PACIFICA FUNDS TRUST, 497, 1996-03-13

PACIFICA FUNDS TRUST
497, 1996-03-13

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<PAGE> 1

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 LLC -- 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 five portfolios (the
"Funds"):

- Pacifica Oregon Tax-Exempt Fund
- Pacifica Arizona Tax-Exempt Fund
- Pacifica California Tax-Exempt Fund
- Pacifica California Short-Term Tax-Exempt Fund
- Pacifica National Tax-Exempt 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 1, 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.
----------------------------

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.

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 1, 1996.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
HIGHLIGHTS............................................... 3
FUND EXPENSES............................................ 7
FEE TABLE -- INVESTOR SHARES............................. 7
FINANCIAL HIGHLIGHTS..................................... 11
THE FUNDS................................................ 17
INVESTMENT POLICIES AND PRACTICES
OF THE FUNDS........................................... 17
RISKS OF INVESTING IN THE FUNDS.......................... 19
MANAGEMENT OF THE FUNDS.................................. 22
FUND SHARE VALUATION..................................... 28
PRICING OF INVESTOR SHARES............................... 29
MINIMUM PURCHASE REQUIREMENTS............................ 33
PURCHASE OF INVESTOR SHARES.............................. 33
EXCHANGE OF INVESTOR SHARES.............................. 34
REDEMPTION OF INVESTOR SHARES............................ 36
DIVIDENDS, DISTRIBUTIONS AND
FEDERAL INCOME TAX..................................... 39
DESCRIPTION OF SECURITIES AND
INVESTMENT PRACTICES................................... 45
INVESTMENT RESTRICTIONS.................................. 50
OTHER INFORMATION........................................ 51
APPENDIX................................................. A-1
</TABLE>

2
<PAGE> 3

HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

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

The Oregon Tax-Exempt Fund. The investment objective of the Oregon
Tax-Exempt Fund is to provide investors with income exempt from Federal and
Oregon personal income taxes. The Fund's assets will be primarily invested in
debt instruments issued by or on behalf of the State of Oregon, other states,
territories and possessions of the United States, the District of Columbia and
their respective authorities, agencies, instrumentalities and political
subdivisions.

The Arizona Tax-Exempt Fund. The investment objective of the Arizona
Tax-Exempt Fund is to provide investors with income exempt from Federal and
Arizona personal income taxes. The Fund's assets will be primarily invested in
debt instruments issued by or on behalf of the State of Arizona, other states,
territories and possessions of the United States, the District of Columbia and
their respective authorities, agencies, instrumentalities and political
subdivisions.

The California Tax-Exempt Fund. The investment objective of the California
Tax-Exempt Fund is to provide investors with as high a level of current income,
exempt from both Federal and California personal income taxes, as is consistent
with limiting the risk of potential capital loss. The Fund pursues this
objective by investing primarily in debt instruments issued by or on behalf of
the State of California, other states, territories and possessions of the United
States, the District of Columbia and their respective authorities, agencies,
instrumentalities and political subdivisions.

The California Short-Term Tax-Exempt Fund. The investment objective of the
California Short-Term Tax-Exempt Fund is to provide investors with as high a
level of current income, exempt from both Federal and California personal income
taxes, as is consistent with limiting the risk of potential loss. The Fund
pursues this objective by investing primarily in short-term debt instruments
issued by or on behalf of the State of California, other states, territories and
possessions of the United States, the District of Columbia and their respective
authorities, agencies, instrumentalities and political subdivisions. The Fund
will maintain a dollar-weighted average portfolio maturity of three years or
less.

3
<PAGE> 4

The National Tax-Exempt Fund. The investment objective of the National
Tax-Exempt Fund is to provide investors with income exempt from Federal income
taxes. The Fund's assets will be primarily invested in 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.

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

The price per share of the Funds will fluctuate with changes in the 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 economic conditions, interest rate levels and
general market conditions. Depending on these factors, the net asset value of a
Fund may decrease instead of increase. Certain Funds may seek to achieve their
investment objectives through investments in instruments with the lowest
investment grade rating which have speculative characteristics. The policy of
the Oregon Tax-Exempt Fund, Arizona Tax-Exempt Fund, California Tax-Exempt Fund
and California Short-Term Tax-Exempt Fund to invest primarily in Oregon, Arizona
and California municipal obligations also presents certain risks because each
Fund's performance will be closely tied to the economic and political conditions
of a particular state. All of the Funds are also classified as non-diversified
portfolios under the Investment Company Act of 1940, as amended (the "1940
Act"), which means that the Funds may be more sensitive to factors affecting a
particular issuer.

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

4
<PAGE> 5

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 -- 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 pages 7 through 10
of this Prospectus.

5
<PAGE> 6

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

Investor Shares of the California Short-Term Tax-Exempt Fund are purchased
at net asset value without a sales charge. Investor Shares of the other Funds
are purchased at net asset value plus a sales charge of no more than 4.5%.

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

<TABLE>
<S> <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 generally 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."

6
<PAGE> 7

FUND EXPENSES

The following tables list 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>
OREGON ARIZONA
TAX-EXEMPT TAX-EXEMPT
FUND FUND
---------- ----------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)... 4.50% 4.50%
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)(++)..... 0.30% 0.00%
12b-1 Fees(++)(++)...................... 0.10% 0.25%
Other Expenses (after
waivers)(++)++++...................... 0.40% 0.40%
------- ------
TOTAL FUND OPERATING EXPENSES:
(after waivers)(++)++++++............... 0.80% 0.65%
======= ======

</TABLE>

- ---------------
(++) Management Fees (before waivers) would be 0.50% and 0.50%, 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 the 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 0.58% and 0.61%,
respectively.

(++)++++++ Total Fund Operating Expenses (before waivers) would be 1.18% and
1.36%, 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> 8

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>
OREGON ARIZONA
TAX-EXEMPT TAX-EXEMPT
FUND FUND
---------- ----------
<S> <C> <C>
1 year................................. $ 53 $ 51
3 years................................ 69 65
5 years................................ 87 80
10 years............................... 140 122
</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.

