to be redeemed; (iv) the
signatures of all registered owners; and (v) a signature guarantee by any
eligible guarantor institution including a member of a national securities
exchange or a commercial bank or trust company, broker-dealers, credit unions
and savings associations. Corporations, partnerships, trusts or other legal
entities will be required to submit additional documentation.

By Telephone. You may redeem your Investor Shams by calling the Funds toll
free at 1-800-662-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount to be redeemed. The
conversation may be recorded to protect you and the Funds. Telephone
redemptions are available only if the shareholder so indicates by checking the
"yes" box on the Purchase Application. The Funds employ reasonable procedures
to confirm that instructions communicated by telephone are genuine. If the
Funds fail to employ such reasonable procedures, they may be liable for any
loss, damage or expense arising out of any telephone

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<PAGE> 70
transactions purporting to be on a shareholder's behalf. In order to assure
the accuracy of instructions received by telephone, the Funds require some form
of personal identification prior to acting upon instructions received by
telephone, record telephone instructions and provide written confirmation to
investors of such transactions.

By Wire. You may redeem your Investor Shares by contacting the Funds by
mail or telephone and instructing them to send a wire transmission to your
personal bank.

Your instructions should include: (i) your account number, social security
number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount to be redeemed. Wire
redemptions can be made only if the "yes" box has been checked on your Purchase
Application, and a copy of a void check from the account where proceeds are to
be wired is attached to the Purchase Application. Your bank may charge you a
fee for receiving a wire payment on your behalf.

The above-mentioned services "By Telephone" and "By Wire" are not available
for IRAs and trust clients of an affiliate of First Interstate Bancorp.

Systematic Withdrawal Plan. An owner of $10,000 or more of Investor Shares
of a Fund may elect to have periodic redemptions from his or her account to be
paid on a monthly, quarterly, semi-annual or annual basis. The minimum
periodic payment is $100. A sufficient number of Investor Shares to make the
scheduled redemption will normally be redeemed on the date selected by the
shareholder. Depending on the size of the payment requested and fluctuation in
the net asset value, if any, of the Investor Shares redeemed, redemptions for
the purpose of making such payments may reduce or even exhaust the account. A
shareholder may request that these payments be sent to a predesignated bank or
other designated party. Capital gains and dividend distributions paid to the
account will automatically be reinvested at net asset value on the distribution
payment date.

Redemption of Small Accounts. Due to the disproportionately higher cost of
servicing small accounts, each Fund reserves the right to redeem, on not less
than 30 days' notice, an account in a Fund that has been reduced by a
shareholder to $500 or less. However, if during the 30-day notice period the
shareholder purchases sufficient Investor Shares to bring the value of the
account above $500, this restriction will not apply.

Redemption in Kind. All redemptions of Investor Shares of the Funds shall
be made in cash, except that the commitment to redeem Investor Shares in cash
extends only to redemption requests made by each shareholder of a Fund during
any 90-day period of up to the lesser of $250,000 or 1% of the net asset value
of that Fund at the beginning of such period. This commitment is irrevocable
without the prior approval of the SEC and is a fundamental policy of the Funds
that may not be changed without shareholder approval. In the case of
redemption requests by shareholders in excess of such amounts, the Board of
Trustees reserves the right to have the Funds make payment, in whole or in
part, in securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of a Fund to the detriment

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<PAGE> 71
of the existing shareholders. In this event, the securities would be valued in
the same manner as the securities of that Fund are valued. If the recipient
were to sell such securities, he or she would incur brokerage charges.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

Each Fund intends to be treated as a regulated investment company under the
Federal tax law. As such, the Funds generally will not pay Federal income tax
on the income and gains they pay as dividends to their shareholders. In order
to avoid a 4% Federal excise tax, each Fund intends to distribute each year all
of its income and gains.

Shareholders will be subject to tax on dividends (other than
exempt-interest dividends as described below) received from a Fund, regardless
of whether received in cash or reinvested in additional shares. Shareholders
must treat dividends, other than capital gain or exempt-interest dividends, as
ordinary income. Dividends designated as capital gain dividends are taxable to
shareholders as long-term capital gain. Certain dividends declared in October,
November, or December of a calendar year are treated for Federal income tax
purposes as though received on December 31 of that year if paid to shareholders
during January of the following calendar year.

To the extent that a Fund's dividends distributed to shareholders are
derived from interest income exempt from Federal income tax and are designated
as exempt-interest dividends by the Fund, they will be excludable from a
shareholder's gross income for regular Federal income tax purposes. A Fund
will be qualified to pay exempt-interest dividends if, at the close of each
quarter of its taxable year, at least 50% of the value of its total assets
consists of securities on which interest payments are exempt from Federal
income tax under Code Section 103. A Fund will inform shareholders annually as
to the portion of the distribution paid by it which constitutes exempt-interest
dividends. A Fund is authorized to make investments which will give rise to
taxable rather than tax-exempt income. To the extent that a Fund's dividends
are derived from income from its taxable investments and from gain recognized
by the Fund, they will be taxable to shareholders as ordinary income.

Tax-exempt interest on private activity bonds and exempt-interest dividends
attributable to private activity bonds generally are treated as tax preference
items for purposes of the Federal alternative minimum tax. Therefore, if a
Fund invests in such private activity bonds, certain shareholders may become
subject to the alternative minimum tax on that part of the Fund's
exempt-interest dividends derived from interest income on such bonds.

The entire amount of exempt-interest dividends received from a Fund by most
corporations will be part of an adjustment in computing Federal alternative
minimum taxable income for purposes of the alternative minimum tax and the
environmental tax under Code section 59A.

Up to 85% of an individual's social security benefits and certain railroad
retirement benefits may be subject to Federal income tax. Along with other
factors, total tax-exempt income,

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<PAGE> 72
including exempt-interest dividends, is used to calculate the portion of such
benefits that are taxed.

There could be retroactive revocation of the tax-exempt status of certain
municipal obligations after their issuance. In addition, in connection with
budget and tax reform efforts, proposals may be made or adopted which would
change the tax treatment arising from an investment in a Fund. It is not
possible to predict the precise impact of these events, but they may affect the
value of the securities in a Fund's portfolio.

Deductions for interest expense incurred (or deemed incurred) to acquire or
carry shares of a Fund may be subject to limitations that reduce or eliminate
such deductions. In addition, under rules issued by the Internal Revenue
Service for determining when borrowed funds are considered used for the
purposes of purchasing or carrying 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 the purchase of shares.

A Fund may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct TIN or to make required
certifications, or where the Fund or shareholder has been notified by the
Internal Revenue Service that the shareholder is subject to backup withholding.
Most corporate shareholders and certain other shareholders specified in the
Code are exempt from backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the shareholder's
U.S. Federal income tax liability.

The treatment for state, local and municipal tax purposes of distributions
of exempt-interest dividends from a Fund will vary according to the laws of
state and local taxing authorities. Exempt-interest dividends and other
dividends may be subject to state and local taxation. Investors should consult
with their tax advisors as to the availability of any exemptions from such
taxes. Persons who may be "substantial users" (or "related persons" of
substantial users) of facilities financed by private activity bonds may suffer
adverse tax consequences from investing in a Fund and, therefore, should
consult their tax advisors before purchasing Fund shares. In some instances, a
state or city may exempt from tax the portion of the distribution from the Fund
that represents interest received on obligations of that state or its political
subdivisions. Under the laws of certain other states and cities, the entire
amount of any such distribution may be taxable.

California law provides that if, at the close of each quarter of its
taxable year, at least 50% of the value of the total assets of a regulated
investment company consists of obligations the interest of which is exempt from
tax under California law or of obligations the interest of which is exempt from
tax under U.S. law, distributions designated as "exempt-interest" dividends for
California purposes are exempt from California personal income taxes.
Shareholders will be notified annually of the Federal income tax status of
distributions and the percentage of municipal obligation interest income
received.

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<PAGE> 73
The preceding discussion primarily relates to Federal income taxes; the
consequences under other tax laws may differ. For additional information
relating to taxation, see the SAI.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

Municipal Obligations. The Funds invest primarily (at least 65% of total
assets) in various types of Municipal Obligations. The California Tax-Exempt
Money Market Fund invests primarily in California Municipal Obligations. The
National Tax-Exempt Money Market Fund invests primarily in municipal
obligations the interest on which is exempt from Federal income tax. Such
municipal securities consist of debt obligations issued to obtain funds for
various public purposes, including general financing for state and local
governments as well as for specific projects or public facilities. Municipal
securities may be backed by the taxing power of the municipality that has
issued the security, by revenues from a specific project or facility being
financed, or by the credit of a private entity.

Tax-Exempt Notes. The Funds may invest in tax-exempt notes. These
instruments are generally used to meet short term capital needs and usually
have maturities of one year or less. Tax and revenue anticipation notes are
issued by municipalities in expectation of future tax or other revenues, and
are payable from those specific taxes or revenues. Bond anticipation notes
normally provide interim financing in advance of an issue of bonds or notes,
the proceeds of which are used to repay the anticipation notes. Tax-exempt
commercial paper is issued by municipalities to help finance short term capital
or operating needs.

Municipal Lease Obligations. The Funds may invest in municipal lease
obligations including certificates of participation (COPs), which finance a
variety of public projects. Because of the way these instruments are
structured, they carry a greater risk than other types of municipal securities.
The Funds may invest in lease obligations only when they are rated by a rating
agency or are deemed by the Advisor, under the direction of the Board of
Trustees, to be of a quality comparable to a Fund's quality standards. Prior
to purchasing a municipal lease obligation and on a regular basis thereafter,
the Advisor will evaluate the credit quality and liquidity of the security. In
making its evaluation, the Advisor will consider various credit factors, such
as the necessity of the project, the municipality's credit quality, future
borrowing plans, and sources of revenue pledged for lease repayment, general
economic conditions in the region where the security is issued, and liquidity
factors, such as dealer activity. For further discussion regarding municipal
lease obligations, see "Investment Policies" in the SAI.

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<PAGE> 74

specified intervals) in order to maintain the interest rate at the prevailing
rate for securities with a seven-day or other designated maturity. A Fund's
investment in demand instruments which provide that the Fund will not receive
the principal note amount within seven days' notice, in combination with each
Fund's other investments in illiquid instruments, will be limited to an
aggregate total of 10% of each Fund's net assets.

The Funds may also buy variable rate master demand notes. The terms of
these obligations permit a Fund to invest fluctuating amounts at varying rates
of interest pursuant to direct arrangements between the Fund, as lender, and
the borrower. These instruments permit weekly and, in some instances, daily
changes in the amounts borrowed. A Fund has the right to increase the amount
under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. The notes may or may not be backed by bank
letters of credit. Because the notes are direct lending arrangements between
the Fund and borrower, it is not generally contemplated that they will be
traded, and there is no secondary market for them, although they are redeemable
(and, thus, immediately repayable by the borrower) at principal amount, plus
accrued interest, at any time. In connection with any such purchase and on an
ongoing basis, the Advisor will consider the earning power, cash flow and other
liquidity ratios of the issuer, and its ability to pay principal and interest
on demand, including a situation in which all holders of such notes make demand
simultaneously.

U.S. Government Securities. U.S. Government securities are obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
U.S. Treasury bills, which have a maturity of up to one year, are direct
obligations of the United States and are the most frequently issued marketable
U.S. Government security. The U.S. Treasury also issues securities with longer
maturities in the form of notes and bonds.

U.S. Government agency and instrumentality obligations are debt securities
issued by U.S. Government-sponsored enterprises and Federal agencies. Some
obligations of agencies are supported by the full faith and credit of the
United States or by U.S. Treasury guarantees, such as mortgage-backed
certificates, which may be guaranteed by the Government National Mortgage
Association; others, such as obligations of the Federal Home Loan Banks,
Federal Farm Credit Bank, Bank for Cooperatives, Federal Intermediate Credit
Banks and the Federal Land Bank, are guaranteed by the right of the issuer to
borrow from the U.S. Treasury; others, such as obligations of the Federal
National Mortgage Association, are supported by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as obligations of the Student Loan Marketing
Association and the Tennessee Valley Authority, are backed only by the credit
of the agency or instrumentality issuing the obligation. In the case of
obligations not backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment.

Repurchase Agreements. Securities held by a Fund may be subject to
repurchase agreements. A repurchase agreement is a transaction in which the
seller of a security commits

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<PAGE> 75

itself at the time of the sale to repurchase that security from the buyer at a
mutually agreed-upon time and price. These agreements may be considered to be
loans by the purchaser collateralized by the underlying securities. These
agreements will be fully collateralized and the collateral will be
marked-to-market daily. A Fund will enter into repurchase agreements only with
dealers, domestic banks or recognized financial institutions which, in the
opinion of the Advisor, present minimal credit risks in accordance with
guidelines adopted by the Board of Trustees. The maturity of the underlying
securities in a repurchase agreement transaction may not exceed seven days.
See "Investment Restrictions." In the event of default by the seller under the
repurchase agreement, a Fund may have problems in exercising its rights to the
underlying securities and may experience time delays in connection with the
disposition of such securities.

Loans of Portfolio Securities. Each Fund may lend its portfolio securities
up to 5% of its total assets to brokers, dealers and financial institutions,
provided certain conditions are met, including the condition that each loan is
secured continuously by collateral maintained on a daily mark-to-market basis
in an amount at least equal to the current market value of the securities
loaned.

Forward Commitments and When-Issued Securities. The Funds may purchase
when-issued securities and make contracts to purchase securities for a fixed
price at a future date beyond customary settlement time if the Fund holds, and
maintains until the settlement date in a segregated account, cash, U.S.
Government securities or high-grade debt obligations in an amount sufficient to
meet the purchase price, or if the Fund enters into offsetting contracts for
the forward sale of other securities it owns. Purchasing securities on a
when-issued basis and forward commitments involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date, which
risk is in addition to the risk of decline in value of the Fund's other assets.
No income accrues on securities purchased on a when-issued basis prior to the
time delivery of the securities is made, although the Fund may earn interest on
securities it has deposited in the segregated account because it does not pay
for the when-issued securities until they are delivered. Investing in
when-issued securities has the effect of (but is not the same as) leveraging
the Fund's assets. Although the Fund would generally purchase securities on a
when-issued basis or enter into forward commitments with the intention of
actually acquiring securities, the Fund may dispose of a when-issued security
or forward commitment prior to settlement, if the Advisor deems it appropriate
to do so. The Fund may realize short-term profits or losses upon such sales
which profits are not tax-exempt.

Illiquid Investments. It is the policy of each Fund that restricted
securities and other illiquid securities may not constitute, at the time of
purchase or at any time, more than 10% of the value of the total net assets of
the Fund.

When, in the opinion of the Advisor, market conditions dictate a temporary
defensive strategy, a Fund may invest more than 20% of its assets in securities
that are subject to Federal income tax, California personal income tax, or
both, as applicable. Such investments would be made for temporary purposes
only, and under normal market conditions each Fund intends to invest at least
80% of its assets in tax-exempt securities.

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<PAGE> 76
INVESTMENT RESTRICTIONS

Each Fund has adopted certain fundamental investment restrictions that may
be changed only with the approval of a majority of the outstanding shares of
the Fund. The following descriptions summarize several of the Funds'
fundamental investment restrictions, which are set forth in full in the
Statement of Additional Information.

No Fund may:

(1) invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same
industry (with certain exceptions including U.S. Government
securities); and

(2) borrow money except in amounts up to 10% of the value of its total
assets at the time of borrowing.

These investment restrictions are applied at the time investment securities
are purchased.

OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Funds are fully paid,
non-assessable and freely transferable.

The Board of Trustees has authorized the issuance of multiple classes of
shares in each of the Funds described in this Prospectus, including Investor
Shares and Institutional Shares. Each share of a Fund represents an equal
proportionate interest in a particular Fund with other shares of the same class
and is entitled to cash dividends and distributions earned on such shares as
are declared in the discretion of the Board of Trustees.

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<PAGE> 77
checkwriting. For information regarding the Funds' Institutional Shares,
contact Furman Selz at 1-800-662-8417 or your Service Organization.

Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims liability of the shareholders, Trustees or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust. The Declaration of Trust also
provides for indemnification out of the property of a Fund of any shareholder
held personally liable solely by reason of being or having been a shareholder
of the Fund. The risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a Fund itself would
be unable to meet its obligations and should be considered remote.

VOTING

Shareholders have the right to vote in the election of Trustees and on any
and all matters on which, by law or under the provisions of the Declaration of
Trust, they may be entitled to vote. The Trust is not required to hold regular
annual meetings of the Funds' shareholders, but in the event that a special
meeting is held, shareholders of each portfolio offered by the Trust will be
entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of a Fund's shares. Voting rights are not cumulative.

Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of a Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of a Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of a Fund. For purposes of the 1940 Act, any person who
owns either directly or

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<PAGE> 78
through one or more controlled companies more than 25 percent of the voting
securities of a company is presumed to "control" such company. Under this
definition, First Interstate Bancorp and its affiliates may be deemed to be
controlling persons of the Trust.

PERFORMANCE INFORMATION

Each Fund may, from time to time, include its yield and effective yield for
its Investor Shares in advertisements or reports to shareholders or prospective
investors. The methods used to calculate the yield of the Funds are mandated
by the SEC.

Quotations of "yield" for a class of shares of a Fund will be based on the
investment income per share during a particular a seven-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income by
the maximum public offering price per share on the last day of the period.

Quotations of yield reflect only the performance of a class of shares
during the particular period on which the calculations re based. Yield will
vary based on changes in market conditions, the level of interest rates and the
level of expenses of a particular class of shares, and no reported performance
figure should be considered an indication of performance which may be expected
in the future.

The funds may also advertise their"taxable equivalent yield." Taxable
equivalent yield is the yield that an investment, subject to Federal and/or
state taxes, would need to earn in order to equal, on an after-tax basis, the
yield on an investment exempt from such taxes (normally calculated assuming the
maximum applicable marginal tax rate). A taxable equivalent yield quotation
for a Fund will be higher than the Fund's yield quotations.

Any fees which may be imposed by Service Organizations directly on their
customer accounts for cash management services in connection with investments
in the Funds are not reflected in yield figures and any such fees, if charged,
will reduce the actual return received by customers on their investments.

For purpose of comparison, a Fund may, from time to time, quote performance
information from IBC/Donoghue's MONEY FUND REPORT of Holliston, Massachusetts
01746. IBC/Donoghue's MONEY MARKET AVERAGE is widely recognized index of money
fund performance. Any performance information should be considered in light of
a Fund's investment objective and policies, characteristics and quality of the
fund and the market conditions during the time period indicated, and should not
be considered to be representative of what may be achieved in the future. For
a description of the methods used to determine yield for the Funds, see "Other
Information -- Performance Information" in the SAI.

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<PAGE> 79
ACCOUNT SERVICES

All transactions in shares of the Funds will be reflected in a statement
for each shareholder. In those cases where a Service Organization or its
nominee is shareholder of record of shares purchased for its customer, the
Funds have been advised that the statement may be transmitted to the customer
at the discretion of the Service Organization.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

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

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED,
ENDORSED OR OTHERWISE SUPPORTED BY FIRST INTERSTATE BANCORP OR ITS AFFILIATES,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

- 28 -
<PAGE> 80
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 81

PACIFICA FUNDS TRUST
(INSTITUTIONAL SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Institutional Shares of the following two
portfolios (the "Funds"):

- Pacifica National Tax-Exempt Money Market Fund

- Pacifica California Tax-Exempt Money Market Fund

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996

<PAGE> 82
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 6

FEE TABLE - INSTITUTIONAL SHARES . . . . . . . . . . . . . . 6

THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . 8

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS . . . . . . . 8

RISKS OF INVESTING IN THE FUNDS . . . . . . . . . . . . . . . 9

MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . . . 10

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . 14

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES . . . . . . . 14

EXCHANGE OF INSTITUTIONAL SHARES . . . . . . . . . . . . . . 16

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . 17

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . 19

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . 22

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 22

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>

- 2 -
<PAGE> 83
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

This Prospectus describes two investment portfolios managed by First
Interstate Capital Management, Inc. Each Fund has a distinct investment
objective and policies.

The National Tax-Exempt Money Market Fund. The investment objective
of the National Tax-Exempt Money Market Fund is to seek as high a level of
current income exempt from Federal income tax as is consistent with liquidity
and stability of principal. To achieve its objective the National Tax-Exempt
Money Market Fund invests primarily in a diversified portfolio of high-quality,
short-term municipal obligations the interest on which is exempt from Federal
income tax and which have remaining maturities not exceeding 397 days.

RISKS OF INVESTING IN THE FUNDS

There is no assurance that the Funds will achieve their investment
objectives.

- 3 -
<PAGE> 84
MANAGEMENT OF THE FUNDS

First Interstate Capital Management, Inc. acts as investment advisor
to the Funds. For its services, the Advisor is entitled to receive a fee from
each Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Institutional Shares" and "Management of the Funds" in this
Prospectus.

Fees and expenses charged to the Funds are outlined on page _ of this
Prospectus.

- 4 -
<PAGE> 85
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

Purchase orders for the Funds received in proper order by 4:15 p.m.,
Eastern time, will become effective that day.

Institutional Shares of the Funds are purchased at net asset value
without a sales charge.

Shareholders may purchase, redeem or exchange Institutional Shares by
telephone.

All dividends and distributions will be automatically reinvested at
net asset value in additional Institutional Shares of the applicable Fund
unless cash payment is requested.

- Distributions for the Funds are paid monthly.

For additional information on how to purchase and redeem Institutional
Shares of the Funds, see "Purchase and Redemption of Institutional Shares" and
"Exchange of Institutional Shares."

- 5 -
<PAGE> 86
FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Institutional shareholder of a Fund.
The information is based on estimated amounts for the initial fiscal year of
each Fund.

FEE TABLE - INSTITUTIONAL SHARES

<TABLE>
<CAPTION>
National California
Tax-Exempt Tax-Exempt
Money Market Fund Money Market Fund
----------------- -----------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price) . . . . . . . . . . . None None
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price) . . . . None None
Deferred Sales Load (as a percentage
of redemption proceeds) None None
Redemption Fees . . . . . . . . . . . . None None
Exchange Fee . . . . . . . . . . . . . None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net
assets)
Management Fees (after waivers)* . . . ____ ____
Other Expenses (after waivers)** . . . ---- ----
TOTAL FUND OPERATING EXPENSES:
(after waivers)*** . . . . . . . . . . .45% .45%
==== ====
</TABLE>

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

* Management Fees (before waivers) would be .35% and .35%, respectively.

** Other Expenses (before waivers) would be ____ and ____, respectively and
are estimated.

*** Total Fund Operating Expenses (before waivers) would be ____ and ____,
respectively.

The purpose of this table is to assist shareholders in understanding the
various costs and expenses that an investor in the Funds' Institutional Shares
will bear. The table does not reflect any charges that may be imposed by a
First Interstate Bank or other institutions directly on their customer accounts
in connection with investments in the Funds.

- 6 -
<PAGE> 87
EXAMPLE:*

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

<TABLE>
<CAPTION>
National California
Tax-Exempt Tax-Exempt
Money Market Fund Money Market Fund
----------------- -----------------
<S> <C> <C>
1 year . . . . . . . . . . . . . . . . . $ $
3 years . . . . . . . . . . . . . . . . . $ $
</TABLE>

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

* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN
IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE GREATER OR LESS THAN THE ASSUMED
AMOUNT.

- 7 -
<PAGE> 88
THE FUNDS

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS

Each Fund follows its own investment policies and practices, including
certain investment restrictions. The SAI contains the specific investment
restrictions which govern the Funds' investments. The Funds' investment
objectives are fundamental policies, which means that they may not be changed
without a majority vote of shareholders of the affected Fund. Except for the
objectives and those restrictions specifically identified as fundamental, all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental. The Advisor selects investments and makes investment
decisions based on the investment objective and policies of each Fund.

- 8 -
<PAGE> 89

The types of securities and investment practices used by the Funds are
described in greater detail below under "Description of Securities and
Investment Practices."

RISKS OF INVESTING IN THE FUNDS

- 9 -
<PAGE> 90

substantial reduction in state revenues. Decreased state revenues may result
in reductions in allocations of state revenues to local governments.

A more detailed description of special factors affecting investment in
California municipal obligations is set forth in the Appendix to the SAI.

MANAGEMENT OF THE FUNDS

- 10 -
<PAGE> 91
THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Funds and
continuously reviews, supervises and administers the Funds' investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Funds' investments directly with brokers and dealers selected by it in its
discretion.

THE SPONSOR AND DISTRIBUTOR

PFD Inc. may from time to time pay a bonus or other incentive to dealers
which employ registered representatives who sell a minimum dollar amount of
Institutional Shares of the Funds and/or other funds distributed by Furman Selz
or PFD Inc. during a specific period of time. Such bonus or other incentive
will take the form of payment for travel expenses, including lodging, incurred
in connection with trips taken by qualifying registered representatives and
members of their families to places within or outside the United States, or
other bonuses, such as gift certificates or the cash equivalent of such
bonuses. PFD Inc. has established such a special promotional incentive program
with First Interstate Securities, Inc.

ADMINISTRATIVE SERVICES

- 11 -
<PAGE> 92
the Funds including coordination of the services performed by the Funds'
investment advisor, transfer agent, custodian, independent accountants and
legal counsel, regulatory compliance, including the compilation of information
for documents such as reports to, and filings with, the SEC and state
securities commissions, and preparation of proxy statements and shareholder
reports for the Funds; (ii) general supervision relative to the compilation of
data required for the preparation of periodic reports distributed to the Funds'
Officers and Board of Trustees; and (iii) furnishing office space and certain
facilities required for conducting the business of the Funds. For these
services, Furman Selz is entitled to receive a fee, payable monthly, at the
annual rate of 0.15% of the average daily net assets of the Funds. Pursuant to
a Services Agreement with the Trust, Furman Selz assists the Trust with certain
transfer and dividend disbursing agent functions and receives a fee of $15.00
per account per year plus out-of-pocket expenses. Pursuant to a Fund
Accounting Agreement with the Trust, Furman Selz assists the Trust in
calculating net asset values and provides certain other accounting services for
each Fund for an annual fee of $30,000 per Fund plus out-of-pocket expenses.

SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate Bancorp),
trust companies, broker-dealers (other than the Sponsor) or other financial
organizations (collectively, "Service Organizations") also may provide
administrative services with respect to the Funds' Institutional Shares, such
as maintaining shareholder accounts and records. The Funds may pay fees to
Service Organizations (which vary depending upon the services provided) in
amounts up to an annual rate of 0.25% of the average daily net asset value of
the outstanding Institutional Shares of the Funds owned by shareholders with
whom a Service Organization has a servicing relationship. These fees will be
home entirely by the Funds' Institutional Shares.

The Glass-Steagall Act and other applicable laws provide that, among other
things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Funds and alternative means for continuing the

- 12 -
<PAGE> 93
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.

OTHER EXPENSES

PORTFOLIO TRANSACTIONS

In effecting purchases and sales of portfolio securities for the account of
the Funds, the Advisor will seek the best execution of the Funds' orders.
Purchases and sales of debt securities are generally placed by the Advisor with
primary market makers for these securities on a net basis, i.e., without any
brokerage commission being paid by the Funds. Trading does, however, involve
transaction costs. Transactions with dealers serving as primary market makers
reflect the spread between the bid and asked prices. Purchases of underwritten
issues may be made which will include an underwriting fee paid to the
underwriter. Broker-dealers are selected on the basis of a variety of factors
such as reputation, capital strength, size and difficulty of the order, sale of
Fund shares by the broker-dealer, and research provided to the Advisor by the
broker-dealer. The Advisor may cause a Fund to pay commissions higher than
another broker-dealer would have charged if the Advisor believes the commission
paid is reasonable in relation to the value of the brokerage and research
services received by the Advisor.

- 13 -
<PAGE> 94
FUND SHARE VALUATION

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES

Institutional Shares of the Funds are sold without a sales load on a
continuous basis primarily to customers ("Customers") of affiliate, franchise
or correspondent banks of First Interstate Bancorp and other selected
institutions ("Institutions"). Customers may include individuals, trusts,
partnerships and corporations. 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
Institutional Shares acting on behalf of their Customers, and will reflect
their Customers' beneficial ownership of Institutional Shares in the account
statements provided by them to their Customers. The exercise of voting rights
and the delivery to Customers of shareholder communications from the Funds will
be governed by the Customers' account agreements with an Institution.
Investors wishing to purchase Institutional Shares of a Fund should contact
their account representatives.

Shares of a Fund are sold at net asset value per share next determined
after a purchase order has become effective. Purchase orders by an Institution
for Institutional Shares in the Funds must be received by the Trust by 4:15
p.m. (Eastern time) on any Business Day. Payment for such shares may be made
by Institutions in Federal funds or other funds immediately available to the
Trust's custodian no later than 4:15 p.m. (Eastern time) on the next Business
Day following the receipt of the purchase order.

It is the responsibility of Institutions to transmit orders for purchases
by their Customers and to deliver required funds on a timely basis. If funds
are not received within the periods

- 14 -
<PAGE> 95
described above, the order will be canceled, notice thereof will be given, and
the Institution will be responsible for any loss to the Fund or its
shareholders. Institutions may charge certain account fees depending on the
type of account the investor has established with an Institution. In addition,
an Institution may receive fees from the Funds with respect to the investments
of its Customers as described above under "Management of the Funds." Payments
for Institutional Shares of a Fund may, in the discretion of the Advisor, be
made in the form of securities that are permissible investments for the Fund.
For further information see "Additional Purchase and Redemption Information" in
the SAI.

The Trust reserves the right to reject any purchase order. Payment for
orders which are not received will be returned after prompt inquiry. The
issuance of Institutional Shares is recorded on the books of the Funds, and
share certificates are not issued.

Neither the Trust, the Distributor nor Furman Selz will be responsible for
the authenticity of telephone instructions for the purchase or redemption of
Institutional Shares where such instructions are reasonably believed to be
genuine. Accordingly, the Institution will bear the risk of loss. The Trust
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable. To the extent that the Trust
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it or its service providers may be liable for any loss, damage or
expense arising from such instructions that prove to be fraudulent or
unauthorized.

Share balances may be redeemed pursuant to arrangements between
Institutions and investors. It is the responsibility of an Institution to
transmit redemption requests to the Trust and to credit its Customers' accounts
with the redemption proceeds on a timely basis. The redemption proceeds for
Institutional Shares of a Fund are normally wired to the redeeming Institution
the following Business Day after receipt of the request by the Trust. The
Trust reserves the right to delay the wiring of redemption proceeds for up to
seven days after it receives a redemption order if, in the judgment of the
Advisor, an earlier payment could adversely affect a Fund.

- 15 -
<PAGE> 96
policy of the Funds that may not be changed without shareholder approval. In
the case of redemption requests by shareholders in excess of such amounts, the
Board of Trustees reserves the right to have the Funds make payment, in whole
or in part, in securities or other assets, in case of an emergency or any time
a cash distribution would impair the liquidity of a Fund to the detriment of
the existing shareholders. In this event, the securities would be valued in
the same manner as the securities of that Fund are valued. If the recipient
were to sell such securities, he or she would incur brokerage charges.

A redemption may be a taxable transaction on which gain or loss may be
recognized. Generally, however, gain or loss is not expected to be recognized
on a redemption of shares of the Funds, both of which seek to maintain a net
asset value of $1.00 per share.

EXCHANGE OF INSTITUTIONAL SHARES

The Funds offer a convenient way to exchange Institutional Shares in one
Fund for Institutional Shares in another investment portfolio of the Trust
(except the Prime Money Market Fund and Treasury Money Market Fund). Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department, 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Institutional Shares of one portfolio for Institutional Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The Trust may terminate or amend the terms of the
exchange privilege at any time.

A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the net asset value next determined following receipt of the
request by the Trust in good order.

To exchange Institutional Shares, or if you have any questions, simply call
the Trust at 1-800-622-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the name of the portfolio from
and the portfolio into which you wish to transfer your investment; and (iii)
the dollar or share amount you wish to exchange. The conversation may be
recorded to protect you and the Funds. Telephone exchanges are available only
if the shareholder so indicates by checking the "yes" box on the Purchase
Application.

In addition, Institutional Shares of a Fund may be exchanged for Investor
Shares of the same Fund in connection with the distribution of assets held in a
qualified trust, agency or

- 16 -
<PAGE> 97
custodial account maintained with the trust department of a First Interstate or
other bank, trust company or thrift institution, or in other cases where
Institutional Shares are not held in such qualified accounts. Similarly,
Investor Shares may be exchanged for Institutional Shares of the same Fund if
the shares are to be held in such a qualified trust, agency or custodial
account. These exchanges are made without a sales charge at the net asset
value of the respective share classes.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

The entire amount of exempt-interest dividends received from a Fund by most
corporations will be part of an adjustment in computing Federal alternative
minimum

- 17 -
<PAGE> 98
taxable income for purposes of the alternative minimum tax and the
environmental tax under Code section 59A.

Up to 85% of an individual's social security benefits and certain railroad
retirement benefits may be subject to Federal income tax. Along with other
factors, total tax-exempt income, including exempt-interest dividends, is used
to calculate the portion of such benefits that are taxed.

California law provides that if, at the close of each quarter of its
taxable year, at least 50% of the value of the total assets of a regulated
investment company consists of

- 18 -
<PAGE> 99
obligations the interest of which is exempt from tax under California law or of
obligations the interest of which is exempt from tax under U.S. law,
distributions designated as "exempt-interest" dividends for California purposes
are exempt from California personal income taxes. Shareholders will be
notified annually of the Federal income tax status of distributions and the
percentage of municipal obligation interest income received.

The preceding discussion primarily relates to Federal income taxes; the
consequences under other tax laws may differ. For additional information
relating to taxation, see the SAI.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

- 19 -
<PAGE> 100

Variable and Floating Rate Demand and Master Demand Notes. The Funds may,
from time to time, buy variable or floating rate demand notes issued by
government agencies and instrumentalities. These securities will typically
have a maturity over one year but carry with them the right of the holder to
put the securities to a remarketing agent or other entity at designated time
intervals and on specified notice. The obligation of the issuer of the put to
repurchase the securities may be backed by a letter of credit or other
obligation issued by a financial institution. The purchase price is ordinarily
par plus accrued and unpaid interest. Generally, the remarketing agent will
adjust the interest rate every seven days (or at other specified intervals) in
order to maintain the interest rate at the prevailing rate for securities with
a seven-day or other designated maturity. A Fund's investment in demand
instruments which provide that the Fund will not receive the principal note
amount within seven days' notice, in combination with each Fund's other
investments in illiquid instruments, will be limited to an aggregate total of
10% of each Fund's net assets.

- 20 -
<PAGE> 101

Association, are supported by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others, such
as obligations of the Student Loan Marketing Association and the Tennessee
Valley Authority, are backed only by the credit of the agency or
instrumentality issuing the obligation. In the case of obligations not backed
by the full faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment.

Repurchase Agreements. Securities held by a Fund may be subject to
repurchase agreements. A repurchase agreement is a transaction in which the
seller of a security commits itself at the time of the sale to repurchase that
security from the buyer at a mutually agreed-upon time and price. These
agreements may be considered to be loans by the purchaser collateralized by the
underlying securities. These agreements will be fully collateralized and the
collateral will be marked-to-market daily. A Fund will enter into repurchase
agreements only with dealers, domestic banks or recognized financial
institutions which, in the opinion of the Advisor, present minimal credit risks
in accordance with guidelines adopted by the Board of Trustees. The maturity
of the underlying securities in a repurchase agreement transaction may not
exceed seven days. See "Investment Restrictions." In the event of default by
the seller under the repurchase agreement, a Fund may have problems in
exercising its rights to the underlying securities and may experience time
delays in connection with the disposition of such securities.

- 21 -
<PAGE> 102

The Fund may realize short-term profits or losses upon such sales which profits
are not tax-exempt.

INVESTMENT RESTRICTIONS

No Fund may:

(2) borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.

These investment restrictions are applied at the time investment securities
are purchased.
OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Funds are fully paid,
non-assessable and freely transferable.

The Board of Trustees has authorized the issuance of multiple classes of
shares in each of the Funds described in this Prospectus, including
Institutional Shares and Investor Shares. Each share of a Fund represents an
equal proportionate interest in a particular Fund with

- 22 -
<PAGE> 103
other shares of the same class and is entitled to cash dividends and
distributions earned on such shares as are declared in the discretion of the
Board of Trustees.

Each Fund's Institutional Shares and Investor Shares bear their pro rata
portion of all operating expenses paid by the Fund except for the distribution
payments, Service Organization fees and other "class" expenses that are
allocated to a particular share class. The Board of Trustees has approved a
Distribution Plan with respect to Investor Shares of each Fund under which the
Trust may pay the Distributor in connection with the distribution of Investor
Shares at a rate or rates set from time to time by the Board of Trustees,
provided that no rate may exceed the annual rate of 0.50% of the average daily
net asset value of Investor Shares of a Fund. In addition, each Fund may pay
fees to Service Organizations in amounts up to an annual rate of 0.25% of the
daily net asset value of the Funds' outstanding Investor Shares owned by
shareholders with whom a Service Organization has a servicing relationship.
Because of the "class expenses", the performance of a Fund's Investor Shares is
expected to be lower than the performance of its Institutional Shares. The
Trust offers various services and privileges in connection with its Investor
Shares that are not offered in connection with its Institutional Shares,
including an automatic investment plan, automatic withdrawal plan and, with
respect to certain portfolios, checkwriting. For information regarding the
Funds' Investor Shares, contact Furman Selz at 1-800-662-8417 or your Service
Organization.

Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims liability of the shareholders, Trustees or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust. The Declaration of Trust also
provides for indemnification out of the property of a Fund of any shareholder
held personally liable solely by reason of being or having been a shareholder
of the Fund. The risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a Fund itself would
be unable to meet its obligations and should be considered remote.

VOTING

Shareholders have the right to vote in the election of Trustees and on any
and all matters on which, by law or under the provisions of the Declaration of
Trust, they may be entitled to vote. The Trust is not required to hold regular
annual meetings of the Funds' shareholders, but in the event that a special
meeting is held, shareholders of each portfolio offered by the Trust will be
entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical.

- 23 -
<PAGE> 104
Similarly, shareholders of each portfolio will vote in the aggregate and not by
class unless the Trustees determine that the matter to be voted on affects only
the interests of the holders of a particular class of a Fund's shares. Voting
rights are not cumulative.

Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of a Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of a Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of a Fund. For purposes of the 1940 Act, any person who
owns either directly or through one or more controlled companies more than 25
percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.

PERFORMANCE INFORMATION

Each Fund may, from time to time, include its yield and effective yield for
its Institutional Shares, Service Shares and Investor Shares in advertisements
or reports to shareholders or prospective investors. The methods used to
calculate the yield of the Funds are mandated by the SEC.

Quotations of yield reflect only the performance of a class of shares
during the particular period on which the calculations are based. Yield will
vary based on changes in market conditions, the level of interest rates and the
level of expenses of a particular class of shares, and no reported performance
figure should be considered an indication of performance which may be expected
in the future.

- 24 -
<PAGE> 105
The Funds may also advertise their "taxable equivalent yield." Taxable
equivalent yield is the yield that an investment, subject to Federal and/or
state taxes, would need to earn in order to equal, on an after-tax basis, the
yield on an investment exempt from such taxes (normally calculated assuming the
maximum applicable marginal tax rate). A taxable equivalent yield quotation
for a Fund will be higher than the Fund's yield quotations.

For purposes of comparison, a Fund may, from time to time, quote
performance information from IBC/Donoghue's MONEY FUND REPORT of Holliston,
Massachusetts 01746. IBC/Donoghue's MONEY MARKET AVERAGE is a widely
recognized index of money market fund performance. Any performance information
should be considered in light of a Fund's investment objective and policies,
characteristics and quality of the fund and the market conditions during the
time period indicated, and should not be considered to be representative of
what may be achieved in the future. For a description of the methods used to
determine yield for the Funds, see "Other Information--Performance Information"
in the SAI.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

- 25 -
<PAGE> 106
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 107

PACIFICA FUNDS TRUST
(INVESTOR SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

- Pacifica Equity Value Fund
- Pacifica Growth Fund
- Pacifica Balanced Fund

- Pacifica International Equity Fund

- Pacifica Equity Index Fund

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

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.

<PAGE> 108
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 7

FEE TABLE - INVESTOR SHARES . . . . . . . . . . . . . . . . 7

FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . 8

THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . 13

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS . . . . . . 13

RISKS OF INVESTING IN THE FUNDS . . . . . . . . . . . . . . 17

MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . . 19

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . 24

PRICING OF INVESTOR SHARES . . . . . . . . . . . . . . . . 25

MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . . 28

PURCHASE OF INVESTOR SHARES . . . . . . . . . . . . . . . . 28

INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . 30

EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . . 30

REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . . 31

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . 34

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . 37

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . 47

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 48

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>

- 2 -
<PAGE> 109
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

This Prospectus describes five diversified investment portfolios
managed by First Interstate Capital Management, Inc. Each Fund has a distinct
investment objective and policies.

The Equity Value Fund. The investment objective of the Equity Value
Fund is to provide investors with long-term capital appreciation. The Fund
pursues this objective by investing primarily in common stocks of both domestic
and foreign companies. The Fund may invest in large, well-established
companies and smaller companies with market capitalization exceeding $50
million. Income generation is a secondary consideration for the Fund.
However, the Fund may purchase dividend paying stocks of particular issuers
when the issuer's dividend record may, in the Advisor's opinion, have a
favorable influence on the market value of the securities. Under normal market
conditions, the Fund will invest at least 65% of its total assets in common
stocks and securities convertible into common stocks.

The Growth Fund. The investment objective of the Growth Fund is to
seek superior, risk-adjusted total return through capital appreciation. The
Fund invests primarily in equity securities, concentrating on those securities
whose growth prospects, in the opinion of the Advisor, appear to exceed that of
the overall market. The Advisor may also consider the potential for income in
selecting portfolio securities. Under normal market conditions, the Fund will
invest at least 65% of its total assets in equity securities.

The Balanced Fund. The investment objective of the Balanced Fund is
to realize both capital appreciation and current income resulting in a high
total investment return consistent with prudent investment risk and a balanced
investment approach. The Fund pursues this objective through a balanced and
diversified program of investing in equity securities and debt instruments.

The Fund will invest between 30% and 70% of its assets in common
stocks that are considered by the Advisor to have better than average prospects
for growth of capital and income. The Fund will invest primarily in domestic
equity securities, but may invest up to 5% of its assets in equity securities
listed or traded exclusively on a foreign exchange. The remaining 30% to 70%
balance of the Fund's assets will be invested in senior fixed income
securities, including corporate debt securities, commercial paper and
mortgage-backed and asset-backed securities, based on the relative stability of
income and principal of such securities. The debt instruments in which the
Fund invests will be rated at least investment grade.

- 3 -
<PAGE> 110

The International Equity Fund. The investment objective of the Fund
is to maximize total return, consisting of capital appreciation (both realized
and unrealized) and income, by investing primarily in the equity securities of
non-U.S. issuers (as described below). The equity securities in which the Fund
invests generally include common stock, preferred stock and securities
convertible into or exchangeable for common or preferred stock. The Fund may
also invest in various types of depositary receipts, which are described below.
Under normal market conditions, at least 65% of the value of the total assets
of the Fund will be invested in the equity securities of issuers in at least
three countries other than the United States.

The Equity Index Fund. The investment objective of the Equity Index
Fund is to replicate the investment performance of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index" or the "Index").(1) The Fund
seeks to achieve this investment objective by investing in all 500 stocks in
the S&P 500 Index in approximately the same proportions as they are represented
in the Index. Most of the stocks included in the S&P 500 Index are listed on
the New York Stock Exchange and represent large capitalization companies.

RISKS OF INVESTING IN THE FUNDS

The price per share of the Funds will fluctuate with changes in value
of the investments held by each Fund. A Fund's performance will change daily
based on many factors, including the quality of the instruments in each Fund's
investment portfolio, national and international economic conditions, interest
rate levels, the overall level of equity prices, general market conditions and
international exchange rates. Depending on these factors, the net asset value
of a Fund may decrease instead of increase. Certain of the Funds may seek to
achieve their investment objectives through investments in securities of
foreign issuers (which involve risks not typically associated with U.S.
issuers), instruments with the lowest investment grade rating which have
speculative characteristics, and by the use of certain options, futures and
currency swap strategies. In addition, certain of the Funds may invest in
securities issued by emerging growth companies, which may involve greater price
volatility and risk than those incurred by Funds that do not invest in such
companies.

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

(1) "Standard & Poor's 500" is a registered service mark of Standard &
Poor's Corporation, which does not sponsor and is in no way
affiliated with the Equity Index Fund.

