NORTHSTAR ADVANTAGE GROWTH FUND, 497, 1996-03-06

NORTHSTAR ADVANTAGE GROWTH FUND
497, 1996-03-06

Previous: AMERICAN CAPITAL LIFE INVESTMENT TRUST, 485BPOS, 1996-03-06

Next: DEFINED ASSET FUNDS MUNICIPAL INVT TR FD INSURED SERIES 132, 485BPOS, 1996-03-06

<PAGE>
[LOGO]

TWO PICKWICK PLAZA (203) 863-6200
GREENWICH, CONNECTICUT, 06830 (800) 595-7827

COMBINED PROSPECTUS FEBRUARY 29, 1996

The Northstar Advantage Funds (the "Funds") are a group of open-end
diversified management investment companies. Each has its own investment
objective and specific investment goals. Shares of the Funds are offered by this
joint Prospectus. Northstar Investment Management Corporation (the "Adviser") is
the investment adviser for each Fund, Northstar Distributors, Inc.
("Underwriter") is the underwriter of the Funds' shares, and Northstar
Administrators Corporation ("Northstar" or "Administrators") serves as
administrator to each Fund. Distributors and Administrators are each affiliates
of the Adviser. Navellier Fund Management, Inc. serves as subadviser for the
Northstar Advantage Special Fund. See "Management of the Funds."

This Prospectus sets forth concisely the information about the Funds
that prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
February 29, 1996, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Statement of Additional Information
is available without charge upon request to Northstar at the address or
telephone number given above.

* NORTHSTAR ADVANTAGE SPECIAL FUND ("Special Fund") seeks to achieve
capital appreciation through investment in a diversified portfolio of equity
securities selected for their potential for growth, primarily in small- and
mid-capitalization companies.

* NORTHSTAR ADVANTAGE GROWTH FUND ("Growth Fund") seeks to achieve
long-term growth of capital by investing principally in common stocks selected
for their prospects for capital appreciation.

* NORTHSTAR ADVANTAGE INCOME AND GROWTH FUND, ("Income and Growth
Fund") seeks current income balanced with the objective of achieving capital
appreciation through investments in common and preferred stocks, convertible
securities, investment grade corporate debt securities and government
securities, selected for their prospects of producing income and/or capital
appreciation.

* NORTHSTAR ADVANTAGE INCOME FUND ("Income Fund") seeks to realize
income and, secondarily, capital appreciation through investments in a balance
of debt securities, common and preferred stocks, and securities convertible into
common stock.

* NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND ("Government
Securities Fund") seeks to achieve a high level of current income and to
conserve principal by investing in debt obligations issued or guaranteed by the
U.S. Government or its agencies and instrumentalities.

* NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND ("Strategic Income Fund")
seeks to achieve high current income by allocating its investments among the
following three sectors of the fixed income securities markets: debt obligations
of the U.S. Government, its agencies and instrumentalities; high yield-high
risk, lower-rated and nonrated U.S. and foreign fixed income securities; and
investment grade debt obligations of foreign governments, their agencies and
instrumentalities and obligations of supranational entities. The Adviser
believes that by allocating the Fund's assets in this manner, the Fund will
experience a more stable net asset value, since diversification over several
market sectors tends to reduce volatility.

* NORTHSTAR ADVANTAGE HIGH YIELD FUND ("High Yield Fund") seeks to
achieve high current income primarily through investments in long and
intermediate-term high yield-high risk, lower-rated and nonrated corporate debt
instruments.

* NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND ("High Total Return
Fund") seeks to achieve high income by investing predominantly in high
yield-high risk, lower-rated and non-rated U.S. dollar-denominated debt
securities. It is the Fund's policy, while investing in income producing
securities, also to maximize total return from a combination of income and
capital appreciation.

UNDER NORMAL MARKET CONDITIONS THE HIGH YIELD FUND AND HIGH TOTAL
RETURN FUND WILL INVEST AT LEAST 65% OF THEIR ASSETS, AND THE STRATEGIC INCOME
FUND MAY INVEST UP TO 60% (AND NO LESS THAN 20% OF ITS ASSETS) IN LOWER RATED
AND NONRATED BONDS, COMMONLY KNOWN AS "JUNK BONDS," THAT ENTAIL GREATER RISKS,
INCLUDING DEFAULT RISKS, THAN THOSE FOUND IN HIGHER RATED SECURITIES, AND ARE
CONSIDERED SPECULATIVE WITH REGARD TO PAYMENT OF INTEREST AND RETURN OF
PRINCIPAL. INVESTMENT IN THESE FUNDS MAY NOT BE APPROPRIATE FOR ALL INVESTORS.
INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS BEFORE INVESTING. SEE "RISK
FACTORS -- HIGH YIELD SECURITIES."

WHILE MUTUAL FUNDS OFFER SIGNIFICANT INVESTMENT OPPORTUNITIES AND ARE
PROFESSIONALLY MANAGED, THEY ALSO CARRY RISKS THAT COULD POSSIBLY RESULT IN LOSS
OF PRINCIPAL. SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
EXPENSE INFORMATION
- ----------------------------------------------------------------------
The tables and examples below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Funds. Shareholder Transaction Expenses are fees charged
directly to your individual account when you buy, sell or exchange shares.
Annual Operating Expenses are paid out of each Fund's assets and include fees
for portfolio management, maintenance of shareholder accounts, shareholder
servicing, accounting, legal and other services. Class A, Class B, and Class C
shares were first offered to investors in the Government Securities Fund, High
Yield Fund, Income Fund, Growth Fund, Special Fund and Strategic Income Fund on
June 5, 1995. Class T shares are no longer offered to new investors in these
Funds. The rules of the Securities and Exchange Commission require that maximum
sales charges be reflected in the table; however, certain investors may qualify
for reduced or no sales charges. See "How to Purchase Shares."