8
<PAGE> 9

FEE TABLE -- INVESTOR SHARES

<TABLE>
<CAPTION>
CALIFORNIA
CALIFORNIA SHORT-TERM NATIONAL
TAX-EXEMPT TAX-EXEMPT TAX- EXEMPT
FUND FUND FUND
---------- ---------- ----------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Load Imposed on
Purchases (as a percentage
of offering price)......... 4.50% 3.00% 4.50%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering
price)..................... None None None
Deferred Sales Load (as a
percentage of redemption
proceeds).................. None+ None None+
Redemption Fees.............. None None None
Exchange Fee................. None None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average
net assets)
Management Fees (after
waivers)(++)............... 0.50% 0.05% 0.00%
12b-1 Fees(++)++............. 0.05% 0.10% 0.00%
Other Expenses (after
waivers)(++)++++........... 0.40% 0.60% 0.35%
---- ---- ----
TOTAL FUND OPERATING EXPENSES:
(after waivers)(++)++++++.... 0.95% 0.75% 0.35%
==== ==== ====
</TABLE>

- ---------------
(++) Management Fees (before waivers) would be 0.50%, 0.35% and 0.50%,
respectively.

(++)++ Under rules of the NASD, a 12b-1 fee may be treated as a sales charge
for certain purposes. Because the 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 0.43%, 0.68% and 0.60%,
respectively.

(++)++++++ Total Fund Operating Expenses (before waivers) would be 0.98%, 1.13%
and 1.10%, respectively.

9
<PAGE> 10

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>
CALIFORNIA
CALIFORNIA SHORT-TERM NATIONAL
TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
FUND FUND FUND
---------- ---------- ----------
<S> <C> <C> <C>
1 year........................ $ 54 $ 37 $ 48
3 years....................... 74 54 56
5 years....................... 95 71 64
10 years...................... 156 124 87
</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.

10
<PAGE> 11

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, 1995
for the Oregon Tax-Exempt Fund, Arizona Tax-Exempt Fund and National Tax-Exempt
Fund has been audited by the former independent accountants of these Funds,
whose report on the financial statements appears in the September 30, 1995
Report to Shareholders for the Funds. The following supplementary information
for the year ended September 30, 1995 for the California Tax-Exempt Fund and
California Short-Term Tax-Exempt Fund (collectively, the "California Funds") has
been audited by Ernst & Young LLP, whose report on the financial statements
appears in the 1995 Annual Report to Shareholders for the Funds. These reports
and financial statements are incorporated by reference into the SAI. The
supplementary information for each of the four years in the period ended
September 30, 1994 for the California Funds has been audited by the former
independent accountants for these Fund. 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 Funds offered only one class of shares to both
institutional and retail investors. See "Other Information -- Capitalization."

11
<PAGE> 12

For a share outstanding throughout the periods indicated:

OREGON TAX-EXEMPT FUND*
<TABLE>
<CAPTION>
PERIOD ENDED FOR THE YEAR ENDED MAY 31,
SEPT. 30, -------------------------------------------
1995** 1995 1994 1993 1992
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value -- Beginning of Period...................... $ 16.47 $ 16.17 $ 16.79 $ 16.07 $ 15.74
INCOME FROM INVESTMENT OPERATIONS
Net investment income...................................... 0.28 0.82 0.84 0.86 0.91
Net realized and unrealized gain (loss) on investments..... (0.08) 0.39 (0.43) 0.76 0.38
------- ------- ------- ------- -------
Total income from investment operations.................. 0.20 1.21 0.41 1.62 1.29
------- ------- ------- ------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income....................... (0.29) (0.87) (0.82) (0.86) (0.92)
Distributions from net realized gain on investments........ (0.00) (0.04) (0.21) (0.04) (0.04)
------- ------- ------- ------- -------
Total dividends and distributions to shareholders........ (0.29) (0.91) (1.03) (0.90) (0.96)
------- ------- ------- ------- -------
Net asset value -- End of Period........................... $ 16.38 $ 16.47 $ 16.17 $ 16.79 $ 16.07
======= ======= ======= ======= =======
Total return (excluding sales load)...................... 3.67%+ 7.92% 2.33% 10.36% 8.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)............................ $50,077 $52,245 $53,846 $45,435 $25,002
Ratio of expenses to average net assets.................... 0.70%+ 0.70% 0.62% 0.60% 0.60%
Ratio of net investment income to average net assets....... 5.01%+ 5.19% 4.90% 5.34% 5.81%
Ratio of expenses to average net assets without fee
waivers.................................................. 1.01%+ 0.90% 0.84% 0.91% 0.98%
Ratio of net investment income to average net assets
without fee waivers...................................... 4.70%+ 4.99% 4.69% 5.03% 5.43%
Portfolio turnover rate(1)................................. 56.53% 15.46% 22.10% 5.62% 16.96%

<CAPTION>
FOR THE YEAR ENDED MAY 31,
-----------------------------
1991 1990 1989
------- ------ ------
<S> <<C> <C> <C>
Net asset value -- Beginning of Period...................... $ 15.27 $15.35 $15.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income...................................... 0.94 0.93 0.93
Net realized and unrealized gain (loss) on investments..... 0.47 (0.06) 0.31
------- ------- ------
Total income from investment operations.................. 1.41 0.87 1.24
------- ------- ------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income....................... (0.94) (0.93) (0.89)
Distributions from net realized gain on investments........ (0.00) (0.02) (0.00)
------- ------- ------
Total dividends and distributions to shareholders........ (0.94) (0.95) (0.89)
------- ------- ------
Net asset value -- End of Period........................... $ 15.74 $15.27 $15.35
======= ======= ======
Total return (excluding sales load)...................... 9.58% 5.80% 8.55%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)............................ $14,607 $7,550 $3,175
Ratio of expenses to average net assets.................... 0.55% 0.50% 0.50%
Ratio of net investment income to average net assets....... 6.27% 6.26% 6.64%
Ratio of expenses to average net assets without fee
waivers.................................................. 1.03% 1.35% 3.29%
Ratio of net investment income to average net assets
without fee waivers...................................... 5.79% 5.41% 3.85%
Portfolio turnover rate(1)................................. 22.89% 93.67% 9.12%
</TABLE>

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

* The Fund operated as the Oregon Tax-Exempt Fund of Westcore Trust from its
commencement of operations on June 1, 1988 until its reorganization as a
portfolio of the Trust on October 10, 1995. During the periods shown, the
Fund was advised by 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) 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
September 30, 1995 were $9,296,225 and $9,230,944, respectively.

+ Annualized.