- 4 -
<PAGE> 111
The market value of a Fund's investments in fixed income securities
will change in response to changes in interest rates and the relative financial
strength of each issuer. During periods of falling interest rates, the values
of fixed income securities generally rise. Conversely, during periods of
rising interest rates the values of such securities generally decline. Debt
securities with longer maturities, which tend to produce higher yields, are
subject to potentially greater capital appreciation and depreciation than
obligations with shorter maturities. Changes in the financial strength of an
issuer or changes in the ratings of any particular security may also affect the
value of these investments. Fluctuations in the market value of fixed income
securities subsequent to their acquisitions will not affect cash income from
such securities, but will be reflected in a Fund's net asset value.

There is no assurance that any Fund will achieve its investment
objective.

MANAGEMENT OF THE FUNDS

Fees and expenses charged to the Funds are outlined on page __ of this
Prospectus.

GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . $ 50
</TABLE>

Investor Shares of the Funds are purchased at net asset value plus a
sales charge of no more than 4.5%.

- 5 -
<PAGE> 112
Shareholders may exchange Investor Shares between Funds by telephone
or mail.

<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>

Shareholders may redeem Investor Shares by telephone, mail or wire.

(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)

All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the applicable Fund unless
cash payment is requested.

- Distributions for the Funds are paid quarterly.

For additional information on how to purchase and redeem Investor
Shares of the Funds, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."

- 6 -
<PAGE> 113
FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of a Fund based
upon the Fund's operating expenses for its most recent fiscal year, adjusted to
reflect current fees and expenses.

FEE TABLE - INVESTOR SHARES

<TABLE>
<CAPTION>
Equity International Equity
Value Growth Balanced Equity Index
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price) . . . . . . . . . . . . . . . . . . . . . . 4.50% 4.50% 4.50% 4.50% 3.00%
Maximum Sales Load Imposed on Reinvested Dividends (as a
percentage of offering price) . . . . . . . . . . . . . . . None None None None None
Deferred Sales Load (as a percentage of redemption proceeds) None+ None+ None+ None+ None+
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . None None None None None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . None None None None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees (after waivers)* . . . . . . . . . . . . . . 0.60% 0.00% 0.60% ____ ____

12b-1 Fees** . . . . . . . . . . . . . . . . . . . . . . . . 0.30 0.02 0.30
Other Expenses (after waivers)*** . . . . . . . . . . . . . 0.45 0.88 0.42
---- ---- ---- ---- ----
TOTAL FUND OPERATING EXPENSES:
(after waivers)**** . . . . . . . . . . . . . . . . . . . . 1.35% 0.90% 1.32% 1.95 .40
===== ===== ===== ==== ====
</TABLE>

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

* Management Fees (before waivers) would be 0.60%, 0.75%, 0.60%, 1.00% and
.25% respectively.

** Under rules of the National Association of Securities Dealers, Inc. (the
"NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 Fee is an annual fee charged against the
assets of a Fund, long-term shareholders may indirectly pay more in total
sales charges than the economic equivalent of the maximum front-end sales
charge permitted by the rules of the NASD. See "Management of the Funds
-- The Sponsor and Distributor."

*** Other Expenses (before waivers) would be 0.45%, 1.23%, 0.42%,
____ and ____ respectively.

**** Total Fund Operating Expenses (before waivers) would be 1.35%, 2.00%,
1.32%, ____ and ____ respectively.

+ Investor Shares sold pursuant to a complete waiver of the initial sales
charge available to purchases of $1 million or more are subject to a 1%
contingent deferred sales charge if redeemed within one year from the
date of purchase.

- 7 -
<PAGE> 114
The purpose of this table is to assist shareholders in understanding the
various costs and expenses that an investor in the Funds' Investor Shares will
bear. The table does not reflect any charges that may be imposed by a First
Interstate Bank or other institutions directly on their customer accounts in
connection with investments in the Funds.

EXAMPLE:*

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

<TABLE>
<CAPTION>
Equity International Equity
Value Growth Balanced Equity Index
Fund Fund Fund Fund Fund
<S> <C> <C> <C>
1 year . . . . . . . . . . . . . . . . . $ 58 $ 54 $ 58
3 years . . . . . . . . . . . . . . . . . 86 72 84
5 years . . . . . . . . . . . . . . . . . 116 93 112
10 years . . . . . . . . . . . . . . . . 200 151 194
</TABLE>

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

* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN
IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE GREATER OR LESS THAN THE ASSUMED
AMOUNT.

FINANCIAL HIGHLIGHTS

The financial information shown below is to assist investors in evaluating
the performance of the Funds since their commencement of operations. The
following supplementary information for the periods through September 30, 1994
for the Equity Value Fund and Balanced Fund has been audited by such Funds'
former independent accountants, and the information for the period ended
September 30, 1995 has been audited by such Funds' present independent
accountants, Ernst & Young LLP, whose report on the financial statements
appears in the 1995 Annual Report to Shareholders for these Funds. The
following supplementary information for the periods through May 31, 1995 for
the Growth Fund has been audited by such Fund's former independent accountants.
The following supplementary information for the period ended September 30, 1995
for the Growth Fund has been audited by the Fund's present independent
accountants, Ernst & Young LLP, whose report on the financial statements
appears in the 1995 Annual Report to Shareholders for the Fund. These reports
and financial statements are incorporated by reference into the

- 8 -
<PAGE> 115

- 9 -
<PAGE> 116

Selected data for a share outstanding for the periods shown:

THE EQUITY VALUE FUND
(INVESTOR SHARES)

Period
Year Ended September 30, Ended
--------------------------------------------------------- September 30,
1995 1994 1993 1992 1991 1990(a)
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . $ $ 13.17 $ 10.73 $ 10.45 $ 8.48 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income* . . . . . . . 0.20 0.21 0.20 0.28 0.08
Net gain (loss) on securities (both
realized and unrealized)* . . . . . . . 0.74 2.75 0.49 1.98 (1.60)
-------- -------- ------- ------- --------
Total from Investment Operations . 0.94 2.96 0.69 2.26 (1.52)
-------- -------- ------- ------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.21) (0.23) (0.22) (0.29) --
Distributions from capital gains . . (1.54) (0.29) (0.19) -- --
--------- --------- -------- -------- -------
Total Distributions . . . . . . . . . (1.75) (0.52) (0.41) (0.29) --
--------- --------- -------- -------- -------
Net Asset Value, End of Period . . . $ 12.36 $ 13.17 $ 10.73 $ 10.45 $ 8.48
======== ======== ======= ======= =======
Total Return (excluding sales load) 7.49% 28.22% 6.81% 27.05% (15.20)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in
thousands) . . . . . . . . . . . . . . $168,852 $140,551 $92,915 $68,412 $26,100
Ratio of Expenses to Average Net
Assets . . . . . . . . . . . . . . . . 0.99% 0.98% 1.02% 0.98% 0.91%+
Effect of Waivers on above Ration . . 0.02% 0.01% -- 0.13% 0.95%+
Ratio of Net Income to Average Net
Assets . . . . . . . . . . . . . . . . 1.60% 1.73% 1.86% 2.69% 3.38%+
Portfolio Turnover Rate . . . . . . . 41% 82% 78% 36% 21%+
</TABLE>

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

(a) Commencement of operations, April 26, 1988.

* Per share data based upon average monthly shares outstanding.

+ Annualized.

- 10 -

<PAGE> 117

For a share outstanding throughout the periods indicated:

GROWTH FUND
(INVESTOR SHARES)*

Period Year Period
Ended Ended Ended
Sept. 30, May 31, May 31,
1995** 1995 1994
--------- ------- --------

<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . $ $ 15.42 $15.39
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25 0.17
Net realized and unrealized gain on investments . . . . . . . . . . . . . . . . 1.90 (0.04)
------- -------

Total income (loss) from investment operations . . . . . . . . . . . . . . . 2.15 0.13
------- ------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . (0.24) (0.10)
Distributions from net realized gain on investments . . . . . . . . . . . . . . (0.06) 0.00
-------- ------

Total dividends and distributions to shareholders . . . . . . . . . . . . . . . (0.30) (0.10)
-------- -------

Net asset value -- End of Period . . . . . . . . . . . . . . . . . . . . . . . $ 17.27 $15.42
======= ======

Total return(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.18% 1.27%(1)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) . . . . . . . . . . . . . . . . . . . . . . . . $200 $80
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . . . . . 0.90% 0.92%(1)
Ratio of net investment income to average net assets . . . . . . . . . . . . . 1.81% 0.95%(1)
Ratio of expenses to average net assets without fee waivers . . . . . . . . . . 2.41% 5.69%(1)
Ratio of net investment income (loss) to average net assets without fee waivers 0.30% (3.82%)(1)
Portfolio turnover rate(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 59.71% 50.90%(1)
</TABLE>

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

* The Fund operated as the Growth Fund of Westcore Trust from its
commencement of operations on August 2, 1993 until its reorganization as a
portfolio of the Trust on October 1, 1995. During the periods shown, the
Fund was advised by First Interstate Bank of Washington, N.A. and First
Interstate Bank of Oregon, N.A. In connection with the Fund's
reorganization, FICM assumed investment advisory responsibilities for the
Fund.

** The Fund changed its fiscal year from May 31 to September 30.

(1) Annualized.

(2) Sales charges are not reflected in total return.

(3) A portfolio turnover rate is, in general, the percentage computed by
taking the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1995 were $11,091,094 and $4,357,936, respectively.

- 11 -

<PAGE> 118

Selected data for a share outstanding throughout the periods shown:

THE BALANCED FUND
(INVESTOR SHARES)

<TABLE>
<CAPTION>
Period
Year Ended September 30, Ended
----------------------------------------------------- September 30,
1995 1994 1993 1992 1991 1990(a)
---- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . $ $ 12.71 $ 11.18 $ 10.80 $ 9.50 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income* . . . . . . . . . . . . . . 0.43 0.44 0.42 0.52 0.14
Net gain (loss) on securities (both realized and
unrealized)* . . . . . . . . . . . . . . . . . . . (0.13) 1.72 0.53 1.40 (0.64)
--------- -------- ------- ------- --------
Total from Investment Operations . . . . . . . . 0.30 2.16 0.95 1.92 (0.50)
-------- -------- ------- ------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income . . . . . . . (0.46) (0.43) (0.43) (0.62) --
Distributions from capital gains . . . . . . . . . (0.88) (0.20) (0.14) -- --
--------- --------- -------- -------- -------

Total Distributions . . . . . . . . . . . . . . . . (1.34) (0.63) (0.57) (0.62) --
--------- --------- -------- -------- -------

Net Asset Value, End of Period . . . . . . . . . . $ 11.67 $ 12.71 $ 11.18 $ 10.80 $ 9.50
======== ======== ======= ======= =======

Total Return (not reflecting sales load) . . . . 2.30% 19.83% 9.03% 20.78% (5.00)%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) . . . . . $108,290 $104,434 $65,226 $50,038 $33,185
Ratio of Expenses to Average Net Assets . . . . . . 1.09% 1.01% 1.02% 0.96% 0.93%+
Effect of Waivers on above Ration . . . . . . . . . 0.02% 0.05% 0.08% 0.22% 0.67%+
Ratio of Net Income to Average Net Assets . . . . . 3.55% 3.62% 3.76% 5.88% 5.87%+
Portfolio Turnover Rate . . . . . . . . . . . . . . 35% 60% 49% 30% 12%+
</TABLE>

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

(a) Commencement of operations, July 2, 1990.

* Per share data based upon average monthly shares outstanding.

+ Annualized.

- 12 -

<PAGE> 119
THE FUNDS

The Funds are portfolios of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Funds and elects the officers of the
Funds.

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS

* The Equity Value Fund's investment objective is to provide
investors with long-term capital appreciation.

* The Growth Fund's investment objective is to seek superior,
risk-adjusted total return through capital appreciation.

* The Balanced Fund's investment objective is to realize both
capital appreciation and current income resulting in a high
total investment return consistent with prudent investment
risk and a balanced investment approach.

* The International Equity Fund's investment objective is to
maximize total return, consisting of capital appreciation
(both realized and unrealized) and income, by investing
primarily in the equity securities of non-U.S. issuers (as
described below).

* The Equity Index Fund's investment objective is to replicate
the investment performance of the S&P 500 Index.

Each Fund follows its own investment policies and practices, including
certain investment restrictions. The SAI contains the specific investment
restrictions which govern the Funds' investments. Those restrictions and the
investment objectives of the Equity Value Fund, the Balanced Fund and the
International Equity Fund are fundamental policies, which means that they may
not be changed without a majority vote of shareholders of the affected Fund.
Except for the objectives and those restrictions specifically identified as
fundamental, all other investment policies and practices described in this
Prospectus and in the SAI are not fundamental, which means that the Board of
Trustees may change them without shareholder approval. Any change in the
investment objective of the Growth Fund or the Equity Index Fund by the Board
of Trustees may result in the Fund having an investment objective different
from the objective which a shareholder considered appropriate at the time of
investment in the Fund.

The Advisor selects investments and makes investment decisions based
on the investment objective and policies of each Fund.

- 13 -
<PAGE> 120
The Equity Value Fund and The Balanced Fund. In selecting equity
investments (which include common stocks of both domestic and foreign
companies) for the Equity Value Fund and Balanced Fund, the Advisor selects
companies for investment using both quantitative and qualitative analysis to
identify those issuers that, in the Advisor's opinion, exhibit below-average
valuation multiples, above-average financial strength, a strong position in
their industry and a history of steady profit growth.

The Advisor may also select other equity securities in addition to
common stocks for investment by the Equity Value Fund and Balanced Fund. Such
other equity securities are preferred stocks, high grade securities convertible
into common stocks, and warrants. Neither Fund will invest more than 5% of its
net assets in warrants, no more than 2% of which will be invested in warrants
which are not listed on the New York or American Stock Exchanges. Under normal
market conditions, the Equity Value Fund will invest at least 65% of its total
assets in common stocks or securities convertible into common stocks. For
temporary defensive purposes, however, both the Equity Value Fund and Balanced
Fund may invest in U.S. Government securities, certificates of deposit,
bankers' acceptances, commercial paper, repurchase agreements (maturing in
seven days or less) and debt obligations of corporations (corporate bonds,
debentures, notes and other similar corporate debt instruments) which are rated
investment grade or better by S&P or Moody's.

In selecting senior fixed income securities for the Balanced Fund, the
Advisor seeks to select those debt instruments that appear best calculated to
achieve the Fund's investment objective within the credit and risk tolerances
established for the Fund. In accordance with those policies, the Balanced Fund
may purchase commercial paper rated A-2 or better by S&P or Prime-2 or better
by Moody's, corporate debt securities rated BBB or better by S&P or Baa or
better by Moody's (which contain some speculative characteristics) and
mortgage-backed and asset-backed securities rated AA or better by S&P or Aa or
better by Moody's (or the foregoing types of debt securities given equivalent
ratings by at least two other nationally recognized statistical rating
organizations ("NRSROs"), or, if any such securities are not rated, are of
comparable quality in the Advisor's opinion).

Growth Fund. The Growth Fund's investment objective is to seek
superior, risk-adjusted total return through capital appreciation. The Advisor
may also consider the potential for income in selecting portfolio securities.
The Fund invests primarily in equity securities, concentrating on those
securities whose growth prospects, in the opinion of the Advisor, appear to
exceed that of the overall market. The Fund's holdings are typically spread
across industry and economic sectors. The investment objective may be changed
by the Trust's Board of Trustees without the approval of a majority of the
Fund's outstanding shares. Any such change may result in the Fund having an
investment objective different from the objective which a shareholder
considered appropriate at the time of investment in the Fund.

- 14 -
<PAGE> 121
The Advisor attempts to invest in the common stocks of companies with
strong financial characteristics and growth tendencies. The Advisor seeks to
acquire stock in companies that will, in its opinion, experience growth in
sales, earnings and dividends greater than such growth experienced by the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"). The Advisor
also monitors the profitability, market capitalization, price to earnings ratio
and capital structures as part of its selection process. The Fund may invest
in non-dividend paying companies which, in the opinion of the Advisor, offer
better total return prospects. In addition, the Fund may invest up to 25% of
its assets in securities issued by foreign issuers and in American Depositary
Receipts which may or may not exhibit the particular growth tendencies and
capitalization characteristics described above.

The Fund's Advisor anticipates that from time to time certain industry
sectors will not be represented in the Fund's portfolio while other sectors
will represent a significant portion of invested assets. As a matter of
fundamental policy, however, the Advisor will not purchase any securities which
would cause 25% or more of the Fund's total assets at the time of purchase to
be invested in the securities of issuers conducting their principal business
activities in the same industry, and the Fund's investments will be diversified
among individual issuers.

As stated, investment emphasis is on equity securities, primarily
common stocks and, to a lesser extent, preferred stocks and debt securities
which are convertible into common stocks. The Fund's policy is to invest at
least 65% of the value of its total assets in equity securities under normal
market conditions.

The International Equity Fund. The investment objective of the
International Equity Fund is to maximize total return, consisting of capital
appreciation (both realized and unrealized) and income, by investing primarily
in the equity securities of non-U.S. issuers (as described below). The equity
securities in which the Fund invests generally include common stock, preferred
stock and securities convertible into or exchangeable for common or preferred
stock. The Fund may also invest in various types of depositary receipts, which
are described below. Under normal market conditions, at least 65% of the value
of the total assets of the Fund will be invested in the equity securities of
issuers in at least three countries other than the United States.

In pursuit of its objective, the Fund may purchase securities of
companies, wherever organized, which, in the judgment of the Fund's investment
adviser, have their principal business activities and interests outside the
United States ("non-U.S. issuers"). The investment adviser generally considers
such companies to include those companies (i) that derive 50% or more of their
revenues outside the United States, (ii) 50% or more of the assets of which are
located outside the United States, or (iii) the equity securities of which are
traded principally on a non-U.S. securities exchange. Investment in foreign
securities and depositary receipts involves certain risks as described under
"Risks of Investing in the Funds" below.

- 15 -
<PAGE> 122

The Fund expects to invest in a number of countries and normally
intends to include in its portfolio securities issuers in no fewer than three
countries. The percentage of the Fund's assets invested in particular
countries or regions of the world will vary depending on political and economic
conditions. The Fund currently contemplates that it will invest in securities
of issuers located in, or securities denominated in the currencies of, a
variety of countries selected from the following: Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland and the United Kingdom, and in securities denominated in a
multinational currency unit, such as the European Currency Unit. The Fund will
not invest more than 25% of its total assets in the equity securities of
issuers in developing countries (i.e., countries which are generally considered
to be in the initial stages of industrialization, as determined by the
investment adviser) not included in the foregoing list, which countries may
include any country in the world not listed above. The Fund may invest up to
35% of the value of its total assets in the equity securities of U.S. issuers.

In focusing on non-U.S. issuers, the Fund is designed to provide
investors with the opportunity to diversify their investments and participate
in economies and markets outside the United States. The Fund's portfolio will
emphasize established companies, although the Fund may invest in companies of
varying sizes as measured by assets, sales or market capitalization. The
equity securities in which the Fund invests are expected to be either listed on
an exchange or traded in an over-the-counter market. The payment or
non-payment of dividends will not be a significant factor in the investment
adviser's selection of investment.

The Equity Index Fund. The Equity Index Fund's investment objective
is to replicate the investment performance of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index" or the "Index"). The S&P 500
Index consists of 500 common stocks selected by Standard & Poor's Corporation
for inclusion in the Index on the basis of market value and industry
diversification. Most of the stocks included in the S&P 500 Index are listed
on the New York Stock Exchange and represent large capitalization companies.
The Fund invests in all 500 stocks in the S&P 500 Index in approximately the
same proportions as they are represented in the Index.

The Fund is not managed according to traditional methods of "active"
investment management, which involve the purchase and sale of securities based
upon economic, financial and market analysis as well as investment judgment.
Rather, the Fund employs a "passive" investment approach typical of "indexing"
in its effort to replicate the investment performance of the S&P 500 Index.
Because the Fund is subject to various brokerage costs, fees and operating
expenses which the Index is not subject to, it is likely that the Fund's total
return will be somewhat lower than that of the Index.

The Fund intends to remain fully invested in the common stocks
comprising the Index, to the extent practicable, in order to carry out its
stated investment objective. The

- 16 -
<PAGE> 123

Fund may utilize certain additional investment techniques in carrying out its
investment objective. These additional techniques involve the use of certain
types of stock options, futures contracts including stock index futures
contracts, options on futures contracts, warrants and equity swaps. These
investment techniques will not be used for speculative purposes and will only
be used in furtherance of achieving the Fund's investment objective. These
investment techniques are described more fully in this Prospectus under
"Description of Securities and Investment Practices."

For temporary or defensive purposes the Fund may vary from its
investment objective and may invest, without limit (except for the limitations
described under "Investment Restrictions"), in cash and/or certain high quality
short-term debt instruments described below. The Fund may also at any time
invest its assets in such instruments for cash management purposes, pending
investment in accordance with the Fund's investment objective and policies and
to meet operating expenses and redemption requests.

All Funds. The Funds may also hold short-term U.S. Government
obligations, money market instruments, repurchase agreements, securities issued
by other investment companies within the limits prescribed by the Investment
Company Act of 1940, as amended (the "1940 Act"), and cash, pending investment,
to meet anticipated redemption requests or if, in the opinion of the Advisor,
suitable investments for a Fund are unavailable. Such investments may be made
in such proportions as, in the opinion of the Advisor, existing circumstances
may warrant, and may include obligations of foreign banks and foreign branches
of U.S. banks. The types of securities and investment practices used by the
Funds are described in greater detail under the section "Description of
Securities and Investment Practices" on pages _______ of this Prospectus.

RISKS OF INVESTING IN THE FUNDS

The price per share of each of the Funds will fluctuate with changes
in value of the investments held by the Fund. Shareholders of a Fund should,
therefore, expect the value of their shares to fluctuate with changes in the
value of the securities owned by that Fund. For example, the value of the
shares of a Fund that invests primarily in debt securities will generally
fluctuate inversely with the movements in interest rates. Additionally,
investments by the Funds in smaller companies may involve greater risks than
investments in large companies due to such factors as limited product lines,
markets and financial or managerial resources, and less frequently traded
securities that may be subject to more abrupt price movements than securities
of larger companies. Smaller companies may have relatively small revenues and
may be unable to generate internally funds necessary for growth or potential
development or to generate such funds through external financing on favorable
terms. Due to these and other factors, smaller companies may incur significant
losses and investments on such companies are therefore speculative.

The market value of a Fund's investment in fixed income securities
will change in response to changes in interest rates and the relative financial
strength of each issuer.

- 17 -
<PAGE> 124
During periods of falling interest rates, the values of fixed income securities
generally rise. Conversely, during periods of rising interest rates the values
of such securities generally decline. Debt securities with longer maturities,
which tend to produce higher yields, are subject to potentially greater capital
appreciation and depreciation than obligations with shorter maturities.
Changes in the financial strength of an issuer or changes in the ratings of any
particular security may also affect the value of these investments.
Fluctuations in the market value of fixed income securities subsequent to their
acquisitions will not affect cash income from such securities, but will be
reflected in a Fund's net asset value. The Balanced Fund may also purchase
zero-coupon bonds (i.e., discount debt obligations that do not make periodic
interest payments) which are subject to greater market fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest.

Investing in the securities of issuers in any foreign country,
involves special risks and considerations not typically associated with
investing in U.S. companies. These include future political and economic
developments, differences in accounting, auditing and financial reporting
standards; generally higher commission rates on foreign portfolio transactions;
the possibility of nationalization, expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations (which may
include suspension of the ability to transfer currency from a country); and
political instability which could affect U.S. investments in foreign countries.

Changes in foreign exchange rates also will affect the value of
securities denominated or quoted in currencies other than the U.S. dollar. A
Fund's share price may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange control regulations and by indigenous economic
and political developments.

Additionally, foreign securities and dividends and interest payable on
those securities may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with less
frequency and volume than domestic securities and, therefore, may exhibit
greater price volatility. Delays or problems with settlement in foreign
markets could affect the liquidity of the Funds' foreign investments and
adversely affect performance. Additional costs associated with an investment
in foreign securities may include higher custodial fees than apply to domestic
custodial arrangements, higher brokerage and other costs, transfer taxes,
transaction charges and transaction costs of foreign currency conversions. In
addition, there may be less publicly available information about a foreign
issuer than about a United States issuer. Finally, in the event of a default
in any such foreign obligations, it may be more difficult for a Fund to obtain
or enforce a judgment against the issuers of such securities. Investments in
depositary receipts are subject to some, but not all, of the foregoing risks.
Investing in securities of issuers in developing countries involves exposure to
economic structures that are generally less diverse and mature, and to
political systems that can be expected to have less stability, than those of
developed countries. The markets of developing countries have historically
been more volatile than the

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<PAGE> 125
markets of the more mature economies of developed countries. Through the
Funds' flexible policies, management endeavors to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places a Fund's investments. See the SAI
for further information about foreign securities.

There is, of course, no assurance that a Fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.

MANAGEMENT OF THE FUNDS

The business and affairs of each Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N. Hankin,
John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer. Information
about the Trustees, as well as the Funds' executive officers, may be found in
the SAI under the heading "Management Trustees and Officers."

THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Funds and
continuously reviews, supervises and administers the Funds' investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Funds' investments directly with brokers and dealers selected by it in its
discretion.

FICM is a wholly-owned subsidiary of First Interstate Bank of
California, which is the largest banking subsidiary of First Interstate
Bancorp, a multi-bank holding company. First Interstate Bancorp provides
financial products and services marketed at the local level to nearly five
million households in over 500 communities in 13 western states. Prior to
March 18, 1994, the investment advisor for the Equity Value Fund and Balanced
Fund was San Diego Financial Capital Management, Inc., which was acquired by
First Interstate Bancorp through its merger with San Diego Financial
Corporation. Prior to October 1, 1995, First Interstate Bank of Oregon, N.A.
and First Interstate of Washington, N.A., both affiliates of FICM, served as
co-investment advisors for the Growth Fund.

Mr. David Underwood serves as FICM's Director of Funds Management.
Mr. Underwood joined FICM in 1995. From 1993 to 1995 Mr. Underwood was
employed by Integra Trust Company as Director of Research. From 1990 to 1993
he was a Portfolio Manager with the firm of C.S. McKee Investment Advisors.
Mr. G. Edward Means serves as FICM's Director of Fixed Income Management. Mr.
Means joined FICM in January 1995. From 1992 to 1994 he was employed by
Clayton Brown & Associates as Senior Vice President, Fixed Income. From 1984
to 1992 he was employed by First National Bank of Chicago as a Senior Vice
President.

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<PAGE> 126
Mr. Leon Newcomb has been responsible for the day-to-day management of
the Equity Value Fund since May 1995. Mr. Newcomb joined First Interstate in
1994. From 1989 through 1993 Mr. Newcomb was employed by Knights of Columbus,
a Connecticut life insurance company, as an equity portfolio manager. Since
May 1995, Mr. Newcomb has also been responsible for the day-to-day management
of the equity portion of the Balanced Fund.

Mr. Richard A. Ferguson has been responsible for the day-to-day
management of the Growth Fund since October 1, 1995. Mr. Ferguson joined FICM
in March 1995. From 1968 to 1995, Mr. Ferguson held various managerial
positions with First Interstate Bank of Arizona, N.A. and served as a manager
of balanced portfolios and equity funds.

Mr. Michael Hughes has been responsible for the day-to-day management
of the fixed income portion of the Balanced Fund since April 1995. Mr. Hughes
has been employed by First Interstate since November 1988. He currently serves
as a Fixed Income Fund Manager for FICM.

Deborah Selz Goodman and Ronald Florance will be responsible for the
day-to-day management of the International Equity Fund. Ms. Selz Goodman
joined FICM in August 1985. Since that time she has served as a financial
analyst with responsibility for domestic and international asset allocation
management. Mr. Florance joined FICM in July 1995. From 1992 to 1995 Mr.
Florance was affiliated with Palos Verdes Investment Corp., an investment
services firm. From 1990 to 1992, Mr. Florance was employed by The Vanguard
Group where his responsibilities included management of several domestic and
international equity mutual funds.

For the advisory services it provides to the Funds, FICM is entitled
to receive from each Fund fees, payable monthly, at the annual rates, based on
average daily net assets, as set forth below:

<TABLE>
<CAPTION>
FUND INVESTMENT ADVISORY FEE
---- -----------------------
<S> <C>
Equity Value Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60%
Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75%
Balanced Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60%
International Equity Fund . . . . . . . . . . . . . . . . . . . . . . . . 1.00%
Equity Index Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%
</TABLE>

The Advisor has advised the Trust that during the current fiscal year,
it intends to voluntarily waive a portion of its fees so that total operating
expenses will not exceed 0.90% of the average daily net assets of the Investor
Shares of the Growth Fund.

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<PAGE> 127
THE SPONSOR AND DISTRIBUTOR

Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Funds. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.

Under the Distribution Plan (the "Plan") adopted by the Funds for
their Investor Shares, each Fund may pay directly or reimburse PFD Inc. monthly
(subject to a limit of 0.50% per annum of the average daily net asset value of
the outstanding Investor Shares of each Fund) for costs and expenses of PFD
Inc. in connection with the distribution of Investor Shares of the Funds.
These costs and expenses include (i) advertising by radio, television,
newspapers, magazines, brochures, sales literature, direct mail or any other
form of advertising; (ii) expenses of sales employees or agents of PFD Inc.,
including salary, commissions, travel and related expenses; (iii) payments to
broker-dealers and financial institutions for services in connection with the
distribution of Investor Shares, including promotional incentives and fees
calculated with reference to the average daily net asset value of Investor
Shares held by shareholders who have a brokerage or other service relationship
with the broker-dealer or other institution receiving such fees; (iv) costs of
printing prospectuses and other materials to be given or sent to prospective
investors; and (v) such other similar services as the Trustees determine to be
reasonably calculated to result in the sale of Investor Shares of the Funds.
Each Fund will pay all costs and expenses in connection with the preparation,
printing and distribution of prospectuses to current shareholders and the
operation of its Plan, including related legal and accounting fees. A Fund
will not be liable for distribution expenditures made by PFD Inc. in any given
year in excess of the maximum annual amount payable under the Plan for that
Fund. All payments made under the Plan for Investor Shares are borne entirely
by a Fund's Investor Shares.

In addition to sales charges paid to dealers, PFD Inc. may from time
to time pay a bonus or other incentive to dealers which employ registered
representatives who sell a minimum dollar amount of Investor Shares of the
Funds and/or other funds distributed by Furman Selz or PFD Inc. during a
specific period of time. Such bonus or other incentive may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and members of their
families to places within or outside the United States, or other bonuses, such
as gift certificates or the cash equivalent of such bonuses. PFD Inc. has
established such a special promotional incentive program with First Interstate
Securities, Inc.

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<PAGE> 128
ADMINISTRATIVE SERVICES

The Funds have also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Funds' operations including: (i)
general supervision of the operation of the Funds including coordination of the
services performed by the Funds' investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Funds' Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Funds. For these services, Furman Selz is entitled to receive a fee, payable
monthly, at the annual rate of 0.15% of the average daily net assets of the
Funds. Pursuant to a Services Agreement with the Trust, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15.00 per account per year plus out-of-pocket expenses.
Pursuant to a Fund Accounting Agreement with the Trust, Furman Selz assists the
Trust in calculating net asset values and provides certain other accounting
services for each Fund for an annual fee of $30,000 per Fund plus out-of-pocket
expenses.

SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Funds' Institutional
Shares, such as maintaining shareholder accounts and records. The Funds may
pay fees to Service Organizations (which vary depending upon the services
provided) in amounts up to an annual rate of 0.25% of the average daily net
asset value of the outstanding Investor Shares of the Funds owned by
shareholders with whom a Service Organization has a servicing relationship.
These fees will be borne entirely by the Funds' Investor Shares.

Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Funds or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Funds. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.

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<PAGE> 129
decisions or interpretations of such laws, as well as changes in either Federal
or state regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Funds and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.

OTHER EXPENSES

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion.

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<PAGE> 130
the basis of a variety of factors such as reputation, capital strength, size
and difficulty of the order, sale of Fund shares by the broker-dealer, and
research provided to the Advisor by the broker-dealer. The Advisor may cause a
Fund to pay commissions higher than another broker-dealer would have charged if
the Advisor believes the commission paid is reasonable in relation to the value
of the brokerage and research services received by the Advisor.

A high portfolio turnover rate involves larger brokerage commission
expenses or transaction costs which must be home directly by a Fund.
Short-term capital gains realized from portfolio transactions are taxable to
shareholders as ordinary income. The Advisor will not consider portfolio
turnover rate a limiting factor in making investment decisions consistent with
a Fund's objective and policies.

FUND SHARE VALUATION

The net asset value of each class of shares of the Funds is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of a Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the Advisor, Furman Selz
and PFD Inc., are accrued daily and taken into account for the purpose of
determining the net asset value.

Securities listed on an exchange are valued on the basis of the last
sale prior to the time the valuation is made. If there has been no sale since
the immediately previous valuation, then the current bid price is used.
Quotations are taken from the exchange where the security is primarily traded.
Portfolio securities which are primarily traded on foreign exchanges may be
valued with the assistance of a pricing service and are generally valued at the
preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time a foreign security is
valued is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under the
direction of the Board of Trustees. Over-the-counter securities are valued on
the basis of the bid price at the close of business on each business day.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Board
of Trustees. Notwithstanding the above, bonds and other fixed income
securities are valued by using market quotations and may be valued on the basis
of prices provided by a pricing service approved by the Board of Trustees. All
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and asked prices of
such currencies against U.S. dollars as last quoted by any major bank.

With respect to option contracts entered into by a Fund, the premium
received is recorded as an asset and equivalent liability, and thereafter the
liability is adjusted to the

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<PAGE> 131
market value of the option determined in accordance with the preceding
paragraph. The premium paid for an option purchased by a Fund is recorded as
an asset and subsequently adjusted to market value.

PRICING OF INVESTOR SHARES

Orders for the purchase of Investor Shares will be executed at the net
asset value per share plus any applicable sales charge (the "public offering
price") next determined after an order has become effective. The sales charge
on purchases of Investor Shares of the Funds varies with the size of the
purchase made according to the following schedules:

For the Equity Value Fund, the Growth Fund, the Balanced Fund and the
International Equity Fund, the following schedule is applicable:

Amount of
Sales Charge as a Sales Charge
Percentage of Reallowed to
------------------- Dealers as a
Public Net Percentage of
Offering Amount Public
Amount of Investment Price Invested Offering Price
-------------------- -------- -------- --------------
<S> <C> <C> <C>
Less than $100,000 . . . . . . . . . . . . . . . . 4.50% 4.71% 4.00%
$100,000 but less than $250,000 . . . . . . . . . . 3.50% 3.63% 3.00%
$250,000 but less than $500,000 . . . . . . . . . . 2.60% 2.67% 2.25%
$500,000 but less than $1,000,000 . . . . . . . . . 2.00% 2.04% 1.75%
$1,000,000 and over . . . . . . . . . . . . . . . . None+ None+ None+
</TABLE>

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

+ There is no initial sales charge on purchases of $1 million or more; however,
the Distributor pays investment dealers and financial institutions a commission
from its own resources of 0.70% of the amount invested, and shareholders who
redeem their Investor Shares within one year of the date of purchase will be
subject to a 1% contingent deferred sales charge for the purpose of reimbursing
the Distributor for the commission paid.

For the Equity Index Fund, the following schedule is applicable:

- 25 -
<PAGE> 132

Amount of
Sales Charge as a Sales Charge
Percentage of Reallowed to
------------------- Dealers as a
Public Net Percentage of
Offering Amount Public
Amount of Investment Price Invested Offering Price
-------------------- -------- -------- --------------
<S> <C> <C> <C>
Less than $100,000 . . . . . . . . . . . . . . . . 3.00% 3.09% 2.75%
$100,000 but less than $250,000 . . . . . . . . . . 2.50% 2.56% 2.25%
$250,000 but less than $500,000 . . . . . . . . . . 2.00% 2.04% 1.75%
$500,000 but less than $1,000,000 . . . . . . . . . 1.25% 1.28% 1.00%
$1,000,000 and over . . . . . . . . . . . . . . . . None+ None+ None+
</TABLE>

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

The initial sales load will not apply to Investor Shares purchased by:
(i) trust, investment management, advisory and fiduciary accounts managed or
administered by First Interstate Bancorp, its subsidiaries and affiliates, or
the Advisor pursuant to a written agreement; (ii) any person purchasing
Investor Shares with the proceeds of a distribution from a trust, investment
management, advisory or other fiduciary account managed or administered by
First Interstate Bancorp, its subsidiaries and affiliates, or the Advisor
pursuant to a written agreement; (iii) any person purchasing Investor Shares
with the proceeds of a redemption from a mutual fund, other than an investment
portfolio offered by the Trust, that was originally purchased with a sales
load, (iv) Furman Selz or any of its affiliates; (v) Trustees or officers of
the Funds; (vi) directors or officers of Furman Selz, the Advisor, or their
affiliates or bona fide employees or former employees of any of the foregoing
who have acted as such for not less than 90 days (including members of their
immediate families and their retirement plans or accounts); or (vii) retirement
accounts or plans for which a depository institution, which is a client or
customer of the Advisor, Furman Selz or PFD Inc. serves as custodian or
trustee, or to any trust, pension, Individual Retirement Account ("IRA"),
spousal IRA, profit-sharing or other benefit plan for such persons so long as
such Investor Shares are purchased through PFD Inc. The initial sales load
also does not apply to Investor Shares sold to representatives of selling
brokers and members of their immediate families. In addition, the initial
sales load does not apply to sales to bank trust departments, acting on behalf
of one or more clients, of Investor Shares having an aggregate value equal to
or exceeding $200,000.

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See "Dividends, Distributions and Federal Income Tax," for an
explanation of circumstances in which a sales load paid to acquire Investor
Shares of a mutual fund may not be taken into account in determining gain or
loss on the disposition of those Investor Shares.

QUANTITY DISCOUNTS IN THE SALES CHARGES

The following quantity discounts shall be available to: (a) an
individual, his or her spouse, and their children under the age of 21, and any
trust, pension, IRA, spousal IRA, profit sharing or other benefit plan for such
persons; (b) a trustee or other fiduciary of a single trust estate or a single
fiduciary account; (c) a pension, profit-sharing or other employee benefit plan
qualified under Section 401 of the Internal Revenue Code of 1986, and (d)
tax-exempt organizations under Section 501 (c) (3) of the Code.

Right of Accumulation. The schedule of reduced sales charges will be
applicable once the accumulated value of the account has reached $100,000. For
this purpose, the dollar amount of the qualifying concurrent or subsequent
purchase is added to the net asset value of any Investor Shares of those
investment portfolios of the Trust that are subject to a sales charge and are
owned at the time of such purchase by the investor. The sales charge imposed
on the Investor Shares being purchased will then be at the rate applicable to
the aggregate value of Investor Shares owned and to be purchased by the
investor. For example, if the investor held Investor Shares valued at $100,000
and purchased an additional $20,000 of Investor Shares (totalling an investment
of $120,000), the sales charge for the $20,000 purchase would be at the next
lower sales charge on the schedule (i.e., the sales charge for purchases over
$100,000 but less than $250,000). There can be no assurance that investors
will receive the cumulative discounts to which they may be entitled unless, at
the time of placing their purchase order, the investors or their dealers make a
written request for the discount. The cumulative discount program may be
amended or terminated at any time. This particular privilege does not entitle
the investor to any adjustment in the sales charge paid previously on purchases
of Investor Shares. If the investor knows that he will be making additional
purchases of Investor Shares in the future, he may wish to consider executing a
Letter of Intent.

Letter of Intent. The schedule of reduced sales charges is also
available to investors who enter into a written Letter of Intent providing for
the purchase, within a 13-month period, of Investor Shares of a particular
Fund. Investor Shares of a Fund previously purchased during the 90-day period
prior to the date of receipt by the Fund of the Letter of Intent which are
still owned by the shareholder may also be included in determining the
applicable reduction, provided the shareholder or the dealer notifies the Fund
of such prior purchases.

A Letter of Intent permits an investor to establish a total investment
goal to be achieved by any number of investments over a 13-month period. Each
investment made during the period will receive the reduced sales commission
applicable to the amount

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<PAGE> 134
represented by the goal as if it were a single investment. A number of
Investor Shares totaling 5% of the dollar amount of the Letter of Intent will
be held in escrow by the Fund in the name of the shareholder. The initial
purchase under a Letter of Intent must be equal to at least 5% of the stated
investment goal.

The Letter of Intent does not obligate the investor to purchase, or a
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the 13-month period, the investor is required to pay the
difference between the sales charge otherwise applicable to the purchases made
during this period and sales charges actually paid. The Fund is authorized by
the shareholder to liquidate a sufficient number of escrowed Investor Shares to
obtain such difference. If the goal is exceeded and purchases pass the next
sales charge level, the sales charge on the entire amount of the purchase that
results in passing that level and on subsequent purchases will be subject to
further reduced sales charges in the same manner as set forth under "Right of
Accumulation," but there will be no retroactive reduction of sales charges on
previous purchases. At any time while a Letter of Intent is in effect, a
shareholder may, by written notice to PFD Inc., increase the amount of the
stated goal. In that event, Investor Shares purchased during the previous
90-day period and still owned by the shareholder will be included in
determining the applicable sales charge reduction. The 5% escrow and minimum
purchase requirements will be applicable to the new stated goal. Investors
electing to purchase Investor Shares pursuant to a Letter of Intent should
carefully read the application for a Letter of Intent which is available from
the Trust.

MINIMUM PURCHASE REQUIREMENTS

PURCHASE OF INVESTOR SHARES

All funds received by the Trust are invested in full and fractional
Investor Shares of the appropriate Fund. Certificates for Investor Shares are
not issued. Furman Selz maintains records of each shareholder's holdings of
Fund shares, and each shareholder receives a statement of transactions,
holdings and dividends. The Funds reserve the right to reject any purchase.

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<PAGE> 135
An investment may be made using any of the following methods:

Orders received by your broker or Service Organization for the Funds
in proper order prior to the determination of a Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.

Have your bank wire funds using the following instructions:
Fiduciary Trust Company

Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name

As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way.
When new accounts are established by wire, the distribution options will be set
to reinvest and the social security or tax identification number ("TIN") will
not be certified until a signed application is received. Completed
applications should be forwarded immediately to the Funds. With the Purchase
Application, the shareholder can specify other distribution options and add any
special features offered by a Fund. Should any dividend distributions or
redemptions be paid before the TIN is certified, they will be subject to 31%
Federal tax withholding.

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<PAGE> 136
use of electronic funds transfers or automatic bank drafts. Shareholders may
elect to make subsequent investments by transfers of a minimum of $50 on either
the fifth or twentieth day of each month into their established Fund accounts.
Contact the Trust at 1-800-662-8417 for more information about the Pacifica
Automatic Investment Program.

INDIVIDUAL RETIREMENT ACCOUNTS

The Funds may be used as a funding medium for IRAs. Investor Shares
may also be purchased for IRAs established with an affiliate of First
Interstate Bancorp or other authorized custodians. In addition, an IRA may be
established through a custodial account with Investors Fiduciary Trust Company.
Completion of a special application is required in order to create such an
account, and the minimum initial investment for an IRA is $250. Contributions
to IRAs are subject to prevailing amount limits set by the Internal Revenue
Service. A $5.00 establishment fee and an annual $12.00 maintenance and
custody fee is payable with respect to each IRA, and there will be a $10.00
termination fee when the account is closed. For more information, call the
Funds at 1-800-662-8417.

EXCHANGE OF INVESTOR SHARES

The Funds offer two convenient ways to exchange Investor Shares in a
Fund for Investor Shares in another investment portfolio of the Trust. Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Investor Shares of one portfolio for Investor Shares of another portfolio if
both or either are not qualified for sale in the state of the shareholder's
residence. The minimum amount for an initial exchange is $500. No minimum is
required in subsequent exchanges. The Trust may terminate or amend the terms
of the exchange privilege at any time.

An exchange is taxable as a sale of a security on which a gain or loss
may be recognized. Shareholders should receive written confirmation of the
exchange within a few days of the completion of the transaction.

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<PAGE> 137
acquire Investor Shares of the Funds may not be taken into account in
determining gain or loss on the disposition of those Investor Shares.

In addition, Institutional Shares of a Fund may be exchanged for
Investor Shares of the same Fund in connection with the distribution of assets
held in a qualified trust, agency or custodial account maintained with the
trust department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares of the same Fund if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made without
a sales charge at the net asset value of the respective share classes.

Exchange by Mail. To exchange Investor Shares of a Fund by mail,
simply send a letter of instruction to Furman Selz. The letter of instruction
must include: (i) your account number, (ii) the Fund from and the Fund into
which you wish to exchange your investment; (iii) the dollar or share amount
you wish to exchange; and (iv) the signatures of all registered owners or
authorized parties. AR signatures must be guaranteed by an eligible guarantor
institution including a member of a national securities exchange or by a
commercial bank or trust company, broker-dealers, credit unions and savings
associations.