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

NORTHSTAR ADVANTAGE SPECIAL FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase
of Shares (as % of Offering Price)............. 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds).................. None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE
NET ASSETS)
Management Fee.................................. .75% .75% .75% .75%
12b-1 Fee....................................... .30% 1.00%(3) 1.00%(3) .95%(3)
Other Expenses (after Class B and C expense
reimbursement)(6).............................. .45% .45% .45% .46%
Total Fund Operating Expenses................... 1.50% 2.20% 2.20% 2.16%
</TABLE>

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

NORTHSTAR ADVANTAGE GROWTH FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase
of Shares (as % of Offering Price)............. 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds).................. None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE
NET ASSETS)
Management Fee.................................. .75% .75% .75% .75%
12b-1 Fee....................................... .30% 1.00%(3) 1.00%(3) .95%(3)
Other Expenses.................................. .37% .32% .36% .30%
Total Fund Operating Expenses................... 1.42% 2.07% 2.11% 2.00%
</TABLE>

2
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE INCOME AND GROWTH FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------- -------- --------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase
of Shares (as % of Offering Price)............. 4.75% None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds).................. None(1) 5.00%(2) 1.00%
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE
NET ASSETS)
Management Fee.................................. .75% .75% .75%
12b-1 Fee....................................... .30% 1.00%(3) 1.00%(3)
Other Expenses.................................. .46% .48% .47%
Total Fund Operating Expenses................... 1.51% 2.23% 2.22%
</TABLE>

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

NORTHSTAR ADVANTAGE INCOME FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase of Shares
(as % of Offering Price)................................. 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale of Shares
(as a % of the lesser of original price or redemption
proceeds)................................................ None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET
ASSETS)
Management Fee............................................ .65% .65% .65% .65%
12b-1 Fee................................................. .30% 1.00%(3) 1.00%(3) .75%(3,4)
Other Expenses............................................ .32% .30% .26% .28%
Total Fund Operating Expenses............................. 1.27% 1.95% 1.91% 1.68%
</TABLE>

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

NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase of Shares
(as a % of Offering Price)................................................... 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale of Shares (as a % of the lesser
of original price or redemption proceeds).................................... None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
Management Fee (after waiver)(5).............................................. .45% .45% .45% .45%
12b-1 Fee..................................................................... .30% 1.00%(3) 1.00%(3) .65%(3,4)
Other Expenses................................................................ .27% .25% .23% .20%
Total Fund Operating Expenses (after waiver)(5)................................. 1.02% 1.70% 1.68% 1.30%
</TABLE>

3
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase of Shares
(as % of Offering Price)................................. 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale of Shares
(as a % of the lesser of original price or redemption
proceeds)................................................ None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET
ASSETS)
Management Fee............................................ .65% .65% .65% .65%
12b-1 Fee................................................. .30% 1.00%(3) 1.00%(3) .95%(3,4)
Other Expenses (after expense reimbursement)(6)........... .41% .41% .37% .30%
Total Fund Operating Expenses............................. 1.36% 2.06% 2.02% 1.90%
</TABLE>

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

NORTHSTAR ADVANTAGE HIGH YIELD FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase of Shares (as % of Offering
Price)....................................................................... 4.75% None None None
Maximum Contingent Deferred Sales Load on Sale of Shares (as a % of the lesser
of original price or redemption proceeds).................................... None(1) 5.00%(2) 1.00% 4.00%(2)
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
Management Fee................................................................ .45% .45% .45% .45%
12b-1 Fee..................................................................... .30% 1.00%(3) 1.00%(3) .65%(3,4)
Other Expenses................................................................ .27% .26% .27% .23%
Total Fund Operating Expenses................................................. 1.02% 1.71% 1.72% 1.33%
</TABLE>

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

NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------- -------- --------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Front-End Sales Load Imposed on Purchase
of Shares (as % of Offering Price)............. 4.75% None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds).................. None(1) 5.00%(2) 1.00%
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE
NET ASSETS)
Management Fee.................................. .75% .75% .75%
12b-1 Fees...................................... .30% 1.00%(3) 1.00%(3)
Other Expenses.................................. .50% .50% .52%
Total Fund Operating Expenses................... 1.55% 2.25% 2.27%
<FN>
- ------------------------
(1) Purchases of $1 million or more are not subject to an initial sales charge;
however, a CDSC of up to 1% will be imposed on such purchases in the event
of certain redemption transactions within 18 months following the date of
purchase.

(2) The Class B CDSC on redemptions decreases 1% annually after year one to 2%
in years four and five and to 0% after year five. The Class T CDSC on
redemptions decreases 1% annually after year one to 0% after year four.

(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. ("NASD") rules regarding investment companies.
</TABLE>

4
<PAGE>
<TABLE>
<S> <C>
(4) Although the Trustees have set 12b-1 fees at the levels indicated, under
the shareholder-approved 12b-1 plans for Class T shares and applicable
rules of the NASD, the Trustees of each Fund, except for Strategic Income
Fund, may increase these fees to an aggregate of up to 0.95% annually
without further shareholder approval. The Trustees of Strategic Income
Fund, may increase these 12b-1 fees for Class T Shares to an aggregate of
up to 1.00% annually without further shareholder approval.

(5) After waiver of 0.20% effective January 1, 1989. Without such a fee waiver,
the Management Fees would be 0.65% of average daily net assets, and Total
Fund Operating Expenses would be 1.22%, 1.90%, 1.88% and 1.50%,
respectively, for Class A, B, C and T shares.