12
<PAGE> 13

For a share outstanding throughout the periods indicated:

ARIZONA TAX-EXEMPT FUND*
<TABLE>
<CAPTION>
FOR THE YEAR
FOR THE PERIOD ENDED MAY 31,
ENDED ----------------
SEPT. 30, 1995** 1995
---------------- ------
<S> <C> <C>
Net asset value -- Beginning of Period................................................ $ 10.68 $ 10.48
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................................................ 0.17 0.51
Net realized and unrealized gain (loss) on investments............................... 0.06 0.23
------- -------
Total income from investment operations............................................ 0.23 0.74
------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................................................. (0.20) (0.53)
Distributions from net realized gain on investments.................................. (0.00) (0.01)
------- -------
Total dividends and distributions to shareholders.................................. (0.20) (0.54)
------- -------
Net asset value -- End of Period..................................................... $ 10.71 $ 10.68
======= =======
Total return (excluding sales load)................................................ 6.55%+ 7.35%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)...................................................... $ 24,622 $ 24,581
Ratio of expenses to average net assets.............................................. 0.45%+ 0.40%
Ratio of net investment income to average net assets................................. 4.73%+ 4.89%
Ratio of expenses to average net assets without fee waivers.......................... 1.35%+ 1.13%
Ratio of net investment income to average net assets without fee waivers............. 3.83%+ 4.16%
Portfolio turnover rate(1)........................................................... 62.10% 13.65%

FOR THE YEAR
ENDED MAY 31,
----------------
1994 1993
------ ------
<S> <C>
Net asset value -- Beginning of Period................................................ $ 10.64 $ 10.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................................................ 0.50 0.49
Net realized and unrealized gain (loss) on investments............................... (0.15) 0.55
------- -------
Total income from investment operations............................................ 0.35 1.04
------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................................................. (0.50) (0.49)
Distributions from net realized gain on investments.................................. (0.01) (0.00)
------- -------
Total dividends and distributions to shareholders.................................. (0.51) (0.49)
------- -------
Net asset value -- End of Period..................................................... $ 10.48 $ 10.64
======= =======
Total return (excluding sales load)................................................ 3.28% 10.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)...................................................... $ 25,153 $ 22,430
Ratio of expenses to average net assets.............................................. 0.31% 0.20%
Ratio of net investment income to average net assets................................. 4.72% 4.98%
Ratio of expenses to average net assets without fee waivers.......................... 1.00% 1.18%
Ratio of net investment income to average net assets without fee waivers............. 4.03% 4.00%
Portfolio turnover rate(1)........................................................... 27.81% 3.96%

FOR THE PERIOD
ENDED
MAY 31, 1992
--------------
Net asset value -- Beginning of Period................................................ $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................................................ 0.09
Net realized and unrealized gain (loss) on investments............................... 0.08
-------
Total income from investment operations............................................ 0.17
-------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................................................. (0.08)
Distributions from net realized gain on investments.................................. (0.00)
-------
Total dividends and distributions to shareholders.................................. (0.08)
-------
Net asset value -- End of Period..................................................... $10.09
=======
Total return (excluding sales load)................................................ 7.02%+
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)...................................................... $4,690
Ratio of expenses to average net assets.............................................. 0.68%+
Ratio of net investment income to average net assets................................. 4.32%+
Ratio of expenses to average net assets without fee waivers.......................... 2.08%+
Ratio of net investment income to average net assets without fee waivers............. 2.92%+
Portfolio turnover rate(1)........................................................... 0.00%
</TABLE>

- ---------------
* The Fund operated as the Arizona Intermediate Tax-Free Fund of Westcore Trust
from its commencement of operations on March 2, 1992 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 Arizona, 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.

+ Annualized.

(1) 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 period ended
September 30, 1995 were $5,546,887 and $4,984,8666, respectively.

13
<PAGE> 14

Selected data for a share outstanding throughout the periods shown:

CALIFORNIA TAX-EXEMPT FUND*

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, PERIOD
------------------------------------------------------------ ENDED
SEPTEMBER 30,
1995 1994 1993 1992 1991 1990(a)
-------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of Period........ $ 10.42 $ 11.49 $ 10.82 $ 10.52 $ 9.88 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(++).................... 0.54 0.54 0.57 0.59 0.62 0.17
Net gain (loss) on securities (both realized
and unrealized)(++)........................ 0.44 (0.87) 0.73 0.30 0.64 (0.12)
------- ------- ------- ------- ------- ------
Total from Investment Operations........... 0.98 (0.33) 1.30 0.89 1.26 0.05
------- ------- ------- ------- ------- ------
LESS DISTRIBUTIONS:
Dividends from net investment income......... (0.54) (0.54) (0.57) (0.59) (0.62) (0.17)
Distributions from capital gains............. (0.11) (0.20) (0.06) -- -- --
------- ------- ------- ------- ------- ------
Total Distributions........................ (0.65) (0.74) (0.63) (0.59) (0.62) (0.17)
------- ------- ------- ------- ------- ------
Net asset value -- End of Period............. $ 10.75 $ 10.42 $ 11.49 $ 10.82 $ 10.52 $ 9.88
======= ======= ======= ======= ======= ======
Total Return (excluding sales load)........ 9.82% (2.99)% 12.34% 8.71% 13.13% 0.42%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000).............. $161,343 $194,419 $226,303 $198,347 $140,127 $ 53,746
Ratio of Expenses to Average Net Assets...... 0.91% 0.94% 0.87% 0.80% 0.57% 0.07%+
Effect of Waivers/Reimbursement on above
Ratio...................................... 0.02% 0.02% 0.07% 0.11% 0.43% 1.33%+
Ratio of Net Investment Income to Average Net
Assets..................................... 5.13% 4.96% 5.11% 5.51% 6.06% 6.75%+
Portfolio Turnover Rate...................... 42% 36% 40% 14% 5% 3%
</TABLE>

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

* Prior to October 1, 1995 the Fund operated as The California Tax-Free Fund.

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

(++) Per share data based upon average monthly shares outstanding.

+ Annualized.

14
<PAGE> 15

Selected data for a share outstanding for the periods shown:

CALIFORNIA SHORT-TERM TAX-EXEMPT FUND*

<TABLE>
<CAPTION>
JANUARY 20, 1993
(COMMENCEMENT OF
YEAR YEAR OPERATIONS)
ENDED ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1993
------------- ------------- ------------------
<S> <C> <C> <C>
Net asset value -- Beginning of Period................................. $ 9.96 $ 10.16 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(++)............................................. 0.41 0.39 0.24
Net gain (loss) on securities (both realized and unrealized)(++)...... 0.19 (0.20) 0.16
------- ------- -------
Total from Investment Operations.................................... 0.60 0.19 0.40
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income.................................. (0.41) (0.39) (0.24)
Distributions from capital gains...................................... -- -- --
------- ------- -------
Total Distributions................................................. (0.41) (0.39) (0.24)
------- ------- -------
Net asset value -- End of Period....................................... $ 10.15 $ 9.96 $ 10.16
======= ======= =======
Total Return........................................................ 6.13% 1.93% 4.09%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000)....................................... $19,095 $25,315 $ 40,637
Ratio of Expenses to Average Net Assets............................... 0.64% 0.56% 0.28%+
Effect of Waivers/Reimbursement on above Ratio........................ 0.53% 0.53% 0.78%+
Ratio of Net Investment Income to Average Net Assets.................. 4.12% 3.88% 3.53%+
Portfolio Turnover Rate............................................... 96% 31% 23%
</TABLE>

- ---------------
* Prior to October 1, 1995 the Fund operated as The Short Term California
Tax-Free Fund.