Exchange by Telephone. To exchange Investor Shares of a Fund by
telephone, or if you have any questions, simply call the Trust at
1-800-662-8417. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the name of the portfolio from and the portfolio
into which you wish to transfer your investment; and (iii) the dollar or share
amount you wish to exchange. The conversation may be recorded to protect you
and the Funds. Telephone exchanges are available only if the shareholder so
indicates by checking the "yes" box on the Purchase Application. See
"Redemption of Investor Fund Shares -- By Telephone" for a discussion of
telephone transactions generally.

REDEMPTION OF INVESTOR SHARES

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<PAGE> 138
Once the Investor Shares are redeemed, a Fund will ordinarily send the
proceeds by check to the shareholder at the address of record on the next
Business Day. The Funds may, however, take up to seven days to make payment.
This will not be the customary practice. Also, if the New York Stock Exchange
is closed (or when trading is restricted) for any reason other than the
customary weekend or holiday closing or if an emergency condition as determined
by the SEC merits such action, the Funds may suspend redemptions or postpone
payment dates.

To ensure acceptance of your redemption request, it is important to
follow the procedures described below. Although the Trust has no present
intention to do so, it reserves the right to refuse or to limit the frequency
of any telephone or wire redemptions. Of course, it may be difficult to place
orders by telephone during periods of severe market or economic change, and a
shareholder should consider alternative methods of communications, such as
couriers or U.S. mail. The services offered by the Funds may be modified or
terminated at any time. If the Funds terminate any particular service, they
will do so only after giving written notice to shareholders.

You may redeem your Investor Shares using any of the following methods:

Through an Authorized Broker, Investment Advisor or Service
Organization. You may redeem your Investor Shares by contacting your broker or
investment advisor and instructing him or her to redeem your Investor Shares.
He or she will then contact PFD Inc. and place a redemption trade on your
behalf. He or she may charge you a fee for this service.

By Mail. You may redeem your Investor Shares by sending a letter
directly to the Funds. To be accepted, a letter requesting redemption must
include: (i) the Fund name and account registration from which you are
redeeming Investor Shares; (ii) your account number, (iii) the amount to be
redeemed; (iv) the signatures of all registered owners; and (v) a signature
guarantee by any eligible guarantor institution including a member of a
national securities exchange or a commercial bank or trust company,
broker-dealers, credit unions and savings associations. Corporations,
partnerships, trusts or other legal entities will be required to submit
additional documentation.

By Telephone. You may redeem your Investor Shams by calling the Funds
toll free at 1-800-662-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount to be redeemed. The
conversation may be recorded to protect you and the Funds. Telephone
redemptions are available only if the shareholder so indicates by checking the
"yes" box on the Purchase Application. The Funds employ reasonable procedures
to confirm that instructions communicated by telephone are genuine. If the
Funds fail to employ such reasonable procedures, they may be liable for any
loss, damage or expense arising out of any telephone transactions purporting to
be on a shareholder's behalf. In order to assure the accuracy of instructions
received by telephone, the Funds require some form of personal

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<PAGE> 139
identification prior to acting upon instructions received by telephone, record
telephone instructions and provide written confirmation to investors of such
transactions.

By Wire. You may redeem your Investor Shares by contacting the Funds
by mail or telephone and instructing them to send a wire transmission to your
personal bank.

The above-mentioned services "By Telephone" and "By Wire" are not
available for IRAs and trust clients of an affiliate of First Interstate
Bancorp.

Systematic Withdrawal Plan. An owner of $10,000 or more of Investor
Shares of a Fund may elect to have periodic redemptions from his or her account
to be paid on a monthly, quarterly, semi-annual or annual basis. The minimum
periodic payment is $100. A sufficient number of Investor Shares to make the
scheduled redemption will normally be redeemed on the date selected by the
shareholder. Depending on the size of the payment requested and fluctuation in
the net asset value, if any, of the Investor Shares redeemed, redemptions for
the purpose of making such payments may reduce or even exhaust the account. A
shareholder may request that these payments be sent to a predesignated bank or
other designated party. Capital gains and dividend distributions paid to the
account will automatically be reinvested at net asset value on the distribution
payment date.

Reinstatement Privilege. A shareholder in the Funds who has redeemed
Investor Shares may reinvest, without a sales charge, up to the full amount of
such redemption at the net asset value determined at the time of the
reinvestment within 30 days of the original redemption. This privilege must be
effected within 30 days of the redemption. The shareholder must reinvest in
the same Fund and the same account from which the Investor Shares were
redeemed. A redemption is a taxable transaction and gain or loss may be
recognized for Federal income tax purposes even if the reinstatement privilege
is exercised. Any loss realized upon the redemption will not be recognized as
to the number of Investor Shares acquired by reinstatement, except through an
adjustment in the tax basis of the Investor Shares so acquired. See
"Dividends, Distributions and Federal Income Tax" for an explanation of
circumstances in which a sales load paid to acquire Investor Shares of a Fund
may not be taken into account in determining gain or loss on the disposition of
those Investor Shares.

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<PAGE> 140
during the 30-day notice period the shareholder purchases sufficient Investor
Shares to bring the value of the account above $500, this restriction will not
apply.

Redemption in Kind. All redemptions of Investor Shares of the Funds
shall be made in cash, except that the commitment to redeem Investor Shares in
cash extends only to redemption requests made by each shareholder of a Fund
during any 90-day period of up to the lesser of $250,000 or 1% of the net asset
value of that Fund at the beginning of such period. This commitment is
irrevocable without the prior approval of the SEC and is a fundamental policy
of the Funds that may not be changed without shareholder approval. In the case
of redemption requests by shareholders in excess of such amounts, the Board of
Trustees reserves the right to have the Funds make payment, in whole or in
part, in securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of a Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the securities of that Fund are valued. If the recipient were
to sell such securities, he or she would incur brokerage charges.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

Each Fund intends to qualify annually and to elect to be treated as a
regulated investment company pursuant to the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). By so qualifying and
electing, each Fund generally will not be subject to Federal income tax to the
extent that it distributes investment company taxable income and net capital
gains in the manner required under the Code.

Each Fund intends to distribute to its shareholders substantially all
of its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short-term capital gains
(generally including any net option premium income) over net long-term capital
losses). Investment company taxable income will be distributed by the Funds
quarterly. Each Fund intends to distribute, at least annually, substantially
all net capital gain (the excess of net long-term capital gains over net
short-term capital losses). In determining amounts of capital gains to be
distributed, any capital loss carryovers from prior years will be applied
against capital gains.

Distributions will be paid in additional shares of the same class held
by a shareholder based on the net asset value at the close of business on the
payment date of the distribution, unless the shareholder elects in writing,
which is received by Furman Selz not less than five full business days prior to
the record date, to receive such distributions in cash. Dividends declared in,
and attributable to, the preceding month will be paid within five business days
after the end of each month. Investors who redeem all or a portion of Fund
shares prior to a dividend payment date will be entitled on the next dividend
payment date to all dividends declared but unpaid on those shares at the time
of their redemption.

Distributions of investment company taxable income (regardless of
whether derived from dividends, interest, net short-term capital gains or other
income) will be taxable to

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<PAGE> 141
shareholders as ordinary income. Distributions of net long-term capital gains
designated by a Fund as capital gain dividends will be taxable as long-term
capital gains, regardless of how long a shareholder has held his Fund shares.
Distributions are taxable in the same manner whether received in additional
shares or in cash.

Earnings of the Funds not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To prevent imposition of this tax, each Fund intends to comply
with this distribution requirement.

A distribution will be treated as paid on December 31 of a calendar
year if it is declared by a Fund during October, November, or December of that
year to shareholders of record in such a month and paid by a Fund during
January of the following calendar year. Such distributions will be treated as
received by shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are
received.

Special tax rules may apply to a Fund's acquisition of financial
futures contracts, forward contracts, and options on futures contracts. Such
rules may, among other things, affect whether gains and losses from such
transactions are considered to be short-term or long-term, may have the effect
of deferring losses and/or accelerating the recognition of gains or losses,
and, for purposes of qualifying as a regulated investment company, may limit
the extent to which a Fund may be able to engage in such transactions.

A Fund's distributions with respect to a given taxable year may exceed
the current and accumulated earnings and profits of that Fund available for
distribution. In that event, distributions in excess of such earnings and
profits would be characterized as a return of capital to shareholders for
Federal income tax purposes, thus reducing each shareholder's cost basis in his
Fund shares. Distributions in excess of a shareholder's cost basis in his
shares would be treated as a gain realized from a sale of such shares.

Any gain or loss realized by a shareholder upon the sale or other
disposition of shares of a Fund, or upon receipt of a distribution in complete
liquidation of a Fund, generally will be a capital gain or loss which will be
long-term or short-term, generally depending upon the shareholder's holding
period for the shares. A loss realized by a shareholder on a redemption, sale,
or exchange of shares of a Fund that were not held for more than six months
with respect to which capital gain dividends have been paid will be
characterized as a long-term capital loss to the extent of such capital gain
dividends.

Before purchasing shares in the Funds, the impact of dividends or
distributions which are expected to be declared or have been declared but not
paid, should be carefully considered. Any dividend or distribution declared
shortly after a purchase of such shares prior to the record date will have the
effect of reducing the per share net asset value by the per share amount of the
dividend or distribution. All or a portion of such dividend or distribution,
although in effect a return of capital, may be subject to tax.

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<PAGE> 142
A portion of the dividends paid by the Funds may qualify for the
dividends-received deduction available to corporations, depending upon the
investments made by the Funds and other eligibility factors.

Under certain circumstances, the sales charge incurred in acquiring
shares of a Fund may not be taken into account in determining the gain or loss
on the disposition of those shares. This rule applies where shares of a Fund
are exchanged within 90 days after the date they were purchased and new shares
of the Fund or of another investment portfolio of the Trust are acquired
without a sales charge or at a reduced sales charge. In that case, the gain or
loss recognized on the exchange will be determined by excluding from the tax
basis of the shares exchanged all or a portion of the sales charge incurred in
acquiring those shares. This exclusion applies to the extent that the
otherwise applicable sales charge with respect to the newly acquired shares is
reduced as a result of having incurred a sales charge initially. The portion
of the sales charge affected by this rule will be treated as a sales charge
paid for the new shares.

The Funds may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct taxpayer identification number or
to make required certifications, or where a Fund or shareholder has been
notified by the Internal Revenue Service that the shareholder is subject to
backup withholding. Most corporate shareholders and certain other shareholders
specified in the Code are exempt from backup withholding. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.

Income or gain from investments in foreign securities may be subject
to foreign withholding or other taxes. It is expected that the Funds may be
subject to foreign withholding taxes with respect to income received from
sources within foreign countries.

If a Fund invests in certain "passive foreign investment companies"
("PFICs"), it would be subject to Federal income tax (and possibly additional
interest charges) on a portion of any excess distribution or gain from the
disposition of such shares even if it distributes such income to its
shareholders. If a Fund elects to treat the PFIC as a qualified electing fund
("QEF") and the PFIC furnishes certain financial information in the required
form to such Fund, the Fund would instead be required to include in income each
year its allocable share of the ordinary earnings and net capital gains on the
QEF, regardless of whether received, and such amounts would be subject to the
various distribution requirements described above.

Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund(s) in which they invest.
Depending on the residence of the shareholder for tax purposes, distributions
also may be subject to state and local taxes, including withholding taxes.
Foreign shareholders may, for example, be subject to special withholding
requirements. Special tax treatment, including a penalty on certain
pre-retirement distributions, is accorded to accounts maintained as IRAs.
Shareholders should

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<PAGE> 143
consult their own tax advisors as to the Federal, state and local tax
consequences of ownership of shares of the Funds in their particular
circumstances.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

U.S. Government Obligations (All Funds). U.S. Government securities
are obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. U.S. Treasury bills, which have a maturity of up to one
year, are direct obligations of the United States and are the most frequently
issued marketable U.S. Government security. The U.S. Treasury also issues
securities with longer maturities in the form of notes and bonds.

U.S. Government agency and instrumentality obligations are debt
securities issued by U.S. Government-sponsored enterprises and Federal
agencies. Some obligations of agencies are supported by the full faith and
credit of the United States or by U.S. Treasury guarantees, such as
mortgage-backed certificates, which may be guaranteed by the Government
National Mortgage Association; others, such as obligations of the Federal Home
Loan Banks, Federal Farm Credit Bank, Bank for Cooperatives, Federal
Intermediate Credit Banks and the Federal Land Bank, are guaranteed by the
right of the issuer to borrow from the U.S. Treasury; others, such as
obligations of the Federal National Mortgage Association, are supported by
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, such as obligations of the
Student Loan Marketing Association and the Tennessee Valley Authority, are
backed only by the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment.

Equity Securities (All Funds). The Funds may invest in equity
securities, which include common stocks, preferred stocks, stocks convertible
into common stock, warrants and any rights to purchase common stocks. Rights
and warrants permit the owner to purchase a specified number of shares of an
issuer at a specified price for a specified period of time. No Fund will
invest more than 5% of its net assets in warrants (other than those that have
been acquired in units or attached to other securities) and no more than 2% of
which will be invested in warrants which are not listed on the New York or
American Stock Exchanges.

Repurchase Agreements (All Funds). The Funds may agree to purchase
securities subject to the seller's agreement to repurchase them at a mutually
agreed upon date and price. The Funds will enter into such repurchase
agreements only with financial institutions that are deemed to be creditworthy
by the Advisor, pursuant to guidelines established by the Trust's Board of
Trustees. During the term of any repurchase agreement, the Advisor will
continue to monitor the creditworthiness of the seller. The Funds will not
enter into repurchase agreements with the Advisor or its affiliates. Although
the securities subject to repurchase agreements may bear maturities exceeding
13 months, the Funds do not presently intend to enter into repurchase
agreements with deemed maturities in excess of seven days. If in the future
one of the Funds were to enter into repurchase agreements with

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<PAGE> 144
deemed maturities in excess of seven days, such Fund would do so only if such
investment, together with other illiquid securities, did not exceed 10% (15% in
the case of the Growth Fund and International Equity Fund) of the value of that
Fund's net assets.

The seller under a repurchase agreement will be required to maintain
the value of the securities that are subject to the agreement and held by a
Fund at not less than the repurchase price. Default or bankruptcy of the
seller would, however, expose a Fund to possible delay in connection with the
disposition of the underlying securities or loss to the extent that proceeds
from a sale of the underlying securities were less than the repurchase price
under the agreement.

Bank Obligations (All Funds). Bank obligations include bankers'
acceptances, negotiable certificates of deposit and non-negotiable time
deposits issued by a U.S. bank, savings bank or savings association that is a
member of the Federal Reserve System or insured by the Federal Deposit
Insurance Corporation. The Funds may also invest in U.S. dollar-denominated
obligations of foreign banks. Obligations of foreign banks or foreign branches
of U.S. banks entail risks that are different from those of investments in
domestic obligations of U.S. banks. These additional risks include future
political and economic developments, the possible imposition of withholding
taxes on interest income, possible seizure or nationalization of foreign
deposits, the possible establishment of exchange controls, or the adoption of
other foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. In addition, foreign
branches of U.S. banks and U.S. branches of foreign banks may be subject to
less stringent reserve requirements and to different accounting, auditing,
reporting, and recordkeeping standards than those applicable to domestic
branches of U.S. banks. Investments in domestic and foreign bank obligations
are limited to the obligations of financial institutions having $1 billion or
more in total assets at the time of purchase.

Commercial Paper (All Funds). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies,
corporations and financial institutions, as well as similar instruments issued
by government agencies and instrumentalities. Investments by the Equity Value
Fund and Balanced Fund in commercial paper will consist of issues that are
rated in one of the two highest rating categories by a NRSRO. Investments by
the Growth Fund in commercial paper will be rated in the highest rating
category by a NRSRO. In addition, the Funds may acquire unrated commercial
paper and corporate bonds that are determined by the Advisor at the time of
purchase to be of comparable quality to rated instruments that may be acquired
by the Funds. Commercial paper may include variable and floating rate
instruments.

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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; (c) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund; and (d) not more than 10% of the outstanding voting stock of any one
investment company will be owned in the aggregate by a Fund and other
investment companies advised by the Advisor or any other affiliate of First
Interstate Bancorp. As a shareholder of another investment company, a Fund
would bear, along with other shareholders, its pro rata portion of the expenses
of such other investment company, including advisory fees. These expenses
would be in addition to the advisory and other expenses that each Fund bears
directly in connection with its own operations, and may represent a duplication
of fees to shareholders of that Fund.

Variable and Floating Rate Instruments (The Equity Value Fund and
Balanced Fund). Instruments purchased by a Fund may include variable and
floating rate demand instruments issued by corporations, industrial development
authorities and governmental entities. These instruments may include variable
amount master demand notes that permit the indebtedness to vary in addition to
providing for periodic adjustments in the interest rate. Although variable and
floating rate demand instruments are frequently not rated by credit rating
agencies, unrated instruments purchased by a Fund will be determined to be of
comparable quality to rated instruments that may be purchased by the Fund.
While there may be no active secondary market with respect to a particular
variable or floating rate instrument purchased by a Fund, the Funds may, from
time to time as specified in the instrument, demand payment in full of the
principal of the instrument or may resell the instrument to a third party. The
absence of such an active secondary market, however, could make it difficult
for a Fund to dispose of a variable or floating rate demand instrument if the
issuer defaulted on its payment obligations or during periods that the Fund is
not entitled to exercise its demand rights, and the Fund could, for these or
other reasons, suffer a loss. Variable and floating rate instruments with no
active secondary market will be included in the calculation of a Fund's
illiquid assets.

Loans of Portfolio Securities (All Funds). To increase return, a Fund
may lend its portfolio securities to broker/dealers and other institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral equal at all times in value to at least the market value
of the securities loaned. The collateral for such loans may include cash,
securities of the U.S. Government, its agencies or instrumentalities, or
irrevocable letters of credit issued by a bank, or any combination thereof.
For each Fund, such loans will not be made if, as a result, the aggregate of
all outstanding loans exceeds 30% of the value of the Fund's total assets.
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. However, loans are made only to
borrowers deemed by the Advisor to be of good standing and when, in their
judgment, the income to be earned from the loan justifies the attendant risks.

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Forward Commitments, When-Issued Purchases and Delayed-Delivery
Transactions (The Growth Fund, Balanced Fund and Equity Index Fund). The Funds
may purchase or sell securities on a when-issued or delayed-delivery basis and
make contracts to purchase or sell securities for a fixed price at a future
date beyond customary settlement time. Securities purchased or sold on a
when-issued, delayed-delivery or forward commitment basis involve a risk of
loss if the value of the security to be purchased declines, or the value of the
security to be sold increases, before the settlement date. Although a Fund
will generally purchase securities with the intention of acquiring them, a Fund
may dispose of securities purchased on a when-issued, delayed-delivery or a
forward commitment basis before settlement when deemed appropriate by the
Advisor.

Mortgage-Related Securities (The Balanced Fund). Mortgage
pass-through securities are securities representing interests in "pools" of
mortgages in which payments of both interest and principal on the securities
are made monthly, in effect "passing through" monthly payments made by the
individual borrowers on the residential mortgage loans which underlie the
securities (net of fees paid to the issuer or guarantor of the securities).
Early repayment of principal on mortgage pass-through securities (arising from
prepayments of principal due to sale of the underlying property, refinancing,
or foreclosure, net of fees and costs which may be incurred) may expose the
Fund to a lower rate of return upon reinvestment of principal. Also, if a
security subject to prepayment has been purchased at a premium, in the event of
prepayment the value of the premium would be lost. Like other fixed-income
securities, when interest rates rise, the value of a mortgage-related security
generally will decline; however, when interest rates decline, the value of
mortgage-related securities with prepayment features may not increase as much
as other fixed-income securities. In recognition of this prepayment risk to
investors, the Public Securities Association (the "PSA") has standardized the
method of measuring the rate of mortgage loan principal prepayments. The PSA
formula, the Constant Prepayment Rate (the "CPIV") or other similar models that
are standard in the industry will be used by the Fund in calculating maturity
for purposes of its investment in mortgage-related securities. Because the
average life of mortgage-related securities may lengthen with increases in
interest rates, the portfolio-weighted average life of the securities in which
the Fund is invested may at times lengthen due to this effect.

Payment of principal and interest on some mortgage pass-through
securities (but not the market value of the securities themselves) may be
guaranteed by the full faith and credit of the U.S. Government (in the case of
securities guaranteed by the Government National Mortgage Association ("GNMA");
or guaranteed by agencies or instrumentalities of the U.S. Government (in the
case of securities guaranteed by the Federal National Mortgage Association
("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC"), which are
supported only by the discretionary authority of the U.S. Government to
purchase the agency's obligations). Mortgage pass-through securities created
by non-governmental issuers (such as commercial banks, savings and loan
institutions, private mortgage insurance companies, mortgage bankers and other
secondary market issuers) may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard

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insurance, and letters of credit, which may be issued by governmental entities,
private insurers or the mortgage poolers.

The Balanced Fund may also invest in investment grade Collateralized
Mortgage Obligations ("CMOs") which are hybrid instruments with characteristics
of both mortgage-backed bonds and mortgage pass-through securities. Similar to
a bond, interest and prepaid principal on a CMO are paid, in most cases,
semi-annually. CMOs may be collateralized by whole mortgage loans but are more
typically collateralized by portfolios of mortgage pass-through securities
guaranteed by GNMA, FHLMC or FNMA. CMOs are structured into multiple classes,
with each class bearing a different stated maturity. Monthly payments of
principal, including prepayments, are first returned to investors holding the
shortest maturity class; investors holding the longer maturity classes receive
principal only after the first class has been retired.

Assumptions generally accepted by the industry concerning the
probability of early payment may be used in the calculation of maturities for
debt securities that contain put or call provisions, sometimes resulting in a
calculated maturity different than the stated maturity of the security.

The Advisor expects that governmental, government-related or private
entities may create mortgage loan pools and other mortgage-related securities
offering mortgage pass-through and mortgage-collateralized investments in
addition to those described above. As new types of mortgage-related securities
are developed and offered to investors, the Advisor will, consistent with the
Fund's investment objective, policies and quality standards, consider making
investments in such new types of mortgage-related securities.

Other Asset-Backed Securities (The Balanced Fund). Other asset-backed
securities (unrelated to mortgage loans) have been offered to investors. These
asset-backed securities may consist of undivided fractional interests in pools
of consumer loans or receivables held in a trust. Examples include
certificates for automobile receivables (CARS) and credit card receivables
(CARDS). Payments of principal and interest on these asset-backed securities
are "passed through" on a monthly or other periodic basis to certificate
holders and are typically supported by some form of credit enhancement, such as
a letter of credit, surety bond, limited guaranty, or subordination. The
extent of credit enhancement varies, but usually amounts to only a fraction of
the asset-backed security's par value until exhausted. Ultimately,
asset-backed securities are dependent upon payment of the consumer loans or
receivables by individuals, and the certificate holder frequently has no
recourse to the entity that originated the loans or receivables.

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Fund's ability to maintain a portfolio which includes high-yielding
asset-backed securities will be adversely affected to the extent reinvestments
are in lower yielding securities. The actual maturity and realized yield will
therefore vary based upon the prepayment experience of the underlying asset
pool and prevailing interest rates at the time of prepayment. Asset-backed
securities are relatively new instruments and may be subject to greater risk of
default during periods of economic downturn than other instruments. Also, the
secondary market for certain asset-backed securities may not be as liquid as
the market for other types of securities, which could result in the Fund's
experiencing difficulty in valuing or liquidating such securities. For
asset-backed securities, the industry standard uses a principal prepayment
model, the "ABS Model," which is similar to the PSA described previously under
"Mortgage-Related Securities." Either the PSA model, the ABS model or other
similar models that are standard in the industry will be used by the Fund in
calculating maturity for purposes of its investment in asset-backed securities.

Derivative Securities (All Funds). The Funds may invest in structured
notes, bonds or other instruments with interest rates that are determined by
reference to changes in the value of other interest rates, indices or financial
indicators ("References") or the relative change in two or more References.
The Funds may also hold derivative instruments that have interest rates that
re-set inversely to changing current market rates and/or have embedded interest
rate floors and caps that require the issuer to pay an adjusted interest rate
if market rates fall below or rise above a specified rate. These instruments
represent relatively recent innovations in the bond markets, and the trading
market for these instruments is less developed than the markets for traditional
types of debt instruments. It is uncertain how these instruments will perform
under different economic and interest-rate scenarios. Because certain of these
instruments are leveraged, their market values may be more volatile than other
types of bonds and may present greater potential for capital gain or loss. On
the other hand, the imbedded option features of other derivative instruments
could limit the amount of appreciation a Fund can realize on its investment,
could cause a Fund to hold a security it might otherwise sell or could force
the sale of a security at inopportune times or for prices that do not reflect
current market value. The possibility of default by the issuer or the issuer's
credit provider may be greater for these structured and derivative instruments
than for other types of instruments. In some cases it may be difficult to
determine the fair value of a structured or derivative instrument because of a
lack of reliable objective information and an established second market for
some instruments may not exist.

Stripped Obligations (All Funds). To the extent consistent with their
respective investment objectives, the Funds may purchase Treasury receipts and
other "stripped" securities that evidence ownership in either the future
interest payments or the future principal payments on U.S. Government and other
obligations. These participations, which may be issued by the U.S. Government
(or a U.S. Government agency or instrumentality) or by private issuers such as
banks and other institutions, are issued at a discount to their "face value,"
and, with respect to the Balanced Fund, may include stripped mortgage-backed
securities ("SMBS"). Stripped securities, particularly, SMBS, may exhibit
greater price

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volatility than ordinary debt securities because of the manner in which their
principal and interest are returned to investors.

SMBS are usually structured with two or more classes that receive
different proportions of the interest and principal distributors from a pool of
mortgage-backed obligations. A common type of SMBS will have one class
receiving all of the interest, while the other class receives all of the
principal. However, in some cases, one class will receive some of the interest
and most of the principal while the other class will receive most of the
interest and the remainder of the principal. If the underlying obligations
experience greater than anticipated prepayments of principal, the Fund may fail
to fully recoup its initial investment. The market value of the class
consisting entirely of principal payments can be extremely volatile in response
to changes in interest rates. The yields on a class of SMBS that receives all
or most of the interest are generally higher than prevailing market yields on
other mortgage-backed obligations because their cash flow patterns are also
volatile and there is a greater risk that the initial investment will not be
fully recouped.

SMBS issued by the U.S. Government (or a U.S. Government agency or
instrumentality) may be considered liquid under guidelines established by the
Board of Trustees if they can be disposed of promptly in the ordinary course of
business at a value reasonably close to that used in the calculation of a
Fund's per share net asset value.

Custodial Receipts for Treasury Securities (All Funds). To the extent
consistent with their respective investment objectives, the Funds may purchase
participations in trusts that hold U.S. Treasury securities (such as TIGRs and
CATS) or other obligations where the trust participations evidence ownership in
either the future interest payments or the future principal payments on the
obligations. These participations are normally issued at a discount to their
"face value," and can exhibit greater price volatility than ordinary debt
securities because of the way in which their principal and interest are
returned to investors. Investments by a Fund in such participations will not
exceed 5% of the value of that Fund's total assets.

Foreign Securities (All Funds). The Growth Fund may invest up to 25%
of the value of its total assets in securities issued by foreign issuers either
directly or through investments in American Depositary Receipts ("ADRs"). The
Equity Value and Balanced Fund may also invest directly in foreign equity
securities and in securities represented by European Depositary Receipts
("EDRs") or ADRs. The International Equity Fund invests, under normal market
conditions, at least 65% of the value of its total assets in the equity
securities of issuers in at least three countries other than the United States.
The equity securities in which the International Equity Fund invests generally
include common stock, preferred stock and securities convertible into or
exchangeable for common or preferred stock. The International Equity Fund may
also invest in various types of depositary receipts.

ADRs, EDRs, and Global Depositary Receipts ("GDRs") (collectively,
"Depositary Receipts") evidence ownership of underlying securities issued by
either a foreign or a U.S.

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corporation that have been deposited with a depositary or custodian bank.
Depositary Receipts may be issued in connection with an offering of securities
by the issuer of the underlying securities or issued by a depository bank as a
vehicle to promote investment and trading in the underlying securities. ADRs
are receipts issued by U.S. banks or trust companies in respect of securities
of foreign issuers held on deposit for use in the U.S. securities markets.
GDRs and EDRs are typically issued by a U.S. bank or trust company and traded
principally in the U.S. and other international markets. While Depositary
Receipts may not necessarily be denominated in the same currency as the
securities into which they may be convened, certain of the risks associated
with foreign securities may also apply to Depositary Receipts.

There are certain risks associated with investments in unsponsored ADR
programs. Because the non-U.S. company does not actively participate in the
creation of the ADR program, the underlying agreement for service and payment
will be between the depositary and the shareholder. The company issuing the
stock underlying the ADRs pays nothing to establish the unsponsored facility,
as fees for ADR issuance and cancellation are paid by brokers. Investors
directly bear the expenses associated with certificate transfer, custody and
dividend payment.

In addition, in an unsponsored ADR program, there may be several
depositories with no defined legal obligations to the non-U.S. company. The
duplicate depositories may lead to marketplace confusion because there would be
no central source of information to buyers, sellers and intermediaries. The
efficiency of centralization gained in a sponsored program can greatly reduce
the delays in delivery of dividends and annual reports. The International
Equity Fund will limit its investment in ADRs not sponsored by the issuer of
the underlying securities to no more than 5% of the value of its net assets (at
the time of investment).

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and the imposition of transfer taxes or transaction changes. In the event of a
default in any such foreign obligations, it may be more difficult for a Fund to
obtain or enforce a judgment against the issuers of such securities. With
respect to certain foreign countries, there is a possibility of expropriation
or confiscatory taxation, limitations on the removal of funds or other assets,
or diplomatic developments that could affect investment within those countries.
Delays or problems with settlement in foreign markets could affect the
liquidity of a Fund's foreign investments and adversely affect performance.
Investing in securities of issuers in developing countries involves exposure to
economic structures that are generally less diverse and mature, and to
political systems that can be expected to have less stability, than those of
developed countries. The markets of developing countries have historically
been more volatile than the markets of the more mature economics of developed
countries. Investments in Depositary Receipts are subject to some, but not
all, of the foregoing risks. Because of these and other factors, securities of
foreign companies acquired by a Fund may be subject to greater fluctuation in
price than securities of domestic companies.

Forward Currency Transactions (All Funds). The Funds may enter into
forward foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates. See the SAI for
further information concerning foreign currency transactions.

Options (All Funds). Each Fund may purchase put and call options
listed on a national securities exchange and issued by the Options Clearing
Corporation in an amount not exceeding 5% of its net assets. Purchasing
options is a specialized investment technique that entails a substantial risk
of a complete loss of the amounts paid as premiums to the writer of the option.

The Funds may also write covered call and secured put options from
time to time as the Advisor deems appropriate. By writing a covered call
option, a Fund forgoes the opportunity to profit from an increase in the market
price of the underlying security above the exercise price except insofar as the
premium represents such a profit, and it is not able to sell the underlying
security until the option expires or is exercised or the Fund effects a closing
purchase transaction by purchasing an option of the same series. If a Fund
writes a secured put option, it assumes the risk of loss should the market
value of the underlying security decline below the exercise price of the
option. The aggregate value of the securities subject to options written by a
Fund will not exceed 25% of the value of its net assets. The use of covered
call options and secured put options will not be a primary investment technique
of the Funds, and they are expected to be used infrequently. If the Advisor is
incorrect in its forecast of market value or other factors when writing the
foregoing options, a Fund would be in a worse position than it would have been
had the foregoing investment techniques not been used.

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broker/dealer that effected the original option transaction. A Fund bears the
risk that the broker/dealer will fail to meet its obligations. There is no
assurance that a liquid secondary trading market exists for closing out an
unlisted option position. Furthermore, unlisted options are not subject to the
protections, afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to perform
in connection with the purchase or sale of options.

The Equity Value Fund, Balanced Fund and Equity Index Fund may also
purchase put and call options on stock indices. An option on a stock index
gives the holder of the option the right to receive, upon exercise of the
option, a fixed amount of cash if the closing value of the index upon which the
option is based is greater than, in the case of a call option, or less than in
the case of a put, the exercise price of the option. Gains or losses on
transactions in Stock index options depend on price movements in the securities
markets generally rather than the price movements of individual securities.

For additional information relating to option trading practices,
including the particular risks thereof, see the SAI.

Stock Index Futures Contracts and Options on Stock Index Futures
Contracts (The Equity Value Fund, Balanced Fund and Equity Index Fund). The
Funds may enter into stock index futures contracts in order to protect the
value of common stock investments or to maintain liquidity, provided that not
more than 5% of a Fund's net assets are committed to such transactions. See
the SAI for further information about stock index futures contracts.

The Funds may also purchase put options on stock index futures as
another method of protecting their assets against market declines. See the SAI
for further information about these options contracts.

There can be no assurance that a liquid market will exist at a time
when a Fund seeks to close out a futures contract or a futures option position.
Most futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single day; once the daily limit
has been reached on a particular contract, no trades may be made that day at a
price beyond that limit. In addition, certain of these instruments are
relatively new and without a significant trading history. As a result, there
is no assurance that an active secondary market will develop or continue to
exist. Lack of a liquid market for any reason may prevent a Fund from
liquidating an unfavorable position and that Fund would remain obligated to
meet margin requirements until the position is closed.

The use of the techniques listed above which involve the segregation
of assets to cover future obligations may impair the liquidity of a Fund's
assets and its ability to operate as an open-end investment company. Furman
Selz and the Advisor will monitor each Fund's use of such techniques and report
to the Trustees concerning their impact, if any, on liquidity and a Fund's
ability to meet redemptions.

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Swap Agreements (The Equity Index Fund). Swap agreements are
contracts between parties in which one party agrees to make payments to the
other party based on a change in market value of a specified index or asset.
In return, the other party agrees to make payments to the first party based on
the return of a different specified index or asset. Swap agreements may be
considered derivatives and entail the risk that a party to the agreement will
default resulting in a loss to the counterparty.

Illiquid Securities (All Funds). Each Fund will not knowingly invest
more than 10% (15% in the case of the Growth Fund and the International Equity
Fund) of the value of its net assets in securities that are illiquid because of
restrictions on transferability or other reasons. Repurchase agreements with
deemed maturities in excess of seven days, time deposits maturing in more than
seven days and securities that are not registered under the Securities Act of
1933 but may be purchased by institutional buyers under Rule 144A are subject
to this limit (unless such securities are variable amount master demand notes
with maturities of nine months or less or unless the Advisor determines under
the supervision of the Board that a liquid trading market exists).

Rule 144A allows for a broader institutional trading market for
securities otherwise subject to restriction on resale to the general public.
Rule 144A establishes a "safe harbor" from the registration requirements of the
Securities Act of 1933 for resales of certain securities to qualified
institutional buyers. The Advisor believes that the market for certain
restricted securities such as institutional commercial paper may expand further
as a result of this regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
foreign issuers, such as the PORTAL System sponsored by the NASD.

The Advisor monitors the liquidity of restricted securities in each of
the Funds under the supervision of the Board of Trustees. In reaching
liquidity decisions, the Advisor will consider such factors as: (a) the
frequency of trades and quotes for the security; (b) the number of dealers
wishing to purchase or sell the security and number of other potential
purchasers; (c) dealer undertakings to make a market in the security; and (d)
the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer). The use of Rule 144A transactions could have the
effect of increasing the level of illiquidity of the Funds during periods that
qualified institutional buyers become uninterested in purchasing restricted
securities.

INVESTMENT RESTRICTIONS

Each Fund has adopted certain fundamental investment restrictions that
may be changed only with the approval of a majority of a Fund's outstanding
shares. The following description summarizes several of the Funds' fundamental
restrictions, which are set forth in full in the SAI.

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<PAGE> 154
No Fund may:

1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of a Fund's total assets may be invested without regard to
this 5% limitation.

2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.

3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.

4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.

If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Funds will not at any time have more than
15% of their respective net assets invested in illiquid securities.

OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Funds are fully paid,
non-assessable and freely transferable.

The Board of Trustees has authorized the issuance of two classes of
shares in each of the Funds described in this Prospectus -- Investor Shares and
Institutional Shares. Each share of a Fund represents an equal proportionate
interest in a particular Fund with other shares of the same class and is
entitled to cash dividends and distributions earned on such shares as are
declared in the discretion of the Board of Trustees.

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by shareholders with whom a Service Organization has a servicing relationship.
Institutional Shares of the Funds are purchased at net asset value per share
without a sales charge. Because of the "class expenses" and sales charges, the
performance of a Fund's Institutional Shares is expected to be higher than the
performance of its Investor Shares. The Trust offers various services and
privileges in connection with its Investor Shares that are not offered in
connection with its Institutional Shares, including an automatic investment
plan, automatic withdrawal plan and, with respect to certain portfolios,
checkwriting. For information regarding the Funds' Institutional Shares,
contact Furman Selz at 1-800-662-8417 or your Service Organization.

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust. The Declaration of
Trust also provides for indemnification out of the property of a Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder of the Fund. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which a Fund
itself would be unable to meet its obligations and should be considered remote.

VOTING

Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Funds' shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of a Fund's shares. Voting rights are not cumulative.

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Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of a Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of a Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of a Fund. For purposes of the 1940 Act, any person who
owns either directly or through one or more controlled companies more than 25
percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.

PERFORMANCE INFORMATION

A Fund may, from time to time, include yield and total return data for
its Investor Shares and Institutional Shares in advertisements or reports to
shareholders or prospective investors. The methods used to calculate the
yields and total returns of the Funds are mandated by the SEC.

Quotations of "yield" for a class of shares of a Fund will be based on
the investment income per share during a particular 30-day (or one month)
period (including dividends and interest), less expenses accrued during the
period ("net investment income"), and will be computed by dividing net
investment income by the maximum public offering price per share on the last
day of the period.

Quotations of yield reflect only the performance of a class of shares
during the particular period on which the calculations are based. Yield will
vary based on changes in market conditions, the level of interest rates and the
level of the expenses of a particular class of shares, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.

Quotations of average annual total return for a class of shares of a
Fund will be expressed in terms of the average annual compounded rate of return
of a hypothetical investment in that class over periods of 1, 5 and 10 years
(up to the life of that class), reflect the deduction of a proportional share
of expenses allocated to that class (on an annual basis), and assume that all
dividends and distributions are reinvested when paid.

Performance information for a Fund may be compared to various
unmanaged indices, such as the Standard & Poor's 500 Stock Index, the Dow Jones
Industrial Average, indices prepared by Lipper Analytical Services, and other
entities or organizations which track the performance of investment companies.
Any performance information should be considered in light of a Fund's
investment objective and policies, characteristics and quality of the Fund and
the market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future. For a
description of the

- 50 -
<PAGE> 157
methods used to determine yield and total return for the Funds, see "Other
Information -- Performance Information" in the SAI.

ACCOUNT SERVICES

All transactions in shares of the Funds will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its nominee is shareholder of record of shares purchased for its customer, the
Funds have been advised that the statement may be transmitted to the customer
at the discretion of the Service Organization.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

- 51 -
<PAGE> 158
APPENDIX

DESCRIPTION OF MOODY'S BOND RATINGS:

Excerpts from Moody's description of its four highest bond ratings are
listed as follows: Aaa - judged to be the best quality and they carry the
smallest degree of investment risk, Aa - judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds; A - possess many favorable investment attributes and are
to be considered as "upper medium grade obligations"; Baa - considered to be
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. Other Moody's
bond descriptions include: Ba -judged to have speculative elements, their
future cannot be considered as well assured; B - generally lack characteristics
of the desirable investment; Caa - are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest; Ca - speculative in a high degree, often in default; C - lowest rated
class of bonds, regarded as having extremely poor prospects.

Moody's also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier I indicates that the security is in the higher end of
its rating category; the modifier 2 indicates a mid-range ranking; and modifier
3 indicates a ranking toward the lower end of the category.

DESCRIPTION OF S&P'S BOND RATINGS:

Excerpts from S&P's description of its four highest bond ratings are
listed as follows: AAA - highest grade obligations, in which capacity to pay
interest and repay principal is extremely strong; AA - also qualify as high
grade obligations, having a very strong capacity to pay interest and repay
principal, and differs from AAA issues only in a small degree; A - regarded as
upper medium grade, having a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher rated
categories; BBB -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. This group is the lowest which
qualifies for commercial bank investment. BB, B, CCC, CC - predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with terms of the obligations; BB indicates the highest grade and CC
the lowest within the speculative rating categories.

A-1
<PAGE> 159
S&P applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major rating
categories.

DESCRIPTION OF MOODY'S RATINGS OF NOTES AND VARIABLE RATE DEMAND INSTRUMENTS:

Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short-term credit and long-term risk. Short-term ratings
on issues with demand features (variable rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payments
relying on external liquidity.

MIG 1/VMIG 1: This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2: This denotes high quality. Margins of protection are
ample although not as large as in the preceding group.

DESCRIPTION OF MOODY'S TAX-EXEMPT COMMERCIAL PAPER RATINGS:

Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually promissory obligations which have an original
maturity not exceeding nine months. Moody's makes no representation that such
obligations are exempt from registration under the Securities Act of 1933, nor
does it represent that any specific note is a valid obligation of a rated
issuer or issued in conformity with any applicable law. The following
designations, all judged to be investment grade, indicate the relative
repayment ability of rated issuers of securities in which the Trust may invest.

PRIME-1: Issuers rated Prime-I (or supporting institutions) have a
superior ability for repayment of senior short-term promissory obligations.

PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term promissory obligations.

DESCRIPTION OF S&P'S RATINGS FOR MUNICIPAL BONDS:

INVESTMENT GRADE

AAA: Debt rated "AAA" has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.

A-2
<PAGE> 160
AA: Debt rated "AA" has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in a small
degree.

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

BBB: Debt rated "BBB" is regarded as having 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.

SPECULATIVE GRADE

BB, B, CCC, CC: Debt rated in these categories is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

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

D: Debt rated "D" is in default, and payment of interest and/or
repayment of principal is in arrears.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.

DESCRIPTION OF S&P'S RATINGS FOR INVESTMENT GRADE MUNICIPAL NOTES AND
SHORT-TERM DEMAND OBLIGATIONS:

SP-1: Issues carrying this designation have a very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics will be given a plus (+) designation.

SP-2: Issues carrying this designation have a satisfactory capacity
to pay principal and interest.

A-3
<PAGE> 161
DESCRIPTION OF S&P'S RATINGS FOR DEMAND OBLIGATIONS AND TAX-EXEMPT COMMERCIAL
PAPER:

An S&P commercial paper rating is a current assessment of the
likelihood of timely repayment of debt having an original maturity of no more
than 365 days. The two rating categories for securities in which the Trust may
invest are as follows:

A-1: This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics will be denoted with a plus (+)
designation.

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

A-4
<PAGE> 162
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 163

PACIFICA FUNDS TRUST
(INSTITUTIONAL SHARES)

237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417

FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")

FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")

PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")

Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Institutional Shares of the following five
portfolios (the "Funds"):

- Pacifica Equity Value Fund
- Pacifica Growth Fund
- Pacifica Balanced Fund

- Pacifica International Equity Fund

- Pacifica Equity Index Fund

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

THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996

<PAGE> 164
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

FEE TABLE - INSTITUTIONAL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 6

FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS . . . . . . . . . . . . . . . . . . . 12

RISKS OF INVESTING IN THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES . . . . . . . . . . . . . . . . . . . 23

EXCHANGE OF INSTITUTIONAL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 25

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . . . . . . . . . . . . . 26

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . 28

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>

- 2 -
<PAGE> 165
HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

This Prospectus describes five diversified investment portfolios
managed by First Interstate Capital Management, Inc. Each Fund has a distinct
investment objective and policies.

- 3 -
<PAGE> 166
The International Equity Fund. The investment objective of the Fund
is to maximize total return, consisting of capital appreciation (both realized
and unrealized) and income, by investing primarily in the equity securities of
non-U.S. issuers (as described below). The equity securities in which the Fund
invests generally include common stock, preferred stock and securities
convertible into or exchangeable for common or preferred stock. The Fund may
also invest in various types of depositary receipts, which are described below.
Under normal market conditions, at least 65% of the value of the total assets
of the Fund will be invested in the equity securities of issuers in at least
three countries other than the United States.

RISKS OF INVESTING IN THE FUNDS

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

(1) "Standard & Poor's 500" is a registered service mark of Standard &
Poor's Corporation, which does not sponsor and is in no way
affiliated with the Equity Index Fund.