(6) Absent the expense reimbursement by the Adviser, Other Expenses and Total
Fund Operating Expenses for Class B and Class C shares of the Special Fund
would have been .46% and .48% and 2.21% and 2.23%, respectively, and Other
Expenses and Total Fund Operating Expenses for Class A, B, C and T shares
of Strategic Fund would have been .48%, .47%, .43% and .58% and 1.43%,
2.12%, 2.08% and 2.18%, respectively.
</TABLE>

EXAMPLES: An investor in each of the Funds would pay the following expenses on
a $1,000 investment assuming a 5% annual return throughout the period, and,
unless otherwise noted, redemption at the end of each period.
<TABLE>
<CAPTION>
NORTHSTAR ADVANTAGE SPECIAL FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 62 $ 72 $ 22 $ 32 $ 22 $ 62 $ 22
3 Years................................. 93 99 69 69 69 88 68
5 Years................................. 125 138 118 118 118 116 116
10 Years................................ 218 236 236 253 253 233 233

NORTHSTAR ADVANTAGE GROWTH FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 61 $ 71 $ 21 $ 31 $ 21 $ 60 $ 20
3 Years................................. 90 95 65 66 66 83 63
5 Years................................. 121 121 111 113 113 108 108
10 Years................................ 210 223 223 244 244 218 218
</TABLE>

<TABLE>
<CAPTION>
NORTHSTAR ADVANTAGE INCOME AND GROWTH FUND
--------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2)
------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
1 year............................................ $ 62 $ 73 $ 23 $ 33 $ 23
3 years........................................... 93 100 70 69 69
5 years........................................... 126 139 119 119 119
10 years.......................................... 219 238 238 255 255
</TABLE>
<TABLE>
<CAPTION>
NORTHSTAR ADVANTAGE INCOME FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 60 $ 70 $ 20 $ 29 $ 19 $ 57 $ 17
3 Years................................. 86 91 61 60 60 73 53
5 Years................................. 114 125 105 103 103 91 91
10 Years................................ 194 210 210 223 223 188 188

NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 57 $ 67 $ 17 $ 27 $ 17 $ 53 $ 13
3 Years................................. 78 84 54 53 53 61 41
5 Years................................. 101 102 92 91 91 71 71
10 Years................................ 166 183 183 199 199 149 149
</TABLE>

5
<PAGE>
<TABLE>
<CAPTION>
NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 61 $ 71 $ 21 $ 31 $ 21 $ 59 $ 19
3 Years................................. 89 95 65 63 63 80 60
5 Years................................. N/A N/A N/A N/A N/A N/A N/A
10 Years................................ N/A N/A N/A N/A N/A N/A N/A

NORTHSTAR ADVANTAGE HIGH YIELD FUND
----------------------------------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2) CLASS T(1) CLASS T(2)
------- ---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year.................................. $ 57 $ 57 $ 17 $ 27 $ 17 $ 54 $ 14
3 Years................................. 78 84 54 54 54 62 42
5 Years................................. 101 113 93 93 93 73 73
10 Years................................ 166 184 184 203 203 152 152
</TABLE>

<TABLE>
<CAPTION>
NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND
--------------------------------------------------------
CLASS A CLASS B(1) CLASS B(2) CLASS C CLASS C(2)
------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
1 year............................................ $ 63 $ 73 $ 23 $ 33 $ 23
3 years........................................... 94 100 70 71 71
5 years........................................... 128 140 120 121 121
10 years.......................................... 223 241 241 261 261
</TABLE>

- ------------------------
(1) Class B and Class T shares convert to Class A shares eight years after
purchase in the case of B Shares and on the later of eight years after
purchase or May 31, 1998 in the case of T Shares; therefore, Class A
expenses are used after year eight.

(2) Assumes no redemption.

The examples above assume the reinvestment of all dividends and distributions
and that the percentage amounts listed under "Annual Operating Expenses" remain
the same each year. The examples should not be considered to be indicative of
actual or expected performance or expenses, both of which will vary.

6
<PAGE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
The financial highlights set forth below present certain information and
ratios as well as performance information for a share of each Class outstanding
throughout each year or portion thereof. Except where indicated, percentages for
periods of less than one year have been annualized. The financial highlights for
fiscal years ended in 1995 (and for all prior periods in the case of the Income
and Growth and High Total Return Funds) have been audited by Coopers & Lybrand
L.L.P., independent accountants, whose report thereon is incorporated by
reference in the Statement of Additional Information and should be read in
conjunction with the related audited financial statements and notes thereto
which are contained in the Annual Report for each Fund. Further information
about performance of each Fund is also contained in the Annual Report, a copy of
which may be obtained without charge from Northstar. The financial highlights
for the Growth, Special, Income, Strategic Income, High Yield and Government
Securities Funds for the periods prior to 1995 were audited by other independent
accountants.

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

NORTHSTAR ADVANTAGE SPECIAL FUND
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1995
---------------------------------------------
CLASS A CLASS B CLASS C CLASS T
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 19.56 $ 19.56 $ 19.56 $ 19.64
Income from investment
operations:
Net investment income
(loss)................... (0.09) (0.12) (0.15) (0.34)
Net realized and
unrealized gain (loss)... 2.48 2.43 2.46 2.57
--------- --------- --------- ---------
Total from investment
operations............... 2.39 2.31 2.31 2.23
--------- --------- --------- ---------
Less distributions:
Dividends from net
realized gain............ (1.03) (1.03) (1.03) (1.03)
--------- --------- --------- ---------
Total distributions....... (1.03) (1.03) (1.03) (1.03)
--------- --------- --------- ---------
Net Asset Value end of
period..................... $ 20.92 $ 20.84 $ 20.84 $ 20.84
--------- --------- --------- ---------
--------- --------- --------- ---------
Total Return (excluding
sales charges)(1).......... 12.20% 11.79% 11.79% 11.34%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 2,335 $ 1,491 $ 62 $ 33,557
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of expenses to
average net assets....... 1.50% 2.20% 2.20% 2.16%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of expenses to
average net assets before
waiver or
reimbursement (3)........ -- 2.21% 2.23% --
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of net investment
income to average net
assets................... (0.91)% (1.64)% (1.60)% (1.50)%
--------- --------- --------- ---------
--------- --------- --------- ---------
Portfolio Turnover Rate... 71% 71% 71% 71%
--------- --------- --------- ---------
--------- --------- --------- ---------