(++) Per share data based upon average monthly shares outstanding.

+ Annualized.

15
<PAGE> 16

For a share outstanding throughout the periods indicated:

NATIONAL TAX-EXEMPT FUND*
<TABLE>
<CAPTION>
FOR THE YEAR
FOR THE PERIOD ENDED MAY 31,
ENDED -----------------
SEPT. 30, 1995** 1995
----------------- -------
<S> <C> <C>
Net asset value -- Beginning of Period......................................... $ 15.28 $ 14.98
INCOME FROM INVESTMENT OPERATIONS
Net investment income......................................................... 0.24 0.68
Net realized and unrealized gain (loss) on investments........................ 0.08 0.32
------- -------
Total income from investment operations..................................... 0.32 1.00
------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income.......................................... (0.26) (0.70)
Distributions from net realized gain on investments........................... (0.00) (0.00)
------- -------
Total dividends and distributions to shareholders........................... (0.26) (0.70)
------- -------
Net asset value -- End of Period............................................... $ 15.34 $ 15.28
======= =======
Total return (excluding sales load)......................................... (6.53%)+ %6.97
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)............................................... $14,305 $ 14,458
Ratio of expenses to average net assets....................................... 0.35%+ %0.35
Ratio of net investment income to average net assets.......................... 4.65%+ %4.59
Ratio of expenses to average net assets without fee waivers................... 1.85%+ %1.51
Ratio of net investment income to average net assets without fee waivers...... 3.15%+ %3.43
Portfolio turnover rate(1).................................................... 86.11% 23.35%

FOR THE YEAR
ENDED MAY 31, FOR THE PERIOD
----------------- ENDED MAY 31,
1994 1993
----------------- -------------

<S> <C> <C>
Net asset value -- Beginning of Period......................................... $ 15.17 $ 15.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income......................................................... 0.64 0.17
Net realized and unrealized gain (loss) on investments........................ (0.17) 0.15
------- ------
Total income from investment operations..................................... 0.47 0.32
------- ------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income.......................................... (0.64) (0.15)
Distributions from net realized gain on investments........................... (0.02) (0.00)
------- ------
Total dividends and distributions to shareholders........................... (0.66) (0.15)
------- ------
Net asset value -- End of Period............................................... $ 14.98 $ 15.17
======= ======
Total return (excluding sales load)......................................... %3.07 5.65%+
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)............................................... $ 13,600 $ 7,457
Ratio of expenses to average net assets....................................... %0.27 0.25%+
Ratio of net investment income to average net assets.......................... %4.29 3.88%+
Ratio of expenses to average net assets without fee waivers................... %1.58 1.99%+
Ratio of net investment income to average net assets without fee waivers...... %2.99 2.14%+
Portfolio turnover rate(1).................................................... 18.81% 18.30%
</TABLE>

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

* The Fund operated as the Quality Tax-Exempt Income Fund of Westcore Trust
from its commencement of operations on January 15, 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 Oregon, N.A.
and First Interstate Bank of Washington, 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.

+ Annualized.

(1) 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 period ended
September 30, 1995 were $4,847,223 and $4,001,951, respectively.

16
<PAGE> 17

THE FUNDS

The Funds are portfolios of Pacifica Funds Trust, a business 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 investment objectives of
the California Funds are fundamental policies, which means that they may not be
changed without a majority vote of shareholders of the affected Fund. The
investment objectives of the other Funds are not fundamental, and may be changed
without shareholder approval. Any such change may result in a Fund having an
investment objective different from the objective which a shareholder considered
appropriate at the time of investment in 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.

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

The investment objective of the Oregon Tax-Exempt Fund, Arizona Tax-Exempt
Fund and National Tax-Exempt Fund is to provide investors with income exempt
from Federal income taxes and, with respect to the Oregon Tax-Exempt Fund and
Arizona Tax-Exempt Fund, to also seek to provide such income exempt from Oregon
and Arizona personal income taxes, respectively.

The investment objective of the California Tax-Exempt Fund is to provide
investors with as high a level of current income, exempt from both Federal and
California personal income taxes, as is consistent with limiting the risk of
potential capital loss.

The investment objective of the California Short-Term Tax-Exempt Fund is to
provide investors with as high a level of current income, exempt from both
Federal and California personal income taxes, as is consistent with limiting the
risk of potential loss.

None of the Funds has any restrictions as to the minimum or maximum
maturity of any individual security held by it. However, except

17
<PAGE> 18

for temporary defensive purposes or during unusual market conditions, the
dollar-weighted average portfolio maturity of the California Short-Term
Tax-Exempt Fund will be 3 years or less. The average portfolio maturity of the
other Funds will vary from time to time in light of current market and economic
conditions, the comparative yields on instruments with different maturities and
other factors.

Each Fund's assets will be primarily invested in 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"). Each of
the Oregon Tax-Exempt Fund, Arizona Tax-Exempt Fund and the California Funds
expects that, except during temporary defensive periods or when acceptable
securities are unavailable for investment by the Fund, at least 65% of such
Fund's total assets will be invested in municipal obligations of issuers located
in a particular state ("Oregon obligations," "Arizona obligations" and
"California obligations," respectively), although the amount of each Fund's
assets invested in such obligations will vary from time to time. As a
fundamental policy, each of the Funds will have at least 80% of their respective
net assets invested 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.

Municipal obligations acquired by a Fund will be rated in one of the three
highest investment grade categories at the time of purchase by a nationally
recognized statistical rating organization ("NRSRO"). The California Funds,
however, may purchase investment grade obligations within the fourth highest
category. In addition, the Oregon Tax-Exempt Fund and Arizona Tax-Exempt Fund
may purchase investment grade obligations within the fourth highest category
when acceptable obligations with higher ratings are unavailable for investment
by such Funds. While obligations rated within the fourth highest category are
regarded as having an adequate capacity to pay principal and interest, such
obligations lack outstanding investment characteristics and in fact have
speculative characteristics as well. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade bonds. No more than 10%
of the Arizona Tax-Exempt Fund's total assets will be invested in municipal
obligations which are rated at the time of purchase below one of the three
highest categories.