- 4 -
<PAGE> 167
The market value of a Fund's investments in fixed income securities
will change in response to changes in interest rates and the relative
financial strength of each issuer. During periods of falling interest rates,
the values of fixed income securities generally rise. Conversely, during
periods of rising interest rates the values of such securities generally
decline. Debt securities with longer maturities, which tend to produce higher
yields, are subject to potentially greater capital appreciation and depreciation
than obligations with shorter maturities. Changes in the financial strength of
an issuer or changes in the ratings of any particular security may also affect
the value of these investments. Fluctuations in the market value of fixed
income securities subsequent to their acquisitions will not affect cash income
from such securities, but will be reflected in a Fund's net asset value.

There is no assurance that any Fund will achieve its investment
objective.

MANAGEMENT OF THE FUNDS

First Interstate Capital Management, Inc. acts as investment advisor
to the Funds. For its services, the Advisor is entitled to receive a fee from
each Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Institutional Shares" and "Management of the Funds" in this
Prospectus.

Fees and expenses charged to the Funds are outlined on page 6 of this
Prospectus.

GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS

Purchase orders for the Funds received in proper order by 4:15 p.m.,
Eastern time, will become effective that day.

Institutional Shares of the Funds are purchased at net asset value
without a sales charge.

Shareholders may purchase, redeem or exchange Institutional Shares by
telephone.

All dividends and distributions will be automatically reinvested at
net asset value in additional Institutional Shares of the applicable Fund
unless cash payment is requested.

- Distributions for the Funds are paid quarterly.

- 5 -
<PAGE> 168
For additional information on how to purchase and redeem Institutional
Shares of the Funds, see "Purchase and Redemption of Institutional Shares" and
"Exchange of Institutional Shares."

FUND EXPENSES

The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Institutional shareholder of a Fund
based upon the Fund's operating expenses for its most recent fiscal year,
adjusted to reflect current fees and expenses.

FEE TABLE - INSTITUTIONAL SHARES

<TABLE>
<CAPTION>
Equity International Equity
Value Growth Balanced Equity Index
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price) . . . . . . . . None None None None None
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price) . None None None None None
Deferred Sales Load (as a
percentage of redemption None None None None None
proceeds) . . . . . . . . . . . None None None None None
Redemption Fees . . . . . . . . None None None None None
Exchange Fee . . . . . . . . .
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net
assets) 0.60% 0.00% 0.60% ____ ____
Management Fees (after waivers)* 0.46 0.90 0.42
---- ---- ---- ---- ----
Other Expenses (after waivers)**
TOTAL FUND OPERATING EXPENSES: 1.06% 0.90% 1.02% 1.70% .30%
===== ===== ===== ===== ====
(after waivers)*** . . . . . .
</TABLE>

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

* Management Fees (before waivers) would be 0.60%, 0.75%, 0.60%, 1.00%
and .25% respectively.

** Other Expenses (before waivers) would be 0.48%, 0.90%, 0.42%, ____ and
____ respectively.

*** Total Fund Operating Expenses (before waivers) would be 1.08%, 1.65%,
0.96%, ____ and ____ respectively.

- 6 -
<PAGE> 169
The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Funds' Institutional
Shares will bear. The table does not reflect any charges that may be imposed
by a First Interstate Bank or other institutions directly on their customer
accounts in connection with investments in the Funds.

EXAMPLE:*

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

<TABLE>
<CAPTION>
Equity International Equity
Value Growth Balanced Equity Index
Fund Fund Fund Fund Fund
<S> <C> <C> <C>
1 year . . . . . . . . . . . . . . . . . $ 11 $ 9 $ 10
3 years . . . . . . . . . . . . . . . . . 34 29 32
5 years . . . . . . . . . . . . . . . . . 58 50 55
10 years . . . . . . . . . . . . . . . . 129 111 122
</TABLE>

- -----------------------
* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.

FINANCIAL HIGHLIGHTS

The financial information shown below is to assist investors in
evaluating the performance of the Funds since their commencement of operations.
The following supplementary information for the periods through September 30,
1994 for the Equity Value Fund and Balanced Fund has been audited by such
Funds' former independent accountants, and the information for the period ended
September 30, 1995 has been audited by such Funds' present independent
accountants, Ernst & Young LLP, whose report on the financial statements
appears in the 1995 Annual Report to Shareholders for these Funds. The
following supplementary information for the periods through May 31, 1995 for
the Growth Fund has been audited by such Fund's former independent accountants.
The following supplementary information for the period ended September 30, 1995
for the Growth Fund has been audited by the Fund's present independent
accountants, Ernst & Young LLP, whose report on the financial statements
appears in the 1995 Annual Report to Shareholders for the Fund. These reports
and financial statements are incorporated by reference into the

- 7 -
<PAGE> 170

SAI. The following financial data should be read in conjunction with the
related financial statements and notes thereto. Further information about the
Funds is contained in their Annual Reports to Shareholders, which may be
obtained without charge by calling 1-800-662-8417. For the periods shown, the
Equity Value Fund and Balanced Fund offered only one class of shares to both
institutional and retail investors. The financial data shown below for these
Funds pertains to the Investor Shares of such Funds, which are not offered
through this Prospectus. No financial data is shown for the Institutional
Shares of such Funds because that class of shares did not commence operations
prior to October 1, 1995. See "Other Information --Capitalization." No
financial data is shown for the International Equity and Equity Index Funds
because those Funds did not commence operations prior to the date of this
Prospectus.

- 8 -
<PAGE> 171

Selected data for a share outstanding for the periods shown:

THE EQUITY VALUE FUND
(INVESTOR SHARES)

<TABLE>
<CAPTION>
Period
Year Ended September 30, Ended
----------------------------------------------- September 30,
1995 1994 1993 1992 1991 1990(a)
---- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . $ $ 13.17 $ 10.73 $ 10.45 $8.48 $10.00

INCOME FROM INVESTMENT OPERATIONS:
Net investment income* . . . . . . . . . . . . . . . . . . 0.20 0.21 0.20 0.28 0.08
Net gain (loss) on securities
(both realized and unrealized)* . . . . . . . . . . . . . 0.74 2.75 0.49 1.98 (1.60)
-------- -------- ------- ------- ------
Total from Investment Operations . . . . . . . . . . . . 0.94 2.96 0.69 2.26 (1.52)
-------- -------- ------- ------- ------

LESS DISTRIBUTIONS:
Dividends from net investment income . . . . . . . . . . . (0.21) (0.23) (0.22) (0.29) --
Distributions from capital gains . . . . . . . . . . . . . (1.54) (0.29) (0.19) -- --
--------- --------- -------- ------ -----

Total Distributions . . . . . . . . . . . . . . . . . . . . (1.75) (0.52) (0.41) (0.29) --
--------- --------- -------- ------ -----

Net Asset Value, End of Period . . . . . . . . . . . . . . $ 12.36 $ 13.17 $ 10.73 $10.45 $8.48
======== ======== ======= ====== =====

Total Return (excluding sales load) . . . . . . . . . . . 7.49% 28.22% 6.81% 27.05% (15.20)%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) . . . . . . . . . $168,852 $140,551 $92,915 $68,412 $26,100
Ratio of Expenses to Average Net Assets . . . . . . . . . . 0.99% 0.98% 1.02% 0.98% 0.91%+
Effect of Waivers on above Ration . . . . . . . . . . . . . 0.02% 0.01% -- 0.13% 0.95%+
Ratio of Net Income to Average Net Assets . . . . . . . . . 1.60% 1.73% 1.86% 2.69% 3.38%+
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . 41% 82% 78% 36% 21%+
</TABLE>

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

(a) Commencement of operations, April 26, 1988.

* Per share data based upon average monthly shares outstanding.

+ Annualized.

- 9 -
<PAGE> 172

For a share outstanding throughout the periods indicated:

GROWTH FUND
(INSTITUTIONAL SHARES)*

<TABLE>
<CAPTION>
Year Period
Period Ended Ended Ended
September 30, May 31, May 31,
1995** 1995 1994
------- -------
<S> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . $ 15.42 $15.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25 0.17
Net realized and unrealized gain on investments . . . . . . . . . . . . . 1.91 0.38
------- -------

Total income from investment operations . . . . . . . . . . . . . . . . 2.16 0.55
------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income . . . . . . . . . . . . . . . . . . (0.24) (0.13)
Distributions from net realized gain on investments . . . . . . . . . . . (0.06) 0.00
------- -------

Total dividends and distributions to shareholders . . . . . . . . . . . . (0.30) (0.13)
------- -------

Net asset value -- End of Period . . . . . . . . . . . . . . . . . . . . $ 17.28 $15.42
======= =======

Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.27% 4.43%(1)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) . . . . . . . . . . . . . . . . . . . . . $12,630 $3,738
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . . 0.90% 0.67%(1)
Ratio of net investment income to average net assets . . . . . . . . . . 1.82% 1.20%(1)
Ratio of expenses to average net assets without fee waivers . . . . . . . 2.15% 5.36%(1)
Ratio of net investment income (loss) to average net
assets without fee waivers . . . . . . . . . . . . . . . . . . . . . . 0.57% (3.49%)(1)
Portfolio turnover rate(2) . . . . . . . . . . . . . . . . . . . . . . . 59.71% 50.90%(1)
</TABLE>

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

** The Fund changed its fiscal year from May 31 to September 30.

(1) Annualized.

(2) A portfolio turnover rate is, in general, the percentage computed by
taking the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1995 were $11,091,094 and $4,357,936, respectively.

- 10 -

<PAGE> 173

Selected data for a share outstanding throughout the periods shown:

THE BALANCED FUND
(INVESTOR SHARES)

<TABLE>
<CAPTION>
Period
Year Ended September 30, Ended
----------------------------------------------------- September 30,
1995 1994 1993 1992 1991 1990(a)
---- ---- ---- ---- ---- -----------

<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . $ $ 12.71 $ 11.18 $ 10.80 $9.50 $10.00

INCOME FROM INVESTMENT OPERATIONS:
Net investment income* . . . . . . . . . . . . . . . 0.43 0.44 0.42 0.52 0.14
Net gain (loss) on securities (both realized
and unrealized)* . . . . . . . . . . . . . . . . . (0.13) 1.72 0.53 1.40 (0.64)
--------- -------- ------- ------- --------
Total from Investment Operations . . . . . . . . . 0.30 2.16 0.95 1.92 (0.50)
--------- -------- ------- ------- --------

LESS DISTRIBUTIONS:
Dividends from net investment income . . . . . . . . (0.46) (0.43) (0.43) (0.62) --
Distributions from capital gains . . . . . . . . . . (0.88) (0.20) (0.14) -- --
--------- -------- ------- ------- --------

Total Distributions . . . . . . . . . . . . . . . . . (1.34) (0.63) (0.57) (0.62) --
-------- -------- ------- ------- --------

Net Asset Value, End of Period . . . . . . . . . . . $ 11.67 $ 12.71 $ 11.18 $10.80 $9.50
======== ======== ======= ======= ========

Total Return (not reflecting sales load) . . . . . 2.30% 19.83% 9.03% 20.78% (5.00)%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in thousands) . . . . . . $108,290 $104,434 $65,226 $50,038 $33,185
Ratio of Expenses to Average Net Assets . . . . . . . 1.09% 1.01% 1.02% 0.96% 0.93%+
Effect of Waivers on above Ration . . . . . . . . . . 0.02% 0.05% 0.08% 0.22% 0.67%+
Ratio of Net Income to Average Net Assets . . . . . . 3.55% 3.62% 3.76% 5.88% 5.87%+
Portfolio Turnover Rate . . . . . . . . . . . . . . . 35% 60% 49% 30% 12%+
</TABLE>

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

(a) Commencement of operations, July 2, 1990.

* Per share data based upon average monthly shares outstanding.

+ Annualized.

- 11 -

<PAGE> 174
THE FUNDS

The Funds are portfolios of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Funds and elects the officers of the
Funds.

INVESTMENT POLICIES AND PRACTICES OF THE FUNDS

* The Equity Value Fund's investment objective is to provide
investors with long-term capital appreciation.

* The Growth Fund's investment objective is to seek superior,
risk-adjusted total return through capital appreciation.

* The Equity Index Fund's investment objective is to replicate
the investment performance of the S&P 500 Index.

Each Fund follows its own investment policies and practices, including
certain investment restrictions. The SAI contains the specific investment
restrictions which govern the Funds' investments. Those restrictions and the
investment objectives of the Equity Value Fund, the Balanced Fund and the
International Equity Fund are fundamental policies, which means that they may
not be changed without a majority vote of shareholders of the affected Fund.
Except for the objectives and those restrictions specifically identified as
fundamental, all other investment policies and practices described in this
Prospectus and in the SAI are not fundamental, which means that the Board of
Trustees may change them without shareholder approval. Any change in the
investment objective of the Growth Fund or the Equity Index Fund by the Board
of Trustees may result in the Fund having an investment objective different
from the objective which a shareholder considered appropriate at the time of
investment in the Fund.

The Advisor selects investments and makes investment decisions based
on the investment objective and policies of each Fund.

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The Equity Value Fund and The Balanced Fund. In selecting equity
investments (which include common stocks of both domestic and foreign
companies) for the Equity Value Fund and Balanced Fund, the Advisor selects
companies for investment using both quantitative and qualitative analysis to
identify those issuers that, in the Advisor's opinion, exhibit below-average
valuation multiples, above-average financial strength, a strong position in
their industry and a history of steady profit growth.

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The Advisor attempts to invest in the common stocks of companies with
strong financial characteristics and growth tendencies. The Advisor seeks to
acquire stock in companies that will, in its opinion, experience growth in
sales, earnings and dividends greater than such growth experienced by the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"). The Advisor
also monitors the profitability, market capitalization, price to earnings ratio
and capital structures as part of its selection process. The Fund may invest
in non-dividend paying companies which, in the opinion of the Advisor, offer
better total return prospects. In addition, the Fund may invest up to 25% of
its assets in securities issued by foreign issuers and in American Depositary
Receipts which may or may not exhibit the particular growth tendencies and
capitalization characteristics described above.

In pursuit of its objective, the Fund may purchase securities of
companies, wherever organized, which, in the judgment of the Fund's investment
adviser, have their principal business activities and interests outside the
United States ("non-U.S. issuers"). The investment adviser generally
considers such companies to include those companies (i) that derive 50% or more
of their revenues outside the United States, (ii) 50% or more of the assets of
which are located outside the United States, or (iii) the equity securities of
which are traded principally on a non-U.S. securities exchange. Investment in
foreign securities and depositary receipts involves certain risks as described
under "Risks of Investing in the Funds" below.

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The Fund intends to remain fully invested in the common stocks
comprising the Index, to the extent practicable, in order to carry out its
stated investment objective. The

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Fund may utilize certain additional investment techniques in carrying out its
investment objective. These additional techniques involve the use of certain
types of stock options, futures contracts including stock index futures
contracts, options on futures contracts, warrants and equity swaps. These
investment techniques will not be used for speculative purposes and will only
be used in furtherance of achieving the Fund's investment objective. These
ivestment techniques are described more fully in this Prospectus under
"Description of Securities and Investment Practices."

RISKS OF INVESTING IN THE FUNDS

The market value of a Fund's investment in fixed income securities
will change in response to changes in interest rates and the relative financial
strength of each issuer.

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During periods of falling interest rates, the values of fixed income securities
generally rise. Conversely, during periods of rising interest rates the values
of such securities generally decline. Debt securities with longer maturities,
which tend to produce higher yields, are subject to potentially greater capital
appreciation and depreciation than obligations with shorter maturities.
Changes in the financial strength of an issuer or changes in the ratings of any
particular security may also affect the value of these investments.
Fluctuations in the market value of fixed income securities subsequent to their
acquisitions will not affect cash income from such securities, but will be
reflected in a Fund's net asset value. The Balanced Fund may also purchase
zero-coupon bonds (i.e., discount debt obligations that do not make periodic
interest payments) which are subject to greater market fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest.

Changes in foreign exchange rates also will affect the value of
securities denominated or quoted in currencies other than the U.S. dollar. A
Fund's objective may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange control regulations and by indigenous economic
and political developments.

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markets of the more mature economies of developed countries. Through the
Funds' flexible policies, management endeavors to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places a Fund's investments. See the SAI
for further information about foreign securities.

MANAGEMENT OF THE FUNDS

The business and affairs of each Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N.
Hankin, John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer.
Information about the Trustees, as well as the Funds' executive officers, may
be found in the SAI under the heading "Management Trustees and Officers."

THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Funds and
continuously reviews, supervises and administers the Funds' investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Funds' investments directly with brokers and dealers selected by it in its
discretion.

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Mr. Leon Newcomb has been responsible for the day-to-day management of
the Equity Value Fund since May 1995. Mr. Newcomb joined First Interstate in
1994. From 1989 through 1993 Mr. Newcomb was employed by Knights of Columbus,
a Connecticut life insurance company, as an equity portfolio manager. Since
May 1995, Mr. Newcomb has also been responsible for the day-to-day management
of the equity portion of the Balanced Fund.

For the advisory services it provides to the Funds, FICM is entitled
to receive from each Fund fees, payable monthly, at the annual rates, based on
average daily net assets, as set forth below:

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THE SPONSOR AND DISTRIBUTOR

Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Funds. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.

PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Institutional Shares of the Funds and/or other funds distributed by
Furman Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc. has established such a special
promotional incentive program with First Interstate Securities, Inc.

ADMINISTRATIVE SERVICES

The Funds have also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Funds' operations including: (i)
general supervision of the operation of the Funds including coordination of the
services performed by the Funds' investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Funds' Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Funds. For these services, Furman Selz is entitled to receive a fee, payable
monthly, at the annual rate of 0.15% of the average daily net assets of the
Funds. Pursuant to a Services Agreement with the Trust, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15.00 per account per year plus out-of-pocket expenses.
Pursuant to a Fund Accounting Agreement with the Trust, Furman Selz assists the
Trust in calculating net asset values and provides certain other accounting
services for each Fund for an annual fee of $30,000 per Fund plus out-of-pocket
expenses.

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SERVICE ORGANIZATIONS

Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Funds' Institutional
Shares, such as maintaining shareholder accounts and records. The Funds may
pay fees to Service Organizations (which vary depending upon the services
provided) in amounts up to an annual rate of 0.25% of the average daily net
asset value of the outstanding Institutional Shares of the Funds owned by
shareholders with whom a Service Organization has a servicing relationship.
These fees will be borne entirely by the Funds' Institutional Shares.

Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Funds or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Funds. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.

The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Funds and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.

OTHER EXPENSES

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"Management" in the SAI for additional information on expenses borne by the
Funds. Trust expenses directly attributable to a particular Fund are charged
to that Fund, and expenses attributable to a particular class of shares of a
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion.

In effecting purchases and sales of portfolio securities for the
account of the Funds, the Advisor will seek the best execution of the Funds'
orders. Purchases and sales of debt securities are generally placed by the
Advisor with primary market makers for these securities on a net basis, i.e.,
without any brokerage commission being paid by the Funds. Trading does,
however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Purchases and sales of common stocks are
generally placed by the Advisor with broker-dealers which, in the Advisor's
judgment, provide prompt and reliable execution at favorable security prices
and reasonable commission rates. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause a Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.

FUND SHARE VALUATION

The net asset value of each class of shares of the Funds is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of a Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class.

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<PAGE> 185
All expenses, including fees paid to the Advisor, Furman Selz and PFD Inc., are
accrued daily and taken into account for the purpose of determining the net
asset value.

With respect to option contracts entered into by a Fund, the premium
received is recorded as an asset and equivalent liability, and thereafter the
liability is adjusted to the market value of the option determined in
accordance with the preceding paragraph. The premium paid for an option
purchased by a Fund is recorded as an asset and subsequently adjusted to market
value.

PURCHASE AND REDEMPTION OF INSTITUTIONAL SHARES

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Shares of a Fund are sold at net asset value per share next determined
after a purchase order has become effective. Purchase orders by an Institution
for Institutional Shares in the Funds must be received by the Trust by 4:15
p.m. (Eastern time) on any Business Day. Payment for such shares may be made
by Institutions in Federal funds or other funds immediately available to the
Trust's custodian no later than 4:15 p.m. (Eastern time) on the next Business
Day following the receipt of the purchase order.

It is the responsibility of Institutions to transmit orders for
purchases by their Customers and to deliver required funds on a timely basis.
If funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the Institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
an Institution. In addition, an Institution may receive fees from the Funds
with respect to the investments of its Customers as described above under
"Management of the Funds." Payments for Institutional Shares of a Fund may, in
the discretion of the Advisor, be made in the form of securities that are
permissible investments for the Fund. For further information see "Additional
Purchase and Redemption Information" in the SAI.

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redeeming Institution the following Business Day after receipt of the request
by the Trust. The Trust reserves the right to delay the wiring of redemption
proceeds for up to seven days after it receives a redemption order if, in the
judgment of the Advisor, an earlier payment could adversely affect a Fund.

All redemptions of Institutional Shares of the Funds shall be made in
cash, except that the commitment to redeem Institutional Shares in cash extends
only to redemption requests made by each shareholder of a Fund during any
90-day period of up to the lesser of $250,000 or 1% of the net asset value of
that Fund at the beginning of such period. This commitment is irrevocable
without the prior approval of the SEC and is a fundamental policy of the Funds
that may not be changed without shareholder approval. In the case of
redemption requests by shareholders in excess of such amounts, the Board of
Trustees reserves the right to have the Funds make payment, in whole or in
part, in securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of a Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the securities of that Fund are valued. If the recipient were
to sell such securities, he or she would incur brokerage charges.

A redemption may be a taxable transaction on which gain or loss may be
recognized.

EXCHANGE OF INSTITUTIONAL SHARES

The Funds offer a convenient way to exchange Institutional Shares in
one Fund for Institutional Shares in another investment portfolio of the Trust
(except the Prime Money Market Fund and Treasury Money Market Fund). Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department, 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Institutional Shares of one portfolio for Institutional Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The Trust may terminate or amend the terms of the
exchange privilege at any time.

To exchange Institutional Shares, or if you have any questions, simply
call the Trust at 1-800-622-8417. You should be prepared to give the telephone
representative the

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following information: (i) your account number, social security number and
account registration; (ii) the name of the portfolio from and the portfolio
into which you wish to transfer your investment; and (iii) the dollar or share
amount you wish to exchange. The conversation may be recorded to protect you
and the Funds. Telephone exchanges are available only if the shareholder so
indicates by checking the "yes" box on the Purchase Application.

In addition, Institutional Shares of a Fund may be exchanged for
Investor Shares of the same Fund in connection with the distribution of assets
held in a qualified trust, agency or custodial account maintained with the
trust department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares of the same Fund if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made without
a sales charge at the net asset value of the respective share classes.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX

Distributions of investment company taxable income (regardless of
whether derived from dividends, interest, net short-term capital gains or other
income) will be taxable to

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shareholders as ordinary income. Distributions of net long-term capital gains
designated by a Fund as capital gain dividends will be taxable as long-term
capital gains, regardless of how long a shareholder has held his Fund shares.
Distributions are taxable in the same manner whether received in additional
shares or in cash.

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A portion of the dividends paid by the Funds may qualify for the
dividends-received deduction available to corporations, depending upon the
investments made by the Funds and other eligibility factors.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

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U.S. Government agency and instrumentality obligations are debt
securities issued by U.S. Government-sponsored enterprises and Federal
agencies. Some obligations of agencies are supported by the full faith and
credit of the United States or by U.S. Treasury guarantees, such as
mortgage-backed certificates, which may be guaranteed by the Government
National Mortgage Association; others, such as obligations of the Federal Home
Loan Banks, Federal Farm Credit Bank, Bank for Cooperatives, Federal
Intermediate Credit Banks and the Federal Land Bank, are guaranteed by the
right of the issuer to borrow from the U.S. Treasury; others, such as
obligations of the Federal National Mortgage Association, are supported by
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, such as obligations of the
Student Loan Marketing Association and the Tennessee Valley Authority, are
backed only by the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment.

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Bank Obligations (All Funds). Bank obligations include bankers'
acceptances, negotiable certificates of deposit and non-negotiable time
deposits issued by a U.S. bank, savings bank or savings association that is a
member of the Federal Reserve System or insured by the Federal Deposit
Insurance Corporation. The Funds may also invest in U.S. dollar-denominated
obligations of foreign banks. Obligations of foreign banks or foreign branches
of U.S. banks entail risks that are different from those of investments in
domestic obligations of U.S. banks. These additional risks include future
political and economic developments, the possible imposition of withholding
taxes on interest income, possible seizure or nationalization of foreign
deposits, the possible establishment of exchange controls, or the adoption of
other foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. In addition, foreign
branches of U.S. banks and U.S. branches of foreign banks may be subject to
less stringent reserve requirements and to different accounting, auditing,
reporting, and recordkeeping standards than those applicable to domestic
branches of U.S. banks. Investments in domestic and foreign bank obligations
are limited to the obligations of financial institutions having $1 billion or
more in total assets at the time of purchase.

Securities Issued by Other Investment Companies (All Funds). Each
Fund may invest in securities issued by other investment companies within the
limits prescribed by the 1940 Act. Each Fund currently intends to limit its
investments so that, as determined immediately after a securities purchase is
made: (a) not more than 5% of the value of its total assets will be invested
in the securities of any one investment company; (b) not more than 10% of the
value of its total assets will be invested in the aggregate in securities of
investment companies as a group; (c) not more than 3% of the outstanding voting
stock of any one investment company will be owned by the Fund; and (d) not more
than 10% of the outstanding voting stock of any one investment company will be
owned in the aggregate by a Fund and other investment companies advised by the
Advisor or any other affiliate of First Interstate Bancorp. As a shareholder
of another investment company, a Fund would bear, along with other
shareholders, its pro rata portion of the expenses of such other investment
company, including advisory fees. These expenses would be in addition to the
advisory and other expenses that each Fund bears directly in connection with
its own operations, and may represent a duplication of fees to shareholders of
that Fund.

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Variable and Floating Rate Instruments (The Equity Value Fund and
Balanced Fund). Instruments purchased by a Fund may include variable and
floating rate demand instruments issued by corporations, industrial development
authorities and governmental entities. These instruments may include variable
amount master demand notes that permit the indebtedness to vary in addition to
providing for periodic adjustments in the interest rate. Although variable and
floating rate demand instruments are frequently not rated by credit rating
agencies, unrated instruments purchased by a Fund will be determined to be of
comparable quality to rated instruments that may be purchased by the Fund.
While there may be no active secondary market with respect to a particular
variable or floating rate instrument purchased by a Fund, the Funds may, from
time to time as specified in the instrument, demand payment in full of the
principal of the instrument or may resell the instrument to a third party. The
absence of such an active secondary market, however, could make it difficult
for a Fund to dispose of a variable or floating rate demand instrument if the
issuer defaulted on its payment obligations or during periods that the Fund is
not entitled to exercise its demand rights, and the Fund could, for these or
other reasons, suffer a loss. Variable and floating rate instruments with no
active secondary market will be included in the calculation of a Fund's
illiquid assets.

Mortgage-Related Securities (The Balanced Fund). Mortgage
pass-through securities are securities representing interests in "pools" of
mortgages in which payments of both

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interest and principal on the securities are made monthly, in effect "passing
through" monthly payments made by the individual borrowers on the residential
mortgage loans which underlie the securities (net of fees paid to the issuer or
guarantor of the securities). Early repayment of principal on mortgage
pass-through securities (arising from prepayments of principal due to sale of
the underlying property, refinancing, or foreclosure, net of fees and costs
which may be incurred) may expose the Fund to a lower rate of return upon
reinvestment of principal. Also, if a security subject to prepayment has been
purchased at a premium, in the event of prepayment the value of the premium
would be lost. Like other fixed-income securities, when interest rates rise,
the value of a mortgage-related security generally will decline; however, when
interest rates decline, the value of mortgage-related securities with
prepayment features may not increase as much as other fixed-income securities.
In recognition of this prepayment risk to investors, the Public Securities
Association (the "PSA") has standardized the method of measuring the rate of
mortgage loan principal prepayments. The PSA formula, the Constant Prepayment
Rate (the "CPIV") or other similar models that are standard in the industry
will be used by the Fund in calculating maturity for purposes of its investment
in mortgage-related securities. Because the average life of mortgage-related
securities may lengthen with increases in interest rates, the
portfolio-weighted average life of the securities in which the Fund is invested
may at times lengthen due to this effect.

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Assumptions generally accepted by the industry concerning the
probability of early payment may be used in the calculation of maturities for
debt securities that contain put or call provisions, sometimes resulting in a
calculated maturity different than the stated maturity of the security.

The underlying assets may be prepaid with the result of shortening the
certificates' weighted average life. Prepayment rates vary widely and may be
affected by changes in market interest rates. It is not possible to accurately
predict the average life of a particular pool of loans or receivables. The
proceeds of prepayments received by the Fund must be reinvested in securities
whose yields reflect interest rates prevailing at the time. Thus, the Fund's
ability to maintain a portfolio which includes high-yielding asset-backed
securities will be adversely affected to the extent reinvestments are in lower
yielding securities. The actual maturity and realized yield will therefore
vary based upon the prepayment experience of the underlying asset pool and
prevailing interest rates at the time of prepayment. Asset-backed securities
are relatively new instruments and may be subject to greater risk of default
during periods of economic downturn than other instruments. Also, the
secondary market for certain asset-backed securities may not be as liquid as
the market for other types of securities, which could result in the Fund's
experiencing difficulty in valuing or liquidating such securities. For
asset-backed securities, the industry standard uses a principal prepayment
model, the "ABS Model," which is similar to the PSA described previously under
"Mortgage-Related Securities." Either the PSA model, the ABS model or other
similar models that are standard in the industry will be used by the Fund in
calculating maturity for purposes of its investment in asset-backed securities.

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Derivative Securities (All Funds). The Funds may invest in structured
notes, bonds or other instruments with interest rates that are determined by
reference to changes in the value of other interest rates, indices or financial
indicators ("References") or the relative change in two or more References.
The Funds may also hold derivative instruments that have interest rates that
re-set inversely to changing current market rates and/or have embedded interest
rate floors and caps that require the issuer to pay an adjusted interest rate
if market rates fall below or rise above a specified rate. These instruments
represent relatively recent innovations in the bond markets, and the trading
market for these instruments is less developed than the markets for traditional
types of debt instruments. It is uncertain how these instruments will perform
under different economic and interest-rate scenarios. Because certain of these
instruments are leveraged, their market values may be more volatile than other
types of bonds and may present greater potential for capital gain or loss. On
the other hand, the imbedded option features of other derivative instruments
could limit the amount of appreciation a Fund can realize on its investment,
could cause a Fund to hold a security it might otherwise sell or could force
the sale of a security at inopportune times or for prices that do not reflect
current market value. The possibility of default by the issuer or the issuer's
credit provider may be greater for these structured and derivative instruments
than for other types of instruments. In some cases it may be difficult to
determine the fair value of a structured or derivative instrument because of a
lack of reliable objective information and an established second market for
some instruments may not exist.

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on other mortgage-backed obligations because their cash flow patterns are also
volatile and there is a greater risk that the initial investment will not be
fully recouped.

ADRs, EDRs, and Global Depositary Receipts ("GDRs") (collectively,
"Depositary Receipts") evidence ownership of underlying securities issued by
either a foreign or a U.S. corporation that have been deposited with a
depositary or custodian bank. Depositary Receipts may be issued in connection
with an offering of securities by the issuer of the underlying securities or
issued by a depository bank as a vehicle to promote investment and trading in
the underlying securities. ADRs are receipts issued by U.S. banks or trust
companies in respect of securities of foreign issuers held on deposit for use
in the U.S. securities markets. GDRs and EDRs are typically issued by a U.S.
bank or trust company and traded principally in the U.S. and other
international markets. While Depositary Receipts may not necessarily be
denominated in the same currency as the securities into which they may be
convened, certain of the risks associated with foreign securities may also
apply to Depositary Receipts.

There are certain risks associated with investments in unsponsored ADR
programs. Because the non-U.S. company does not actively participate in the
creation of the ADR

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program, the underlying agreement for service and payment will be between the
depositary and the shareholder. The company issuing the stock underlying the
ADRs pays nothing to establish the unsponsored facility, as fees for ADR
issuance and cancellation are paid by brokers. Investors directly bear the
expenses associated with certificate transfer, custody and dividend payment.

Investments in foreign securities involve certain inherent risks, such
as political or economic instability of the issuer or the country of the issue,
the imposition of foreign withholding taxes on dividend or interest income
payable on such securities held by a Fund, the difficulty of predicting
international trade patterns, changes in exchange rates of foreign currencies
in which a Fund's investments may be denominated, which will affect the United
States dollar value of such Fund's assets and such Fund's return, and the
possibility of changes in investment or exchange control regulations that might
adversely affect the payment of dividends on equity securities and principal of
and interest on debt securities held by a Fund. There may be less publicly
available information about a foreign company than about a domestic company.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to domestic
companies. Further, foreign stock markets are generally not as developed or
efficient as those in the United States, and in most foreign markets volume and
liquidity are less than in the United States. Fixed commissions on foreign
stock exchanges are generally higher than the negotiated commissions on U.S.
exchanges, and there is generally less government supervision and regulation of
foreign stock exchanges, brokers and companies than in the United States.
Investment in foreign securities also may result in higher costs and the
imposition of transfer taxes or transaction changes. In the event of a default
in any such foreign obligations, it may be more difficult for a Fund to obtain
or enforce a judgment against the issuers of such securities. With respect to
certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, limitations on the removal of funds or other assets, or
diplomatic developments that could affect investment within those countries.
Delays or problems with settlement in foreign markets could affect the
liquidity of a Fund's foreign investments and adversely affect performance.
Investing in securities of issuers in developing countries involves exposure to
economic structures that are generally less diverse and mature, and to
political systems that can be expected to have less stability, than those of
developed countries. The markets of developing countries have historically
been more volatile than the markets of the more mature economics of developed
countries. Investments in Depositary Receipts are subject to some, but not
all, of the foregoing risks.

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<PAGE> 199
Because of these and other factors, securities of foreign companies acquired by
a Fund may be subject to greater fluctuation in price than securities of
domestic companies.

The Equity Value Fund, Balanced Fund and Equity Index Fund may engage
in unlisted over-the-counter options with broker/dealers deemed creditworthy by
the Advisor. Closing transactions for such options are usually effected
directly with the same broker/dealer that effected the original option
transaction. A Fund bears the risk that the broker/dealer will fail to meet
its obligations. There is no assurance that a liquid secondary trading market
exists for closing out an unlisted option position. Furthermore, unlisted
options are not subject to the protections, afforded purchasers of listed
options by the Options Clearing Corporation, which performs the obligations of
its members who fail to perform in connection with the purchase or sale of
options.

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<PAGE> 200

transactions in Stock index options depend on price movements in the securities
markets generally rather than the price movements of individual securities.

For additional information relating to option trading practices,
including the particular risks thereof, see the SAI.

The Funds may also purchase put options on stock index futures as
another method of protecting their assets against market declines. See the SAI
for further information about these options contracts.

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<PAGE> 201
deposits maturing in more than seven days and securities that are not
registered under the Securities Act of 1933 but may be purchased by
institutional buyers under Rule 144A are subject to this limit (unless such
securities are variable amount master demand notes with maturities of nine
months or less or unless the Advisor determines under the supervision of the
Board that a liquid trading market exists).

INVESTMENT RESTRICTIONS

No Fund may:

1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of a Fund's total assets may be invested without regard to
this 5% limitation.

2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.

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<PAGE> 202
3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.

4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.

If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Funds will not at any time have more than
15% of their respective net assets invested in illiquid securities.

OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Funds are fully paid,
non-assessable and freely transferable.

The Board of Trustees has authorized the issuance of two classes of
shares in each of the Funds described in this Prospectus -- Institutional
Shares and Investor Shares. Each share of a Fund represents an equal
proportionate interest in a particular Fund with other shares of the same class
and is entitled to cash dividends and distributions earned on such shares as
are declared in the discretion of the Board of Trustees.

Each Fund's Institutional Shares and Investor Shares bear their pro
rata portion of all operating expenses paid by the Fund except for the
distribution payments, Service Organization fees and other "class" expenses
that are allocated to a particular share class. The Board of Trustees has
approved a Distribution Plan with respect to Investor Shares of each Fund under
which the Trust may pay the Distributor in connection with the distribution of
Investor Shares at a rate or rates set from time to time by the Board of
Trustees, provided that no rate may exceed the annual rate of 0.50% of the
average daily net asset value of Investor Shares of a Fund. In addition, each
Fund may pay fees to Service Organizations in amounts up to an annual rate of
0.25% of the daily net asset value of the Funds' outstanding Investor Shares
owned by shareholders with whom a Service Organization has a servicing
relationship. Investor Shares of the Funds are purchased at net asset value
per share plus a maximum 4.50% sales charge (3.0% maximum in the case of the
Equity Index Fund) subject to certain exceptions. Because of the "class
expenses" and sales charges, the performance of a Fund's Investor Shares is
expected to be lower than the performance of its Institutional Shares. The
Trust offers various services and privileges in connection with its Investor
Shares that are not offered in connection with its Institutional Shares,
including an automatic investment plan, automatic withdrawal plan and, with
respect

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<PAGE> 203
to certain portfolios, checkwriting. For information regarding the Funds'
Investor Shares, contact Furman Selz at 1-800-662-8417 or your Service
Organization.

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust. The Declaration of
Trust also provides for indemnification out of the property of a Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder of the Fund. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which a Fund
itself would be unable to meet its obligations and should be considered remote.

VOTING

Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Funds' shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of a Fund's shares. Voting rights are not cumulative.

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<PAGE> 204
of the outstanding shares of a Fund. For purposes of the 1940 Act, any person
who owns either directly or through one or more controlled companies more than
25 percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.

PERFORMANCE INFORMATION

A Fund may, from time to time, include yield and total return data for
its Institutional Shares and Investor Shares in advertisements or reports to
shareholders or prospective investors. The methods used to calculate the
yields and total returns of the Funds are mandated by the SEC.

Quotations of yield reflect only the performance of a class of shares
during the particular period on which the calculations are based. Yield will
vary based on changes in market conditions, the level of interest rates and the
level of the expenses of a particular class of shares, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.

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<PAGE> 205
SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.

General and Account Information: (800) 662-8417.

AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

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<PAGE> 206
APPENDIX

DESCRIPTION OF MOODY'S BOND RATINGS:

DESCRIPTION OF S&P'S BOND RATINGS:

A-1
<PAGE> 207
S&P applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major rating
categories.

DESCRIPTION OF MOODY'S RATINGS OF NOTES AND VARIABLE RATE DEMAND INSTRUMENTS:

MIG 2/VMIG 2: This denotes high quality. Margins of protection are
ample although not as large as in the preceding group.

DESCRIPTION OF MOODY'S TAX-EXEMPT COMMERCIAL PAPER RATINGS:

PRIME-1: Issuers rated Prime-I (or supporting institutions) have a
superior ability for repayment of senior short-term promissory obligations.

PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term promissory obligations.

DESCRIPTION OF S&P'S RATINGS FOR MUNICIPAL BONDS:

INVESTMENT GRADE

AAA: Debt rated "AAA" has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.

A-2
<PAGE> 208
AA: Debt rated "AA" has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in a small
degree.

SPECULATIVE GRADE

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

D: Debt rated "D" is in default, and payment of interest and/or
repayment of principal is in arrears.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.

DESCRIPTION OF S&P'S RATINGS FOR INVESTMENT GRADE MUNICIPAL NOTES AND
SHORT-TERM DEMAND OBLIGATIONS:

SP-2: Issues carrying this designation have a satisfactory capacity
to pay principal and interest.

A-3
<PAGE> 209
DESCRIPTION OF S&P'S RATINGS FOR DEMAND OBLIGATIONS AND TAX-EXEMPT COMMERCIAL
PAPER:

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

A-4
<PAGE> 210
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169

DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169

CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017

INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 211

PACIFICA FUNDS TRUST
237 Park Avenue
New York, New York 10017
General and Account Information: (800) 662-8417

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

First Interstate Capital Management, Inc.--Investment Advisor
("FICM" or the "Advisor")

Furman Selz Incorporated--Administrator and Sponsor
("Furman Selz" or the "Sponsor")

Pacifica Funds Distributor Inc.--Distributor
("PFD Inc." or the Distributor")

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") describes
fifteen investment portfolios (the "Funds") managed by First Interstate Capital
Management, Inc. The Funds are:

- Pacifica Growth Fund
- Pacifica Equity Value Fund
- Pacifica Balanced Fund

- Pacifica Equity Index Fund

- Pacifica International Equity Fund

- Pacifica Asset Preservation Fund
- Pacifica Short-Term Government Bond Fund
- Pacifica Intermediate Government Bond Fund
- Pacifica Government Income Fund
- Pacifica Intermediate Bond Fund
- Pacifica Oregon Tax-Exempt Fund
- Pacifica Arizona Tax-Exempt Fund
- Pacifica California Short-Term Tax-Exempt Fund
- Pacifica California Tax-Exempt Fund
- Pacifica National Tax-Exempt Fund
- Pacifica Government Money Market Fund
- Pacifica Money Market Fund

- Pacifica National Tax-Exempt Money Market Fund

- Pacifica California Tax-Exempt Money Market Fund

- Pacifica 100% U.S. Treasury Money Market Fund

This SAI is not a prospectus and is only authorized for
distribution when preceded or accompanied by the prospectuses for the Funds
dated February __, 1996, as may be revised from time to time (the
"Prospectuses"). This SAI contains additional and more detailed information
than that set forth in the Prospectuses and should be read in conjunction with
the Prospectuses. The Prospectuses may be obtained without charge by writing
or calling the Funds at the address or information number printed above.
Capitalized terms not otherwise defined herein have the same meaning as in the
Prospectuses.

<PAGE> 212
Shares of the Trust are not deposits or obligations of, or
guaranteed or endorsed by, any First Interstate or other bank, and are not
insured by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency. Mutual fund shares involve certain investment
risks, including the possible loss of principal.

February __, 1996.

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<PAGE> 213
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>
GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INVESTMENT POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Government Obligations . . . . . . . . . . . . . . . . . . . . . . 1
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . 2
Bank Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . 2
Investment Company Securities . . . . . . . . . . . . . . . . . . 3
Variable and Floating Rate Instruments . . . . . . . . . . . . . . 3
Lending Securities . . . . . . . . . . . . . . . . . . . . . . . . 4
Forward Commitments, When-Issued Purchases and Delayed-
Delivery Transactions . . . . . . . . . . . . . . . . . . 4
Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . 5
Asset-Backed Securities . . . . . . . . . . . . . . . . . . . . . 6
Municipal Obligations . . . . . . . . . . . . . . . . . . . . . . 6
Stand-By Commitments . . . . . . . . . . . . . . . . . . . . . . . 9
Foreign Securities . . . . . . . . . . . . . . . . . . . . . . . . 10
Options Trading . . . . . . . . . . . . . . . . . . . . . . . . . 12
Interest Rate Futures Contracts . . . . . . . . . . . . . . . . . 14
Stock Index Futures Contracts and Options of Stock
Index Futures Contracts . . . . . . . . . . . . . . . . . 15
Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Nationally Recognized Statistical Ratings Organizations . . . . . 17

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 18

MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . 26
Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Distribution of Fund Shares . . . . . . . . . . . . . . . . . . . 33
Administrative Services . . . . . . . . . . . . . . . . . . . . . 35
Service Organizations . . . . . . . . . . . . . . . . . . . . . . 39

EXPENSES AND EXPENSE LIMITS . . . . . . . . . . . . . . . . . . . . . . . . 40

DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . 41

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . 43

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . 49

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
All Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Tax-Exempt Funds . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>

- i -
<PAGE> 214
<TABLE>
<S> <C>
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . 59
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Custodian, Transfer Agent and Dividend Disbursing Agent . . . . . 65
Performance Information . . . . . . . . . . . . . . . . . . . . . 65
Independent Accountants . . . . . . . . . . . . . . . . . . . . . 71
Registration Statement . . . . . . . . . . . . . . . . . . . . . . 71

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
</TABLE>

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<PAGE> 215

GENERAL

Pacifica Funds Trust (the "Trust") is an open-end management
investment company currently offering shares in a series of separately managed
investment portfolios. The Trust was organized on July 17, 1984 under the name
Fund Source. The Trust changed its name to "Pacifica Funds Trust" on February
9, 1993. The Growth Fund, Short-Term Government Bond Fund, Intermediate
Government Bond Fund, Intermediate Bond Fund, Oregon Tax-Exempt Fund, Arizona
Tax-Exempt Fund and National Tax-Exempt Fund were originally organized as
investment portfolios of Westcore Trust under the following names: Growth
Fund, Short-Term Government Bond Fund, GAMA Fund, Bonds Plus Fund, Oregon
Tax-Exempt Fund, Arizona Intermediate Tax-Free Fund and Quality Tax-Exempt
Income Fund, respectively. On October 1, 1995, each of these Funds was
reorganized as an investment portfolio of the Trust. The Growth Fund, Equity
Value Fund, the International Equity Fund and the Equity Index Fund are
sometimes collectively referred to hereafter as the "Equity Funds." The Asset
Preservation Fund, Short-Term Government Bond Fund, Intermediate Government
Bond Fund, Government Income Fund and Intermediate Bond Fund are sometimes
collectively referred to hereafter as the "Bond Funds." The Oregon Tax-Exempt
Fund, Arizona Tax-Exempt Fund, California Short-Term Tax-Exempt Fund,
California Tax-Exempt Fund, National Tax-Exempt Fund, the California Tax-Exempt
Money Market Fund and the National Tax-Exempt Money Market Fund are sometimes
collectively referred to hereafter as the "Tax-Exempt Funds." The California
Short-Term Tax-Exempt Fund, California Tax-Exempt Fund and the California
Tax-Exempt Money Market Fund are sometimes collectively referred to hereafter
as the "California Funds." The Government Money Market Fund, the Money Market
Fund, the 100% U.S. Treasury Money Market Fund, the California Tax-Exempt Money
market Fund and the National Tax-Exempt Money Market Fund are sometimes
collectively referred to hereafter as the "Money Market Funds."