CLASS T SHARES
------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986
-------- -------- -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 20.79 $ 17.40 $ 15.74 $ 10.64 $ 11.67 $ 9.55 $ 7.90 $ 8.92 $ 10.00
Income from investment
operations:
Net investment income
(loss)................... (0.25) (0.32) (0.33) (0.21) (0.20) (0.06) (0.13) (0.14) (0.06)
Net realized and
unrealized gain (loss)... (0.76) 3.83 2.61 6.24 (0.83) 2.18 1.78 (0.88) (1.02)
-------- -------- -------- ------- ------- ------- ------- ------- -------
Total from investment
operations............... (1.01) 3.51 2.28 6.03 (1.03) 2.12 1.65 (1.02) (1.08)
-------- -------- -------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
realized gain............ (0.14) (0.12) (0.62) (0.93) -- -- -- -- --
-------- -------- -------- ------- ------- ------- ------- ------- -------
Total distributions....... (0.14) (0.12) (0.62) (0.93) -- -- -- -- --
-------- -------- -------- ------- ------- ------- ------- ------- -------
Net Asset Value end of
period..................... $ 19.64 $ 20.79 $ 17.40 $ 15.74 $ 10.64 $ 11.67 $ 9.55 $ 7.90 $ 8.92
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Total Return (excluding
sales charges)(1).......... (4.86)% 20.16% 14.54% 57.27% (8.83)% 22.20% 20.89% (11.43)% (10.80)%
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 38,848 $ 28,838 $ 11,336 $ 5,480 $ 3,024 $ 3,958 $ 3,330 $ 3,078 $ 3,823
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Ratio of expenses to
average net assets....... 2.16% 2.34% 2.84% 2.95% 2.95% 2.95% 2.96% 2.94% 2.90%
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Ratio of expenses to
average net assets before
waiver or
reimbursement (3)........ -- -- -- 3.69% 4.98% 4.89% 6.01% 4.52% 4.82%
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Ratio of net investment
income to average net
assets................... (1.25)% (1.66)% (2.12)% (1.57)% (0.97)% (0.44)% (1.06)% (1.22)% (0.76)%
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
Portfolio Turnover Rate... 39.43% 34.57% 39.62% 85.43% 71.79% 85.36% 39.88% 57.08% 27.86%
-------- -------- -------- ------- ------- ------- ------- ------- -------
-------- -------- -------- ------- ------- ------- ------- ------- -------
</TABLE>

7
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE GROWTH FUND
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1995
-----------------------------------------
CLASS A CLASS B CLASS C CLASS T
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 17.59 $ 17.59 $ 17.59 $ 15.75
Income from investment
operations:
Net investment income
(loss)................... 0.08 0.06 0.04 0.07
Net realized and
unrealized gain (loss)... 1.95 1.92 1.92 3.77
-------- -------- -------- --------
Total from investment
operations............... 2.03 1.98 1.96 3.84
-------- -------- -------- --------
Less distributions:
Dividends from net
investment income........ (0.10) (0.08) (0.06) (0.07)
Dividends from net
realized gain............ (3.99) (3.99) (3.99) (3.99)
Dividends from capital.... -- -- -- --
-------- -------- -------- --------
Total distributions....... (4.09) (4.07) (4.05) (4.06)
-------- -------- -------- --------
Net Asset Value end of
period..................... $ 15.53 $ 15.50 $ 15.50 $ 15.53
-------- -------- -------- --------
-------- -------- -------- --------
Total Return (excluding
sales charges)(1).......... 11.55% 11.27% 11.17% 24.40%
-------- -------- -------- --------
-------- -------- -------- --------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 1,355 $ 1,987 $ 69 $ 76,343
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of expenses to
average net assets....... 1.42% 2.07% 2.11% 2.00%
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of net investment
income to average net
assets................... 0.63% 0.06% 0.02% 0.37%
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio Turnover Rate... 134% 134% 134% 134%
-------- -------- -------- --------
-------- -------- -------- --------

CLASS T SHARES
------------------------------------------------------------------------------------------------

1994 1993 1992 1991 1990 1989 1988 1987 1986

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

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 17.33 $ 16.36 $ 16.37 $ 12.49 $ 13.85 $ 11.96 $ 10.47 $ 10.54 $ 10.00

Income from investment
operations:
Net investment income
(loss)................... 0.08 0.02 0.02 0.09 0.10 0.20 0.16 0.09 0.03

Net realized and
unrealized gain (loss)... (1.41) 1.67 1.30 4.62 (0.83) 2.66 1.58 (0.07) 0.87

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

Total from investment
operations............... (1.33) 1.69 1.32 4.71 (0.73) 2.86 1.74 0.02 0.90

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

Less distributions:
Dividends from net
investment income........ (0.08) (0.04) (0.02) (0.08) (0.10) (0.20) (0.17) (0.08) (0.03)

Dividends from net
realized gain............ (0.15) (0.67) (1.31) (0.75) (0.51) (0.76) (0.08) -- (0.33)

Dividends from capital.... (0.02) (0.01)(2) -- -- (0.02) (0.01) -- (0.01) --

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

Total distributions....... (0.25) (0.72) (1.33) (0.83) (0.63) (0.97) (0.25) (0.09) (0.36)

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

Net Asset Value end of
period..................... $ 15.75 $ 17.33 $ 16.36 $ 16.37 $ 12.49 $ 13.85 $ 11.96 $ 10.47 $ 10.54

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

Total Return (excluding
sales charges)(1).......... (7.66)% 10.36% 8.05% 38.10% (5.24)% 24.25% 16.70% 0.11% 8.91%

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

Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 76,391 $ 80,759 $ 56,759 $ 40,884 $ 24,927 $ 29,842 $ 25,359 $ 27,493 $ 17,013

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

Ratio of expenses to
average net assets....... 2.00% 2.04% 2.15% 2.25% 2.33% 2.33% 2.46% 2.29% 2.77%

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

Ratio of net investment
income to average net
assets................... 0.49% 0.13% 0.09% 0.66% 0.80% 1.39% 1.40% 0.83% 0.37%

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

Portfolio Turnover Rate... 53.76% 42.27% 46.77% 63.56% 54.22% 74.56% 58.73% 54.72% 32.66%