18
<PAGE> 19

If, subsequent to its purchase by a Fund, an issue of debt securities
should cease to be rated by one or more of the Fund's selected NRSROs due to
factors relating to the value of the security, or should its rating be reduced
by one or more of such NRSROs below the minimum rating required for purchase by
such Fund, the Advisor will consider such event in determining whether the Fund
should continue to hold the security.

Each of the Funds may also acquire tax-exempt commercial paper rated within
the highest rating category or, when deemed advisable by the Fund's Advisor,
rated within the second highest rating category. Each Fund may acquire municipal
notes and variable rate demand obligations rated within one of the two highest
rating categories.

The California Funds may invest more than 15% of their net assets in
municipal lease obligations determined by the Board of Trustees to be liquid
investments based upon guidelines established for the Advisor providing for
analysis of such factors as the frequency of trades and quotes for the security,
the number of dealers willing to purchase or sell the security and the number of
other potential buyers, and the willingness of dealers to undertake to make a
market in the security.

Unrated obligations purchased by a Fund will be determined by the Advisor
to be comparable in quality to instruments that are so rated. (See Appendix A
for a description of applicable debt obligation ratings).

Each Fund may from time to time invest a portion of its assets on a
temporary basis (for example, when appropriate municipal obligations are
unavailable) or for temporary defensive purposes in short-term taxable money
market instruments, in securities issued by other investment companies which
invest in taxable or tax-exempt money market instruments and in U.S. Government
obligations. In addition, each Fund may hold uninvested cash reserves pending
investment, during temporary defensive periods, or if, in the opinion of the
Advisor, suitable tax-exempt obligations are unavailable.

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 45-49 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.

19
<PAGE> 20

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

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.
Moreover, although each Fund does not presently intend to do so on a regular
basis, it may invest 25% or more of its assets in industrial development bonds
issued before August 7, 1986 that are not subject to the Federal alternative
minimum tax and in municipal obligations the interest on which is paid solely
from revenues of similar projects if such investment is deemed necessary or
appropriate by the Fund's Advisor. To the extent that each Fund's assets are
concentrated in municipal obligations payable from revenues on similar projects,
the Fund will be subject to the peculiar risks presented by such projects to a
greater extent than it would be if the Fund's assets were not so concentrated.
Furthermore, payment of municipal obligations of certain projects may be secured
by mortgages or deeds of trust. In the event of a default, enforcement of the
mortgages or deeds of trust will be subject to statutory enforcement procedures
and limitations, including rights of redemption and limitations on obtaining
deficiency judgments. In the event of a foreclosure, collection of the proceeds
of the foreclosure may be delayed and the amount of proceeds from the
foreclosure may not be sufficient to pay the principal of and accrued interest
on the defaulted municipal obligations.

Each Fund is classified as a non-diversified investment company under the
1940 Act. Investment return on a non-diversified portfolio typically is

20
<PAGE> 21

dependent upon the performance of a smaller number of securities relative to the
number held in a diversified portfolio. Consequently, the change in value of any
one security may affect the overall value of a non-diversified portfolio more
than it would a diversified portfolio, and thereby subject the market-based net
asset value per share of the non-diversified portfolio to greater fluctuations.
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.

The concentration of the Oregon Tax-Exempt Fund, Arizona Tax-Exempt Fund
and California Funds in municipal obligations of particular states raises
additional considerations. Payment of the interest on and the principal of these
obligations is dependent upon the continuing ability of Oregon, Arizona and
California issuers and/or obligors of state, municipal and public authority debt
obligations to meet their obligations thereunder. Investors should consider the
greater risk inherent in a Fund's concentration in such obligations versus the
safety that comes with a less geographically concentrated investment portfolio
and should compare the yield available on a portfolio of state-specific issues
with the yield of a more diversified portfolio including issues of other states
before making an investment decision.

Many of the California Funds' 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. In addition, both Oregon and Arizona have constitutional
and/or statutory restrictions that affect government revenues.

Because of the complex nature of the various initiatives and restrictions
mentioned above, the 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, as well as Oregon and Arizona, 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
these states over the past several years.

21
<PAGE> 22

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 in particular. 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 a 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. Similarly, there
is a relatively small active market for municipal obligations of Oregon and
Arizona issues other than the general obligations of the states themselves, and
the market price of such bonds may therefore be volatile. If the Oregon
Tax-Exempt Fund or Arizona Tax-Exempt Fund was forced to sell a large volume of
Oregon obligations and Arizona obligations owned by it for any reason, such as
to meet redemption requests for a large number of shares, there is a risk that
the large sale itself would adversely offset the value of the Fund's portfolios.

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

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."

22
<PAGE> 23

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 October 1, 1995 affiliates
of FICM served as investment advisors for certain Funds as follows: First
Interstate Bank of Oregon, N.A. served as investment advisor to the Oregon
Tax-Exempt Fund; First Interstate Bank of Arizona, N.A. served as investment
advisor to the Arizona Tax-Exempt Fund; and First Interstate Bank of Washington,
N.A. and First Interstate Bank of Oregon, N.A. served as co-investment advisors
to the National Tax-Exempt Fund. Prior to March 18, 1994, San Diego Financial
Capital Management, Inc., which was acquired by First Interstate Bancorp through
its merger with San Diego Financial Corporation, served as investment advisor to
the California Funds.

On January 24, 1996, First Interstate Bancorp signed a definitive merger
agreement to merge with Wells Fargo & Company ("Wells Fargo"), a publicly-held
bank holding company with its head office at 420 Montgomery Street, San
Francisco, California 94104. The merger is conditioned upon, among other things,
certain regulatory approvals. Upon completion of the merger, currently expected
to occur during the second quarter of 1996, FICM will be wholly-owned by Wells
Fargo, and the existing investment advisory agreement between the Trust and FICM
will automatically terminate. It is contemplated that an application will be
filed with the Securities and Exchange Commission to ensure there is no
disruption as a result of the merger in the provision of investment advisory
services to the Funds, and that a meeting of shareholders will be held not later
than 120 days after the merger to approve ongoing investment advisory
arrangements for the Funds.

Mr. David Underwood serves as FICM's Director of Equity Funds Management.
Mr. Underwood joined FICM in 1995. From 1993 to 1995 Mr. Underwood was employed
by Integra Trust Company as Director of

23
<PAGE> 24

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.