INVESTMENT POLICIES

The Prospectuses discuss the investment objectives of the
Funds and the policies to be employed to achieve those objectives. This
section contains supplemental information concerning certain types of
securities and other instruments in which the Funds may invest, the investment
policies and portfolio strategies that the Funds may utilize, and certain risks
attendant to such investments, policies and strategies.

Government Obligations. The Funds may invest in obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Examples of the types of U.S. Government obligations that may be held by the
Funds include U.S.

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<PAGE> 216
Treasury bonds, notes and bills and the obligations of Federal Home Loan Banks,
Federal Farm Credit Banks, Federal Land Banks, the 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 and Maritime Administration.

Repurchase Agreements. The repurchase price under repurchase
agreements described in the Funds' Prospectuses generally equals the price paid
by a Fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement). Securities subject to repurchase agreements are held by
the Funds' custodian (or sub-custodian) or in the Federal Reserve/Treasury
book-entry system. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement in an amount
exceeding the repurchase price (including accrued interest). Default by the
seller would, however, expose a Fund to possible loss because of adverse market
action or delay in connection with the disposition of the underlying
obligations.

Bank Obligations. For purposes of the Funds' investment
policies with respect to bank obligations, the assets of a bank will be deemed
to include the assets of its domestic and foreign branches. A Fund's
investments in the obligations of foreign branches of U.S. banks and of foreign
banks may subject the Fund to investment risks that are different in some
respects from those of investments in obligations of U.S. domestic issuers.
Such risks include future political and economic developments, the possible
imposition of withholding taxes on interest income, possible seizure or
nationalization of foreign deposits, the possible establishment of exchange
controls or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on such obligations. In
addition, foreign branches of U.S. banks and foreign banks may be subject to
less stringent reserve requirements and to different accounting, auditing,
reporting and recordkeeping standards than those applicable to domestic
branches of U.S. banks. A Fund will acquire securities issued by foreign
branches of U.S. banks or foreign banks only when the Advisor believes that the
risks associated with such instruments are minimal.

Commercial Paper. Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign

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<PAGE> 217
bank holding companies, corporations and financial institutions as well as
similar taxable instruments issued by government agencies and
instrumentalities.

Investment Company Securities. The Funds may invest in
securities issued by other investment companies. A Fund will limit its
investments in securities issued by other investment companies so that, as
determined immediately after a purchase of such securities is made: (i) not
more than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) 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 (iii) 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. It is the Funds' policy not to invest in securities issued
by other investment companies which pay asset-based fees to the Advisor, the
Distributor or their affiliates.

Variable and Floating Rate Instruments. The Funds may
purchase variable rate and floating rate obligations as described in the
Prospectuses. The Advisor will consider the earning power, cash flows and
other liquidity ratios of the issuers and guarantors of such obligations and,
if the obligation is subject to a demand feature, will monitor their financial
ability to meet payment on demand. in determining average weighted portfolio
maturity, an instrument will usually be deemed to have a maturity equal to the
longer of the period remaining to the next interest rate adjustment or the time
a Fund can recover payment of principal as specified in the instrument.

Variable and floating rate demand instruments acquired by the
Tax-Exempt Funds may include participations in municipal obligations purchased
from and owned by financial institutions, primarily banks. Participation
interests provide these Funds with a specified undivided interest (up to 100%)
in the underlying obligation and the right to demand payment of the unpaid
principal balance plus accrued interest on the participation interest from the
institution upon a specified number of days' notice, not to exceed thirty days.
Each participation interest is backed by an irrevocable letter of credit or
guarantee of a bank that the Advisor has determined meets the prescribed
quality standards for these Funds. The bank typically retains fees out of the
interest paid on the obligation for servicing the obligation, providing the
letter of credit and issuing the repurchase commitment.

U.S. Government securities that have variable or floating
interest rates or demand or put features may be deemed to have remaining
maturities as follows: (a) a government

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<PAGE> 218
security with a variable or floating rate of interest will be deemed to have a
maturity equal to the period remaining until the next readjustment of the
interest rate; (b) a government security with a demand or put feature that
entitles the holder to receive the principal amount of the underlying security
at the time of or sometime after the holder gives notice of demand or exercise
of the put will be deemed to have a maturity equal to the period remaining
until the principal amount can be recovered through demand or exercise of the
put; and (c) a government security with both a variable or floating rate of
interest as described in clause (a) and a demand or put feature as described in
clause (b) will be deemed to have a maturity equal to the shorter of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand or
exercise of the put.

Lending Securities. The Funds may lend their portfolio
securities to brokers, dealers and financial institutions, provided: (1) the
loan is secured continuously by collateral consisting of U.S. Government
securities or cash or letters of credit maintained on a daily mark-to-market
basis in an amount at least equal to the current market value of the securities
loaned; (2) the Funds may at any time call the loan and obtain the return of
the securities loaned within five business days; (3) the Funds will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities loaned will not at any time exceed 30% of the total
assets of a particular Fund.

The Funds will earn income for lending their securities
because cash collateral pursuant to these loans will be invested in short-term
money market instruments. In connection with lending securities, the Funds may
pay reasonable finders, administrative and custodial fees. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral. When a Fund lends its securities, it
continues to receive interest or dividends on the securities loaned and may
simultaneously earn interest on the collateral received from the borrower or
from the investment of cash collateral 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 may be called
at any time and will be called so that the securities may be voted by a Fund if
a material event affecting the investment is to occur.

Forward Commitments, When-Issued Purchases and Delayed-Delivery
Transactions. When a Fund agrees to purchase securities on a when-issued basis
or enters into a forward commitment (sometimes called delayed-delivery) to
purchase securities, its

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<PAGE> 219
custodian will set aside cash, U.S. government securities or other liquid
high-grade debt obligations equal to the amount of the purchase or the
commitment in a separate account. Normally, the custodian will set aside
portfolio securities to meet this requirement. The market value of the
separate account will be monitored and if such market value declines, the Fund
will be required to place additional assets in the separate account in order to
ensure that the value of the account remains equal to the amount of the Fund's
commitment. Because a Fund will set aside cash or liquid high grade debt
securities in the manner described, the Fund's liquidity and ability to manage
its portfolio might be affected in the event its when-issued purchases or
forward commitments ever exceeded 25% of the value of its assets. In the case
of a forward commitment to sell portfolio securities, the Fund's custodian will
hold the portfolio securities themselves in a segregated account while the
commitment is outstanding.

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

When a Fund engages in when-issued and forward commitment
transactions, it relies on the other party to consummate the trade. Failure of
such party to do so may result in the Funds incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.

The value of the securities underlying a when-issued purchase
or a forward commitment to purchase securities, and any subsequent fluctuations
in their value, is taken into account when determining a Fund's net asset value
starting on the day the Fund agrees to purchase the securities. A Fund does
not earn interest on the securities it has committed to purchase until they are
paid for and delivered on the settlement date. When a Fund makes a forward
commitment to sell securities it owns, the proceeds to be received upon
settlement are included in the Fund's assets, and fluctuations in the value of
the underlying securities are not reflected in the Fund's net asset value as
long as the commitment remains in effect.

Mortgage-Backed Securities. As stated in the Prospectuses,
certain Funds may invest in mortgage-backed

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securities, including those representing an undivided ownership interest in a
pool of mortgages, such as certificates of the Government National Mortgage
Association ("GNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC").
These certificates are in most cases pass-through instruments, through which
the holder receives a share of all interest and principal payments from the
mortgages underlying the certificate, net of certain fees. The average life of
a mortgage-backed security varies with the underlying mortgage instruments,
which have maximum maturities of 40 years. The average life is likely to be
substantially less than the original maturity of the mortgage pools underlying
the securities as the result of prepayments, mortgage refinancings or
foreclosure. Mortgage prepayment rates are affected by factors including the
level of interest rates, general economic conditions, the location and age of
the mortgage and other social and demographic conditions. Such prepayments are
passed through to the registered holder with the regular monthly payments of
principal and interest and have the effect of reducing future payments.

There are risks inherent in the purchase of mortgagebacked
securities. For example, these securities are subject to a risk that default
in payment will occur on the underlying mortgages. In addition to default
risk, these securities are subject to the risk that prepayment on the
underlying mortgages will occur earlier or later or at a lessor or greater rate
than expected. To the extent that Advisor's assumptions about prepayments are
inaccurate, these securities may expose the Funds ,to significantly greater
market risks than expected.

Asset-Backed Securities. To the extent described in the
prospectuses, the Funds may purchase asset-backed securities, which are
securities backed by installment contracts, credit card receivables or other
assets. Asset-backed securities represent interests in "pools" of assets in
which payments of both interest and principal on the securities are made
monthly, thus in effect "passing through" monthly payments made by the
individual borrowers on the assets that underlie the securities, net of any
fees paid to the issuer or guarantor of the securities. The average life of
asset-backed securities varies with the maturities of the underlying
instruments, and is likely to be substantially less than the original maturity
of the assets underlying the-securities as a result of prepayments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely.

Municipal Obligations. Municipal obligations include debt
obligations issued by governmental entities to obtain funds for various public
purposes, including the construction of a wide

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range of public facilities, the refunding of outstanding obligations, the
payment of general operating expenses and the extension of loans to public
institutions and facilities.

The two principal classifications of municipal obligations
which may be held by the Funds are "general obligation" securities and
"revenue" securities. General obligation securities are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue securities are payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise tax or other specific revenue source such
as the issuer of the facility being financed. The Funds' portfolios may also
include "moral obligation" securities, which are normally issued by special
purpose public authorities. If the issuer of moral obligation securities is
unable to meet its debt service obligations from current revenues, it may draw
on a reserve fund, the restoration of which is a moral commitment but not a
legal obligation of the state or municipality which created the issuer.

There are, of course, variations in the quality of municipal
obligations both within a particular classification and between
classifications, and the yields on municipal obligations depend upon a variety
of factors, including general money market conditions, the financial condition
of the issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligation and the rating of the
issue.

Private activity bonds are issued to obtain funds to provide
privately operated housing facilities, pollution control facilities, convention
or trade show facilities, mass transit, airport, port or parking facilities and
certain local facilities for water supply, gas, electricity or sewage or solid
waste disposal. Private activity bonds are also issued to privately held or
publicly owned corporations in the financing of commercial or industrial
facilities. State and local governments are authorized in most states to issue
private activity bonds for such purposes in order to encourage corporations to
locate within their communities. Private activity bonds are in most cases
revenue securities and are not payable from the unrestricted revenues of the
issuer. The credit quality of such bonds is usually directly related to the
credit standing of the corporate user of the facility involved. Private
activity bonds issued by or on behalf of public authorities to finance various
privatelyoperated facilities are considered municipal obligations if the
interest paid thereon is (subject to Federal alternative minimum tax) exempt
from Federal income tax.

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The Tax-Exempt Funds may also purchase short-term General
Obligation Notes, Tax Anticipation Notes, Bond Anticipation Notes, Revenue
Anticipation Notes, Tax-Exempt Commercial Paper, Construction Loan Notes and
other forms of short-term tax-exempt loans. Such instruments are issued with a
short-term maturity in anticipation of the receipt of tax funds, the proceeds
of bond placements or other revenues.

Information about the financial condition of issuers of
municipal obligations may be less available than about corporations a class of
whose securities is registered under the Securities Exchange Act of 1934.

As stated in the Prospectuses, the Advisor, under the
supervision of the Board, will make determinations concerning the liquidity of
a municipal lease obligation based on all relevant factors. These factors may
include, among others: (1) the frequency of trades and quotes for the
obligation; (2) the number of dealers willing to purchase or sell the security
and the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; and (4) the nature of the
marketplace trades, including the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of transfer. In addition, the
general credit quality of the municipality and the essentiality to the
municipality of the property covered by the lease may be considered. In
evaluating the credit quality of a municipal lease obligation, the factors to
be considered might include: (1) whether the lease can be canceled; (2) what
assurance there is that the assets represented by the lease can be sold; (3)
the strength of the lessee's general credit (e.g., its debt, administrative,
economic, and financial characteristics); (4) the likelihood that the
municipality will discontinue appropriating funding for the leased property
because the property is no longer deemed essential to the operations of the
municipality (e.g., the potential for an "event of the nonappropriation"); and
(5) the legal recourse in the event of failure to appropriate.

From time to time, proposals have been introduced before
Congress for the purpose of restricting or eliminating the Federal income tax
exemption for interest on municipal obligations. For example, under Federal
tax legislation enacted in 1986, interest on certain private activity bonds
must be included in an investor's alternative minimum taxable income, and
corporate investors must treat all tax-exempt interest as an item of tax
preference. Moreover, with respect to Oregon obligations, Arizona obligations
and California obligations, as the case may be, the Funds cannot predict what
legislation, if any, may be proposed in the state legislature regarding the
state income tax status of interest on such obligations, or which proposals, if

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any, might be enacted. Such proposals, while pending or if enacted, might
materially and adversely affect the availability of municipal obligations
generally, or Oregon obligations, Arizona obligations or California
obligations, specifically, for investment by a Fund and the liquidity and value
of the Fund's portfolio. In such an event, the Fund involved would re-evaluate
its investment objective and policies and consider possible changes in its
structure or possible dissolution.

Opinions relating to the validity of municipal obligations and
to the exemption of interest thereon from Federal income tax are rendered by
bond counsel to the respective issuers at the time of issuance. Neither the
Funds nor the Advisor will review the proceedings relating to the issuance of
municipal obligations or the bases for such opinions.

Certain of the municipal obligations held by the Funds may be
insured as to the timely payment of principal and interest. The insurance
policies will usually be obtained by the issuer of the municipal obligation at
the time of its original issuance. In the event that the issuer defaults on
interest or principal payment, the insurer will be notified and will be
required to make payment to the bondholders. There is, however, no guarantee
that the insurer will meet its obligations. In addition, such insurance will
not protect against market fluctuations caused by changes in interest rates and
other factors. The Oregon Tax-Exempt, Arizona Tax-Exempt Fund, National
Tax-Exempt Fund and California Short-Term Tax-Exempt Fund may, from time to
time, invest more than 25% of their assets in municipal obligations covered by
insurance policies.

As stated in the Prospectuses, certain Bond Funds may, when
deemed appropriate by the Advisor in light of a Fund's investment objective,
invest in obligations issued by state and local governmental issuers.
Dividends paid by one of the Bond Funds that are derived from interest of
municipal obligations would be taxable to the Fund's shareholders for Federal
income tax purposes.

Stand-By Commitments. Each of the Tax-Exempt Funds may
acquire stand-by commitments with respect to municipal obligations held by it.
Under a stand-by commitment, a dealer or bank agrees to purchase from a Fund,
at the Fund's option, specified municipal obligations at a specified price.
The amount payable to a Fund upon its exercise of a stand-by commitment is
normally (i) the Fund's acquisition cost of the municipal obligations
(excluding any accrued interest which the Fund paid on their acquisition), less
any amortized market premium plus any amortized market or original issue
discount during the period the Fund owned the securities, plus (ii) all
interest accrued on the

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<PAGE> 224
securities since the last interest payment date during that period. Stand-by
commitments may be sold, transferred or assigned by a Fund only with the
underlying instrument.

Each Fund expects that stand-by commitments will generally be
available without the payment of any direct or indirect consideration.
However, if necessary or advisable, a Fund may pay for a stand-by commitment
either separately in cash or by paying a higher price for portfolio securities
which are acquired subject to the commitment (thus reducing the yield to
maturity otherwise available for the same securities). Where a Fund pays any
consideration directly or indirectly for a stand-by commitment, its cost would
be reflected as unrealized depreciation for the period during which the
commitment was held by the Fund.

Each Fund intends to enter into stand-by commitments only with
dealers, banks and broker-dealers which, in the Advisor's opinion, present
minimal credit risks. Each Fund's reliance upon the credit of these dealers,
banks and brokerdealers will be secured by the value of the underlying
municipal obligations that are subject to the commitment. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the Advisor, will
review periodically the issuer's assets, liabilities, contingent claims and
other relevant financial information.

Each Fund would acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The acquisition of a stand-by commitment
would not affect the valuation or assumed maturity of the underlying municipal
obligations, which would continue to be valued in accordance with the ordinary
method of valuation employed by the Funds. Stand-by commitments acquired by a
Fund would be valued at zero in determining net asset value.

Foreign Securities. Because certain Funds may invest in
securities denominated in currencies other than the U.S. dollar and may
temporarily hold funds in bank deposits or other money market investments
denominated in foreign currencies, they may be affected favorably or
unfavorably by exchange control regulations or changes in the exchange rate
between such currencies and the dollar. Changes in foreign currency exchange
rates will influence values within a Fund from the perspective of U.S.
investors. Changes in foreign currency exchange rates may also affect the
value of dividends and interest earned, gains and losses realized on the sale
of securities, and net investment income and gains, if any, to be distributed
to shareholders by a Fund. The rate of exchange between the U.S. dollar and
other currencies is determined by the forces of supply and demand in

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the foreign exchange markets. These forces are affected by the international
balance of payments and other economic and financial conditions, government
intervention, speculation and other factors.

The Equity Value Fund, Balanced Fund, Asset Prevention Fund,
Government Income Fund, the International Equity Fund and the Equity Index Fund
may enter into foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates. A forward foreign
currency exchange 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 entered into in the interbank market
conducted between. currency traders (usually large commercial banks) and their
customers. Forward foreign currency exchange contracts may be bought or sold
to protect a Fund against a possible loss resulting from an adverse change in
the relationship between foreign currencies and the U.S. dollar, or between
foreign currencies. Although such contracts are intended to minimize the risk
of loss due to a decline in the value of the hedged currency, at the same time,
they tend to limit any potential gain which might result should the value of
such currency increase.

The Equity Funds and the Balanced Fund may also invest in
ADRs. ADRs are receipts issued by an American bank or trust company 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, although the
underlying security may be denominated in a foreign currency. The underlying
security may be subject to foreign government taxes which could reduce the
yield on such securities. Some institutions issuing ADRs may not be sponsored
by the issuer. A non-sponsored depository may not provide the same shareholder
information that a sponsored depository is required to provide under its
contractual arrangement with the issuer.

Investments in foreign securities also involve certain
inherent risks, such as political or economic instability of the issuer or the
country of issue, the difficulty of predicting international trade patterns and
the possibility of imposition of exchange controls. Such securities may also
be subject to greater fluctuations in price than securities of domestic
corporations. In addition, there may be less publicly available information
about a foreign company than about a domestic company. Foreign companies
generally are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to domestic companies. With
respect to

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<PAGE> 226
certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, or diplomatic developments which could affect
investments in those countries.

Options Trading. Certain Funds may buy put and call options
and write covered call and secured put options. Options trading is a highly
specialized activity which entails greater than ordinary investment risk.
Options may be more volatile than the underlying instruments, and therefore, on
a percentage basis, an investment in options may be subject to greater
fluctuation than an investment in the underlying instruments themselves.

A call option for a particular security gives the purchaser of
the option the right to buy, and a writer the obligation to sell, the
underlying security at the stated exercise price at any time prior to the
expiration of the option, regardless of the market price of the security. The
premium paid to the writer is in consideration for undertaking the obligation
under the option contract. A put option for a particular security gives the
purchaser the right to sell the security at the stated exercise price at any
time prior to the expiration date of the option, regardless of the market price
of the security. Options on indices provide the holder with the right to make
or receive a cash settlement upon exercise of the option. With respect to
options on indices, the amount of the settlement will equal the difference
between the closing price of the index at the time of exercise and the exercise
price of the option expressed in dollars, times a specified multiple.

The Funds will write call options only if they are "covered."
In the case of a call option on a security or currency, the option is "covered"
if a Fund owns the instrument underlying the call or has an absolute and
immediate right to acquire that instrument without additional cash
consideration (or, if additional cash consideration is required, cash, U.S.
Government securities or other liquid high grade debt obligations, in such
amount are held in a segregated account by the Fund's custodian) upon
conversion or exchange of other securities held by it. For a call option on an
index, the option is covered if a Fund maintains with its custodian a
diversified portfolio of securities comprising the index or liquid assets equal
to the contract value. A call option is also covered if a Fund holds a call on
the same instrument or index as the call written where the exercise price of
the call held is (i) equal to or less than the exercise price of the call
written, or (ii) greater than the exercise price of the call written provided
the difference is maintained by the Fund in liquid assets in a segregated
account with its custodian. The Funds will write put options only if they are
"secured" by liquid assets maintained in a segregated account by the Funds,
custodian in an amount not

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<PAGE> 227
less than the exercise price of the option at all times during the option
period.

A Fund's obligation to sell an instrument subject to a covered
call option written by it, or to purchase an instrument subject to a secured
put option written by it, may be terminated prior to the expiration date of the
option by the Fund's execution of a closing purchase transaction, which is
effected by purchasing on an exchange an option of the same series (i.e., same
underlying instrument, exercise price and expiration date) as the option
previously written. Such a purchase does not result in the ownership of an
option. A closing purchase transaction will ordinarily be effected to realize
a profit on an outstanding option, to prevent an underlying instrument from
being called, to permit the sale of the underlying instrument or to permit the
writing of a new option containing different terms on such underlying
instrument. The cost of such a liquidation purchase plus transaction costs may
be greater than the premium received upon the original option, in which event
the Fund will have incurred a loss in the transaction. There is no assurance
that a liquid secondary market will exist for any particular option. An option
writer, unable to effect a closing purchase transaction, will not be able to
sell the underlying instrument (in the case of a covered call option) or
liquidate the segregated account (in the case of a secured put option) until
the option expires or the optioned instrument or currency is delivered upon
exercise with the result that the writer in such circumstances will be subject
to the risk of market decline or appreciation in the instrument during such
period.

When a Fund purchases an option, the premium paid by it is
recorded as an asset of the Fund. When a Fund writes an option, an amount
equal to the net premium (the premium less the commission) received by a Fund
is included.in the liability section of the Fund's statement of assets and
liabilities as a deferred credit. The amount of this asset or deferred credit
will be subsequently marked-to-market to reflect the current value of the
option purchased or written. The current value of the traded option is the
last sale price or, in the absence of a sale, the current bid price. If an
option purchased by a Fund expires unexercised the Fund realizes a loss equal
to the premium paid. If a Fund enters into a closing sale transaction on an
option purchased by it, the Fund will realize a gain if the premium received by
the Fund on the closing transaction is more than the premium paid to purchase
the option, or a loss if it is less. If an option written by a Fund expires on
the stipulated expiration date or if a Fund enters into a closing purchase
transaction, it will realize a gain (or loss if the cost of a closing purchase
transaction exceeds the net premium received when the option is sold) and the
deferred credit related to such

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<PAGE> 228
option will be eliminated. If an option written by a Fund is exercised, the
proceeds of the sale will be increased by the net premium originally received
and the Fund will realize a gain or loss.

There are several risks associated with transactions in
options. For example, there are significant differences between the
securities, currency and options markets that could result in an imperfect
correlation between these markets, causing a given transaction not to achieve
its objectives. In addition, a liquid secondary market for particular options,
whether traded over-thecounter or on an exchange may be absent for reasons
which include the following: there may be insufficient trading interest in
certain options; restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; trading halts, suspensions or
other restrictions may be imposed with respect to particular classes or series
of options or underlying securities or currencies; unusual or unforeseen
circumstances may interrupt normal operations on an exchange; the facilities of
an exchange or the Options Clearing Corporation may not at all times be
adequate to handle current trading value; or one or more exchanges could, for
economic or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that exchange (or in that
class or series of options) would cease to exist, although outstanding options
that had been issued by the Options Clearing Corporation as a result of trades
on that exchange would continue to be exercisable in accordance with their
terms. A Fund will likely be unable to control losses by closing its position
where a liquid secondary market does not exist. A decision as to whether, when
and how to use options involves the exercise of skill and judgment, and even a
well-conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected events.

Interest Rate Futures Contracts. The Asset Preservation Fund
and Government Income Funds may purchase and sell interest rate futures
contracts as a hedge against changes in interest rates. A futures contract is
an agreement between two parties to buy and sell a security for a set price on
a future date. Future contracts are traded on designated "contracts markets"
which, through their clearing corporations, guarantee performance of the
contracts. Currently, there are futures contracts based on securities such as
long-term U.S. Treasury bonds, U.S. Treasury notes, GNMA Certificates and
threemonth U.S. Treasury bills.

Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa).

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<PAGE> 229
Entering into a futures contract for the sale of securities has an effect
similar to the actual sale of securities, although sale of the futures contract
might be accomplished more easily and quickly. For example, if a Fund holds
long-term U.S. Government securities and the Advisor anticipates a rise in
long-term interest rates, it could, in lieu of disposing of its portfolio
securities, enter into futures contracts for the sale of similar long-term
securities. If rates increased and the value of the Fund's portfolio
securities declined, the value of the Fund's futures contracts would increase,
thereby protecting the Fund by preventing net asset value from declining as
much as it otherwise would have. Similarly, entering into futures contracts
for the purchase of securities has an effect similar to actual purchase of the
underlying securities, but permits the continued holding of securities other
than the underlying securities. For example, if the Advisor expects long-term
interest rates to decline, the Fund might enter into futures contracts for the
purchase of longterm securities, so that it could gain rapid market exposure
that may offset anticipated increases in the cost of securities it intends to
purchase,-while continuing to hold higher-yielding short-term securities or
waiting for the long-term market to stabilize.

Stock Index Futures Contracts and Options on Stock Index
Futures Contracts (The Equity Value Fund, Balanced Fund and Equity Index Fund).
A stock index futures contract is an agreement in which one party agrees to
deliver to the other an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
As the aggregate market value of the stocks in the index changes, the value of
the index also will change. In the event that the index level rises above the
level at which the stock index futures contract was sold, the seller of the
stock index futures contract will realize a loss determined by the difference
between the two index levels at the time of expiration of the stock index
futures contract, and the purchaser will realize a gain in that amount. In the
event the index level falls below the level at which the stock index futures
contract was sold, the seller will recognize a gain determined by the
difference between the two index levels at the expiration of the stock index
futures contract, and the purchaser will realize a loss. Stock index futures
contracts expire on a fixed date, currently one to seven months from the date
of the contract, and are settled upon expiration of the contract.

Stock index futures contracts may be purchased to protect a Fund
against an increase in prices of stocks which the Fund intends to purchase. If
the Fund is unable to invest its cash (or cash equivalents) in stock in an
orderly fashion, the Fund

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could purchase a stock index futures contract which may be used to offset any
increase in the price of the stock. However, it is possible that the market
may decline instead, resulting in a loss on the stock index futures contract.
If the Fund then concludes not to invest in stock at that time, or if the price
of the securities to be purchased remains constant or increases, the Fund will
realize a loss on the stock index futures contract that is not offset by a
reduction in the price of securities purchased. The Funds also may buy or sell
stock index futures contracts to close out existing futures positions.

The Equity Value Fund, Balanced Fund and the Equity Index Fund
may also purchase put options on stock index futures contracts. Sales of such
options may also be made to close out an open option position. The Funds may,
for example, purchase a put option on a particular stock index futures contract
or stock index to protect against a decline in the value of the common stocks
it holds. If the stocks in the index decline in value, the put should become
more valuable and the Funds could sell it to offset losses in the value of the
common stocks. In this way, put options may be used to achieve the same goals
the Funds seek in selling futures contracts. A put option on a stock index
future gives the purchaser the right, in return for a premium paid, to assume a
short (i.e., the right to sell stock index futures) position in a stock index
futures contract at a specified exercise price ("strike price") at any time
during the period of the option. If the option is exercised by the holder
before the last trading date during the option period, the holder receives the
futures position, as well as any balance in the futures margin account. If an
option is exercised on the last trading day prior to the expiration date of the
option, the settlement will be made entirely in cash in an amount equal to the
difference between the strike price and the closing level of the relevant index
on the expiration date.

The Advisor expects that an increase or decrease in the index
in relation to the strike price level would normally correlate to an increase
or decrease (but not necessarily to the same extent) in the value of the Funds,
common stock portfolio against which the option was written. Thus, any loss in
the option transaction may be offset by an increase in the value of the common
stock portfolio to the extent changes in the index correlate to changes in the
value of that portfolio. The Funds may liquidate the put options they have
purchased by effecting a closing sale transactions rather than exercising the
option. This is accomplished by selling an option of the same series as the
option previously purchased. There is no guarantee that the Funds will be able
to effect the closing sale transaction. The Funds will realize a gain from a
closing sale transaction if the price at which the transaction is effected
exceeds the premium

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<PAGE> 231

paid to purchase the option and, if less, the Funds will realize a loss.

Borrowing. At the time a Fund enters into a reverse
repurchase agreement (an agreement under which the Fund sells portfolio
securities and agrees to repurchase them at an agreedupon date and price), it
will place in a segregated custodial account liquid assets such as U.S.
Government securities or other liquid high-grade debt securities having a value
equal to or greater than the repurchase price (including accrued interest) and
will subsequently monitor the account to ensure that such value is maintained.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by a Fund may decline below the price at which the Fund is
obligated to repurchase the securities. Reverse repurchase agreements are
considered to be borrowings under the 1940 Act. Each Fund intends to limit its
borrowings (including reverse repurchase agreements) during the current fiscal
year to not more than 10% of its net assets.

Nationally Recognized Statistical Ratings Organizations. The
ratings of Moody's Investors Service, Inc., Standard & Poor's Ratings Group,
Division of McGraw Hill, Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc. Thomson Bank Watch and IBCA Inc. represent their opinions as to
the quality of debt securities. It should be emphasized, however, that ratings
are general and are not absolute standards of quality, and debt securities with
the same maturity, interest rate and rating may have different yields while
debt securities of the same maturity and interest rate with different ratings
may have the same yield. Subsequent to purchase by a Fund, an issue of debt
securities may cease to be rated or its rating may be reduced below the minimum
rating required for purchase by a Fund. The Advisor will consider such an
event in determining whether the Fund involved should continue to hold the
obligation.

The payment of principal and interest on debt securities
purchased by the Funds will depend upon the ability of the issuers to meet
their obligations. An issuer's obligations under its debt securities are
subject to the provisions of bankruptcy, insolvency, and other laws affecting
the rights and remedies of creditors, such as the Federal Bankruptcy Code, and
laws, if any, which may be enacted by Federal or state legislatures extending
the time for payment of principal or interest, or both, or imposing other
constraints upon enforcement of such obligations or, in the case of
governmental entities, upon the ability of such entities to levy taxes. The
power or ability of an issuer to meet its obligations for the payment of
interest and principal of its debt securities may be materially adversely
affected by litigation or other conditions. Further, it should also be, noted

- 17 -
<PAGE> 232
with respect to all municipal obligations issued after August 15, 1986 (August
31, 1986 in the case of certain bonds), the issuer must comply with certain
rules formerly applicable only to "industrial development bonds" which, if the
issuer fails to observe them, could cause interest on the municipal obligations
to become taxable retroactive to the date of issue.

INVESTMENT RESTRICTIONS

The Funds are subject to the investment limitations enumerated
below which may be changed with respect to a particular Fund only by a vote of
a majority of the holders of such Fund's outstanding shares (as defined under
"Other Information -- Voting Rights" below).

With respect to the Growth Fund, Short-Term Government Bond
Fund, Intermediate Government Bond Fund, Intermediate Bond Fund, Oregon
Tax-Exempt Fund, Arizona Tax-Exempt Fund and National Tax-Exempt Fund, no Fund
may:

1. Purchase or sell commodity contracts (including
futures contracts with respect to the Arizona Tax-Exempt Fund and the
Tax-Exempt Bond Fund), or invest in oil, gas or mineral exploration or
development programs, except that the Fund may, to the extent appropriate to
its investment objective, purchase publicly traded securities of companies
engaging in whole or in part in such activities and with respect to the Growth
Fund, Short-Term Government Bond Fund, Intermediate Government Bond Fund,
Intermediate Bond Fund and Oregon Tax-Exempt Fund, enter into futures contracts
and related options.

2. Purchase or sell real estate, except that each Fund
may purchase securities of issuers which deal in real estate and may purchase
securities which are secured by interests in real estate.

3. Purchase securities of companies for the purpose of
exercising control.

4. 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
Investment Company Act of 1940.

5. Act as an underwriter of securities within the
meaning of the Securities Act of 1933 except insofar as a Fund might be deemed
to be an underwriter upon disposition of portfolio securities acquired within
the limitation on purchases of restricted securities and except to the extent
that the purchase of obligations directly from the issuer thereof in

- 18 -
<PAGE> 233
accordance with a Fund's investment objective, policies and limitations may be
deemed to be underwriting.

6. Write or sell put options, call options, straddles,
spreads, or any combination thereof, except that the Oregon Tax-Exempt Fund may
enter into transactions in futures contracts and related options and except
that the Growth Fund, Short-Term Government Bond Fund, Intermediate Government
Bond Fund and Intermediate Bond Fund may enter into transactions in options on
securities, futures contracts and options on futures contracts.

7. Borrow money or issue senior securities, except that
each Fund may borrow from banks and enter into reverse repurchase agreements
for temporary purposes in amounts up to 10% of the value of the total assets at
the time of such borrowing; or mortgage, pledge or hypothecate any assets,
except in connection with any such borrowing and in amounts not in excess of
the lesser of the dollar amounts borrowed or 10% of the value of a Fund's total
assets at the time of such borrowing. None of these Funds will purchase
securities while its borrowings (including reverse repurchase agreements) in
excess of 5% of its total assets are outstanding. Securities held in escrow or
separate accounts in connection with a Fund's investment practices described in
this Statement of Additional Information or in its Prospectus are not deemed-to
be pledged for purposes of this limitation.

With respect to the Growth Fund, Short-Term Government Bond
Fund, Intermediate Government Bond Fund, and Intermediate Bond Fund, no Fund
may:

1. Purchase securities of any one issuer (other than
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities) 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 these limitations.

2. Purchase any securities that would cause 25% or more
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 obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; (b) wholly-owned finance companies will be
considered to be in the industries of their parents if

- 19 -
<PAGE> 234
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.

3. Make loans, except that the Fund may purchase and
hold debt instruments and enter into repurchase agreements in accordance with
its investment objective and policies and may lend portfolio securities in an
amount not exceeding 30%- of its total assets.

4. 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.

With respect to the Oregon Tax-Exempt Fund, Arizona Tax-Exempt
Fund and National Tax-Exempt Fund, no Fund may:

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

2. Purchase or sell commodity contracts, including
futures contracts, except for futures contracts and related options entered
into or purchased by the Oregon Tax-Exempt Fund, or invest in oil, gas or
mineral exploration or development programs, except that the Funds may, to the
extent appropriate to its investment objective, purchase publicly traded
securities of companies engaging in whole or in part in such activities.

3. Invest less than 80% of its net assets in securities
the interest on which is exempt from Federal income tax, except during periods
of unusual market conditions. For purposes of this investment limitation,
securities the interest on which is treated as a specific tax preference item
under the Federal alternative minimum tax are considered taxable.

4. Make loans, except that each Fund may purchase and
hold debt instruments and enter into repurchase agreements in accordance with
its investment objective and policies.

* * *

- 20 -
<PAGE> 235
The Oregon Tax-Exempt Fund may not:

1. Purchase securities of any one issuer 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, except that (a) up to 50% of the
value of the Fund's total assets may be invested without regard to this 5%
limitation provided that no more than 25% of the value of the Fund's total
assets are invested in the securities of any one issuer and (b) this 5%
limitation does not apply to securities issued or guaranteed by the U.S.
Government, its agencies, authorities, instrumentalities or political
subdivisions. For purposes of this limitation, a security is considered to be
issued by the governmental entity (or entities) whose assets and revenues back
the security, or, with respect to a private activity bond that is backed only
by the assets and revenues of a nongovernmental user, such nongovernmental
user. In certain circumstances, the guarantor of a guaranteed security may
also be considered to be an issuer in connection with such guarantee, except
that a guarantee of a security shall not be deemed to be a security issued by
the guarantor when the value of all 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.

2. Purchase any securities, except securities issued (as
defined in the preceding Investment Limitation) 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, 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
issuers conducting their principal business activities in the same industry.

* * *

The Arizona Tax-Exempt Fund may not:

- 21 -
<PAGE> 236
governmental entity (or entities) whose assets and revenues back the security,
or, with respect to a private activity bond that is backed only by the assets
and revenues of a nongovernmental user, such nongovernmental user. In certain
circumstances, the guarantor of a guaranteed security may also be considered to
be an issuer in connection with such guarantee, except that a guarantee of a
security shall not be deemed to be a security issued by the guarantor when the
value of all 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.

2. Purchase any securities, except securities issued (as
defined in the preceding Investment Limitation) 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, 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
issuers conducting their principal business activities in the same industry.

* * *

The National Tax-Exempt Fund may not:

1. Purchase securities of any one issuer 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, except that (a) up to
50% of the value of the Fund's total assets may be invested without regard to
these limitations provided that no more than 25% of the value of the Fund's
total assets are invested in the securities of any one issuer and (b) these
limitations do not apply to securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. For purposes of these
limitations, a security is considered to be issued by the governmental entity
'(or entities) whose assets and revenues back the security, or, with respect to
a private activity bond that is backed only by the assets and revenues of a
nongovernmental user, such nongovernmental user. In certain circumstances, the
guarantor of a guaranteed security may also be considered to be an issuer in
connection with such guarantee, except that a guarantee of a security shall not
be deemed to be a security issued by the guarantor when the value of all
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.

2. Purchase any securities which would cause 25% or more
of the value of its total assets at the time of purchase to

- 22 -
<PAGE> 237
be invested in municipal obligations with similar characteristics (such as
private activity bonds where the payment of principal and interest is the
ultimate responsibility of issuers in the same industry, pollution control
revenue bonds, housing finance agency bonds or hospital bonds) or the
securities of issuers conducting their principal business activities in the
same industry, provided that there is no limitation with respect to obligations
issued or guaranteed by the U.S. Government, the District of Columbia, and
their respective agencies, authorities, instrumentalities or political
subdivisions.

With respect to the Equity Value Fund, Balanced Fund, Asset
Preservation Fund, Government Income Fund, California Short-Term Tax-Exempt
Fund, California Tax-Exempt Fund, Government Money Market Fund, Money Market
Fund, 100% U.S. Treasury Money Market Fund, California Tax-Exempt Money Market
Fund, National Tax-Exempt Money Market Fund, Equity Index Fund and
International Equity Fund, each Fund, except as indicated, may not:

1. The Government Money Market Fund, Money Market Fund,
100% U.S. Treasury Money Market Fund, California Tax-Exempt Money Market Fund
and National Tax-Exempt Money Market Fund, may not invest more than 10% of the
aggregate value of its total assets in investments which are illiquid, or not
readily marketable (including repurchase agreements having maturities of more
than seven calendar days, variable and floating rate demand and master demand
notes requiring receipt of principal note amount within seven days notice and
securities of foreign issuers which are not listed on a recognized domestic or
foreign securities exchange);

2. Borrow money or pledge or mortgage its assets, except
that a Fund may borrow from banks up to 10% of the current value of its total
net assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of its total
net assets (but investments may not be purchased by the Fund while any such
borrowings exist);

3. Make loans, except loans of portfolio securities and
except that a Fund may enter into repurchase agreements with respect to its
portfolio securities and may purchase the types of debt instruments described
in the Prospectuses or the SAI;

4. Invest in companies for the purpose of exercising
control or management;

5. Knowingly purchase securities of other investment
companies, except (i) in connection with a merger, consolidation,

- 23 -
<PAGE> 238
acquisition, or reorganization; and (ii) all Funds listed above except the
Money Market Funds may invest up to 10%- of their net assets in shares of other
investment companies;

6. Invest in real property (including limited
partnership interests), commodities, commodity contracts, or oil, gas and other
mineral resource, exploration, development, lease or arbitrage transactions;

7. Acquire securities subject to restrictions on
disposition imposed by the Securities Act of 1933, if, immediately after and as
a result of such acquisition, the value of such restricted securities and all
other illiquid securities held by the Fund would exceed 10% (15% in the case of
The California Short-Term Tax-Exempt Fund) of the value of the Fund's total
assets;

8. Engage in the business of underwriting securities of
other issuers, except to the extent that the disposal of an investment position
may technically cause it to be considered an underwriter as that term is
defined under the Securities Act of 1933;

9. Make loans, except that the Funds may purchase
readily marketable debt securities and invest in repurchase agreements and make
loans of portfolio securities. The Funds will not invest in repurchase
agreements maturing in more than seven days (unless subject to a demand
feature) if any such investment, together with any illiquid securities
(including securities which are subject to legal or contractual restrictions on
resale) held by the Funds, exceeds 10% (15% in the case of The California
Short-Term Tax-Exempt Fund) of the value of its total assets;

10. Sell securities short, except to the extent that a
Fund contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

11. Purchase securities on margin, except that a Fund may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities;

12. Mortgage, pledge, or hypothecate any of its assets,
except as described in Investment Restriction No. 2;

13. Purchase or retain the securities of any issuer, if
those individual officers and Trustees of the Trust, its Advisor, the Sponsor,
or the Distributor, each owning beneficially more than 1/2 of 1% of the
securities of such

- 24 -
<PAGE> 239
issuer, together own more than 5% of the securities of such issuer;

14. Invest more than 5% of its net assets in warrants
which are unattached to securities, included within that amount, no more than
2% of the value of the Fund's net assets, may be warrants which are not listed
on the New York or American Stock Exchanges;

15. Write, purchase or sell puts, calls or combinations
thereof, except that all Funds listed above except the Money Market Funds may
purchase or sell puts and calls as otherwise described in the Prospectus or
SAI; however, no Fund will invest more than 5% of its total assets in these
classes of securities; or

16. Invest more than 5% of the current value of its total
assets in the securities of companies which, including predecessors, have a
record of less than three years' continuous operation.

If a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of a Fund's investments will not constitute a violation of
such limitation, except that any borrowing by a Fund that exceeds the
fundamental investment limitations stated above must be reduced to meet such
limitations within the period required by the 1940 Act (currently three days)
and the Funds will not at any time hold more than 15% (10% in the case of the
Money Market Funds) of their net assets in illiquid securities. Otherwise, a
Fund may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.

In order to permit the sale of shares in certain states, the
Trust may make commitments more restrictive than the investment policies and
limitations described above. Should the Trust determine that these commitments
are no longer in the best interests of the Trust, it will revoke the commitment
by terminating sales of its shares in the states involved.

In addition, in accordance with current SEC
regulations, the Money Market Funds intend, as a non-fundamental policy, to
limit investments in the securities of any single issuer (other than securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
and repurchase agreements collateralized by such securities) to not more than
5% of the value of their respective total assets at the time of purchase,
except for 25% of the value of their total assets which

- 25 -
<PAGE> 240
may be invested in any one issuer for a period of up to three business days.

MANAGEMENT

Trustees and Officers

The principal occupations of the Trustees and executive
officers of the Funds for the past five years and their ages are listed below.
None of the Trustees is deemed to be an "interested person" of the Trust for
purposes of the 1940 Act.

<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s)
Name, Address and Age with Registrant During Past 5 Years
- --------------------- ----------------- -----------------------
<S> <C> <C>
Joseph N. Hankin Trustee President, Westchester Community College
75 Grasslands Road since 1971; President of Hartford Junior
Valhalla, NY 10595 College from 1967 to 1971; Adjunct Professor
Age: 54 of Columbia University Teachers College
since 1976.

Richard A. Wedemeyer Trustee Vice President of Performance Advantage,
17 High Street Inc., 17 High Street, Norwalk, CT 06851
Suite 301 since 1992; Vice President of Jim Henson
Norwalk, CT 06851 Productions from 1979 to 1992; Author of In
Age: 59 Transition (Harper Collins); co-founder and
coconductor of Harvard Business School Club
of New York Career Seminar; Trustee of Jim
Henson Legacy trust.