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

</TABLE>

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

NORTHSTAR ADVANTAGE INCOME AND GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------------------
1994
---------------------------------------
1995 CLASS A CLASS B CLASS C
--------------------------------------- FROM FROM FROM
CLASS A CLASS B CLASS C 11/8/93 2/9/94 3/21/94
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
beginning of
period........... $ 10.00 $ 9.99 $ 9.99 $ 10.00 $ 10.64 $ 10.37
Income from
investment
operations:
Net investment
income......... .35 .27 .27 0.30 0.20 0.20
Net realized and
unrealized gain
(loss)......... .84 .85 .85 (0.05) (0.65) (0.38)
----- ----- ----- ----------- ----------- -----------
Total from
investment
operations..... 1.19 1.12 1.12 0.25 (0.45) (0.18)
----- ----- ----- ----------- ----------- -----------
Less
distributions:
Dividends (from
net investment
income)........ (0.33) (0.27) (0.28) (0.25) (0.20) (0.20)
----- ----- ----- ----------- ----------- -----------
Net Asset Value
end of period.... $ 10.86 $ 10.84 $ 10.83 $ 10.00 $ 9.99 $ 9.99
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Total Return
(excluding sales
charge).......... 13.19% 12.31% 12.33% 2.48% (4.20)% (1.75)%
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Ratios/Supplemental
Data:
Net assets end
of period (in
thousands)..... 76,031 60,347 53,661 72,223 37,767 4,823
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Ratio of
expenses to
average net
assets......... 1.51% 2.23% 2.22% 1.50% 2.20% 2.20%
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Ratio of expense
reimbursement
to average net
assets......... 0% 0% 0% 0.06% 0.16% 0.47%
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Ratio of net
investment
income to
average net
assets......... 3.39% 2.66% 2.67% 3.73% 3.00% 2.87%
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
Portfolio
Turnover
Rate........... 91% 91% 91% 26% 26% 26%
----- ----- ----- ----------- ----------- -----------
----- ----- ----- ----------- ----------- -----------
</TABLE>

8
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE INCOME FUND
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1995
-----------------------------------------
CLASS A CLASS B CLASS C CLASS T
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 12.77 $ 12.77 $ 12.77 $ 11.54
Income from investment
operations:
Net investment income
(loss)................... 0.43 0.35 0.38 0.57
Net realized and
unrealized gain (loss)... 1.06 1.09 1.07 2.27
-------- -------- -------- --------
Total from investment
operations............... 1.49 1.44 1.45 2.84
-------- -------- -------- --------
Less distributions:
Dividends from net
investment income........ (0.48) (0.45) (0.45) (0.59)
Dividends from net
realized gain............ (1.25) (1.25) (1.25) (1.25)
Dividends from capital.... -- -- -- --
-------- -------- -------- --------
Total distributions....... (1.73) (1.70) (1.70) (1.84)
-------- -------- -------- --------
Net Asset Value end of
period..................... $ 12.53 $ 12.51 $ 12.52 $ 12.54
-------- -------- -------- --------
-------- -------- -------- --------
Total Return (excluding
sales charges)(1).......... 11.95% 11.56% 11.49% 25.11%
-------- -------- -------- --------
-------- -------- -------- --------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 797 $ 1,759 $ 231 $ 72,472
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of expenses to
average net assets....... 1.27% 1.95% 1.91% 1.68%
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of net investment
income to average net
assets................... 4.99% 4.38% 4.49% 4.44%
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio Turnover Rate... 131% 131% 131% 131%
-------- -------- -------- --------
-------- -------- -------- --------

CLASS T SHARES
------------------------------------------------------------------------------------------------

1994 1993 1992 1991 1990 1989 1988 1987 1986

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

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 12.94 $ 12.05 $ 11.66 $ 10.13 $ 10.71 $ 9.71 $ 9.11 $ 10.39 $ 10.00

Income from investment
operations:
Net investment income
(loss)................... 0.57 0.49 0.55 0.57 0.61 0.68 0.62 0.56 0.40

Net realized and
unrealized gain (loss)... (1.25) 1.20 0.36 1.53 (0.54) 1.00 0.58 (1.04) 0.67

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

Total from investment
operations............... (0.68) 1.69 0.91 2.10 0.07 1.68 1.20 (0.48) 1.07

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

Less distributions:
Dividends from net
investment income........ (0.54) (0.49) (0.52) (0.57) (0.63) (0.68) (0.60) (0.57) (0.40)

Dividends from net
realized gain............ (0.16) (0.31) -- -- -- -- -- (0.22) (0.28)

Dividends from capital.... (0.02)(2) -- -- -- (0.02) -- -- (0.01) --

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

Total distributions....... (0.72) (0.80) (0.52) (0.57) (0.65) (0.68) (0.60) (0.80) (0.68)

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

Net Asset Value end of
period..................... $ 11.54 $ 12.94 $ 12.05 $ 11.66 $ 10.13 $ 10.71 $ 9.71 $ 9.11 $ 10.39

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

Total Return (excluding
sales charges)(1).......... (5.33)% 14.08% 8.06% 21.17% 0.78% 17.70% 13.39% (5.35)% 10.74%

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

Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 73,764 $ 80,841 $ 56,823 $ 49,367 $ 44,750 $ 58,006 $ 57,425 $ 58,722 $ 49,332

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

Ratio of expenses to
average net assets....... 1.69% 1.77% 2.02% 2.06% 2.10% 2.04% 2.10% 1.98% 2.15%

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

Ratio of net investment
income to average net
assets................... 4.36% 3.99% 4.73% 5.21% 5.73% 6.38% 6.30% 5.70% 5.72%

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

Portfolio Turnover Rate... 59.26% 38.26% 58.96% 76.87% 57.39% 56.15% 24.57% 45.91% 78.71%

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

</TABLE>

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

NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1995
---------------------------------------------
CLASS A CLASS B CLASS C CLASS T
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 9.51 $ 9.51 $ 9.51 $ 8.74
Income from investment
operations:
Net investment income
(loss)................... 0.34 0.30 0.30 0.58
Net realized and
unrealized gain (loss)... 0.59 0.59 0.59 1.35
--------- --------- --------- ---------
Total from investment
operations............... 0.93 0.89 0.89 1.93
--------- --------- --------- ---------
Less distributions:
Dividends from net
investment income........ (0.37) (0.33) (0.33) (0.60)
Dividends from net
realized gain............
Dividends from capital.... -- -- -- --
--------- --------- --------- ---------
Total distributions....... (0.37) (0.33) (0.33) (0.60)
--------- --------- --------- ---------
Net Asset Value end of
period..................... $ 10.07 $ 10.07 $ 10.07 $ 10.07
--------- --------- --------- ---------
--------- --------- --------- ---------
Total Return (excluding
sales charges)(1).......... 10.04% 9.61% 9.61% 22.90%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 3,235 $ 2,790 $ 8 $ 150,951
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of expenses to
average net assets....... 1.02% 1.70% 1.68% 1.30%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of expenses to
average net assets before
waiver or
reimbursement (3)........ 1.22% 1.90% 1.88% 1.50%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of net investment
income to average net
assets................... 6.01% 5.20% 5.28% 6.23%
--------- --------- --------- ---------
--------- --------- --------- ---------
Portfolio Turnover Rate... 295% 295% 295% 295%
--------- --------- --------- ---------
--------- --------- --------- ---------