Ms. Mary Gail Walton has been responsible for the day-to-day management of
the Oregon Tax-Exempt Fund since February 1994 and the National Tax-Exempt Fund
since the inception of the Fund. Ms. Walton has been employed by First
Interstate since 1991. She joined FICM in April 1995. She currently serves as a
Vice President, portfolio manager/analyst. From 1989 through 1990 Ms. Walton was
employed by Badgley, Phelps & Bell, Inc.

Mr. Richard Carhidi has been responsible for the day-to-day management of
the Arizona Tax-Exempt Fund since the inception of the Fund, and the California
Funds since June 1995. Mr. Carhidi has been employed by First Interstate since
1989. He joined FICM in April 1995. He currently serves as a Vice President.

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>
INVESTMENT
FUND ADVISORY FEE
-------------------------------------------- ------------
<S> <C>
Oregon Tax-Exempt Fund...................... 0.50%
Arizona Tax-Exempt Fund..................... 0.50%
California Tax-Exempt Fund.................. 0.50%
California Short-Term Tax-Exempt Fund....... 0.35%
National Tax-Exempt Fund.................... 0.50%
</TABLE>

The Advisor has agreed that during the current fiscal year, it will waive a
portion of its fees so that total operating expenses will not exceed 1.20% of
the average daily net assets of the Investor Shares of the California Tax-Exempt
Fund. For its period ended September 30, 1995, the Oregon Tax-Exempt Fund paid
advisory fees, after fee waivers, at the annual rate of 0.24% of its average
daily net assets. For the same time period, the previous advisors to the Arizona
Tax-Exempt Fund and National Tax-Exempt Fund waived their entire advisory fees.
For their fiscal year ended September 30, 1995, the California Tax-Exempt Fund
and California Short-Term Tax-

24
<PAGE> 25

Exempt Fund paid advisory fees, after fee waivers, at the annual rates of 0.50%
and 0.01%, respectively, of their average daily net assets.

THE SPONSOR AND DISTRIBUTOR

Furman Selz LLC, 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.

25
<PAGE> 26

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.

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' Investor 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

26
<PAGE> 27

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.

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 auditing expenses; Trustees' fees and expenses;
insurance premiums; advisory, administration, fund accounting, 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

27
<PAGE> 28

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 distribution payments under the Plan and 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. 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.

A high portfolio turnover rate involves larger brokerage commission
expenses or transaction costs which must be borne 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,

28
<PAGE> 29

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.

Bonds and other fixed-income securities are normally 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. 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.

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 California Short-Term Tax-Exempt Fund varies
with the size of the purchase made according to the following schedule:

<TABLE>
<CAPTION>
SALES CHARGE AS A AMOUNT OF SALES
PERCENTAGE OF CHARGE REALLOWED
-------------------- TO DEALERS AS A
PUBLIC NET PERCENTAGE
OFFERING AMOUNT OF 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...................... 1.50% 1.52% 1.25%
$500,000 but less than
$1,000,000.................... 1.00% 1.01% 0.75%
$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 0.50% 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.

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<PAGE> 30

The sales charge on purchases of Investor Shares of the other Funds varies
with the size of the purchase made according to the following schedule:

<TABLE>
<CAPTION>
SALES CHARGE AS A AMOUNT OF SALES
PERCENTAGE OF CHARGE REALLOWED
-------------------- TO DEALERS AS A
PUBLIC NET PERCENTAGE
OFFERING AMOUNT OF 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 0.50% 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.

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

30
<PAGE> 31

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. The initial
sales load on Investor Shares of the California Short-Term Tax-Exempt Fund does
not apply to investors who were shareholders of that Fund prior to February 1,
1996.

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. For Investor Shares of the Funds that are subject
to a sales charge, 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

31
<PAGE> 32

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
which is subject to a sales charge. Investor Shares of such 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 represented by the goal as if it were a single
investment. A number of Investor Shares totalling 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.

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<PAGE> 33

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Funds is $500. Any subsequent
investments must be at least $50. All initial investments should be accompanied
by a completed Purchase Application. The Funds reserve the right to reject
purchase orders.

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 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

33
<PAGE> 34

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 1-800-662-8417.

Have your bank wire funds using the following instructions:
Investors 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 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.

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 the
Funds at 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

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<PAGE> 35

$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 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.

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 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-

35
<PAGE> 36

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.

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, 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

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<PAGE> 37

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 Shares 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 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.

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<PAGE> 38

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.

Check Writing. A check redemption ($500 minimum, no maximum) feature is
available. Checks are free and may be obtained from the Funds. It is not
possible to use a check to close out your account since additional shares accrue
daily.

The above-mentioned services "By Telephone," "By Wire," and Check Writing
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

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<PAGE> 39

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.

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 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

FEDERAL TAXES

Each Fund has qualified and intends to continue 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 its earnings in accordance
with the Code.

Each Fund intends to distribute to its shareholders substantially all of
its net tax-exempt interest income and its investment company taxable income
(which includes, among other items, dividends and taxable 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). The California Funds
will declare distributions of such income daily and pay

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those dividends monthly. The other Funds will declare dividends and distribute
such income monthly. 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.

With respect to the California Funds the amount declared each day as a
dividend may be based on projections of estimated monthly net investment income
and may differ from the actual investment income determined in accordance with
generally accepted accounting principles. An adjustment will be made to the
dividend each month to account for any difference between the projected and
actual monthly investment income.

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.

In the case of the California Funds, shares purchased will begin earning
dividends on the day after the purchase order is executed, and shares redeemed
will earn dividends through the day the redemption is executed. 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.

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.

Dividends derived from interest excludable from gross income under the Code
on obligations issued by states or political subdivisions thereof and which are
designated by the Funds as "exempt-interest dividends" are not subject to the
regular Federal income tax. Each of the Funds will be qualified to designate and
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 the interest payments are exempt from Federal income tax under Code
Section 103. To the extent that a Fund's dividends distributed to shareholders
are derived from earnings on interest income exempt from Federal income tax and
are designated as "exempt-interest dividends" by that Fund, they will be
excludable from a share-

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holder's gross income for regular Federal income tax purposes. Other dividends
paid by the Funds, if any, will be taxable to shareholders.