John E. Heilmann Trustee Retired; Chairman, President and Chief
Old Norwood Plantation Executive Officer,
Wingina, VA 24599 Distillers Somerset, Inc. and Norwood
Age: 63 Enterprises, Inc. from 1987 to 1992.

Dennis W. Draper Trustee Associate Professor of Finance,
University of Southern at University of Southern California
California since 1978; Director of
School of Business Data Analysis, Inc. (financial services);
</TABLE>

- 26 -
<PAGE> 241
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s)
Name, Address and Age with Registrant During Past 5 Years
- --------------------- ----------------- -----------------------
<S> <C> <C>

Hoffman 701-F and Editorial Board of Chicago
Los Angeles, CA 90089 Board of Trade.
Age: 45

Jack D. Henderson Trustee Partner of the law firm of Clanahan, Tanner,
1600 Broadway Downing Knowlton, P.C.
Denver, CO 80202
Age: 67

Michael C. Petrycki President Executive Vice President and Director of
230 Park Avenue Furman Selz since 1984.
New York, NY 10169
Age: 52

Steven D. Blecher Executive Vice Executive Vice President and Director of
230 Park Avenue President Furman Selz since 1983; Vice President,
New York, NY 10169 Secretary and Treasurer of Furman Selz
Age: 52 Capital Management, Inc. since 1984.

John J. Pileggi Vice President Managing Director of Furman Selz, from 1984
237 Park Avenue and Treasurer to 1992; Senior Managing Director since 1992
New York, NY 10169 and Director of Furman Selz since 1994.
Age: 36

Joan V. Fiore Vice President Managing Director and Counsel of Furman Selz
237 Park and Secretary since 1991; Staff Attorney at the U.S.
New York, NY 10017 Securities and Exchange Commission, Division
Age: 39 of Investment Management, from 1986 to 1991.

Donald E. Brostrom Assistant Treasurer Director, Fund Services, Furman Selz
237 Park Avenue Incorporated since 1986; Managing Director
New York, NY 10169 of Furman Selz since 1995.
Age: 36
</TABLE>

- 27 -
<PAGE> 242
Trustees receive from the Trust an annual retainer of $5,000
and a fee of $1,000 for each Board of Trustees meeting and $500 for each Board
committee meeting attended, and are reimbursed for all out-of-pocket expenses
relating to attendance at such meetings.

For the fiscal year ended September 30, 1995, the Trustees
received the following compensation from the Trust and from certain other
investment companies (as indicated) that have the same investment advisor as
the Trust or an investment advisor that is an affiliated person of the Trust's
investment advisor:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ACCRUED ESTIMATED TOTAL COMPENSATION
NAME OF COMPENSATION FROM AS PART OF TRUST ANNUAL BENEFITS FROM REGISTRANT
TRUSTEE THE TRUST EXPENSE UPON RETIREMENT AND FUND COMPLEX
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dennis W. $0 $0
Draper
- -----------------------------------------------------------------------------------------------------------

Joseph N. $0 $0
Hankin
- -----------------------------------------------------------------------------------------------------------

John E. $0 $0
Heilmann
- -----------------------------------------------------------------------------------------------------------

Jack D. $0 $0
Henderson
- -----------------------------------------------------------------------------------------------------------

Richard A. $0 $0
Wedemeyer
- -----------------------------------------------------------------------------------------------------------
</TABLE>

** Includes amounts received for service as a member of the Boards of Trustees
of Pacific American Fund and Westcore Trust.

The Trustees and officers of the Trust, as a group, own less
than 1% of the outstanding shares of the Funds as of the date of this SAI.

Advisor

First Interstate Capital Management, Inc., 7501 E. McCormick
Parkway, Scottsdale, Arizona 85258, serves as advisor to the Funds. FICM
manages the investment and reinvestment of the assets of the Funds and
continuously reviews, supervises and administers the Funds' investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Funds' investments directly with brokers and dealers selected by it in its
discretion. See "Portfolio Transactions." FICM also furnishes to the Board of
Trustees, which has overall responsibility for the business and affairs of the
Trust, periodic reports on the investment performance of the Funds.

- 28 -
<PAGE> 243
FICM is a wholly-owned subsidiary of First Interstate Bank of
California ("FICAL"). FICAL is the largest banking subsidiary of First
Interstate Bancorp. First Interstate Bancorp provides financial products and
services marketed at the local level to nearly five million households in over
500 communities in 13 western states.

Under the terms of the Investment Advisory Contracts between
the Trust and FICM, FICM is obligated to manage the Funds' portfolios in
accordance with applicable laws and regulations. The investment advisory
services provided by FICM to the Funds are not exclusive under the terms of the
Investment Advisory Contracts. FICM is free to, and does, render investment
advisory services to others. In making its investment decisions, FICM does not
use material inside information in the possession of its affiliates.

The Investment Advisory Contracts for the Funds will continue
in effect for a period beyond more than two years from the date of their
execution with respect to a particular Fund, only as long as such continuance
is approved annually (i) by the holders of a majority of the outstanding voting
securities of the Funds or by the Board of Trustees and (ii) by a majority of
the Trustees who are not parties to such Contract or "interested persons" (as
defined in the 1940 Act) of any such party. Each Investment Advisory Contract
may be terminated with respect to a particular Fund without penalty by vote of
the Trustees or the shareholders of such Fund, or by the Advisor, on 60 days
written notice by either party to the Contract and will terminate automatically
if assigned.

The Investment Advisory Contracts provide that FICM shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by a Fund in connection with the performance of such contracts, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of FICM in the performance of its duties
or from reckless disregard of its duties and obligations under the Contracts.

Prior to October 1, 1995, First Interstate Bank of Oregon,
N.A. and First Interstate Bank of Washington, N.A. served as the co-advisors
to the Growth Fund and the National Tax-Exempt Fund; First Interstate Bank of
Oregon, N.A. served as the advisor to the Short-Term Government Bond Fund,
Intermediate Government Bond Fund, Intermediate Bond Fund and Oregon Tax-Exempt
Fund; First Interstate Bank of Arizona, N.A. served as the advisor to the
Arizona Tax-Exempt Fund. For the fiscal years ended September 30, 1995, May
31, 1995 and May 31, 1994, the previous

- 29 -
<PAGE> 244
advisors for these Funds were entitled to receive advisory fees from the Funds
at the same annual rates as those currently in effect. For such fiscal years,
the previous advisors were entitled to receive the following amounts in
advisory fees:

Investment Advisory Fees

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
YEAR ENDED
SEPTEMBER 30, YEAR ENDED YEAR ENDED
FUND 1995* MAY 31, 1995 MAY 31, 1994
- -------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund $63,300 $13,655
- -------------------------------------------------------------------------------------

Short-Term Government Bond
Fund $249,204 $275,549
- -------------------------------------------------------------------------------------

Intermediate Government Bond
Fund $180,883 $197,768
- -------------------------------------------------------------------------------------

Intermediate Bond Fund $275,948 $318,000
- -------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund $256,430 $269,574
- -------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund $124,904 $128,905
- -------------------------------------------------------------------------------------

National Tax-Exempt Fund $67,845 $57,059
- -------------------------------------------------------------------------------------
</TABLE>

* The Funds changed their fiscal year from May 31 to September 30.

For the fiscal years ended September 30, 1995, May 31, 1995
and May 31, 1994, the previous advisors for the Funds listed below waived
advisory fees and reimbursed expenses in the following amounts:

- 30 -
<PAGE> 245

Investment Advisory Fees Waived
and Expenses Reimbursed by Advisor

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPTEMBER 30, MAY 31, 1995 MAY 31, 1994
1995*
- ----------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund $89,494 $75,741
- ----------------------------------------------------------------------------------

Short-Term Government
Bond Fund $135,679 $178,274
- ----------------------------------------------------------------------------------

Intermediate Government
Bond Fund $54,265 $43,013
- ----------------------------------------------------------------------------------

Intermediate Bond Fund $0 $0
- ----------------------------------------------------------------------------------

Oregon Tax-Exempt Fund $84,770 $104,948
- ----------------------------------------------------------------------------------

Arizona Tax-Exempt Fund $166,803 $172,383
- ----------------------------------------------------------------------------------

National Tax-Exempt Fund $145,244 $141,590
- ----------------------------------------------------------------------------------

</TABLE>

* The Funds changed their fiscal year from May 31 to September 30.

Prior to March 18, 1994, the advisor for the Equity Value
Fund, Balanced Fund, Asset Preservation Fund, Government Income Fund,
California Short-Term Tax-Exempt Fund, California Tax-Exempt Fund, Government
Money Market Fund and Money Market Fund was San Diego Financial Capital
Management, Inc. ("San Diego Financial"), which was a wholly-owned subsidiary
of San Diego Trust & Savings Bank ("San Diego Trust"), which in turn was a
wholly-owned subsidiary of San Diego Financial Corporation ("SDFC"). On that
date, SDFC merged into First Interstate Bancorp and San Diego Trust merged into
FICAL. As a result of these transactions, San Diego Financial became an
indirect wholly-owned subsidiary of FICAL. On January 12, 1995, San Diego
Financial merged into First Interstate Investment Services, Inc., a direct
wholly-owned subsidiary of FICAL, which has since changed its name to First
Interstate Capital Management, Inc.

During the fiscal years ended September 30, 1995, September
30, 1994 and September 30, 1993, the Advisor (and previous advisor, as the case
may be) was entitled to receive advisory fees from the Funds listed below at
the same annual rates as those currently in effect. For such fiscal years, the

- 31 -
<PAGE> 246
Advisor (and previous advisor, as the case may be) were entitled to receive the
following amounts in advisory fees:

Investment Advisory Fees

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Value Fund $953,400 $701,500
- -------------------------------------------------------------------------------------------------------

Balanced Fund $683,626 $503,720
- -------------------------------------------------------------------------------------------------------

Asset Preservation Fund $446,807 $561,960
- -------------------------------------------------------------------------------------------------------

Government Income Fund $792,907 $767,575
- -------------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt
Fund* $117,116 $71,787
- -------------------------------------------------------------------------------------------------------

California Tax-Exempt Fund $1,068,954 $1,036,999
- -------------------------------------------------------------------------------------------------------

Government Money Market Fund $442,842 $534,447
- -------------------------------------------------------------------------------------------------------

Money Market Fund $482,643 $463,402
- -------------------------------------------------------------------------------------------------------
</TABLE>

* The California Short-Term Tax-Exempt Fund commenced operations on
January 20, 1993.

During the fiscal years ended September 30, 1995, September
30, 1994 and September 30, 1993, the Advisor (or previous advisor, as the case
may be) waived advisory fees and reimbursed expenses for the Funds listed below
in the following amounts:

- 32 -
<PAGE> 247

Investment Advisory Fees Waived
and Expenses Reimbursed by Advisor

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Value Fund $0 $808
- -------------------------------------------------------------------------------------------------------

Balanced Fund $0 $21,507
- -------------------------------------------------------------------------------------------------------

Asset Preservation Fund $0 $33,487
- -------------------------------------------------------------------------------------------------------

Government Income Fund $0 $91,292
- -------------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt
Fund* $114,128 $95,431
- -------------------------------------------------------------------------------------------------------

California Tax-Exempt Fund $0 $106,028
- -------------------------------------------------------------------------------------------------------

Government Money Market Fund $0 $0
- -------------------------------------------------------------------------------------------------------

Money Market Fund $128,705 $123,574
- -------------------------------------------------------------------------------------------------------
</TABLE>

* The California Short-Term Tax-Exempt Fund commenced operations on
January 20, 1993.

Distribution of Fund Shares

The Trust has retained Pacifica Funds Distributor Inc., a
subsidiary of Furman Selz, to serve as principal underwriter for the shares of
the Funds pursuant to a Distribution Contract. The Distribution Contract
provides that the Distributor will use its best efforts to maintain a broad
distribution of the Funds' shares among bona fide investors and may enter into
selling group agreements with responsible dealers and dealer managers as well
as sell the Funds' shares to individual investors. The Distributor is not
obligated, however, to sell any specific amount of shares.

Prior to October 1, 1995, ALPS Mutual Funds Service, Inc.
("ALPS") served as the distributor of the Growth Fund, Short-Term Government
Bond Fund, Intermediate Government Bond Fund, Intermediate Bond Fund, Oregon
Tax-Exempt Fund, Arizona Tax-Exempt Fund and National Tax-Exempt Fund. ALPS
was not entitled to any compensation for its services as distributor for the
Funds.

Under an Investor Shares Distribution Plan, the Funds may pay
directly or reimburse the Distributor monthly in amounts described in the
Prospectuses for costs and expenses of marketing the Investor Shares of the
Equity, Bond and Tax-Exempt Funds.

- 33 -
<PAGE> 248
Under a separate Distribution Plan for the Money Market Funds (together with
the Investor Shares Distribution Plan, the "Plans"), the Money Market Funds may
pay directly or reimburse. the Distributor monthly in amounts described in the
Prospectus for costs and expenses of marketing their shares. The Board of
Trustees has concluded that there is a reasonable likelihood that the Plan will
benefit the Funds and their shareholders covered by the Plan.

Each Plan provides that it may not be amended to increase
materially the costs which a Fund may bear pursuant to the Plan without
approval of the shareholders of the class of shares to which the Plan relates,
and that other material amendments of the Plan must be approved by the Board of
Trustees, and by 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 or in any related agreement, by vote cast
in person at a meeting called for the purpose of considering such amendments.
The selection and nomination of the Trustees of the Trust have been committed
to the discretion of the Trustees who are not "interested persons" of the
Trust. The Plans have been approved and are subject to annual approval by the
Board of Trustees and by the Trustees who are neither "interested persons" of
the Trust nor have any direct or indirect financial interest in the operation
of the Plans, by vote cast in person at a meeting called for the purpose of
voting on the Plans.

Each Plan is terminable with respect to a Fund time by a vote
of a majority of the Trustees who are not "interested persons" of the Trust and
who have no direct indirect financial interest in the operation of the Plan
vote of the holders of a majority of the class of shares of that Fund to which
the Plan relates.

During the fiscal year ended September 30, 1995, the following
Funds reimbursed the Distributor, pursuant to their Plans, the following
amounts:

- 34 -
<PAGE> 249

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------

California Government
Equity Asset Government California Short-Term Money Money
Value Balanced Preservation Income Tax-Exempt Tax-Exempt Market Market
Fund Fund Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Advertising and $ $ $ $ $ $ $ $
Promotional
Materials
- ---------------------------------------------------------------------------------------------------------------------------------

Printing and
mailing of
financial
statements and
prospectuses to
other than current
shareholders
- ---------------------------------------------------------------------------------------------------------------------------------

Compensation to
underwriters
Compensation to
broker/dealers
- ---------------------------------------------------------------------------------------------------------------------------------

Compensation to
sales personnel
- ---------------------------------------------------------------------------------------------------------------------------------

Financing charges
- ---------------------------------------------------------------------------------------------------------------------------------

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

Administrative Services

Furman Selz provides management and administrative services
necessary for the operation of the Funds, including among other things, (i)
preparation of shareholder reports and communications, (ii) regulatory
compliance, such as reports to and filings with the Securities and Exchange
Commission ("SEC") and state securities commissions and (iii) general
supervision of the operation of the Funds, including coordination of the
services performed by the Funds' advisor, distributor, transfer agent,
custodians, independent accountants, legal counsel and others. In addition,
Furman Selz furnishes office space and facilities required for conducting the
business of the Funds and pays the compensation of the Funds' officers,
employees and Trustees affiliated with Furman Selz. For these services, Furman
Selz is entitled to receive a fee, payable monthly, at the annual rate of 0.15%
of the average daily net assets of each Fund.

The Administrative Services Contract is terminable with
respect to a particular Fund without penalty, at any time, by vote of a
majority of the Trustees who are not "interested persons" of the Trust and who
have no direct or indirect financial interest in the Administrative Services
Contract upon not more than 60 days written notice to Furman Selz or by vote of
the holders of a majority of the shares of the Fund involved, or, upon 60 days
notice, by Furman Selz. The Administrative Services Contract will terminate
automatically in the event of its assignment.

- 35 -
<PAGE> 250

Prior to October 1, 1995, ALPS served as the administrator
for each Fund listed below. For its administration services, ALPS was entitled
to receive the following amounts for the fiscal years ended September 30, 1995,
May 31, 1995 and May 31, 1994:

Administration Fees

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
YEAR ENDED
SEPTEMBER 30, YEAR ENDED YEAR ENDED
FUND 1995* MAY 31, 1995 MAY 31, 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund $4,220 $910
- -------------------------------------------------------------------------------------------

Short-Term Government Bond $24,921 $27,601
Fund
- -------------------------------------------------------------------------------------------

Intermediate Government Bond $18,088 $20,580
Fund
- -------------------------------------------------------------------------------------------

Intermediate Bond Fund $27,595 $31,800
- -------------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund $25,643 $26,957
- -------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund $12,490 $12,890
- -------------------------------------------------------------------------------------------

National Tax-Exempt Fund $6,785 $5,706
- -------------------------------------------------------------------------------------------
</TABLE>

* The Funds changed their fiscal year from May 31 to September 30.

For the fiscal years ended September 30, 1995, May 31, 1995
and May 31, 1994, ALPS waived administration fees for the Funds listed below in
the following amounts:

- 36 -
<PAGE> 251

Administration Fees Waived

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPTEMBER 30, MAY 31, 1995 MAY 31, 1994
1995*
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund $1,223 $910
- -------------------------------------------------------------------------------------------

Short-Term Government Bond $0 $0
Fund
- -------------------------------------------------------------------------------------------

Intermediate Government Bond $0 $3,500
Fund
- -------------------------------------------------------------------------------------------

Intermediate Bond Fund $0 $0
- ------------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund $0 $0
- ------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund $0 $0
- ------------------------------------------------------------------------------------------

National Tax-Exempt Fund $2,018 $4,210
- -------------------------------------------------------------------------------------------
</TABLE>

* The Funds changed their fiscal year from May 31 to September 30.

During the years ended September 30, 1995, September 30, 1994
and September 30, 1993, Furman Selz was entitled to receive administration
services fees from the Funds listed below in the following amounts:

- 37 -
<PAGE> 252

Administration Fees

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Value Fund $317,992 $233,834
- -------------------------------------------------------------------------------------------------------------

Balanced Fund $227,896 $167,907
- -------------------------------------------------------------------------------------------------------------

Asset Preservation Fund $266,358 $321,120
- -------------------------------------------------------------------------------------------------------------

Government Income Fund $317,694 $307,030
- -------------------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund* $66,924 $41,021
- -------------------------------------------------------------------------------------------------------------

California Tax-Exempt Fund $427,178 $414,800
- -------------------------------------------------------------------------------------------------------------

Government Money Market Fund $295,228 $356,611
- -------------------------------------------------------------------------------------------------------------

Money Market Fund $321,762 $308,935
- -------------------------------------------------------------------------------------------------------------
</TABLE>

* The California Short-Term Tax-Exempt Fund commenced operations on
January 20, 1993.

For the fiscal years ended September 30, 1995, September 30,
1994 and September 30, 1993, Furman Selz waived administration fees for the
Funds listed below in the following amounts:

Administration Fees Waived

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Value Fund $31,972 $16,972
- -------------------------------------------------------------------------------------------------------------

Balanced Fund $22,808 $21,652
- -------------------------------------------------------------------------------------------------------------

Asset Preservation Fund $26,286 $26,812
- -------------------------------------------------------------------------------------------------------------

Government Income Fund $32,247 $40,348
- -------------------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund* $66,924 $64,664
- -------------------------------------------------------------------------------------------------------------

California Tax-Exempt Fund $42,354 $54,855
- -------------------------------------------------------------------------------------------------------------

Government Money Market Fund $29,523 $23,652
- -------------------------------------------------------------------------------------------------------------

Money Market Fund $32,174 $20,684
- -------------------------------------------------------------------------------------------------------------
</TABLE>

* The California Short-Term Tax-Exempt Fund commenced operations on
January 20, 1993.

- 38 -
<PAGE> 253
Service Organizations

The Trust may also contract with banks (including affiliates of First
Interstate Bancorp), trust companies, brokerdealers (other than Furman Selz) or
other financial organizations ("Service Organizations") to provide certain
administrative services with respect to the Funds. Services provided by
Service Organizations may include among other things: providing necessary
personnel and facilities to establish and maintain certain shareholder accounts
and records; assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving funds in
connection with client orders to purchase or redeem shares; verifying and
guaranteeing client signatures in connection with redemption orders, transfers
among and changes in client-designating accounts; providing periodic statements
showing a client's account balance and, to the extent practicable, integrating
such information with other client transactions; furnishing periodic and annual
statements and confirmations of all purchases and redemptions of shares in a
client's account; transmitting proxy statements, annual reports, and updating
prospectuses and other communications from the Funds to clients; and providing
such other services as the Funds or a client reasonably may request, to the
extent permitted by applicable statute, rule or regulation.

Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest more
than the minimum initial or subsequent investments specified by the Funds or
charging a direct fee for servicing. If imposed, these fees would be in
addition to any amounts which might be paid to the Service Organization by the
Funds. Each Service Organization has agreed to transmit to its clients a
schedule of any such fees. Shareholders using Service Organizations are urged
to consult them regarding any such fees or conditions.

The Glass-Steagall Act and other applicable laws, among other
things, prohibit banks from engaging in the business of underwriting, selling
or distributing securities. There currently is no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
statutes or regulations relating to the permissible activities of banks and
their subsidiaries or affiliates, could prevent a bank from continuing to
perform all or a part of its servicing activities. In addition, state
securities laws on this issue may differ from the interpretations of federal
law expressed herein and banks and financial institutions may be required to
register as dealers pursuant to

- 39 -
<PAGE> 254
state law. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders of the Trust and alternative means
for continuing the servicing of such shareholders would be sought. In that
event, changes in the operation of the Trust might occur and a shareholder
serviced by such a bank might no longer be able to avail itself of any services
then being provided by the bank. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.

EXPENSES AND EXPENSE LIMITS

Except for the expenses paid by the Advisor, the Distributor
and Furman Selz, the Funds bear all costs of their operations.

Currently, California is the only state imposing limitations
on the expenses of the Funds. Those expense limitations are 2-1/2 percent of
the first $30 million of a Fund's average net assets, 2 percent of the next $70
million and 1-1/2 percent of a Fund's remaining average net assets. If in any
fiscal year expenses of the Funds (excluding taxes, interest, expenses under
the Plan, brokerage commissions and other portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, but including the advisory
and administrative fees) exceed the expense limitations applicable to the Funds
imposed by the securities regulations of any state, Furman Selz and the FICM
each will reimburse the Funds for a portion of the excess in accordance with
the following table:

- 40 -
<PAGE> 255

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
FUND FURMAN SELZ FICM
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund 16% 84%
- -------------------------------------------------------------------------------------------------------------

Equity Value Fund 25% 75%
- -------------------------------------------------------------------------------------------------------------

Balanced Fund 25% 75%
- -------------------------------------------------------------------------------------------------------------

Asset Preservation Fund 37% 63%
- -------------------------------------------------------------------------------------------------------------

Short-Term Government Bond Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

Intermediate Government Bond Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

Government Income Fund 29% 71%
- -------------------------------------------------------------------------------------------------------------

Intermediate Bond Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund 29% 71%
- -------------------------------------------------------------------------------------------------------------

California Tax-Exempt Fund 29% 71%
- -------------------------------------------------------------------------------------------------------------

National Tax-Exempt Fund 23% 77%
- -------------------------------------------------------------------------------------------------------------

Government Money Market Fund 40% 60%
- -------------------------------------------------------------------------------------------------------------

Money Market Fund 40% 60%
- -------------------------------------------------------------------------------------------------------------

100% U.S. Treasury Money Market Fund
- -------------------------------------------------------------------------------------------------------------

California Tax-Exempt Money Market Fund
- -------------------------------------------------------------------------------------------------------------

National Tax-Exempt Money Market Fund
- -------------------------------------------------------------------------------------------------------------

Equity Index Fund
- -------------------------------------------------------------------------------------------------------------

International Equity Fund
- -------------------------------------------------------------------------------------------------------------
</TABLE>

DETERMINATION OF NET ASSET VALUE

The portfolio instruments of the Money Market Funds are valued
on the basis of amortized cost. This technique involves valuing an instrument
at its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price each Fund would receive if it
sold the instrument. During periods of declining interest rates, the daily
yield on

- 41 -
<PAGE> 256
shares of each Fund computed as described above may tend to be higher than a
like computation made by a fund with identical investments utilizing a method
of valuation based upon market prices and estimates of market prices for all of
its instruments. Thus, if the use of amortized cost by each Fund resulted in a
lower aggregate portfolio value on a particular day, a prospective investor in
such Fund would be able to obtain a somewhat higher yield than would result
from investment in a fund utilizing solely market values and existing investors
in each Fund would receive less investment income. The converse would apply in
a period of rising interest rates.

The valuation of Money Market Funds' instruments, based upon
their amortized cost and the concomitant maintenance by each Fund of a net
asset value of $1.00, is permitted in accordance with Rule 2a-7 under the Act,
pursuant to which the Fund must adhere to certain conditions. Each Fund must
maintain a dollarweighted average maturity of 90 days or less, purchase only
instruments having remaining maturities of thirteen months or less, and invest
only in securities which are determined to present minimal credit risks
pursuant to guidelines adopted by the Trustees. Instruments having variable or
floating interest rates or demand features may be deemed to have remaining
maturities as FOLLOWS: (a) a government security with a variable rate of
interest readjusted no less frequently than every thirteen months may be deemed
to have a maturity equal to the period remaining until the next readjustment of
the interest rate; (b) an instrument with a variable rate of interest, the
principal amount of which is scheduled on the face of the instrument to be paid
in thirteen months or less, may be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate; (c) an
instrument with a variable rate of interest that is subject to a demand feature
may be deemed to have a maturity equal to the longer of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand; (d) an instrument with a
floating rate of interest that is subject to a demand feature may be deemed to
have a maturity equal to the period remaining until the principal amount can be
recovered through demand; and (e) a repurchase agreement may be deemed to have
a maturity equal to the period remaining until the date on which the repurchase
of the underlying securities is scheduled to occur or, where no date is
specified but the agreement is subject to demand, the notice period applicable
to a demand for the repurchase of the securities.

The Trustees have established procedures designed to
stabilize, to the extent reasonably possible, the Money Market Funds' price per
share as computed for the purpose of sales and

- 42 -
<PAGE> 257
redemptions at a single value. Such procedures will include the determination,
at such intervals as the Trustees deem appropriate, of the extent to which each
Fund's NAV as calculated by using available market quotations deviates from
$1.00 per share, such deviation may result in material dilution or other unfair
results to existing shareholders or investors. In the event the Trustees
determine that such a material deviation exists, they have agreed to take such
corrective action as they regard as necessary and appropriate, which may
include selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding
dividends; redeeming shares in kind or without monetary or other consideration;
or establishing a net asset value per share by using available market
quotations. It is the intention of the Money Market Funds to maintain a per
share net asset value of $1.00, but there can be no assurance that each Fund
will do so.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Payment for shares may, in the discretion of the Advisor, be
made in the form of securities that are permissible investments for the Funds
as described in the Prospectuses. For further information about this form of
payment please contact Furman Selz. In connection with an in-kind securities
payment, a Fund will require, among other things, that the securities be valued
on the day of purchase in accordance with the pricing methods used by the Fund
and that the Fund receive satisfactory assurances that (1) it will have good
and marketable title to the securities received by it; (2) that the securities
are in proper form for transfer to the Fund; and (3) adequate information will
be provided concerning the basis and other matters relating to the securities.

Under the 1940 Act, a Fund may suspend the right of redemption
or postpone the date of payment upon redemption for any period during which the
New York Stock Exchange is closed (other than customary weekend and holiday
closings), or during which trading on said Exchange is restricted, or during
which as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit. (A Fund may also
suspend or postpone the recordation of the transfer of its shares upon the
occurrence of any of the foregoing conditions.)

The Trust may suspend redemption rights or postpone redemption
payments (as well as suspend the recordation of the transfer of shares) for
such periods as are permitted under the 1940 Act. The Trust may also redeem
shares involuntarily or make payment for redemption in securities or other
property if it

- 43 -
<PAGE> 258
appears appropriate to do so in light of the Trust's responsibilities under the
1940 Act.

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

If shares of the Funds are represented by a share certificate,
the certificate must be surrendered to the Funds' transfer agent for
cancellation before the shares can be redeemed.

All redemptions of shares of the Funds will be made in cash,
except that the commitment to redeem shares in cash extends only to redemption
requests made by each shareholder of a Fund during any 90-day period of up to
the lesser of $250,000 or 1% of the net asset value of that Fund at the
beginning of such period. This commitment is irrevocable without the prior
approval of the SEC and is a fundamental policy of the Funds that may not be
changed without shareholder approval. In the case of redemption requests by
shareholders in excess of such amounts, the Board of Trustees reserves the
right to have the Funds make payment, in whole or in part in securities or
other assets, in case of an emergency or any time a cash distribution would
impair the liquidity of a Fund to the detriment of the existing shareholders.
In this event, the securities would be valued in the same manner as the
securities of that Fund are valued. If the recipient were to sell such
securities, he or she would incur brokerage charges.

The computation of the offering price per Investor Share of
each Fund that charges a sales load based on the value of each Fund's Investor
class net assets and number of outstanding Investor Shares at the close of
business on the date indicated is as follows:

- 44 -
<PAGE> 259
As of May 31, 1995:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
INTERMEDIATE
GOVERNMENT
GROWTH FUND BOND FUND
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets $199,710 $9,161,600
- -------------------------------------------------------------------------------------------------------------

Outstanding Shares 11,564 584,634
- -------------------------------------------------------------------------------------------------------------

Net Asset Value Per Share $17.27 $15.67
- -------------------------------------------------------------------------------------------------------------

Sales Charge, 4.50 percent of offering price (4.71
percent of net asset value) per share, or per Investor
share $.81 $.74
- -------------------------------------------------------------------------------------------------------------

Offering to Public $18.08 $16.41
- -------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
SHORT-TERM GOVERNMENT BOND
FUND
- -------------------------------------------------------------------------------------------
<S> <C>

Net Assets $4,515,492
- -------------------------------------------------------------------------------------------

Outstanding Shares 291,593
- -------------------------------------------------------------------------------------------

Net Asset Value Per Share $15.49
- -------------------------------------------------------------------------------------------

Sales Charge, 3.00 percent of offering price (3.09
percent of net asset value) per share, or per Investor
share $.48
- -------------------------------------------------------------------------------------------

Offering to Public $15.97
- -------------------------------------------------------------------------------------------
</TABLE>

As of May 31, 1995, there were no Investor Shares outstanding for the
Intermediate Bond Fund, Oregon Tax-Exempt Fund, Arizona Tax-Exempt Fund and
National Tax-Exempt Fund.

- 45 -
<PAGE> 260
As of September 30, 1994:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
EQUITY VALUE FUND BALANCED FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets $159,626,816 $95,906,714
- --------------------------------------------------------------------------------------------------------------

Outstanding Shares 13,612,593 8,664,090
- --------------------------------------------------------------------------------------------------------------

Net Asset Value Per Share $11.07 $11.73
- --------------------------------------------------------------------------------------------------------------

Sales Charge, 4.50 percent of offering price (4.71
percent of net asset value) per share, or per Investor
share $.52 $.55
- --------------------------------------------------------------------------------------------------------------

Offering to Public $11.59 $12.28
- --------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
GOVERNMENT INCOME CALIFORNIA TAX-EXEMPT
FUND FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets $124,372,015 $173,785,383
- --------------------------------------------------------------------------------------------------------------

Outstanding Shares 13,074,031 16,493,634
- --------------------------------------------------------------------------------------------------------------

Net Asset Value Per Share $9.51 $10.54
- --------------------------------------------------------------------------------------------------------------

Sales Charge, 4.50 percent of offering price (4.71 $.45 $.50
percent of net asset value) per share, or per Investor
share
- --------------------------------------------------------------------------------------------------------------

Offering to Public $9.96 $11.04
- --------------------------------------------------------------------------------------------------------------
</TABLE>

There is no sales charge on the Money Market Funds, the
Institutional Shares of all the Funds, or the Investor Shares of the Asset
Preservation Fund and California Short-Term Tax-Exempt Fund.

PORTFOLIO TRANSACTIONS

Investment decisions for the Funds and for the other
investment advisory clients of the Advisor are made with a view to achieving
their respective investment objectives. Investment decisions are the product
of many factors in addition to basic suitability for the particular client
involved. Thus, a particular security may be bought or sold only for certain
clients even though it could have been bought or sold for other

- 46 -
<PAGE> 261
clients at the same time. Likewise, a particular security may be bought for
one or more clients while at the same time one or more clients are selling the
security. In some instances, one client may sell a particular security to
another client. It also sometimes happens that two or more clients
simultaneously purchase or sell the same security, in which event each day's
transactions in such security are, insofar as possible, averaged as to price
and allocated between such clients in a manner which in the Advisor's opinion
is equitable to each and in accordance with the amount being purchased or sold
by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other
clients.

The Funds have no obligation to deal with any dealer or group
of dealers in the execution of transactions in portfolio securities. Subject
to policies established by the Trust's Board of Trustees, the Advisor is
primarily responsible for portfolio decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Funds to obtain the
best results taking into account the broker-dealer's general execution and
operational facilities, the type of transaction involved and other factors such
as the dealer's risk in positioning the securities. While the Advisor
generally seeks reasonably competitive spreads or commissions, the Funds will
not necessarily be paying the lowest spread or commission available.

Purchases and sales of securities will often be principal
transactions in the case of debt securities and equity securities traded
otherwise than on an exchange. The purchase or sale of equity securities will
frequently involve the payment of a commission to a broker-dealer who effects
the transaction on behalf of a Fund. Debt securities normally will be
purchased or sold from or to issuers directly or to dealers serving as market
makers for the securities at a net price. Generally, money market securities
are traded on a net basis and do not involve brokerage commissions. Under the
1940 Act, persons affiliated with the Funds or the Sponsor are prohibited from
dealing with the Funds as a principal in the purchase and sale of securities
except in limited situations permitted by SEC regulations, unless a permissive
order allowing such transactions is obtained from the SEC.

The Advisor may, in circumstances in which two or more
broker-dealers are in a position to offer comparable results, give preference
to a dealer which has provided statistical or other research services to the
Advisor. By allocating transactions in this manner, the Advisor is able to
supplement its research and analysis with the views and information of
securities firms. These services, which in some cases may also be purchased
for cash, include such matters as general economic

- 47 -
<PAGE> 262
and security market reviews, industry and company reviews, evaluations of
securities and recommendations as to the purchase and sale of securities. Some
of these services are of value to the Advisor in advising various of its
clients (including the Funds), although not all of these services are
necessarily useful and of value in managing the Funds. The management fee paid
by the Funds is not reduced because the Advisor and its affiliates receive such
services.

As permitted by Section 28(e) of the Securities Exchange Act
of 1934 (the "1934 Act"), the Advisor may cause the Funds to pay a
broker-dealer which provides "brokerage and research services" (as defined in
the 1934 Act) to the Advisor an amount of disclosed commission for effecting a
securities transaction for the Funds in excess of the commission which another
broker-dealer would have charged for effecting that transaction.

Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking the most
favorable price and execution available and such other policies as the Trustees
may determine, the Advisor may consider sales of shares of the Funds as a
factor in the selection of broker-dealers to execute portfolio transactions for
the Funds.

During the fiscal years ended September 30, 1995, May 31, 1995
and May 31, 1994, the Short-Term Government Bond Fund, Intermediate Government
Bond Fund, Intermediate Bond Fund, Oregon Tax-Exempt Fund, Arizona Tax-Exempt
Fund and National Tax-Exempt Fund did not pay any brokerage commissions,
because all of their portfolio transactions occurred in the over-the-counter
market. During the fiscal years ended September 30, 1995, May 31, 1995 and May
31, 1994, the Growth Fund paid $___________, $32,392 and $10,939, respectively,
in brokerage commissions.

During the fiscal years ended September 30, 1995, September
30, 1994 and September 30, 1993, the Asset Preservation Fund, Government Income
Fund, California Short-Term Tax-Exempt Fund, California Tax-Exempt Fund,
Government Money Market Fund and Money Market Fund did not pay any brokerage
commissions, because all of their portfolio transactions occurred in the
overthe-counter market. During the same time periods, the Equity Value Fund
and Balanced Fund paid the following amounts in brokerage commissions:

- 48 -
<PAGE> 263

Brokerage Commissions Paid

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FUND SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Value Fund $247,218 $368,789
- --------------------------------------------------------------------------------------------------------------

Balanced Fund $104,835 $149,294
- --------------------------------------------------------------------------------------------------------------
</TABLE>

During the time periods stated above, no brokerage commissions
were paid by the Funds to an affiliated broker.

Portfolio Turnover

Changes may be made in the portfolio consistent with the
investment objectives and policies of the Funds whenever such changes are
believed to be in the best interests of the Funds and their shareholders. The
portfolio turnover rate is calculated by dividing the lesser of purchases or
sales of portfolio securities by the average monthly value of the Fund's
portfolio securities. For purposes of this calculation, portfolio securities
exclude all securities having a maturity when purchased of one year or less.

TAXATION

All Funds

The Funds intend to qualify and elect annually to be treated
as regulated investment companies under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). To qualify as a regulated investment
company, a Fund must (a) distribute to shareholders at least 90% of its
investment company taxable income (which includes, among other items,
dividends, taxable interest and the excess of net short-term capital gains over
net long-term capital losses); (b) derive in each taxable year at least 90% of
its gross income from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of stock, securities or
foreign currencies or other income derived with respect to its business of
investing in such stock, securities or currencies; (c) derive less than 30% of
its gross income from the sale or other disposition of certain assets (namely,
in the case of the Funds, (i) stock or securities; (ii) options, futures, and
forward contracts (other than those on foreign currencies), and (iii) foreign
currencies (including options, futures, and forward contracts on such
currencies) not directly related to the Fund's principal business

- 49 -
<PAGE> 264
of investing in stock or securities (or options and futures with respect to
stocks or securities)) held less than 3 months; and (d) diversify its holdings
so that, at the end of each quarter of the taxable year, (i) at least 50% of
the market value of the Fund's assets is represented by cash and cash items
(including receivables), U.S. Government securities, the securities of other
regulated investment companies and other securities, with such other securities
of any one issuer limited for the purposes of this calculation to an amount not
greater than 5% of the value of the Fund's total assets and not greater than
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of its total assets is invested in the securities of any one
issuer (other than U.S. Government securities or the securities of other
regulated investment companies). In addition, a Fund earning tax-exempt
interest must, in each year, distribute at least 90% of its net tax-exempt
income. By meeting these requirements, the Funds generally will not be subject
to Federal income tax on their investment company taxable income and net
capital gains which are distributed to shareholders. If the Funds do not meet
all of these Code requirements, they will be taxed as ordinary corporations and
their distributions will be taxed to shareholders as ordinary income.

Amounts, other than tax-exempt interest, not
distributed on a timely basis in accordance with a calendar year distribution
requirement are subject to a nondeductible 4% excise tax. To prevent
imposition of the excise tax, each Fund must distribute for each calendar year
an amount equal to the sum of (1) at least 98% of its ordinary income
(excluding any capital gains or losses) for the calendar year, (2) at least 98%
of the excess of its capital gains over capital losses (adjusted for certain
ordinary losses) for the one-year period ending October 31 of such year, and
(3) all ordinary income and capital gain net income (adjusted for certain
ordinary losses) for previous years that were not distributed during such
years.

Some Funds may invest in stocks of foreign companies that are
classified under the Code as passive foreign investment companies ("PFICs").
In general, a foreign company is classified as a PFIC under the Code if at
least one-half of its assets constitutes investment-type assets or 75% or more
of its gross income is investment-type income. Under the PFIC rules, an
"excess distribution" received with respect to PFIC stock is treated as having
been realized ratably over the period during which the Fund held the PFIC
stock. A Fund itself will be subject to tax on the portion, if any, of the
excess distribution that is allocated to the Fund's holding period in prior
taxable years (and an interest factor will be added to the tax, as if the tax
has actually been payable in such prior taxable years) even

- 50 -
<PAGE> 265
though the Fund distributes the corresponding income to stockholders. Excess
distributions include any gain from the sale of PFIC stock as well as certain
distributions from a PFIC. All excess distributions are taxable as ordinary
income.

A Fund may be able to elect alternative tax treatment with
respect to PFIC stock. Under an election that currently may be available, a
Fund generally would be required to include in its gross income its share of
the earnings of a PFIC on a current basis, regardless of whether any
distributions are received from the PFIC. If this election is made, the
special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, other elections may become
available that would affect the tax treatment of PFIC stock held by a Fund.
Each Fund's intention to qualify annually as a regulated investment company may
limit its elections with respect to PFIC stock.

Because the application of the PFIC rules may affect, among
other things, the character of gains, the amount of gain or loss and the timing
of the recognition of income with respect to PFIC stock, as well as subject a
Fund itself to tax on certain income from PFIC stock, the amount that must be
distributed to stockholders and that will be taxed to stockholders as ordinary
income or long-term capital gain may be increased or decreased substantially as
compared to a Fund that did not invest in PFIC stock.

Distributions of investment company taxable income generally
are taxable to shareholders as ordinary income. Distributions from certain of
the Funds may be eligible for the dividends-received deduction available to
corporations. Distributions of net long term capital gains, if any, designated
by the Funds as long-term capital gain dividends are taxable to shareholders as
long-term capital gain, regardless of the length of time the Funds' shares have
been held by a shareholder. All distributions are taxable to the shareholder
in the same manner whether reinvested in additional shares or received in cash.
Shareholders will be notified annually as to the Federal tax status of
distributions.

Distributions by a Fund reduce the net asset value of the
Fund's shares. Should a distribution reduce the net asset value below a
stockholder's cost basis, such distribution, nevertheless, would be taxable to
the shareholder as ordinary income or capital gain as described above, even
though, from an investment standpoint, it may constitute a partial return of
capital. In particular, investors should be careful to consider the tax
implications of buying shares just prior to a distribution by the Funds. The
price of shares purchased at that

- 51 -
<PAGE> 266
time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will receive a distribution which nevertheless
generally will be taxable to them.

Upon the taxable disposition (including a sale or redemption)
of shares of a Fund, a shareholder may realize a gain or loss depending upon
his basis in his shares. Such gain or loss generally will be treated as
capital gain or loss if the shares are capital assets in the shareholder's
hands. Such gain or loss will be long-term or short-term, generally depending
upon the shareholder's holding period for the shares. However, a loss realized
by a shareholder on the disposition of Fund shares with respect to which
capital gain dividends have been paid will, to the extent of such capital gain
dividends, be treated as longterm capital loss if such shares have been held by
the shareholder for six months or less. A loss realized on the redemption,
sale or exchange of Fund shares will be disallowed to the extent an
exempt-interest dividend was received with respect to those shares if the
shares have been held by the shareholder for six months or less. Further, a
loss realized on a disposition will be disallowed to the extent the shares
disposed of are replaced (whether by reinvestment of distributions or
otherwise) within a period of 61 days beginning 30 days before and ending 30
days after the shares are disposed of. In such a case, the basis of the shares
acquired will be adjusted to reflect the disallowed loss. Shareholders
receiving distributions in the form of additional shares will have a cost basis
for Federal income tax purposes in each share received equal to the net asset
value of a share of the Funds on the reinvestment date.

Under certain circumstances, the sales charge incurred in
acquiring shares of a Fund may not be taken into account in determining the
gain or lose on the disposition of those shares. This rule applies where
shares of a Fund are exchanged within 90 days after the date they were
purchased and new shares of a Fund are acquired without a sales charge or at a
reduced sales charge. In that case, the gain or loss recognized on the
exchange will be determined by excluding from the tax basis of the shares
exchanged all or a portion of the sales charge incurred in acquiring those
shares. This exclusion applies to the extent that the otherwise applicable
sales charge with respect to the newly acquired shares is reduced as a result
of having incurred the sales charge initially. Instead, the portion of the
sales charge affected by this rule will be treated as a sales charge paid for
the new shares.

The taxation of equity options is governed by section 1234 of
the Code. Pursuant to Code section 1234, the premium received by a Fund for
selling a put or call option is not

- 52 -
<PAGE> 267
included in income at the time of receipt. If the option expires, the premium
is short-term capital gain to the Fund. If the Fund enters into a closing
transaction, the difference between the amount paid to close out its position
and the premium received is short-term capital gain or loss. If a call option
written by a Fund is exercised, thereby requiring the Fund to sell the
underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a
Fund, if the option is sold, any resulting gain or loss will be a capital gain
or loss, and will be long-term or short-term, depending upon the holding period
of the option. If the option expires, the resulting loss is a capital loss and
is long-term or short-term, depending upon the holding period of the option.
If the option is exercised, the cost of the option, in the case of a call
option, is added to the basis of the purchased security and, in the case of a
put option, reduces the amount realized on the underlying security in
determining gain or loss.