CLASS T SHARES
-----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986
--------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value beginning of
period..................... $ 10.32 $ 9.22 $ 8.99 $ 8.47 $ 8.47 $ 8.26 $ 8.80 $ 9.94 $ 10.00
Income from investment
operations:
Net investment income
(loss)................... 0.56 0.59 0.61 0.67 0.68 0.72 0.75 0.64 0.54
Net realized and
unrealized gain (loss)... (1.56) 1.09 0.23 0.52 -- 0.21 (0.48) (1.10) 0.27
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations............... (1.00) 1.68 0.84 1.19 0.68 0.93 0.27 (0.46) 0.81
--------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income........ (0.57) (0.58) (0.61) (0.67) (0.68) (0.72) (0.75) (0.64) (0.54)
Dividends from net
realized gain............ -- -- -- -- -- -- -- -- (0.33)
Dividends from capital.... (0.01) -- -- -- -- -- (0.06) (0.04) --
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions....... (0.58) (0.58) (0.61) (0.67) (0.68) (0.72) (0.81) (0.68) (0.87)
--------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value end of
period..................... $ 8.74 $ 10.32 $ 9.22 $ 8.99 $ 8.47 $ 8.47 $ 8.26 $ 8.80 $ 9.94
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total Return (excluding
sales charges)(1).......... (9.82)% 18.48% 9.77% 14.73% 8.57% 11.73% 2.97% (4.72)% 8.50%
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets end of period
(thousands).............. $ 152,608 $184,156 $144,144 $121,389 $108,420 $123,735 $169,421 $237,190 $223,598
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Ratio of expenses to
average net assets....... 1.29% 1.31% 1.39% 1.44% 1.43% 1.45% 1.88% 1.79% 1.89%
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Ratio of expenses to
average net assets before
waiver or
reimbursement (3)........ 1.49% 1.51% 1.59% 1.64% 1.63% 1.65% -- -- --
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Ratio of net investment
income to average net
assets................... 6.00% 5.83% 6.81% 7.68% 8.23% 8.57% 8.47% 7.02% 6.38%
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
Portfolio Turnover Rate... 314.91% 81.41% 120.08% 87.00% 16.77% 73.94% 494.05% 412.29% 241.73%
--------- -------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- -------- --------
</TABLE>

9
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1994
-------
1995 CLASS T
------------------------------------- FROM
CLASS A CLASS B CLASS C CLASS T 7/1/94
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value beginning of period.......... $12.24 $12.24 $12.24 $11.71 $12.00
Income from investment operations:
Net investment income (loss)............... 0.63 0.55 0.55 0.98 0.51
Net realized and unrealized gain (loss).... 0.13 0.15 0.14 0.66 (0.25)
------- ------- ------- ------- -------
Total from investment operations........... 0.76 0.70 0.69 1.64 0.26
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income....... (0.60) (0.55) (0.55) (0.96) (0.49)
Dividends from net realized gain........... -- -- -- -- (0.05)
Dividends from capital..................... -- -- -- -- (0.01)(2)
------- ------- ------- ------- -------
Total distributions........................ (0.60) (0.55) (0.55) (0.96) (0.55)
------- ------- ------- ------- -------
Net Asset Value end of period................ $12.40 $12.39 $12.38 $12.39 $11.71
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total Return (excluding sales charges)(1).... 6.40% 5.89% 5.81% 14.54% 2.14%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets end of period (thousands)....... $21,790 $22,143 $2,172 $30,228 $25,252
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of expenses to average net assets.... 1.36% 2.06% 2.02% 1.90% 1.90%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of expenses to average net assets
before waiver or reimbursement (3)........ 1.43% 2.12% 2.08% 2.18% 2.53%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of net investment income to average
net assets................................ 7.03% 6.47% 6.48% 6.86% 7.92%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Portfolio Turnover Rate.................... 153% 153% 153% 153% 156%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>

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

NORTHSTAR ADVANTAGE HIGH YIELD FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------------------
1995 CLASS T SHARES
----------------------------------------- ------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS T 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
beginning of
period........... $ 8.68 $ 8.68 $ 8.68 $ 8.29 $ 9.31 $ 9.09 $ 7.94 $ 6.27 $ 8.55 $ 10.00
Income from
investment
operations:
Net investment
income
(loss)......... 0.48 0.44 0.44 0.84 0.81 0.85 0.92 1.08 1.12 0.60
Net realized and
unrealized gain
(loss)......... (0.10) (0.09) (0.09) 0.26 (0.99) 0.80 1.19 1.67 (2.30) (1.45)
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Total from
investment
operations..... 0.38 0.35 0.35 1.10 (0.18) 1.65 2.11 2.75 (1.18) (0.85)
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Less
distributions:
Dividends from
net investment
income......... (0.50) (0.46) (0.46) (0.83) (0.83) (0.83) (0.94) (1.08) (1.10) (0.60)
Dividends from
net realized
gain........... -- -- -- -- (0.01) (0.60) (0.02) -- -- --
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Total
distributions... (0.50) (0.46) (0.46) (0.83) (0.84) (1.43) (0.96) (1.08) (1.10) (0.60)
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Net Asset Value
end of period.... $ 8.56 $ 8.57 $ 8.57 $ 8.56 $ 8.29 $ 9.31 $ 9.09 $ 7.94 $ 6.27 $ 8.55
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Total Return
(excluding sales
charges)(1)...... 4.48% 4.17% 4.17% 13.71% (2.18)% 18.89% 27.57% 46.49% (14.59)% (8.81)%
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Ratios/supplemental
data:
Net assets end
of period
(thousands).... $ 7,466 $ 79,063 $ 3,410 $139,711 $ 136,426 $ 125,095 $ 64,063 $ 25,651 $ 11,342 $ 11,045
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Ratio of
expenses to
average net
assets......... 1.02% 1.71% 1.72% 1.33% 1.34% 1.40% 1.50% 1.50% 1.44% 1.35%
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Ratio of
expenses to
average net
assets before
waiver or
reimbursement (3)... -- -- -- -- -- -- 1.55% 1.96% 2.25% 2.65%
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Ratio of net
investment
income to
average net
assets......... 9.83% 9.18% 9.29% 9.69% 9.08% 8.84% 10.30% 14.84% 15.15% 11.44%
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
Portfolio
Turnover
Rate........... 103% 103% 103% 103% 86.20% 176.40% 121.51% 57.48% 156.23% 39.63%
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
-------- -------- -------- -------- --------- --------- -------- -------- -------- ---------
</TABLE>