The Funds may derive interest on temporary taxable investments and realize
capital gains or losses from its portfolio transactions, including the sale of
securities. Dividends derived from such interest, short-term capital gains, and
long-term capital gains, respectively, will be taxable to shareholders as
described, whether such distributions are made in cash or in additional shares
of the Fund. In addition, a sale of shares in Funds (including a redemption of
such shares and an exchange of shares between Funds) may be a taxable event and
may result in a taxable gain or loss to the shareholder. It is possible that a
portion of the distributions of the Funds may constitute taxable rather than
tax-exempt income in the hands of a shareholder. A loss realized by a
shareholder on the redemption, sale, or exchange of shares of a Fund with
respect to which exempt-interest dividends have been paid will be disallowed to
the extent of the exempt-interest dividends received if such shares have been
held by the shareholder for six months or less.

Tax-exempt interest from certain private activity bonds and exempt-interest
dividends attributable to that interest income constitute an item of tax
preference under the 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 such Fund's exempt-interest dividends
derived from interest income on such bonds. See the SAI for further information
about the tax consequences for certain types of investors of a Fund investing in
private activity bonds.

The entire amount of exempt-interest dividends received from the Funds by
most corporations will be part of an adjustment in computing alternative minimum
taxable income and will have to be taken into account for purposes of the
environmental tax under the Code.

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 the Funds. It is not
possible to predict the precise impact of any of these events, but they may
affect the value of the securities in the 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

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<PAGE> 42

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.

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.

The treatment for state, local and municipal tax purposes of distributions
of exempt-interest dividends from the Funds 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. Shareholders will be notified
annually of the Federal income tax status of distributions and the percentage of
municipal obligation interest income received, with its source indicated.

A distribution, including an "exempt-interest dividend," 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.

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.

Before purchasing shares in the Funds, the impact of dividends and
distributions which are expected to be declared or have been declared, but not
paid, should be carefully considered. Any dividend or distribution

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<PAGE> 43

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.

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

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.

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
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.

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<PAGE> 44

STATE TAXES

OREGON STATE AND LOCAL TAXES. Individuals, trusts and estates resident in
Oregon will not be subject to Oregon personal income tax on distributions from
the Oregon Tax-Exempt Fund that represent tax-exempt interest paid on municipal
obligations of the State of Oregon and its political subdivisions and certain
other issuers, including Puerto Rico and Guam. Such individuals, trusts and
estates will be subject to Oregon personal income tax on other types of
distributions received from the Oregon Tax-Exempt Fund, including distributions
of interest on municipal obligations issued by other issuers and all long-term
and short-term capital gains. Except as noted above with respect to Oregon
personal income taxation of individuals, trusts and estates resident in Oregon,
distributions from the Oregon Tax-Exempt Fund may be taxable to investors under
state or local law as dividend income even though all or a portion of such
distributions may be derived from interest on tax-exempt obligations which, if
realized directly, would be exempt from such income taxes.

Corporations subject to the Oregon corporate excise tax will generally be
subject to tax on all distributions from the Oregon Tax-Exempt Fund, including
distributions of income that is exempt for Federal tax purposes. Shares of the
Oregon Tax-Exempt Fund will not be subject to the Oregon property tax.

Shareholders of the Oregon Tax-Exempt Fund, including part-year residents
of Oregon, should consult their tax advisors about other state and local tax
consequences of their investments in the Oregon Tax-Exempt Fund, which may have
different consequences from those under Federal income tax law.

ARIZONA STATE TAXES. Individuals, trusts and estates who are subject to
Arizona income tax will not be subject to such tax on dividends paid by the
Arizona Tax-Exempt Fund, to the extent that such dividends qualify as
exempt-interest dividends of a regulated investment company under sec.852(b)(5)
of the Code and are attributable to either (i) obligations of the State of
Arizona or its political subdivisions thereof or (ii) obligations issued by the
governments of Guam, Puerto Rico, or the Virgin Islands. In addition, dividends
paid by the Arizona Tax-Exempt Fund which are attributable to interest payments
on direct obligations of the United States government will not be subject to
Arizona income tax to the extent the Arizona Tax-Exempt Fund qualifies as a
regulated investment company under subchapter M of the Code. Other distributions
from the Arizona Tax-Exempt Fund, however, such as distributions of short-term
or long-term capital gains, will generally not be exempt from Arizona income
tax.

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There are no municipal income taxes in Arizona. Moreover, because shares of
the Arizona Tax-Exempt Fund are intangibles, they are not subject to Arizona
property tax. Shareholders of the Arizona Tax-Exempt Fund should consult their
tax advisor about other state and local tax consequences of their investment in
the Arizona Tax-Exempt Fund.

CALIFORNIA STATE TAXES. If, at the close of each quarter of the California
Funds' taxable year, at least 50% of the value of their respective total assets
consists of California municipal obligations and certain specified federal
obligations, and if the Funds qualify as a regulated investment company for
federal tax purposes, then the Funds will be qualified to pay dividends exempt
from California state personal income tax to its shareholders. If the Funds so
qualify, dividends derived from interest attributable to California municipal
obligations and such federal obligations will be exempt from California state
personal income tax. (Such treatment may not apply, however, to investors who
are "substantial users" or "related persons" with respect to facilities financed
by portfolio securities held by the Fund.) For this purpose, federal obligations
are any obligations the interest on which is excludable from income under the
United States Constitution or the laws of the United States. Any dividends paid
to shareholders subject to California state franchise tax or California state
corporate income tax may be taxed as ordinary or capital gain dividends to such
shareholders notwithstanding that all or a portion of such dividends are exempt
from California state personal income tax.

NATIONAL TAX-EXEMPT FUND -- STATE AND LOCAL TAXES. Investors are advised
to consult their tax advisors concerning the application of state and local
taxes, which may have different consequences from those under Federal income tax
law.

DESCRIPTION OF SECURITIES AND
INVESTMENT PRACTICES

Municipal Obligations. 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 ad valorem 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 user of the facility being financed. Private activity bonds
(e.g., bonds issued by industrial development authorities) that are issued by or
on behalf of public authorities to finance various

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<PAGE> 46

privately-operated facilities are included within the term "municipal
obligations" if the interest paid thereon is exempt from regular Federal income
tax (See "Dividends, Distributions and Federal Income Tax" above) and not
treated as a specific tax preference item under the Federal alternative minimum
tax. 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.

Municipal obligations 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.

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 an 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.