Certain of the options, futures contracts, and forward foreign
currency exchange contracts that several of the Funds may invest in are
so-called "section 1256 contracts." With certain exceptions, gains or losses
on section 1256 contracts generally are considered 60% long-term and 40%
short-term capital gains or losses ("60/40"). Also, section 1256 contracts
held by a Fund at the end of each taxable year (and, generally, for purposes of
the 4% excise tax, on October 31 of each year) are "marked-to-market" with the
result that unrealized gains or losses are treated as though they were realized
and the resulting gain or loss is treated as 60/40 gain or loss.

Generally, the hedging transactions undertaken by a Fund may
result in "straddles" for Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by a Fund. In addition,
losses realized by a Fund on a position 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 such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences to a Fund of hedging transactions are
not entirely clear. Hedging transactions may increase the amount of short-term
capital gain realized by a Fund which is taxed as ordinary income when
distributed to stockholders.

A Fund may make one or more of the elections available under
the Code which are applicable to straddles. If a Fund makes any of the
elections, the amount, character and timing of

- 53 -
<PAGE> 268
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 positions.

Because application of 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 must be
distributed to shareholders and which will be taxed to shareholders as ordinary
income or long-term capital gain may be increased or decreased substantially as
compared to a Fund that did not engage in such hedging transactions.

Certain requirements that must be met under the Code in order
for a Fund to qualify as a regulated investment company may limit the extent to
which a Fund will be able to engage in transactions in options, futures, and
forward contracts.

Under the Code, gains or losses attributable to fluctuations
in exchange rates which occur between the time a Fund accrues interest,
dividends or other receivables, or accrues expenses or other 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 options and forward and
futures contracts, 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, decrease, or eliminate the amount of a Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.

Income received by a Fund from sources within foreign
countries may be subject to withholding and other similar income taxes imposed
by the foreign country. If more than 50% of the value of a Fund's total assets
at the close of its taxable year consists of securities of foreign
corporations, the Fund will be eligible and intends to elect to "pass-through"
to its shareholders the amount of such foreign taxes paid by the Fund.
Pursuant to this election, a shareholder would be required to include in gross
income (in addition to taxable dividends actually received) his pro rata share
of the foreign taxes paid by a Fund and would be entitled either to deduct his
pro rata share of foreign taxes in computing his taxable income or to use it as
a foreign tax credit against his U.S. Federal income tax

- 54 -
<PAGE> 269
liability, subject to limitations. No deduction for foreign taxes may be
claimed by a shareholder who does not itemize deductions, but such a
shareholder may be eligible to claim the foreign tax credit (see below). Each
shareholder will be notified within 60 days after the close of a Fund's taxable
year if the foreign taxes paid by a Fund will "pass-through" for that year and,
if so, such notification will designate (a) the shareholder's portion of the
foreign taxes paid to each such country and (b) the portion of the dividend
which represents income derived from foreign sources.

Generally, a credit for foreign taxes is subject to the
limitation that it may not exceed the shareholder's U.S. tax attributable to
his total foreign source taxable income. For this purpose, if a Fund makes the
election described in the preceding paragraph, the source of the Fund's income
flows through to its shareholders. With respect to a Fund, gains from the sale
of securities will be treated as derived from U.S. sources and certain currency
fluctuations gains, including fluctuation gains from foreign
currency-denominated debt securities,, receivables and payables, will be
treated as ordinary income derived from U.S. sources. The limitation on the
foreign tax credit is applied separately to foreign source passive income (as
defined for purposes of the foreign tax credit) including foreign source
passive income of a Fund. The foreign tax credit may off-set only 90% of the
alternative minimum tax imposed on corporations and individuals, and foreign
taxes generally may not be deducted in computing alternative minimum taxable
income.

The Funds are required to report to the Internal Revenue
Service ("IRS") all distributions except in the case of certain exempt
shareholders. All such distributions generally are subject to withholding of
Federal income tax at a rate of 31% ("backup withholding") in the case of
non-exempt shareholders if (1) the shareholder fails to furnish the Funds with
and to certify the shareholder's correct taxpayer identification number or
social security number, (2) the IRS notifies the Funds or a shareholder that
the shareholder has failed to report properly certain interest and dividend
income to the IRS and to respond to notices to that effect, or (3) when
required to do so, the shareholder fails to certify that he is not subject to
backup withholding. If the withholding provisions are applicable, any such
distributions, whether reinvested in additional shares or taken in cash, will
be reduced by the amounts required to be withheld. Backup withholding is not
an additional tax. Any amount withheld may be credited against the
shareholders U.S. Federal income tax liability. Investors may wish to consult
their tax advisors about the applicability of the backup withholding
provisions.

- 55 -
<PAGE> 270
The foregoing discussion relates only to Federal income tax
law as applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Funds
also may be subject to state and local taxes and their treatment under state
and local income tax laws may differ from the Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local taxes in certain states. Shareholders should consult
their tax advisors with respect to particular questions of Federal, state and
local taxation. Shareholders who are not U.S. persons should consult their tax
advisors regarding U.S. and foreign tax consequences of ownership of shares of
the Funds including the likelihood that distributions to them would be subject
to withholding of U.S. tax at a rate of 30% (or at a lower rate under a tax
treaty).

Tax-Exempt Funds

The Tax-Exempt Funds intend to manage their portfolios so that
they will be eligible to pay "exempt-interest dividends" to shareholders. The
Funds will so qualify if, at the close of each quarter of their taxable year,
at least 50% of the value of their total assets consists of state, municipal,
and certain other securities, the interest on which is exempt from the regular
Federal income tax. To the extent that a Fund's dividends distributed to
shareholders are derived from such interest income and are designated as
exempt-interest dividends by the Fund, they will be excludable from a
shareholder's gross income for Federal income tax purposes. Exempt-interest
dividends, however, must be taken into account by shareholders in determining
whether their total incomes are large enough to result in taxation of up to 85%
of their Social Security benefits and certain railroad retirement benefits.
The Funds will inform shareholders annually as to the portion of the
distributions from each Fund which constitute exempt-interest dividends. In
addition, for corporate shareholders of the Funds, exempt-interest dividends
may comprise part or all of an adjustment to alternative minimum taxable
income. Exempt-interest dividends that are attributable to certain private
activity bonds, while not subject to the regular Federal income tax, may
constitute an item of tax preference for purposes of the alternative minimum
tax.

To the extent that a Tax-Exempt Fund's dividends are derived
from its investment company taxable income (which includes interest on its
temporary taxable investments and the excess of net short-term capital gain
over net long-term capital loss), they are considered ordinary (taxable) income
for Federal income tax purposes. Such dividends will not qualify for the

- 56 -
<PAGE> 271
dividends-received deduction for corporations. Distributions, if any, of net
long term capital gains (the excess of net long-term capital gain over net
short-term capital loss) designated by a Fund as long term capital gain
dividends are taxable to shareholders as long-term capital gain regardless of
the length of time the shareholder has owned shares of the Fund.

Upon redemption, sale or exchange of shares in a Tax-Exempt
Fund, a shareholder will realize a taxable gain or loss, depending on whether
the gross proceeds are more or less than the shareholder's tax basis for the
shares. The discussion above provides additional detail about the income tax
consequences of disposing of Fund shares.

Deductions for interest expense incurred to acquire or carry
shares of a Tax-Exempt Fund may be subject to limitations that reduce, defer,
or eliminate such deductions. This includes limitations on deducting interest
on indebtedness properly allocable to investment property (which may include
shares of a Fund). In addition, a shareholder may not deduct a portion of
interest on indebtedness incurred or continued to purchase or carry shares of
an investment company (such as the Funds) paying exempt-interest dividends.
Such disallowance would be in an amount 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. Under rules
issued by the IRS for determining when borrowed funds are considered used for
the purposes of purchasing or carrying 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 the purchase of shares.

Certain of the debt securities acquired by the Tax-Exempt Funds
may be treated as debt securities that were originally issued at a discount.
Original issue discount can generally be defined as the difference between the
price at which a security was issued and its stated redemption price at
maturity. Although no cash income is actually received by the Funds, original
issue discount on a taxable debt security earned in a given year generally is
treated for Federal income tax purposes as interest and, therefore, such income
would be subject to the distribution requirements of the Code. Original issue
discount on an obligation, the interest from which is exempt from Federal
income tax, generally will constitute tax-exempt interest income.

Some of the debt securities may be purchased by the Tax-Exempt
Funds at a discount which exceeds the original issue discount on such
securities, if any. This additional discount represents market discount for
Federal income tax purposes. The

- 57 -
<PAGE> 272
gain realized on the disposition of any debt security having market discount
will be treated as ordinary taxable income to the extent it does not exceed the
accrued market discount on such debt security. Generally, market discount
accrues on a daily basis for each day the debt security is held by a Fund at a
constant rate over the time remaining to the debt security's maturity or, at
the election of the Fund, at a constant yield to maturity which takes into
account the semi-annual compounding of interest.

The Tax-Exempt Funds will be required to report to the IRS all
distributions of investment company taxable income and net capital gains and
gross proceeds from the redemption or exchange of a Fund's shares, except in
the case of certain exempt shareholders. All such distributions and proceeds
from the redemption or exchange of a Fund's shares may be subject to
withholding of Federal income tax at the rate of 31% in the case of non-exempt
shareholders who fail to furnish the Fund with their taxpayer identification
numbers and with required certifications regarding their status under Federal
income tax laws.

A deductible "environmental tax" of 0.12% is imposed on a
corporation's modified alternative minimum taxable income in excess of $2
million. The environmental tax will be imposed even if the corporation is not
required to pay an alternative minimum tax because the corporation's regular
income tax liability exceeds its minimum tax liability. To the extent that
exemptinterest dividends paid by a Fund are included in alternative minimum
taxable income, corporate shareholders may be subject to the environmental tax.

Opinions relating to the validity of municipal securities and
the exemption of interest thereon from Federal and state income tax are
rendered by bond counsel to the issuers. The Funds, the Advisor and their
affiliates, and the Funds' counsel make no review of proceedings relating to
the issuance of state or municipal securities or the bases of such opinions.

Persons who may be "substantial users" (or "related persons"
of substantial users) of facilities financed by private activity bonds should
consult their tax advisors before purchasing shares of a Tax-Exempt Fund since
the acquisition of shares of a Fund may result in adverse tax consequences to
them. In addition, all shareholders of a Fund should consult their tax
advisors about the tax consequences to them of their investments in the Fund.

Changes in the tax law, including provisions relating to
tax-exempt income, frequently come under consideration. If

- 58 -
<PAGE> 273
such changes are enacted, the tax consequences arising from an investment in
the Funds may be affected. Since the Trust does not undertake to furnish tax
advice, it is important for shareholders to consult their tax advisors
regularly about the tax consequences to them of investing in one or more of the
Funds.

OTHER INFORMATION

Capitalization

The Trust is a Massachusetts business trust established under
a Declaration of Trust dated July 17, 1984, and consists of series of
separately managed portfolios which are described in this SAI. The
capitalization of the Trust consists solely of an unlimited number of shares of
beneficial interest with a par value of $0.001 each. The Board of Trustees may
establish additional portfolios (with different investment objectives and
fundamental policies) at any time in the future. Establishment and offering of
additional portfolios will not alter the rights of the Funds' shareholders.
When issued, shares are fully paid, non-assessable, redeemable and freely
transferable. Shares do not have preemptive rights or subscription rights.

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 such Fund, and a
proportionate distribution, based upon the relative net asset values of the
Trust's respective 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 Fund on
liquidation, based on the number of shares of the Fund that are held by each
shareholder, except that, in the case of a Fund offering more than one class of
shares, Institutional Shares and Investor Shares of a Fund will each be solely
responsible for Service Organization fees and other "class" expenses, if any,
that are attributable to the particular share class, and Investor Shares shall
be solely responsible for payments made under the Distribution Plan.

Principal Shareholders

On the dates indicated below primarily all of the
outstanding shares of the Funds were held of record by affiliates of First
Interstate Bancorp or their nominees as agent or custodian for their customers.
On _____________, 1996 the name, address and percentage share ownership of the
persons who may have possessed voting or investment power with respect to more

- 59 -
<PAGE> 274

than 5% of the outstanding shares of the Funds listed below are as follows:

First Interstate Bank, Attn: Mutual Funds A88-4, P.O. Box 9800, Calabasas, CA
91302:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Balanced Fund
- ---------------------------------------------------------------------------------------

Equity Value Fund
- ---------------------------------------------------------------------------------------

Asset Preservation Fund
- ---------------------------------------------------------------------------------------

Government Income Fund
- ---------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund
- ---------------------------------------------------------------------------------------

California Tax-Exempt Fund
- ---------------------------------------------------------------------------------------
</TABLE>

First Interstate Bank, TTEE, Choicemaster, Attn: Mutual Funds A88-4, P.O. Box
9800, Calabasas, CA 91302:

Equity Value Fund
- ---------------------------------------------------------------------------------------

Asset Preservation Fund
- ---------------------------------------------------------------------------------------

Government Income Fund
- ---------------------------------------------------------------------------------------

Money Market Fund
- ---------------------------------------------------------------------------------------

Government Money Market Fund
- ---------------------------------------------------------------------------------------
</TABLE>

First Interstate Bank, Attn: Fund Accounting, P.O. Box 9800, Calabasas, CA
91302:

Money Market Fund
- ---------------------------------------------------------------------------------------

Government Money Market Fund
- ---------------------------------------------------------------------------------------
</TABLE>

- 60 -
<PAGE> 275

First Interstate Bank of California, Attn: Fund Accounting ACM Desk, 26610
West Agoura Road, Calabasas, CA 91302:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Money Market Fund
- ---------------------------------------------------------------------------------------

Government Money Market Fund
- ---------------------------------------------------------------------------------------
</TABLE>

First Interstate Bank of Oregon, N.A., Attn: Investment Sweep T-15, 1300 S.W.
Fifth Avenue, Portland, OR 97201:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Money Market Fund
- ---------------------------------------------------------------------------------------

Government Money Market Fund
- ---------------------------------------------------------------------------------------
</TABLE>

First Fidelity Bank, N.A., 2-1/2 Witherspoon, Philadelphia, PA 19109:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Government Money Market Fund
- ---------------------------------------------------------------------------------------
</TABLE>

First Interstate of California, For the Cash Account, Attn: Mutual Funds
A88-4, P.O. Box 9800, Calabasas, CA 91302:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
California Short-Term Tax-Exempt Fund
- ---------------------------------------------------------------------------------------
</TABLE>

At ____________, 1996, the following persons owned of record 5
percent or more of the outstanding shares of the Funds listed below:

- 61 -
<PAGE> 276

Sym Inc. Profit Sharing Plan & Trust, Kazuto Mikami TTEE, 3114 South McClellan
Street, Seattle, WA 98144-5573:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Growth Fund--Investor
- ---------------------------------------------------------------------------------------
</TABLE>

Tanfir & Co., P.O. Box 53436, Phoenix, AR 85072-3436:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Arizona Tax-Exempt Fund
- ---------------------------------------------------------------------------------------

Short-Term Government Bond Fund - Institutional
- ---------------------------------------------------------------------------------------

Intermediate Bond Fund
- ---------------------------------------------------------------------------------------

National Tax-Exempt Fund
- ---------------------------------------------------------------------------------------
</TABLE>

Southern California Business Development Corp., 714 West Olympic Boulevard,
Suite 706, Los Angeles, CA 90015-1439:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Short-Term Government Bond Fund - Investor
- ---------------------------------------------------------------------------------------
</TABLE>

State Street Bank & Trust Company as custodian for the IRA rollover of Donald
G. Wakin, 1326 N. Yakima, Tacoma, WA 98405-2825:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Growth Fund - Investor
- ---------------------------------------------------------------------------------------
</TABLE>

- 62 -
<PAGE> 277

State Street Bank & Trust Company as custodian for the IRA of James B.
Giguette, 7102 N. 43rd Avenue #418, Glendale, AR 85301-2930:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Growth Fund - Investor
- ---------------------------------------------------------------------------------------
</TABLE>

Firnap & Company, c/o First Interstate Bank of Oregon, P.O. Box 2971, Portland,
OR 97208-2971:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Oregon Tax-Exempt Fund
- ---------------------------------------------------------------------------------------

Intermediate Bond Fund
- ---------------------------------------------------------------------------------------

Short-Term Government Bond Fund - Institutional
- ---------------------------------------------------------------------------------------

National Tax-Exempt Fund
- ---------------------------------------------------------------------------------------

Growth Fund - Institutional
- ---------------------------------------------------------------------------------------
</TABLE>

Society of Certified Insurance Counselors, Inc., 3630 North Hills Drive,
Austin, TX 78731-3028:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Short-Term Government Bond Fund - Investor
- ---------------------------------------------------------------------------------------
</TABLE>

Eric D. Mayer, Mary Ann Mayer JT. Wrds., 9601 Wilshire Blvd. #200, Beverly
Hills, CA 90210-5209:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERCENTAGE OF
FUND OUTSTANDING SHARES
- ---------------------------------------------------------------------------------------
<S> <C>
Short-Term Government Bond Fund - Investor
- ---------------------------------------------------------------------------------------
</TABLE>

The Trust believes that all of the shares of the Funds were
beneficially owned by the record owners named above because they possessed or
shared investment or voting power with respect to them while owning the shares
or while acting in a fiduciary, advisory, custodial, or other similar capacity
on behalf of their customers, except that the shares owned by Tanfir & Co. and
DIV &

- 63 -
<PAGE> 278
Company were beneficially owned by First Interstate Bank of Arizona, N.A., the
shares owned of record by Firnap & Company were beneficially owned by First
Interstate Bank of Oregon, N.A., and the shares owned of record by Dake &
Company were beneficially owned by First Interstate Bank of Denver, N.A.

Voting Rights

Under the Declaration of Trust, the Trust is not required to
hold annual meetings of its shareholders to elect Trustees or for other
purposes. It is not anticipated that the Trust will hold shareholders'
meetings unless required by law or the Declaration of Trust. In this regard,
the Trust will be required to hold a meeting to elect Trustees to fill any
existing vacancies on the Board if, at any time, fewer than a majority of the
Trustees have been elected by the shareholders of the Trust. In addition, the
Declaration of Trust provides that the holders of not less than two-thirds of
the outstanding shares of the Trust may remove persons serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting for the purpose of considering the
removal of persons serving as Trustee if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust. To the
extent required by applicable law, the Trustees shall assist shareholders who
seek to remove any person serving as Trustee.

The Trust's shares do not have cumulative voting rights, so
that the holders of more than 50% of the outstanding shares may elect the
entire Board of Trustees, in which case the holders of the remaining shares
would not be able to elect any Trustees.

Holders of all outstanding shares of a particular Fund that
offers more than one class of shares will vote together in the aggregate and
not by class on all matters, except that only Institutional Shares of a Fund
will be entitled to vote on matters submitted to a vote of shareholders
pertaining to the Fund's arrangements with Service Organizations with respect
to Institutional Shares, and only Investor Shares of a Fund will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
Distribution Plan and the Fund's arrangements with Service Organizations with
respect to Investor 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
portfolio-by-portfolio 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

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<PAGE> 279
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 portfolio is
affected by a matter unless it is clear that the interests of each portfolio in
the matter are substantially identical or that the matter does not affect any
interest of the portfolio. Under the Rule, the approval of an investment
advisory agreement or any change in a fundamental investment policy would be
effectively acted upon with respect to a portfolio only if approved by a
majority of the outstanding shares of such portfolio. However, the Rule also
provides that the ratification of the appointment of independent auditors, 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 a particular portfolio.

The term "majority of the outstanding shares" of a portfolio
means the vote of the lesser of (i) 67% or more of the shares of the portfolio
present at a meeting, if the holders of more than 50% of the outstanding shares
of the portfolio are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the portfolio.

Custodian, Transfer Agent and Dividend Disbursing Agent

First Interstate Bank of California, 707 Wilshire Blvd., Los
Angeles, California 90017, acts as custodian of the Trust's assets, but plays
no role in making decisions as to the purchase or sale of portfolio securities
for the Funds. FICAL is entitled to receive a fee from the Trust, computed
daily and payable monthly, at the annual rate of 0.021% of the first $5 billion
in aggregate average daily net assets of the Funds; 0.0175% of the next $5
billion in aggregate average daily net assets of the Funds; and 0.015% of the
aggregate average daily net assets of the Funds in excess of $10 billion.

Furman Selz acts as transfer agent for the Funds. The Trust
compensates Furman Selz for providing personnel and facilities to perform
transfer agency related services for the Trust at a rate intended to represent
the cost of providing such services.

Performance Information

The Funds may, from time to time, include their yields, tax
equivalent yields and average annual total returns in advertisements or reports
to shareholders or prospective investors. During the periods shown below the
Equity Value Fund, Balanced Fund, Asset Preservation Fund, Government Income
Fund,

- 65 -
<PAGE> 280
Intermediate Bond Fund, Oregon Tax-Exempt Fund, Arizona TaxExempt Fund,
National Tax-Exempt Fund, California Short-Term TaxExempt Fund, California
Tax-Exempt Fund, Government Money Market Fund and Money Market Fund offered one
class of shares with a sales charge to both retail and institutional investors.

Current yield for the Money Market Funds will be based on the
change in the value of a hypothetical investment (exclusive of capital changes)
over a particular seven-day period, less a pro-rata share of each Fund's
expenses accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the "base period
return"). The base period return is then annualized by multiplying by 365/7,
with the resulting yield figure carried to at least the nearest hundredth of
one percent. "Effective yield" for the Money Market Funds assumes that all
dividends received during an annual period have been reinvested. Calculation
of "effective yield" begins with the same "base period return" used in the
calculation of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula:

365/7
Effective Yield = [(Base Period Return + 1) ] - 1.

For the seven-day period ended September 30, 1995, the yields
of the Government Money Market Fund and Money Market Fund were _____% and
_____%, respectively, and the effective yields for the Government Money Market
Fund and Money Market Fund were _____% and _____%, respectively.

Quotations of yield for the Bond Funds and Tax-Exempt Funds
will be based on the investment income per share earned during a particular
30-day period, less expenses accrued during a period ("net investment income")
and will be computed by dividing net investment income by the maximum offering
price per share on the last day of the period, according to the following
formula:

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

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

For the one-month period ended September 30, 1995, the yields
of the Funds listed below were as follows:

- 66 -
<PAGE> 281

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
FUND 30-DAY YIELD
- ----------------------------------------------------------------------------------------------
<S> <C>
Short-Term Government Bond Fund
- ----------------------------------------------------------------------------------------------

Institutional Shares ____%
- ----------------------------------------------------------------------------------------------

Investor Shares ____%
- ----------------------------------------------------------------------------------------------

Intermediate Government Bond Fund
- ----------------------------------------------------------------------------------------------

Institutional Shares ____%
- ----------------------------------------------------------------------------------------------

Investor Shares ____%
- ----------------------------------------------------------------------------------------------

Intermediate Bond Fund* ____%
- ----------------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------

National Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------
</TABLE>

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

* Prior to October 1, 1995, these Funds only offered a single class of
shares to both retail and institutional shareholders.

For the one-month period ended September 30, 1995, the yields
of the Funds listed below were as follows:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
FUND 30-DAY YIELD

- ----------------------------------------------------------------------------------------------
<S> <C>
Asset Preservation Fund* ____%
- ----------------------------------------------------------------------------------------------

Government Income Fund* ____%
- ----------------------------------------------------------------------------------------------

California Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------
</TABLE>

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

* Prior to October 1, 1995, these Funds only offered a single class of
shares to both retail and institutional shareholders.

- 67 -
<PAGE> 282
Quotations of tax-equivalent yield for a Tax-Exempt
Fund will be calculated according to the following formula:

TAX EQUIVALENT YIELD = ( E ) + t
---
1-p

E = Tax-exempt yield
p = stated income tax rate
t = taxable yield

For the one-month period ended September 30, 1995, the
tax-equivalent yield of the Funds listed below were as follows:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
FUND TAX-EQUIVALENT YIELD**
- ----------------------------------------------------------------------------------------------
<S> <C>
Oregon Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------

National Tax-Exempt Fund* ____%
- ----------------------------------------------------------------------------------------------
</TABLE>

- ----------

* Prior to October 1, 1995, these Funds only offered a single class of
shares to both retail and institutional shareholders.

** Based on a combined Federal and state income tax rate of 37% and 33%
for the Oregon Tax-Exempt Fund and the Arizona TaxExempt Fund,
respectively, and a Federal income tax rate of 28% for the National
Tax-Exempt Fund.

For the one-month period ended September 30, 1995, the
tax-equivalent yields of the California Short-Term Tax-Exempt Fund and the
California Tax-Exempt Fund were _____% and _____%, respectively, (based on
combined Federal and state income tax rate of 46.24%).

Quotations of average annual total return will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in a Fund over periods of 1, 5 and 10 years (up to the life of the
Fund), calculated pursuant to the following formula:

n
P (1 + T) = ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV the

- 68 -
<PAGE> 283

ending redeemable value of a hypothetical $1,000 payment made at the beginning
of the period). All total return figures will reflect the deduction of the
maximum applicable sales charge and a proportional share of Fund expenses (net
of certain reimbursed expenses) on an annual basis, and will assume that all
dividends and distributions are reinvested when paid.

For the fiscal year ended September 30, 1995, the average
annual total returns of the Funds listed below were as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
COMMENCEMENT OF
YEAR ENDED FIVE YEARS ENDED OPERATIONS* TO
9/30/95 9/30/95 9/30/95
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Fund
- --------------------------------------------------------------------------------------------------------------

Institutional _____% N/A ____%
- --------------------------------------------------------------------------------------------------------------

Investor** ____% N/A ____%
- --------------------------------------------------------------------------------------------------------------

Short-Term Government Bond Fund
- --------------------------------------------------------------------------------------------------------------

Institutional ____% 6.82% ____%
- --------------------------------------------------------------------------------------------------------------

Investor** ____% N/A ____%
- --------------------------------------------------------------------------------------------------------------

Intermediate Government Bond Fund
- --------------------------------------------------------------------------------------------------------------

Institutional _____% 8.36% ____%
- --------------------------------------------------------------------------------------------------------------

Investor** ____% N/A ____%
- --------------------------------------------------------------------------------------------------------------

Intermediate Bond Fund*** _____% 7.68% ____%
- --------------------------------------------------------------------------------------------------------------

Oregon Tax-Exempt Fund*** ____% 7.68% ____%
- --------------------------------------------------------------------------------------------------------------

Arizona Tax-Exempt Fund*** ____% N/A ____%
- --------------------------------------------------------------------------------------------------------------

National Tax-Exempt Fund*** ____% N/A ____%
- --------------------------------------------------------------------------------------------------------------
</TABLE>

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

* The Growth Fund, Arizona Tax-Exempt Fund and National TaxExempt Fund
commenced operations on August 2, 1993, March 2, 1992 and January 15,
1993, respectively. The other Funds listed above all commenced
operations on June 1, 1988.

** On October 11, 1993, each Fund commenced offering a Investor class of
shares (prior to October 1, 1995, the "Retail" class).

*** Prior to October 1, 1995, each Fund offered one class of shares to
both retail and institutional shareholders.

- 69 -
<PAGE> 284

For the fiscal year ended September 30, 1995, the average
annual total returns of the Funds listed below were as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
FIVE YEARS COMMENCEMENT OF
YEAR ENDED ENDED OPERATIONS* TO
9/30/95 9/30/95 9/30/95
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Value Fund ____% ____% ____%
- -----------------------------------------------------------------------------------------------------

Balanced Fund ____% ____% ____%
- -----------------------------------------------------------------------------------------------------

Asset Preservation Fund ____% ____% ____%
- -----------------------------------------------------------------------------------------------------

Government Income Fund ____% ____% ____%
- -----------------------------------------------------------------------------------------------------

California Short-Term Tax-Exempt Fund ____% N/A ____%
- -----------------------------------------------------------------------------------------------------

California Tax-Exempt Fund ____% ____% ____%
- -----------------------------------------------------------------------------------------------------
</TABLE>

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

* Each Fund commenced operations on July 2, 1990, with the exception of
the California Short-Term Tax-Exempt Fund, which commenced operations
on January 20, 1993.

Quotations of yield and total return will reflect only the
performance of a hypothetical investment in the Funds during the particular
time period shown. Yield and total return for the Funds will vary based on
changes in the market conditions and the level of a Fund's expenses, and no
reported performance figure should be considered an indication of performance
which may be expected in the future.

In connection with communicating its yields or total return to
current or prospective shareholders, the Funds also may compare these figures
to the performance of other mutual funds tracked by mutual fund rating services
or to other unmanaged indices which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs.

Performance information for the Funds may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's 500 Stock
Index, Dow Jones Industrial Average, or other

- 70 -
<PAGE> 285
unmanaged indices so that investors may compare the Funds' results with those
of a group of unmanaged securities widely regarded by investors as
representative of the securities markets in general; (ii) other groups of
mutual funds tracked by Lipper Analytical Services, a widely used independent
research firm which ranks mutual funds by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons who rank mutual funds on overall performance or other criteria; and
(iii) the Consumer Price Index (measure for inflation) to assess the real rate
of return from an investment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.

Investors who purchase and redeem shares of the Funds through
a customer account maintained at a Service Organization may be charged one or
more of the following types of fees as agreed upon by the Service Organization
and the investor, with respect to the provision of customer services: account
fees (a fixed amount per month or per year); transaction fees (a fixed amount
per transaction processed); compensating balance requirements (a minimum dollar
amount a customer must maintain in order to obtain the services offered); or
account maintenance fees (a periodic charge based upon a percentage of the
assets in the account or of the dividends paid on those assets). Such fees are
not reflected in the Funds, performance quotations, and will have the effect of
reducing the yield and average annual total return of the Funds for those
investors.

Independent Accountants

Ernst & Young LLP, 515 South Flower Street, Los Angeles,
California 90071 has been selected to serve as the independent accountants for
the Funds for the current fiscal year. The audited financial statements
incorporated by reference into this SAI and the audited financial highlights
which appear in the Pospectuses for the fiscal year ended September 30, 1995
for each of the Funds (except the Equity Index Fund, the International Equity
Fund, the 100% U.S. Treasury Money Market Fund, the California Tax-Exempt Money
Market Fund and the National Tax-Exempt Money Market Fund) have been audited by
Ernst & Young LLP.

Registration Statement

This SAI and the Prospectuses do not contain all the
information included in the Trust's Registration Statement filed with the SEC
under the Securities Act of 1933 with respect to the securities offered hereby.
Certain portions of the Trust's Registration Statement have been omitted
pursuant to the rules and regulations of the SEC. The Registration Statement,

- 71 -
<PAGE> 286
including the exhibits filed therewith, may be examined at the office of the
SEC in Washington, D.C.

Statements contained herein and in the Prospectuses as to the
contents of any contract or other documents referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Trust's Registration Statement,
each such statement being qualified in all respects by such reference.

FINANCIAL STATEMENTS

The Financial Statements included in the September 30, 1995
Annual Reports to Shareholders for the Equity Value Fund, Balanced Fund, Asset
Preservation Fund, Government Income Fund, California Short-Term Tax-Exempt
Fund, California Tax-Exempt Fund, Government Money Market Fund, Money Market
Fund, Growth Fund, Short-Term Government Bond Fund, Intermediate Government
Bond Fund, Intermediate Bond Fund, Oregon Tax-Exempt Fund, Arizona Tax-Exempt
Fund and National Tax-Exempt Fund are incorporated by reference into this SAI.
Copies of the Financial Statements may be obtained upon request and without
charge from the Trust at the address and telephone number provided on the cover
of this SAI.

- 72 -
<PAGE> 287
APPENDIX

SPECIAL CONSIDERATIONS REGARDING INVESTMENT IN STATE OBLIGATIONS

OREGON TAX-EXEMPT FUND

The concentration of the Oregon Tax-Exempt Fund in Oregon
Obligations raises additional considerations for investors in that portfolio,
as discussed below.

State Bonds and Revenues

As of September 1, 1995, $3.99 billion in general obligation
bonds issued by the State of Oregon and its agencies and instrumentalities were
outstanding, including $83.9 million in general obligation bonds supported by
the budget for the State's general fund and $3.91 billion of self-supporting
general obligation bonds. The State's self-supporting general obligation bonds
include $3.12 billion of State veteran's bonds, which, in the event of poor
economic conditions resulting in an increased number of mortgage defaults,
could cease to be self-supporting. All of the existing and outstanding general
obligation bonds of the State have been issued under specific State
constitutional provisions that authorize the issuance of such bonds and provide
authority for ad valorem taxation to pay the principal of and interest on such
bonds. With the exception of the veteran's bonds, for which no more than two
mills on each dollar valuation may be levied to pay principal and interest, the
authority of the State to tax property for the payment of its general
obligation bonds is unlimited. Since at least 1950, the State has not imposed
ad valorem tax for the payment of any of its obligations because other
revenues, including those generated by the selfsupporting bonds, have been
sufficient.

In addition to general obligation bonds, various State
statutes authorize the issuance of State revenue bonds and certificates of
participation. These limited obligations of the State or its agencies or
instrumentalities may be payable from a specific project or source, including
lease rentals. The State is not authorized to impose ad valorem taxes on
property for the payment of principal and interest on these bonds, so they are
more sensitive to changes in the economy. There can be no assurance that
future economic problems will not adversely affect the market value of Oregon
obligations held by the Fund or the ability of the respective obligors (both
private and governmental) to make required payments on such obligations.

Oregon does not have a sales tax. As a result, State tax
revenues are particularly sensitive to economic recessions.

- 73 -
<PAGE> 288
The principal sources of State tax revenues are personal income and corporate
income taxes. For the 1993-95 biennium, approximately 96.7% of the State's
revenues are projected to come from combined income taxes, insurance taxes,
gift and inheritance taxes, and cigarette and tobacco taxes. Since 1983 State
revenues have improved substantially, and in recent years the State has granted
tax refunds because of budget surpluses, as required by statute. The State's
June 1995 economic and revenue forecast released on May 15, 1995 predicts that
State General Fund revenues will exceed the legislatively approved budget
forecast by approximately $314.0 million (or 5.1 percent).

The Economy

Oregon's economy generally has outperformed the national
average in recent years. According to the State's June 1995 economic and
revenue forecast released on May 15, 1995, the recent strong growth is expected
to slow over the next year. The major factors slowing the economy are a
softening of the State's housing markets, reductions in timber output and
employment, and weaker national demand for Oregon's manufactured products.
These downward pressures are expected to be offset to a degree by continued
expansion of the high technology manufacturing sector, a strong international
export sector, further nonresidential construction activity and a steady stream
of in-migration. This combination of forces is likely to generate growth,
though increases in income and jobs will likely be less than they were in 1994.

As they have since 1987, Oregon's job and income growth are
expected to exceed national growth rates through the next two years. The
biggest foreseeable short-term risk to the Oregon economy is the instability in
the national economy. Oregon's income, population, and employment growth are
all expected to exceed the national average for the seven-year period between
1994 and 2001. Population is expected to grow considerably faster than the
national average. On a per capita basis, Oregon's personal income is forecast
to move slowly toward the national average.

Recent Environmental Developments

In 1991 and 1992, in response to concerns over diminishing
salmon runs, three populations of Snake River salmon were placed on the
Endangered Species list. More recently, the National Marine Fisheries Service
and the U.S. Fish and Wildlife Service have commenced status reviews of
hundreds of additional salmon and trout populations in the Columbia Basin and
throughout Western Oregon. The Snake River salmon listings have already had
substantial economic impacts, primarily through increased

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<PAGE> 289
electricity rates and related impacts on rate-sensitive industries such as the
aluminum industry. Efforts to protect salmon and steelhead populations may
eventually affect a wide variety of industrial, recreational and land use
activities, with corresponding impacts on long-term economic growth; however,
the magnitude and extent of any future environmental action is impossible to
predict at this time. The State's economic forecasts do not address the
potential impact of endangered species problems on Oregon's economy.

Recent Developments Affecting Government Revenues

BALLOT MEASURE 5. Article XI, section 11b of the Oregon Constitution, adopted
by Oregon's voters in November 1990 ("Ballot Measure 5"), imposes an aggregate
limit on the rate of property taxes, including ad valorem taxes, that may be
levied against any real or personal property. The limit is subject to certain
exceptions and is being phased in over a five-year period. Beginning with the
tax year that starts on July 1, 1996, the final year of the phase-in period,
not more than $15 per $1,000 of real market value can be levied against any
piece of property. Of this amount, $5 may be used for public education, and
the remaining $10 may be used for general governmental purposes.

The limitations of Ballot Measure 5 do not apply to taxes
imposed to pay the principal of and interest on bonded indebtedness authorized
by a specific provision of the State Constitution. Therefore, the ability of
the State to levy taxes to service its general obligation bonds is not subject
to the limit. In addition, because the State currently receives its revenues
from sources other than property taxes, Ballot Measure 5 has not directly
affected State revenues.

Ballot Measure 5 does affect the financial condition of the
State, however, since it (1) requires the State to replace losses to school
funds caused by its restriction on the levy of ad valorem taxes for education
through fiscal year 1995-96, and (2) restricts the ability of Oregon local
governments to raise revenues through the imposition of property tax increases.
The State's Legislative Revenue Office estimates that the State will make
payments in excess of its obligations to replace school revenues during the
1993-95 biennium and the 1995-96 fiscal year. The State's obligation to
replace school revenues terminates after fiscal year 1995-96.

Where two or more general governmental units have overlapping
taxing jurisdiction over a particular property, their tax levies will be in
competition if the property's aggregate tax levy for general government exceeds
$10 per $1,000 (in the case

- 75 -
<PAGE> 290
of taxes imposed to fund the public school system from prekindergarten through
post-graduate training, competition is for the remaining $5 per $1,000
allowable under Ballot Measure 5). In such cases, each governmental unit's tax
levy will be decreased on a pro rata basis and the amount of tax received will
be less than the amount budgeted. To date, only a few local governments have
experienced this problem. However, as governmental expenses increase, local
governments may experience increasing budget pressures unless property values
also increase. Ballot Measure 5 does not apply to ad valorem taxes imposed to
pay the principal and interest on general obligation bonds for capital
construction or improvements if the bonds were either: (1) issued on or prior
to November 6, 1990, or (2) approved by the electors of the issuing
governmental unit.

The effect that Ballot Measure 5 will ultimately have on local
government revenues is difficult to predict. Since passage of Ballot Measure
5, property values have been adjusted to more closely approximate real market
values. If the trend of increased property values in Oregon continues, the
real market value base of property against which the limited tax rate may be
imposed may be more than enough to support the needs of Oregon governments.

The tax limitations of Ballot Measure 5 do not apply to user
fees, licenses, excise or income taxes and incurred charges for local
improvements. Therefore, since 1990 local governments have begun to rely more
heavily on such fees and taxes to finance certain services and improvements.

THE INITIATIVE PROCESS. The Oregon Constitution reserves to the people of the
State initiative and referendum power pursuant to which measures designed to
amend the State Constitution or enact legislation, can be placed on the
statewide general election ballot for consideration by the voters. "Referendum"
generally means measures referred to the electors by a legislative body such as
the State Legislative Assembly or the governing body of a city, county or other
political subdivision, while "initiative" generally means a measure placed
before the voters as a result of a petition circulated by one or more private
citizens.

Any person may file a proposed initiative with the Oregon
Secretary of State's office. The Oregon Attorney General is required by law to
draft a proposed ballot title for the initiative, and interested parties may
submit comments on the legal sufficiency of the proposed ballot title and on
whether the proposed initiative complies with a "one subject only" rule for
initiative measures. After considering any public comments, the Attorney
General must either certify or revise the draft ballot title. In general, any
elector who timely submitted written

- 76 -
<PAGE> 291
comments on the draft ballot title may petition the Oregon Supreme Court
seeking a revision of the certified ballot title.

To have an initiative placed on a general election ballot, the
proponents Of the proposed initiative must submit to the Secretary of State
initiative petitions signed by a number of qualified voters equal to a
specified percentage of the total number of votes cast for all candidates for
governor in the most recent gubernatorial election. The initiative petition
must be filed with the Secretary of State not less than four months prior to
the general election at which the proposed measure is to be. voted upon.
State law permits persons circulating initiative petition to pay money to
persons obtaining signatures for the petition.

Over the past decade Oregon has witnessed increasing activity
in the number of initiative petitions that have qualified for the statewide
general election. As of September 6, 1995, no initiatives had qualified for
the statewide general election. As of September 6, 1995, no initiatives had
qualified to be placed on the 1996 general election ballot. In recent years, a
number of initiatives involving the fiscal operations of the State have been
proposed and placed on the ballot. One of these initiatives was approved by
the voters and has had a significant impact on the fiscal operations of the
State. See "Recent Developments Affecting Government Revenues - Ballot Measure
5." Other initiatives, had they been approved by the voters, also may have had
significant impacts on the fiscal operations of the State.

It is difficult to predict with certainty either the
likelihood of a proposed initiative measure obtaining the required number of
valid initiative petition signatures or the likelihood of an initiative which
has acquired the necessary number of valid signatures being approved by the
voters. There can be no assurance that an initiative which will have a
material adverse impact on the financial condition of the State or the State's
ability to collect the revenues required to repay its general obligation bonds
will not be proposed, placed on the ballot, or be approved by the voters.

The Oregon Bond Market

There is a relatively small active market for municipal bonds
of Oregon issuers other than the general obligations of the State itself, and
the market price of such other bonds may therefore be volatile. If the Oregon
Tax-Exempt Fund were forced to sell a large volume of Oregon Obligations owned
by it for any reason, such as to meet redemption requests for a large number of
its shares, there is a risk that the large sale itself would

- 77 -
<PAGE> 292
adversely affect the value of the Oregon Tax-Exempt Fund's portfolio.

ARIZONA TAX-EXEMPT FUND

The concentration of the Arizona Tax-Exempt Fund in securities
issued by governmental units of only one state exposes the Fund to risks
greater than those of a more diversified portfolio holding securities issued by
governmental units of different states and different regions of the country.

Under its constitution, the State of Arizona is not permitted
to issue general obligation bonds secured by the full faith and credit of the
State. However, certain agencies and instrumentalities of the State are
authorized to issue bonds secured by revenues from specific projects and
activities. The State enters into certain lease transactions which are subject
to annual renewal at the option of the State. Local governmental units in the
State are also authorized to incur indebtedness. The major source of financing
for such local government indebtedness is an ad valorem property tax. In
addition, in order to finance public projects, local governments in the State
can issue revenue bonds payable from the revenues of a utility or enterprise or
from the proceeds of an excise tax, or assessment bonds payable from special
assessments. Arizona local governments have also financed public projects
through leases which are subject to annual appropriation at the option of the
local government.

There is a statutory restriction on the amount of annual
increases in taxes that can be levied by the various taxing jurisdictions in
the State without electoral approval. This restriction does not apply to taxes
levied to pay general obligation debt.

There are periodic attempts in the form of voter initiatives
and legislative proposals to further limit the amount of annual increases in
taxes that can be levied by the various taxing jurisdictions without voter
approval. it is possible that if such a proposal were enacted, there would be
an adverse impact on State or local government financing. It is not possible
to predict whether any such proposals will be enacted in the future or what
would be their possible impact on state or local government financing.

Arizona is required by law to maintain a balanced budget. To
achieve this objective, the State has, in the past, utilized a combination of
spending reductions and tax increases. In recent years, the State's fiscal
situation has improved.

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Arizona state government general fund revenue growth in fiscal
year 1995 exceeded projections, increasing 9.7% overall. The 9.8% increase in
sales tax revenue reflects continued strong economic growth in the state. With
revenue growth outpacing increased expenditures, the state general fund ended
fiscal year 1995 with a total general fund balance of approximately $494.3
million. The amount of this balance is greater than 11% of total general fund
expenditures for fiscal year 1995. Included in the total balance is a general
fund ending balance of approximately $271.3 million, and a budget stabilization
("rainy day") fund balance of approximately $223 million.

The fiscal year 1996 budget adopted by the legislature assumes
that the total general fund balance carried forward from fiscal year 1995 will
be drawn down by over $160 million during the course of fiscal year 1996.
Based on this assumption, the total general fund balance at the end of fiscal
year 1996 will be lower than for fiscal year 1995.

Additionally, the 1995 legislature enacted a $200 million
income tax reduction package and has committed to enact a $200 million property
tax reduction package in 1996. In 1992, Arizona voters passed a measure that
requires a two-thirds vote of the legislature to increase state revenue.
Accordingly, it will be more difficult to reverse the current year and future
planned tax reductions, which may adversely affect state fund balances and
fiscal conditions.