10
<PAGE>
- --------------------------------------------------------------------------------

NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------------------------
1994
----------------------------
1995 CLASS A CLASS B CLASS C
--------------------------- FROM FROM FROM
CLASS A CLASS B CLASS C 11/8/93 2/9/94 3/21/94
------- ------- ------- ------------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value beginning of period..... $ 4.41 $ 4.41 $ 4.41 $ 5.00 $ 5.20 $ 5.06
Income from investment operations:
Net investment income (loss).......... .48 .45 .44 0.41 0.33 0.26
Net realized and unrealized gain
(loss)............................... .07 .06 .09 (0.60) (0.80) (0.65)
------- ------- ------- ------ ------ ------
Total from investment operations...... .55 .51 .53 (0.19) (0.47) (0.39)
------- ------- ------- ------ ------ ------
Less distributions:
Dividends (from net investment
income).............................. (0.48) (0.45) (0.45) (0.40) (0.32) (0.26)
------- ------- ------- ------ ------ ------
Net Asset Value end of period........... $ 4.48 $ 4.47 $ 4.49 $ 4.41 $ 4.41 $ 4.41
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Total Return (excluding sales charge)... 13.02% 11.97% 12.44% (4.11)% (9.30)% (7.21)%
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Ratios/Supplemental Data:
Net assets end of period (in
thousands)........................... 88,552 96,362 11,011 50,797 25,880 2,330
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Ratio of expenses to average net
assets............................... 1.55% 2.25% 2.27% 1.50% 2.20% 2.20%
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Ratio of expense reimbursement to
average net assets................... 0% 0% 0% 0.11% 0.20% 0.99%
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Ratio of net investment income to
average net assets................... 10.90% 10.20% 10.18% 10.09% 9.72% 9.46%
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Portfolio Turnover Rate............... 145% 145% 145% 163% 163% 163%
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
<FN>
- ------------------------------
(1) Total returns for 1986 for the Government Securities, Growth, Income, and
Special Funds (1989 for the High Yield Fund and 1994 for Strategic Income
Fund) represent actual, not annualized, percentages. Unaudited prior to
1992.

(2) Represents distribution in excess of net investment income due to
differences in book and tax income.

(3) Reflects ratio that would have existed, in the case of the Government
Securities Fund, had the former Adviser not elected to waive 0.20% of its
investment advisory fee effective January 1, 1989, and, in the case of the
High Yield, Special and Strategic Income Funds, had the former Adviser or
its affiliates not reimbursed such Funds for a portion of their expenses.
</TABLE>

11
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
- ----------------------------------------------------------------------
Each Fund has its own investment objective and policies, and each utilizes
specific investment techniques to achieve its objective. Each of the Funds is
diversified, which is a means of reducing risk by investing the Fund's assets in
a broad range of securities designed to meet the Fund's objectives. The
objectives and policies of each Fund can be expected to affect the investment
return of such Fund and the degree of market and financial risk to which such
Fund is exposed. The percentage limitations included in these policies apply
only at the time of purchase. Policies and objectives that are noted as
"fundamental" cannot be changed without a shareholder vote. All other policies,
including the investment objective for each Fund other than the Income and
Growth Fund and High Total Return Fund are not fundamental and may be changed by
the Fund's Trustees without shareholder approval. Shareholders of those Funds
will be notified at least thirty days in advance of a change in the investment
objective of a Fund, and will be notified of any other material changes. If
there is a change to a Fund's investment objective, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current financial goals. Shareholders may incur a contingent deferred sales
charge if shares are redeemed in response to a change in objective. There can,
of course, be no guarantee that the investment objective of any of the Funds
will be achieved, due to the uncertainty inherent in all investments.

NORTHSTAR ADVANTAGE SPECIAL FUND. The Fund's investment objective is capital
appreciation. The Fund invests in a diversified portfolio of equity securities
selected on the basis of their potential for growth. The Fund invests in equity
securities of companies which are listed on domestic securities exchanges or are
traded in the over-the-counter markets. However, the Fund may, to a limited
extent, invest in securities traded in markets outside the U.S. Securities
purchased by the Fund are primarily issues of smaller, lesser-known companies.
While the Fund does not limit itself to smaller companies, many of its
investments are in small, emerging growth companies. Small companies are those,
for example, with annual revenues of less than $500 million. Emerging growth
companies are those that, while still in the developmental stage, have
demonstrated, or are expected to achieve, growth of earnings over major business
cycles. Smaller, less established companies may offer greater opportunities for
capital appreciation than larger, better established companies, but may also
involve certain special risks. Such companies often have limited product lines,
markets or financial resources and depend heavily on a small management group.
Their securities may trade less frequently, in smaller volumes, and fluctuate
more sharply in value than exchange listed securities of larger companies.

Equity securities in which the Fund may invest consist of common stocks,
preferred stocks, convertible securities, warrants and other stock purchase
rights, private placements and other restricted equity securities, equity
interests in trusts, limited partnerships and joint ventures and interests in
real estate investment trusts. The Fund may invest up to 20% of its net assets
in the securities of foreign issuers, not more than 10% of which may be in
issuers whose securities are not listed on a U.S. securities exchange. See "Risk
Factors -- Foreign Investments."