Further, the Funds may purchase municipal obligations known as
"certificates of participation" which represent undivided proportional interests
in lease payments by a governmental or nonprofit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited by applicable municipal charter
provisions or the nature of the appropriation for the lease. In particular,
lease obligations may be subject to periodic appropriation. Lease obligations
may also be abated if the leased property is damaged or becomes unsuitable for
the lessee's purpose. If the entity does not appropriate funds for future lease
payments, the entity cannot be compelled to make such payments. Furthermore, a
lease may or may not provide that the certificate trustee can accelerate lease
obligations upon default. If the trustee could not accelerate lease obligations
upon default, the trustee would only be able to enforce lease payments as they
became due. In the event of a default or failure of appropriation, it is
unlikely that the trustee would be able to obtain an acceptable substitute
source of payment. Certificates of participation are generally subject to
redemption by the issuing municipal entity under specified circumstances. If a
specified

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event occurs, a certificate is callable at par either at any interest payment
date or, in some cases, at any time. As a result, certificates of participation
are not as liquid or marketable as other types of municipal obligations and are
generally valued at par or less than par in the open market.

The Advisor for the Funds, under the supervision of the Board of Trustees,
will make determinations concerning the liquidity of a municipal lease
obligation based on all relevant factors. A Fund may also purchase unrated
municipal lease obligations. The Advisor, under the supervision of the Board of
Trustees, will determine the credit quality of such leases on an ongoing basis,
including an assessment of the likelihood that the underlying lease will not be
canceled.

Opinions relating to the validity of municipal obligations and to the
exemption of interest thereon from regular Federal income tax (and to the
exemption of interest from state personal income tax) are rendered by bond
counsel to the respective issuers at the time of issuance. Neither the Funds,
the Advisor nor their counsel will review the proceedings relating to the
issuance of municipal obligations or the bases for such opinions.

Securities Issued by Other Investment Companies. 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.

Variable and Floating Rate Instruments. 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

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<PAGE> 48

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.

Forward Commitments, When-Issued Purchases and Delayed-Delivery
Transactions. 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.

Stand-by Commitments. The Funds may acquire "stand-by commitments" with
respect to municipal obligations held in their respective portfolios. Under a
stand-by commitment, a dealer agrees to purchase at a Fund's option specified
municipal obligations at a price equal to their amortized cost value plus
accrued interest. The Funds will acquire stand-by commitments solely to
facilitate portfolio liquidity and do not intend to exercise their respective
rights thereunder for trading purposes.

Derivative Securities. 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

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<PAGE> 49

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 secondary
market for some instruments may not exist.

Illiquid Securities. Each Fund will not knowingly invest more than 15%
(10% in the case of the California Tax-Exempt Fund) of the value of its net
assets in securities that are illiquid because of restrictions on
transferability or other reasons. 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 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

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<PAGE> 50

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.

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 50% of a Fund's total assets may be
invested without regard to this 5% limitation.

2. 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.

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

Restriction 1 does not apply to the California Funds. Instead, as a non-
fundamental investment restriction, each California Fund will not hold any
securities (except U.S. Government securities and repurchase agreements
collateralized by such securities) that would cause, at the end of any tax
quarter, more than 5% of its total assets to be invested in securities of any
one issuer, except that up to 50% of a Fund's total assets may be invested
without regard to this limitation so long as no more than 25% of the Fund's
total assets are invested in any one issuer (except U.S. Government, its
agencies and instrumentalities).

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.

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OTHER INFORMATION

CAPITALIZATION

Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1984. 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 such dividends and distributions earned on such shares as are
declared in the discretion of the Board of Trustees.

Each Fund's Investor Shares and Institutional 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. Each Fund may pay fees
to Service Organizations in amounts up to an annual rate of 0.25% of the average
daily net asset value of the Funds' outstanding Institutional Shares owned 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

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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.

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.

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 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

52
<PAGE> 53

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.

The Funds may also advertise "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.

The following charts show the approximate yield a taxable investment would
have to earn to keep up with the yield of a tax-exempt investment. Across the
top of each table are various tax-exempt rates of return. On the left are tax
rates reflecting different state tax brackets plus a 28% Federal Income Tax
rate. By following across the table at the appropriate tax rate,

53
<PAGE> 54

you can find the taxable yield you would need to achieve in order to equal the
tax-exempt yield at the top of the table.
<TABLE>
<CAPTION>
1995 FEDERAL TAX RATES

INCOME INCOME INCOME INCOME INCOME
<S> <C> <C> <C> <C> <C>
$23,350- $ 56,550- $117,950- Over
Single Return $56,550 $117,950 N/A $256,500 $256,500
$39,000- $ 94,250- $143,600- Over
Joint Return $94,250 $143,600 $256,500 N/A $256,500
Federal Tax Rate+ 28% 31% 36% 38% 39.6%
</TABLE>

+ This rate assumes the maximum effective Federal income tax rate. Your
effective tax rate may vary depending upon your filing status and taxable
income level. For some investors, alternative minimum tax considerations may
apply.

OREGON TAX-EXEMPT FUND*

<TABLE>
<CAPTION>
ASSUMED OREGON &
FEDERAL COMBINED
TAX-FREE RATE OF
RETURN 4.00% 4.50% 5.00% 5.50% 6.00%

ARIZONA TAX-EXEMPT FUND*

<TABLE>
<CAPTION>
ASSUMED ARIZONA &
FEDERAL COMBINED
TAX-FREE RATE OF
RETURN 4.00% 4.50% 5.00% 5.50% 6.00%

54
<PAGE> 55

THE CALIFORNIA FUNDS*

<TABLE>
<CAPTION>
ASSUMED CALIFORNIA &
FEDERAL COMBINED
TAX-FREE RATE OF
RETURN 4.00% 4.50% 5.00% 5.50% 6.00%

NATIONAL TAX-EXEMPT BOND FUND*

<TABLE>
<CAPTION>
ASSUMED FEDERAL
TAX-FREE RATE OF
RETURN 4.00% 4.50% 5.00% 5.50% 6.00%

* Each chart shows the taxable rate of return an investor needs to achieve in
order to equal various tax-free returns. At higher tax rates a higher yield is
required to overcome the tax burden. Yields set forth are for illustrative
purposes only and do not reflect a Fund's past and/or future performance. Your
investment in the Funds may be subject to Alternative Minimum Tax (AMT) and
your combined tax rate may differ from those shown. Please consult your tax
advisor.

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
methods used to determine yield and total return for the Funds, see "Other
Information -- Performance Information" in the SAI.

55
<PAGE> 56

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 Funds, 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 THEIR 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 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.

56
<PAGE> 57

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 1 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

A-1
<PAGE> 58

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.

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-1 (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.

A-2
<PAGE> 59

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.

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.

A-3
<PAGE> 60

SP-2: Issues carrying this designation have a satisfactory capacity to pay
principal and interest.

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> 61
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258

ADMINISTRATOR
Furman Selz LLC
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

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