Arizona has a diversified economic base which is not dependent
on any single industry. Principal economic sectors include services,
manufacturing, mining, tourism, and the military. Agriculture, which was at
one time a major sector, now plays a much smaller role in the State's economy.
For several decades, the population of the State has grown at a substantially
higher rate than the population of the United States. While the State's
economy flourished during the early 80's, a substantial amount of overbuilding
occurred, adversely affecting Arizona based financial institutions, many of
which were placed under the control of the Resolution Trust Corporation. The
spillover effects produced further weakening in the State's economy. The
Arizona economy has begun to grow again, albeit at a slower pace than
experienced before the real estate collapse. However, current and proposed
reductions in Federal military expenditures may adversely affect the Arizona
economy.

THE CALIFORNIA FUNDS

The ability of the California Funds to achieve its investment
objective depends on the ability of issuers of California municipal obligations
to meet their continuing

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obligations for the payment of principal and interest. Recent amendments to
the California State Constitution and certain State statutes which limit the
taxing and spending authority of California governmental entitles may impair
the ability of the issuers of some California municipal obligations to maintain
debt service on their obligations.

In 1978, California voters approved "Proposition 13," adding
Article XIII A, an amendment to the state constitution which limits ad valorem
taxes on real property to it of "full cash value" and restricts the ability of
taxing entities to increase real property taxes. The full cash value may be
adjusted annually to reflect increases (not to exceed 2%) or decreases in the
consumer price index or comparable local data, or declining property value
caused by damage, destruction or other factors.

The foregoing limitation does not apply to ad valorem taxes or
special assessments to pay the interest and redemption charges on any
indebtedness approved by the voters before July 1, 1978 or, pursuant to an
amendment to Article XIII A, any bonded indebtedness for the acquisition or
improvement of real property approved by two-thirds of the votes cast by the
voters voting on the proposition.

Primarily as a result of the reductions in local property tax
revenues received by local governments following the passage of Proposition 13,
subsequent legislation provided for the redistribution of California's General
Fund surplus to local agencies, the reallocation of revenues to local agencies,
and the assumption of certain local obligations by the State so as to help
California municipal issuers to raise revenue to pay their bond obligations.
There can be no assurance that additional revenue redistribution legislation
will be enacted in the future and whether, if enacted, such legislation would
provide sufficient revenue for California issuers to pay their obligations.

The U.S. Supreme Court previously struck down as a violation
of equal protection certain property tax assessment practices in West Virginia
which had resulted in vastly different assessments of similar properties.
Among other provisions, Proposition 13 provides that property may only be
reassessed up to 2% per year, except upon change of ownership or new
construction. As a result, recent purchasers may pay substantially higher
property taxes than long-time owners of comparable property in a community.
The Supreme Court in the West Virginia case expressly declined to comment in
any way on the constitutionality of Proposition 13.

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Based on this decision, however, property owners in California
have brought three suits challenging the acquisition value assessment
provisions of Proposition 13. Two cases involve residential property, and one
case involves commercial property. In all three cases, State trial and
appellate courts have upheld the constitutionality of Proposition 13's
assessment rules and concluded that the West Virginia case did not apply to
California's laws. On June 3, 1991 the U.S. Supreme Court agreed to hear the
appeal in the challenge relating to commercial property, but the plaintiff
subsequently withdrew its case. It cannot be predicted whether the Supreme
Court will decide to hear these appeals, and if so, how it will resolve the
challenge to Proposition 13. If the Court strikes down the assessment rules of
Proposition 13, it is not known what rules will then become operative. Further
legislation is also likely. It cannot be predicted what impact any of these
developments might have on the State's financial obligations to local
governments.

In 1979 California voters approved another constitutional
amendment, Article XIII B, which may have an adverse impact on California state
and municipal issuers. Article XIII B prohibits the State from spending
Appropriations subject to limitation" in excess of an annual appropriations
limit (the "Appropriations Limit"). Article XIII B was modified substantially
by Propositions 98 and III in 1988 and 1990, respectively. "Appropriations
subject to limitation" with respect to the State, are authorizations to spend
Proceeds of taxes," which consist of tax revenues, and certain other funds,
including proceeds from regulatory licenses, user charges or other fees to the
extent that such proceeds exceed "the cost reasonably borne by that entity in
providing the regulation, product or service," but "proceeds of taxes" exclude
most state subventions to local governments, tax refunds and some benefit
payments such as unemployment insurance. No limit is imposed on appropriations
of funds which are not "proceeds of taxes," such as reasonable user charges or
fees, and certain other non-tax funds.

Not included in the Appropriations Limit are appropriations
for the debt service costs of bonds existing or authorized by January 1, 1979,
or subsequently authorized by the voters, appropriations required to comply
with mandates of courts or the federal government and, pursuant to Proposition
111, appropriations for qualified capital outlay projects and appropriations of
revenues derived from any increase in gasoline taxes and motor vehicle weight
fees above January 1, 1990 levels. The Proposition ill provisions are needed
to make effective the transportation funding package approved by the
Legislature and the Governor, which counts on raising over $15 billion in
additional taxes over the next 10 years to fund transportation

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programs. In addition, a number of recent initiatives were structured or
proposed to create new tax revenues dedicated to certain specific uses, with
such new taxes expressly exempted from the Article XIII B limits (e.g.,
increased cigarette and tobacco taxes enacted by Proposition 99 and 1988). The
Appropriations Limit may also be exceeded in cases of emergency. However,
unless the emergency arises from civil disturbance or natural disaster declared
by the Governor, and the appropriations are approved by two-thirds of the
Legislature, the Appropriations Limit for the next three years must be reduced
by the amount of the excess.

The Appropriations Limit in each year is based on the limit
for the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable, for
any transfer of financial responsibility of providing services to or from
another unit of government. The measurement of change in population is a
blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the Appropriations Limit is tested over consecutive
two-year periods. Any excess of the aggregate "proceeds of taxes" received
over such two-year period above the combined Appropriations Limits for those
two years is divided equally between transfers to K-14 districts and refunds to
taxpayers.

As originally enacted in 1979, the Appropriations Limit was
based on 1978-79 Fiscal Year authorizations to expend proceeds of taxes and was
adjusted annually to reflect changes in cost of living and population (using
different definitions, which were modified by Proposition 111). Starting in
the 1990-91 Fiscal Year, the State's Appropriations Limit will be recalculated
by taking the actual 1986-87 limit, and applying the annual adjustments as if
Proposition ill had been in effect. This recalculation has resulted in an
increase of $1 billion to the Appropriations Limit in 1990-91. The Legislature
has enacted legislation to implement Article XIII B which defines certain terms
used in Article XIII B and sets forth the methods for determining the
appropriations Limit. Government Code Section 7912 requires an estimate of the
Appropriations Limit to be included in the annual budget proposed by the
Governor in January of each year for the next fiscal year, and thereafter to be
subject to the budget process and established in the Budget Act.

On November 4, 1986, California voters approved an initiative
statute known as Proposition 62. This statute (i) requires that any tax for
general governmental purposes imposed by local governments be approved by
resolution or ordinance adopted by a two-thirds vote of the governmental
entity's

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legislative body and by a majority vote of the electorate of the governmental
entity; (ii) requires that any special tax (defined as taxes levied for other
than general governmental purposes) imposed by a local governmental entity be
approved by a two-thirds vote of the voters within that jurisdiction; (
restricts the use of revenues from a special tax to the purposes or for the
service for which the special tax was imposed; (i-v) prohibits the imposition
of ad valorem taxes on real property by local governmental entities except as
permitted by Article XIII A of the California Constitution; (v) prohibits the
imposition of transaction taxes and sales taxes on the sale of real property by
local governments; (vi) requires that any tax imposed by a local government on
or after August 1, 1985 be ratified by a majority of the electorate within two
years of the adoption of the initiative or be terminated by November 15, 1988;
(vii) requires that, in the event a local government fails to comply with the
provisions of this measure, a reduction in the amount of tax revenue allocated
to such local government occur in an amount equal to the revenues received by
such entity attributable to the tax levied in violation of the initiative; and
(viii) permits these provisions to be amended exclusively by t e voters of the.
State of California.

Other legislation and pending court cases, including those
challenging assessments, fees and other taxes as unconstitutional under
Proposition 13, may reduce the amount of state or local revenues available to
California state and municipal issuers for the purpose of paying their
obligations.

Effective for the 1980-81 Fiscal Year and each fiscal year
thereafter, business inventories are entirely exempt from local taxation in
California. Although the State presently reimburses local agencies for lost
revenue equal to the total due in 1978-79 with annual increases allowed based
on increases in population and inflation, the Legislature has decreased the
inflation adjustment for State reimbursement revenues because of the need to
reduce State expenditures, and there is no assurance that further reductions in
the reimbursement formula or elimination of such reimbursements will not occur.

In June 1982, the voters of California passed two initiative
measures to repeal the California gift and inheritance tax laws and to enact,
in lieu thereof, a California death tax. California voters also passed an
initiative measure to increase, for taxable years commencing on or after
January 1, 1982, the amount by which personal income tax brackets will be
adjusted annually in an effort to index tax brackets to account for the effects
of inflation. The voters also passed an initiative measure to exclude from the
definition of "change of ownership," for purposes of the valuation of real
property for taxation, the

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replacement of real property taken through eminent domain proceedings.
Decreases in state and local revenues in future fiscal years as a consequence
of these initiatives may result in reductions in allocations of state revenues
to California municipal issuers or the ability of such California issuers to
pay their obligations. In addition, the State has increased expenditures by
providing a variety of tax credits, including renters' and senior citizens,
credits and energy credits.

As a result of expenditures and reductions in revenues
following approval of Proposition 13, the State's financial condition declined
significantly. The State's General Fund surplus of approximately $3.7 billion
that existed at the beginning of the 1978-79 fiscal year was depleted resulting
in a deficit of approximately $801 million at the close of the 1982-83 fiscal
year. Cash flow shortages were financed through internal and external sources
including the issuance of revenue anticipation warrants in November, 1982. In
response, legislation was enacted reducing General Fund expenditures and
assisting local governments, and changes to existing laws were made to raise
additional revenue.

On November 8, 1988, voters approved Proposition 98, which has
significantly altered the operation and effect of the Article XIII B spending
limit, the first changes since its adoption in 1979. This combined initiative
constitutional amendment and statute called the "Classroom Instructional
Improvement and AccountabiLity Act" (the "Act"), changes State funding of
public education below the university level, and the operation of the State's
Appropriations Limit. The Act (as modified by Proposition III, which was
enacted on June 5, 1990), guarantees State funding for K-12 school districts
and community college districts ("K-14 Schools") at a level equal to the
greater of (a) 40.3 percent of General Fund revenues (the "first test"), (b)
the amount appropriated to K-14 schools in the prior year, adjusted for changes
in the cost of living (measured as in Article XIII B by reference to California
per capita personal income) and enrollment (the "second test"), or (c) a third
test, which would replace the second test in any year when the percentage
growth in per capita General Fund revenues from the prior year plus one half of
one percent is less than the percentage growth in California per capita
personal income. Under the third test, schools would receive the amount
appropriated in the prior year adjusted for changes in enrollment and per
capita General Fund revenues, plus an additional small adjustment factor. If
the third test is used in any year, the difference between the third test and
the second test would become a "credit" to schools which would be the basis of
payments in future years when per capita General Fund revenue growth exceeds
per capita personal income growth.

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Proposition 98 permits the Legislature by two-thirds vote of
both houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3
percent of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains provisions
transferring certain State tax revenues in excess of the Article XIII B limit
to K-14 schools.

The 1990-91 Budget Act appropriated $16.7 billion for K-14
schools, applying "test 2" of Proposition 98. During the course of the fiscal
year, revenues proved to be substantially below expectations. By the time the
Governor's Budget was introduced in January 1991, it became clear that per
capita growth in General Fund revenues for 1990-91 would be far smaller than
the growth in California per capita personal income and the Governor therefore
proposed reducing Proposition 98 funding in 1990-91 by applying "Test 3" rather
than "Test 2." The Governor also called for suspension of Proposition 98 and
1991-92 to save $1.4 billion for the General Fund.

In response to the changing revenue situation and to fully
fund the Proposition 98 guarantee in both years without exceeding it, the
Legislature enacted several bills prior to June 30, 1991 which responded to a
fiscal crisis in education funding. Fiscal Year 1990-91 Proposition 98
appropriations for K-14 schools were reduced by $1.233 billion. In order to
not adversely impact cash received by school districts, however, a short-term
loan was appropriated from the non-Proposition 98 State General Fund. The
Legislature then appropriated $18.4 billion to K-14 schools for 1991-92 (the
minimum guaranteed by Proposition 98), but designated $1.233 billion of this
amount to "repay" the prior year loan, thereby reducing cash outlays in 1991-92
by that amount. The minimum Proposition 98 guarantee requirements for 1989-90,
thereby completing the reduction in monies which count towards Proposition 98
in 1990-91 to the minimum required amount.

Since the Act is unclear in some details, there can be no
assurance that the Legislature or a court might not interpret the Act to
require a different percentage of General Fund revenues to be allocated to K-14
Schools, or to apply the relevant percentage to the State's budgets in a
different way than is proposed in the Governor's Budget. In any event, the
Governor and other fiscal observers expect the Act to place increasing pressure
on the State's budget over future years, potentially reducing resources
available for other State programs, especially to the extent the Article XIII B
spending

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limit would restrain the State's ability to fund such other programs by raising
taxes.

On November 8, 1988, voters also approved another initiative,
Proposition 99, the "Tobacco Tax and Health Protection Act." It imposes, as of
January 1, 1989, an additional 25 cents per pack excise tax on cigarettes, and
a new, equivalent excise tax on other tobacco products. Funds from these new
taxes are allocated to a special fund, and are required to be used for
specified purposes in certain given amounts, including education to prevent and
reduce smoking, research on tobacco-related disease, certain environmental,
wildlife habitat and parks programs, and payment of hospital and physician
costs for persons who cannot afford to pay (not limited to tobacco-related
illness). Such funds are supposed to supplement current services, rather than
fund existing service levels. The Department of Finance projects that the new
taxes Will produce additional revenues of $329 million in 1988-89, $576 million
in 1989-90, and $561 million in 1990-91. Pursuant to the initiative,
expenditures of these new taxes are excluded from the Article XIII B
appropriations limit.

At the end of the 1988-89 Fiscal Year and during the 1989-90
Fiscal Year, the Legislature and the governor agreed an a major initiative to
increase funding for transportation programs in the State by $18.5 billion over
a 10-year period. This initiative includes increased motor vehicle fuel taxes
and vehicle weight fees and bond issues, which were approved by the voters at
the June 1990 election.

Due to continuing budgetary and financial difficulties,
California's bond ratings have deteriorated since December 1991. S&P initially
lowered California's bond rating in December 1991 from AAA, to AA. Then, in
July 1992, S&P again lowered California's bond rating, from AA to A+. These
downgrades affected the state's general obligation bonds and certain other
obligations. Likewise, in February 1992, Moody's lowered its California
general obligation bond rating from Aaa to Aal. Moody's subsequently lowered
the state's general obligation rating in July 1992 from Aal to Aa.

The 1994-95 Budget Act, signed by the Governor on July 8,
1994, projects revenues and transfers of $41.9 billion, $2.1 billion higher
than revenues in 1993-94. This reflects the Administration's forecast of an
improving economy. Also included in this figure is a projected receipt of
about $360 million from the Federal Government to reimburse the State's cost of
incarcerating undocumented immigrants. The State will not know how much the
Federal Government will actually provide until the Federal Fiscal Year 1995
Budget is completed. The Legislature

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took no action on a proposal in the January Governor's Budget to undertake an
expansion of the transfer of certain programs to counties, which would also
have transferred to counties 0.5* of the State's current sales tax.

The 1994-95 Budget Act projects Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues. The 1994-95
Budget Act also projects General Fund expenditures of $40.9 billion, an
increase of $1.6 billion over 1993-94. The Budget Act further projects Special
Fund expenditures of $12.3 billion, a 4.7% decrease from 1993-94 estimated
expenditures.

Among other major features of the Budget Act were reductions
in health and welfare costs, increases in educational funding, and increased
funding for anticipated growth in the State's prison inmate population,
including provisions for implementing recent legislation which requires
mandatory life prison terms for certain third time felony offenders.

On January 17, 1994, southern California experienced a major
earthquake measuring 6.6 on the Richter scale. The earthquake has been
estimated to be one of the worst disasters in U.S. history based upon economic
costs and damages. The long term impact of this earthquake on the State of
California cannot adequately be predicted, however, it is possible that certain
taxes could be raised to cover additional costs incurred as a result of the
earthquake.

On November 8, 1994, California voters approved "Proposition
187," which bars public schooling, social services and non-emergency health
care to illegal immigrants. Since its adoption, at least eight lawsuits
challenging Proposition 187 have been filed in state and federal courts
throughout California. A federal district court judge has imposed a
preliminary injunction blocking enforcement of nearly all provisions of
Proposition 187 until a trial determines the constitutionality of the
initiative. The preliminary injunction could prohibit enforcement Proposition
187's provisions for six months to a year or more. Implementation of certain
of Proposition 187's provisions could put at risk California's receipt of some
federal funds.

On December 6, 1994, Orange County filed for protection under
Chapter 9 of the federal Bankruptcy Code. The filing was precipitated by the
seizure by lenders of securities serving as collateral for loans to Orange
County's investment pool. Orange County's investment pool is estimated to have
incurred losses of at least $2 billion. Approximately 187 local agencies,
including 60 school districts and 11 water districts, invested in Orange

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County's investment pool. Orange County is currently engaged in bankruptcy
proceedings and negotiations. Since filing for bankruptcy protection, Orange
County officials have implemented a plan for the orderly liquidation of certain
securities in Orange County's investment pool. Pursuant to the plan, Orange
County financial advisors have sold approximately $2.9 billion face amount of
the investment pools securities. It is unclear what effect Orange County's
filing for bankruptcy protection will have on the Orange County economy and
California's economy. The effect of the filing on Orange County's municipal
bonds also remains unclear. S&P has downgraded its ratings on many Orange
County bonds to "CCC" from "AA-." Moody's has suspended its ratings on many of
Orange County's bonds that are not covered by bond insurance or backed by
letters of credit. Moody's has downgraded certain other Orange County bonds to
speculative grade.

The State is a party to numerous legal proceedings, many of
which normally occur in governmental operations. In addition, the State is
involved in certain other legal proceedings that, if decided against the State,
may require the State to make significant future expenditures or may impair
future revenue sources. Because of the prospective nature of these
proceedings, no estimate of the potential loss can be made.

While at any given time, including the present, there are
numerous civil actions pending against the State which could, if determined
adversely to the State, affect the State's expenditures and, in some cases, its
revenues, the Attorney General of the State of California is of the opinion
that no pending actions are likely to have a material adverse effect on the
State's ability to pay debt service as it becomes due.

Because of the uncertain impact of the aforementioned statutes
and cases, the possible inconsistencies in the respective terms of the statutes
and the impossibility of predicting the level of future appropriations and
applicability of related statutes to such questions, it is not currently
possible to assess the impact of such legislation, cases and policies on the
long term ability of California state and municipal issuers to pay interest or
repay principal on their obligations.

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PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

(1) For Registrant's Equity Value Fund, Balanced
Fund, Growth Fund, Short-Term Government Bond
Fund, Intermediate Government Bond Fund,
Intermediate Bond Fund, Oregon Tax-Exempt
Fund, Arizona Tax-Exempt Fund, National
Tax-Exempt Bond Fund, Asset Preservation
Fund, Government Income Fund, California
Tax-Exempt Fund, California Short-Term
Tax-Exempt Fund, Money Market Fund and
Government Money Market Fund.

(A) Financial Highlights are included in
Part A (with respect to the Equity
Value Fund, Growth Fund and Balanced
Fund)

(B) Audited Financial Statements for the
fiscal year ended September 30, 1995
are incorporated by reference in
Part B for each Fund

(2) For Registrant's 100% U.S. Treasury Money
Market Fund, California Tax-Exempt Money
Market Fund, National Tax-Exempt Money Market
Fund, Equity Index Fund and International
Equity Fund, Financial Statements and
Highlights will be filed by amendment.

(b) Exhibits:

(1) Declaration of Trust of Registrant(1)

(2) By-laws of Registrant(1)

(3) Not applicable

(4) Specimen certificates of shares of
beneficial interest of Registrant(3)

(5) (i) Advisory Contract for The
Government Money Market Fund(4)

(ii) Advisory Contract for The Money
Market Fund(5)

(iii) Master Advisory Contract between
Fund Source and San Diego Financial
Capital Management, Inc. for The
Asset

<PAGE> 304
Preservation Fund, The Government
Income Fund, The Equity Value Fund,
The Balanced Fund and The California
Tax-Exempt Fund(5)

(iv) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The Asset Preservation Fund(5)

(v) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The Government Income Fund(5)

(vi) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The Equity Value Fund(5)

(vii) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The Balanced Fund(5)

(viii) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The California Tax-Exempt Fund(5)

(ix) Advisory Contract Supplement between
Fund Source and San Diego Financial
Capital Management, Inc. relating
to The California Short-Term
Tax-Exempt Fund(7)

(x) Investment Advisory and Management
Agreement between the Registrant and
First Interstate Capital Management,
Inc. for the Pacifica Prime Money
Market Fund and Pacifica Treasury
Money Market Fund(10)

(xi) Form of Investment Advisory Contract
between the Registrant and First
Interstate Capital Management, Inc.
relating to the Money Market Trust,
Growth Fund, Short-Term Government
Bond Fund, Intermediate Government
Bond Fund, Intermediate Bond Fund,
Oregon Tax-

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<PAGE> 305
Exempt Fund, Arizona
Tax-Exempt Fund and National
Tax-Exempt Bond Fund(12)

(xii) Form of Investment Advisory Contract
between the Registrant and First
Interstate Capital Management, Inc.
relating to the 100% U.S. Treasury
Money Market Fund, National
Tax-Exempt Money Market Fund,
California Tax-Exempt Money Market
Fund, Equity Index Fund and
International Equity Fund.(15)

(6) (i) Master Distribution Contract between
Fund Source and Pacifica Funds
Distributor Inc. for The Money
Market Fund, The Government Money
Market Fund, The Asset Preservation
Fund, The Government Income Fund,
The Equity Value Fund, The Balanced
Fund and The California Tax-Exempt
Fund(6)

(ii) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The Money Market Fund(6)

(iii) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The Government Money Market Fund(6)

(iv) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The Asset Preservation Fund(6)

(v) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The Government Income Fund(6)

(vi) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The Equity Value Fund(6)

(vii) Distribution Contract Supplement
between Fund Source and Pacifica
Funds

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<PAGE> 306
Distributor Inc. relating to The
Balanced Fund(6)

(viii) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The California Tax-Exempt Fund(6)

(ix) Distribution Contract Supplement
between Fund Source and Pacifica
Funds Distributor Inc. relating to
The California Short-Term Tax-Exempt
Fund(6)

(x) Distribution Agreement between the
Registrant and Premier Mutual Fund
Services, Inc. for the Pacifica
Prime Money Market Fund and Pacifica
Treasury Money Market Fund(10)

(xi) Form of Distribution Contract
Supplements between the Registrant
and Pacifica Funds Distributor, Inc.
relating to the Money Market Trust,
Growth Fund, Short-Term Government
Bond Fund, Intermediate Government
Bond Fund, Intermediate Bond Fund,
Oregon Tax-Exempt Fund, Arizona
Tax-Exempt Fund, National Tax-Exempt
Bond Fund, Prime Money Market Fund
and Treasury Money Market Fund(13)

(xii) Form of Distribution Contract
Supplements between the Registrant
and Pacifica Funds Distributor,
Inc., relating to the 100% U.S.
Treasury Money Market Fund,
California Tax-Exempt Money Market
Fund, National Tax-Exempt Money
Market Fund, Equity Index Fund and
International Index Fund(15)

(7) Not applicable

(8) (i) Custodian Contract Between Pacifica
Funds Trust and First Interstate
Bank of California(8)

(ii) Custody Agreement between Pacifica
Funds Trust and First Interstate
Bank of California for the Pacifica
Prime Money

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<PAGE> 307
Market Fund and Pacifica Treasury
Money Market Fund(10)

(9) (i) Transfer Agency and Service
Agreement between Pacifica Funds
Trust and First Interstate Bank of
California for the Pacifica Prime
Money Market Fund and Pacifica
Treasury Money Market Fund(10)

(ii) Service Agreement between Pacifica
Funds Trust and Furman Selz
Incorporated(13)

(iii) (a) Shareholder Services Plan
for Institutional Shares(14)

(b) Form of Shareholder Servicing
Agreement for Institutional
Shares(14)

(iv) (a) Shareholder Services Plan
for Service Shares(14)

(b) Form of Shareholder Servicing
Agreement for Service
Shares(14)

(v) (a) Shareholder Services Plan
for Investor Shares(14)

(b) Form of Shareholder Servicing
Agreement for Investor
Shares(14)

(10) Filed on November 22, 1994 with the Trust's
Notices Pursuant to Rule 24f-2

(11) Consent of Independent Public Accountants(15)

(12) Not applicable

(13) Not applicable

(14) Model retirement plans(2)

(15) (i) Form of Amended and Restated Master
Distribution Plan(12)

(ii) Form of Amended and Restated Master
Distribution Plan Supplements(13)

- 5 -

<PAGE> 308
(iii) Master Administrative Services
Contract between Fund Source and
Furman Selz Incorporated for The
Government Money Market Fund, The
Money Market Fund, The Asset
Preservation Fund, The Government
Income Fund, The Equity Value Fund,
The Balanced Fund and The California
Tax-Exempt Fund(5)

(iv) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Government Money Market Fund(5)

(v) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Money Market Fund(5)

(vi) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Asset Preservation Fund(5)

(vii) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Government Income Fund(5)

(viii) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Equity Value Fund(5)

(ix) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The Balanced Fund(5)

(x) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The California Tax-Exempt Fund(5)

(xi) Administrative Services Contract
Supplement between Fund Source and
Furman Selz Incorporated relating to
The California Short-Term Tax-Exempt
Fund(7)

- 6 -

<PAGE> 309
(xii) Administration Agreement with The
Dreyfus Corporation for the Pacifica
Prime Money Market Fund and Pacifica
Treasury Money Market Fund(10)

(xiii) Form of Administrative Services
Contract Supplements between
Registrant and Furman Selz
Incorporated relating to the Money
Market Trust, Growth Fund,
Short-Term Government Bond Fund,
Intermediate Government Bond Fund,
Intermediate Bond Fund, Oregon
Tax-Exempt Fund, Arizona Tax-Exempt
Fund and National Tax-Exempt Bond
Fund(13)

(xiv) Sub-Administration Agreement between
Premier Mutual Fund Services, Inc.
and The Dreyfus Corporation for the
Pacifica Prime Money Market Fund and
Pacifica Treasury Money Market Fund
(10)

(xv) Administrative Services Contract
Supplement between Registrant and
Furman Selz Incorporated relating to
the 100% U.S. Treasury Money Market
Fund, California Tax-Exempt Money
Market Fund, National Tax- Exempt
Money Market Fund, Equity Index Fund
and International Equity Fund(15)

(16) Performance calculations for purposes of Item
22:

(i) For Registrant's Pacifica Prime
Money Market Fund and Pacifica
Treasury Money Market Fund(9)

(ii) For Registrant's Money Market Fund,
Government Money Market Fund, Asset
Preservation Fund, California
Short-Term Tax-Exempt Fund,
California Tax-Exempt Fund,
Government Income Fund, Balanced
Fund and Equity Value Fund(8)

(iii) For Registrant's Money Market Trust,
Growth Fund, Short-Term Government
Bond Fund, Intermediate Government
Bond Fund, Intermediate Bond Fund,
Oregon Tax-

- 7 -

<PAGE> 310
Exempt Fund, Arizona Tax-Exempt Fund
and National Tax-Exempt Bond Fund(16)

(iv) For Registrant's 100% U.S. Treasury
Money Market Fund, California
Tax-Exempt Money Market Fund,
National Tax-Exempt Money Market
Fund, Equity Index Fund and
International Equity Fund(15)

(17) Not Applicable

(18) (i) Plan pursuant to Rule 18f-3 for
Operation of a Multi-Class System -
Each Series of the Registrant other
than the Pacifica Prime Money Market
Fund, Pacifica Treasury Money
Market Fund, Pacifica Money Market
Trust, Pacifica Money Market Fund
and Pacifica Government Money Market
Fund(13)

(ii) Plan pursuant to Rule 18f-3 for
operation of a Multi-Class System -
Pacifica Prime Money Market Fund and
Pacifica Treasury Money Market
Fund(13)

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

(1) Filed as an exhibit to Registration Statement No. 2-92260 on
July 17, 1984.
(2) Filed as an exhibit to Pre-Effective Amendment No. 4 to
Registration Statement No. 2-92260 on November 9, 1984.
(3) Filed as an exhibit to Post-Effective Amendment No. 4 to
Registration Statement No. 2-92260 on December 10, 1985.
(4) Filed as an exhibit to Post-Effective Amendment No. 14 to
Registration Statement No. 2-92260 on November 30, 1987.
(5) Filed as an exhibit to Post-Effective Amendment No. 22 to
Registration Statement No. 2-92260 on February 13, 1990.
(6) Filed as an exhibit to Post-Effective Amendment No. 26 to
Registration Statement No. 2-92260 on December 3, 1991.
(7) Filed as an exhibit to Post-Effective Amendment No. 28 to
Registration No. 2-92260 on October 16, 1992.

- 8 -

<PAGE> 311
(8) Filed as an exhibit to Post-Effective Amendment No. 33 to
Registration Statement No. 2-92260 on February 1, 1994.
(9) Filed as an exhibit to Post-Effective Amendment No. 34 to
Registration Statement No. 2-92260 on July 29, 1994.
(10) Filed as an exhibit to Post-Effective Amendment No. 37 to
Registration Statement No. 2-92260 on January 29, 1995.
(11) Filed as an exhibit to Post-Effective Amendment No. 38 to
Registration Statement No. 2-92260 on February 1, 1995.
(12) Filed as an appendix to Part A of Registration Statement No.
33-95022 on Form N-14 on July 26, 1995.
(13) Filed as an exhibit to Registration Statement No. 33-95022 on
Form N-14 on July 26, 1995.
(14) Filed as an exhibit to Post-Effective Amendment No. 43 to
Registration Statement No. 2-92260 on August 24, 1995.
(15) To be filed by amendment.
(16) Filed as an exhibit to Post-Effective Amendment No. 44 to
Registration Statement No. 2-92260 on September 25, 1995.

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

None

Item 26. Number of Holders of Securities as of October 26, 1995

Pacifica Money Market Trust - 15
Pacifica Money Market Fund - 720
Pacifica Government Money Market Fund - 176
Pacifica Prime Money Market Fund
Institutional Shares - 66
Investor Shares - 720
Service Shares - 5
Pacifica Treasury Money Market Fund
Institutional Shares - 621
Investor Shares - 154
Service Shares - 5
Pacifica Short-Term Government Bond Fund
Institutional Shares - 758
Investor Shares - 690
Pacifica Intermediate Bond Fund
Institutional Shares - 8
Investor Shares - 225

- 9 -

<PAGE> 312
Pacifica Intermediate Government Bond Fund
Institutional Shares - 1087
Investor Shares - 1175
Pacifica California Tax-Exempt Bond Fund
Institutional Shares - 68
Investor Shares - 857
Pacifica National Tax-Exempt Bond Fund
Institutional Shares - 6
Investor Shares - 196
Pacifica Oregon Tax-Exempt Fund
Institutional Shares - 0
Investor Shares - 1027
Pacifica Arizona Tax-Exempt Fund
Institutional Shares - 5
Investor Shares - 5
Pacifica Growth Fund
Institutional Shares - 54
Investor Shares - 66
Pacifica Equity Value Fund
Institutional Shares - 711
Investor Shares - 1482
Pacifica Balanced Fund
Institutional Shares - 1511
Investor Shares - 2570
Pacifica Asset Preservation Fund
Institutional Shares - 8
Investor Shares - 617
Pacifica Government Income Fund
Institutional Shares - 8
Investor Shares - 482
Pacifica California Short-Term Tax-Exempt Fund
Institutional Shares - 6
Investor Shares - 170

Item 27. Indemnification

Reference is made to Article IV of the Registrant's
Declaration of Trust.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or

- 10 -

<PAGE> 313
paid by trustees, officers or controlling persons of the
Registrant in connection with the successful defense of any
act, suit or proceeding) is asserted by such trustees,
officers or controlling persons in connection with the shares
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 issues.

Item 28. Business and Other Connections of Investment Advisor

FIRST INTERSTATE CAPITAL MANAGEMENT, INC.

First Interstate Capital Management, Inc. serves as the
Registrant's Investment Adviser and, in addition, renders investment advisory
services to First Interstate Bancorp's employee benefit plans and various other
corporate and individual investors.

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER: OTHER BUSINESSES:
- ------------------------ -----------------
<S> <C>
Tom Slonaker Executive Vice President, First Interstate Bancorp(2)
Director and
Chairman of the Board

Chief Investment Officer, First Interstate Bancorp(2)

Edward S. Claunch Senior Vice President, First Interstate Bank of Denver,
President and Chief N.A.(6)
Executive Officer

Deborah Goodman Senior Vice President, First Interstate Bank of
Senior Vice President California(1)

Walter Jim Brown Senior Vice President, First Interstate Bank of Texas,
Senior Vice President N.A.(3)

G. Edward Means Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)

G. David Underwood Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)
</TABLE>

- 11 -

<PAGE> 314
<TABLE>
<S> <C>
Barbara Walchli Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)

Richard A. Palmer Senior Vice President, First Interstate Management Services
Senior Vice President Company(1)
Chief Financial Officer

Senior Vice President, First Interstate Bancorp(2)

Chief Financial Officer, D.A.G. Management, Inc.

Russell K. Snow, Jr. Executive Vice President, First Interstate Bank of
Director California(1)

Director, First Interstate Portfolio Lending Services(1)

Vern Kozlen Executive Vice President, First Interstate Bank of
Director California(1)

President, First Interstate
Portfolio Lending Services(1)

Susan K. Riechel, Senior Vice President, First Interstate Bank of
Vice President California(1)

Michael Neitzke Vice President, First Interstate Bank of California(1)
Vice President

Dale Annis Vice President First Interstate Bank of Oregon, N.A.(5)
Vice President

Barbara Bruser Senior Vice President, First Interstate Bank of
Vice President California(1)

Thomas Hooker Vice President, First Interstate Bank of California(1)
Vice President

Michael Hughes Vice President, First Interstate Bank of California(1)
Vice President

David Williams Vice President, First Interstate Bank of California(1)
Vice President

Richard Ferguson Vice President, First Interstate Bank of Arizona, N.A.(2)
Vice President
</TABLE>

- 12 -
<PAGE> 315
<TABLE>
<S> <C>
Charlie Fish Vice President, First Interstate Bank of Oregon, N.A.(5)
Vice President

Robert O. Lindig Vice President, First Interstate Bank of Denver, N.A.(6)
Vice President

Gerald Wagner Vice President, First Interstate Bank of California(1)
Vice President

Robert Daviduk Vice President, First Interstate Bank of California(1)
Vice President

Roger S. Teetzel Vice President, First Interstate Bank of California(7)
Vice President

Richard Carhidi Assistant Vice President, First Interstate Bank of Arizona,
Assistant Vice President N.A.(2)

Marianne R. Minihane Assistant Vice President, First Interstate Bank of
Assistant Vice President California(7)

Sandra U. Torres Assistant Vice President, First Interstate Bank of
Assistant Vice President California(7)

Leon Newcomb Assistant Vice President, First Interstate Bank of Utah,
Assistant Vice President N.A.(2)

Mary Gail Walton Assistant Vice President, First Interstate Bank of
Assistant Vice President Washington, N.A.(8)

Thomesina Beagle Investment Officer, First Interstate Bank of California(7)
Investment Officer

William J. Souza Managing Counsel, First Interstate Management Services
Secretary Company(1)

Secretary, First Interstate Portfolio Lending Services(1)
</TABLE>

- ----------------------------------
(1) The address of the office is indicated as 707 Wilshire Boulevard, Los
Angeles, California 90017.
(2) The address of the office is indicated as 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258.
(3) The address of the office is indicated as 1000 Louisiana, Houston,
Texas 77002.

- 13 -

<PAGE> 316
(4) The address of the office is indicated as 100 W. Washington, Phoenix,
Arizona 85003.
(5) The address of the office is indicated as 1300 S.W. Fifth Ave.,
Portland, Oregon 97201.
(6) The address of the office is indicated as 633 Seventeenth Street,
Denver, Colorado 80270.
(7) The address of the office is indicated as 4365 Executive Drive, Suite
1820, San Diego, California 92121.
(8) The address of the office is indicated as 999 Third Avenue, Seattle,
Washington 98104.

Item 29. Principal Underwriters

(a)(i) Premier Mutual Fund Services Inc., principal underwriter for
the Institutional and Service Shares of Registrant's Pacifica Prime Money
Market Fund and Pacifica Treasury Money Market Fund (exclusive distributor)
acts as principal underwriter or exclusive distributor for the investment
companies named below:

1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus GNMA Fund, Inc.
26) Dreyfus Government Cash Management

- 14 -

<PAGE> 317
27) Dreyfus Growth and Income Fund, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.

32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
34) Dreyfus Investors GNMA Fund
35) The Dreyfus/Laurel Funds, Inc.
36) The Dreyfus/Laurel Funds Trust
37) The Dreyfus/Laurel Tax-Free Municipal Funds
38) The Dreyfus/Laurel Investment Series
39) The Dreyfus Leverage Fund, Inc.
40) Dreyfus Life and Annuity Index Fund, Inc.
41) Dreyfus LifeTime Portfolios, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund, Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Intermediate Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
65) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.

- 15 -

<PAGE> 318
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Tax Exempt Cash Management
75) Dreyfus Treasury Cash Management
76) Dreyfus Treasury Prime Cash Management
77) Dreyfus Variable Investment Fund
78) Dreyfus-Wilshire Target Funds, Inc.
79) Dreyfus Worldwide Dollar Money Market Fund, Inc.
80) General California Municipal Bond Fund, Inc.
81) General California Municipal Money Market Fund
82) General Government Securities Money Market Fund, Inc.
83) General Money Market Fund, Inc.
84) General Municipal Bond Fund, Inc.
85) General Municipal Money Market Fund, Inc.
86) General New York Municipal Bond Fund, Inc.
87) General New York Municipal Money Market Fund
88) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
89) Peoples Index Fund, Inc.
90) Peoples S&P MidCap Index Fund, Inc.
91) Premier Insured Municipal Bond Fund
92) Premier California Municipal Bond Fund
93) Dreyfus Global Investing, Inc.
94) Premier GNMA Fund
95) Premier Growth Fund, Inc.
96) Premier Municipal Bond Fund
97) Premier New York Municipal Bond Fund
98) Premier State Municipal Bond Fund

(a)(ii) Pacifica Funds Distributor Inc. ("PFD Inc.") is the principal
underwriter for the Investor Shares of Pacifica Prime Money Market Fund and
Pacifica Treasury Money Market Fund and each class of each other series of the
Registrant. PFD Inc., a subsidiary of Furman Selz Incorporated, was organized
specifically to distribute shares of the Registrant.

(b)(i) Premier Mutual Fund Services Inc.:

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH PFD, INC. WITH REGISTRANT
---------------- -------------- ---------------
<S> <C> <C>
Marie E. Connolly+ Director, President, None
Chief Operating Officer and Compliance
Officer

Joseph F. Tower, III+ Senior Vice President, None
Treasurer and Chief Financial Officer
</TABLE>

- 16 -

<PAGE> 319
<TABLE>
<S> <C> <C>
John E. Pelletier+ Senior Vice President, None
General Counsel, Secretary and Clerk

Frederick C. Dey++ Senior Vice President None

Eric B. Fischman++ Vice President and Associate General Counsel None

Lynn H. Johnson+ Vice President None

Ruth D. Leibert++ Assistant Vice President None

Paul Prescott++ Assistant Vice President None

Leslie M. Gaynor+ Assistant Treasurer None

Mary Nelson++ Assistant Treasurer None

John J. Pyburn++ Assistant Treasurer None

Jean M. O'Leary+ Assistant Secretary, and None
Assistant Clerk

John W. Gomez+ Director None

William J. Nutt+ Director None
</TABLE>

- ----------------------------
+ Principal business address is One Exchange Place, Boston,
Massachusetts 02109.
++ Principal business address is 200 Park Avenue, New York, New York
10166.

(b)(ii) PFD Inc.:

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH PFD, INC. WITH REGISTRANT
---------------- -------------- ---------------
<S> <C> <C>
Michael C. Petrycki President and Director President

Steven D. Blecher Vice President, Secretary and Treasurer Executive Vice President*

Robert J. Miller Chief Financial Officer and Vice President None

Elizabeth Q. Solazzo Assistant Secretary None
</TABLE>

- ----------------------------
* The authority of Mr. Blecher is limited to matters involving each
series of the Registrant other than the Pacifica Prime Money Market
Fund and Pacifica Treasury Money Market Fund.

- 17 -

<PAGE> 320

(c)(i) Not Applicable

(ii) Not Applicable

Item 30. Location of Accounts and Records

<TABLE>
<S> <C> <C>
1. First Interstate Capital Records relating to its function
Management, Inc. as Adviser for each portfolio
7501 E. McCormick Parkway
Scottsdale, Arizona 85258

2. First Interstate Bank of Records relating to its function
California as Custodian for each portfolio
707 Wilshire Blvd, W10-6 and Transfer Agent for the
Los Angeles, California 90017 Service and Institutional Shares
of the Pacifica Prime Money
Market Fund and the Pacifica
Treasury Money Market Fund

3. The Dreyfus Corporation Records relating to its function
200 Park Avenue as Administrator for the Pacifica
New York, New York 10016 Prime Money Market Fund and the
Pacifica Money Market Treasury
Fund

4. Furman Selz Incorporated Records relating to its function
230 Park Avenue as Administrator for each
New York, New York 10169 portfolio other than the Pacifica
Prime Money Market Fund and the
Pacifica Treasury Money Market
Fund
</TABLE>

- 18 -

<PAGE> 321
<TABLE>
<S> <C> <C>
5. Premier Mutual Fund Services, Records relating to its function
Inc. One Exchange Place as Sub-Administrator and
Boston, Massachusetts 02109 Distributor of the Service and
Institutional Shares for the
Pacifica Prime Money Market Fund
and the Pacifica Treasury Money
Market Fund

6. Pacifica Funds Distributor, Record relating to its function
Inc. 230 Park Avenue as Distributor for each class of
New York, New York 10169 each series of the Registrant other
than the Service and Institutional
Shares of the Pacifica Prime Money
Market Fund and the Pacifica
Treasury Money Market Fund
</TABLE>

Item 31. Management Services

Not applicable

Item 32. Undertakings

(a) Registrant undertakes to call a meeting of Shareholders for
the purpose of voting upon the question of removal of a
Trustee or Trustees when requested to do so by the holders of
at least 10% of the Registrant's outstanding shares and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940.

(b) Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not
be certified, within four to six months from the effective
date of Registrant's Registration Statement under the
Securities Act of 1933.

(c) Registrant undertakes to provide its Annual Report upon
request without charge to any recipient of a Prospectus for
the Funds.

- 19 -

<PAGE> 322

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 46 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Washington, District of Columbia on the 21st day of November, 1995.

<TABLE>
<S> <C>
PACIFICA FUNDS TRUST
--------------------
(REGISTRANT)

By: Michael C. Petrycki
-------------------------------
Michael C. Petrycki, President*

By: Jeffrey L. Steele
--------------------------------
*Jeffrey L. Steele,
as attorney-in-fact
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 46 to the Registration Statement has been signed
by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Michael C. Petrycki President November 21, 1995
- ----------------------
Michael C. Petrycki*

Dennis W. Draper Trustee November 21, 1995
- ----------------------
Dennis W. Draper*

Joseph N. Hankin Trustee November 21, 1995
- ----------------------
Joseph N. Hankin*

John E. Heilmann Trustee November 21, 1995
- ----------------------
John E. Heilmann*
</TABLE>

<PAGE> 323

<TABLE>
<S> <C> <C>
Jack D. Henderson Trustee November 21, 1995
- ------------------------
Jack D. Henderson*

Richard A. Wedemeyer Trustee November 21, 1995
- -----------------------
Richard A. Wedemeyer*

John J. Pileggi Treasurer (Principal November 21, 1995
- ----------------------- Financial and
John J. Pileggi* Accounting Officer)

By: Jeffrey L. Steele
-------------------------
*Jeffrey L. Steele,
as attorney-in-fact
</TABLE>

* Pursuant to power of attorney filed with Post-Effective Amendment No. 43
on August 24, 1995.

- 2 -