NORTHSTAR ADVANTAGE GROWTH FUND. The Fund's investment objective is long-term
growth of capital. Under normal conditions, at least 65% of the Fund's total
assets will be invested in securities purchased for their prospects for capital
appreciation. The Fund invests principally in common stocks of companies which
are listed on the domestic securities exchanges or are traded in the domestic
over-the-counter markets, but may, to a limited extent, invest in securities
traded in markets outside the U.S. The Fund also may invest in preferred stocks
and convertible securities issued by such companies.

The Fund invests in industries and companies which, in the opinion of the
Adviser, have potential for capital growth and selects securities of companies
with records of above-average earnings growth or companies which, in its view,
are substantially undervalued in relation to assets. Some of the equity
securities in which the Fund invests may be speculative and involve substantial
risk, since they may experience significant price fluctuations in both rising
and declining markets. The Fund may invest up to 20% of its net assets in
securities of foreign issuers, not more than 10% of which may be invested in
issuers that are not listed on a U.S. securities exchange. See "Risk Factors --
Foreign Investments."

NORTHSTAR ADVANTAGE INCOME AND GROWTH FUND. The Fund's investment objective
is to seek current income balanced with the objective of achieving capital
appreciation. Under normal market conditions, the Fund will invest at least 65%
of its total assets in income-producing securities. In seeking to achieve its
objective, the Fund will invest in equity securities of domestic and foreign
issuers that have prospects for dividend income and growth of capital,
convertible securities, and selected investment grade debt securities of
domestic and foreign private and government issuers. These debt securities would
include U.S. Government obligations, foreign and domestic corporate bonds, and
bonds issued by foreign governments considered stable by the Adviser and
supported through the authority to levy taxes by national state or provincial
governments or similar political subdivisions. The

12
<PAGE>

proportion of holdings in common stocks, preferred stocks, other equity-related
securities, and debt securities will vary in accordance with the level of return
that can be achieved from these various types of securities. Securities are also
purchased on the basis of fundamental attraction regarding capital appreciation
prospects. In this way, income is "balanced" with capital. The Fund invests in
equity securities that are listed primarily on the New York Stock Exchange or
American Stock Exchange or that are traded in the over-the-counter market.
Equity and equity-related securities purchased by the Fund will typically be of
large well-established companies, but may also include to a lesser extent small
capitalization companies selected for their growth potential. Under normal
conditions, the Fund does not intend to invest more than 30% of its assets in
convertible securities. Debt securities purchased by the Fund will only be
securities rated investment grade (I.E., in the top four rating categories of
Moodys or S&P) at the time of purchase, or securities deemed to be of equivalent
quality by the Adviser. Securities that are in the lowest investment grade debt
category may have speculative characteristics and changes in economic conditions
or other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments than in the case of higher grade securities. In
the event that an existing holding is downgraded to below investment grade, the
Fund may nevertheless retain the security.

The Fund may invest up to 20% of its net assets in the securities of foreign
issuers, not more than 10% of which shall be in issuers whose securities are not
listed on a U.S. securities exchange. See "Risk Factors -- Foreign Investments."

NORTHSTAR ADVANTAGE INCOME FUND. The Fund's primary investment objective is
income. As a secondary objective, the Fund seeks capital appreciation. The Fund
invests in debt securities and equity securities of companies which are listed
or traded on domestic securities exchanges or in the over-the-counter market,
but may to a limited extent, invest in securities traded in markets outside the
U.S. Under normal market conditions, at least 65% of the Fund's total assets
will be invested in income-producing securities. Up to 25% of the Fund's assets
may be invested in debt securities rated below investment grade (i.e. rated
lower than Baa by Moody's or BBB by S&P), or which are not rated, but normally
will not invest in securities rated below B by Moody's or S&P. These securities
are considered speculative investments and generally involve greater risk,
including the risk of loss of income and principal, than higher-rated
securities. In addition, the yield and price of a lower-rated security may tend
to fluctuate more than the yield and price of a higher-rated security.
Investment in these securities involves special risks outlined below under the
heading "Risk Factors -- High Yield Securities" and in the Appendix. The Fund
may invest up to 20% of its net assets in securities of foreign issuers, not
more that 10% of which may be invested in issuers that are not listed on a U.S.
securities exchange. See "Risk Factors -- Foreign Investments."

Equity securities include common and preferred stocks, warrants or rights to
purchase such stock, and securities convertible into such stock. Debt securities
may be of any maturity and pay fixed, floating or adjustable interest rates. The
Fund also may invest in discount obligations, including zero coupon securities,
that do not pay interest but rather are issued at a significant discount to
their maturity values, or securities that pay interest, at the issuer's option,
in additional securities instead of cash (pay-in-kind securities). The values of
debt securities generally fluctuate inversely with changes in interest rates.
This is less likely to be true for adjustable or floating rate securities, since
interest rate changes are more likely to be reflected in changes in the rates
paid on the securities. However, reductions in interest rates also may translate
into lower distributions paid by the Fund. Additionally, because zero coupon and
pay-in-kind securities do not pay interest but the Fund nevertheless must accrue
and distribute the income deemed to be earned on a current basis, the Fund may
have to sell other investments to raise the cash needed to make income
distributions.

NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND. The investment objective of
the Fund is to achieve a high level of current income and to conserve principal
by investing primarily in debt obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities ("U.S. Government Securities").

U.S. Government Securities include U.S. Treasury obligations and obligations
of agencies and instrumentalities of the U.S. Government. The Fund may at
various times have all or substantially all of its assets in U.S. Government
Securities issued by a single agency or instrumentality. Some U.S. Government
Securities, such as U.S. Treasury obligations, are supported by the full faith
and credit of the United States; others, such as securities of Federal Home Loan
Banks, are supported by the right of the issuer to borrow from the U.S.
Treasury; still others, such as bonds issued by the Federal National Mortgage
Association, a private corporation, are supported only by the credit of the
instrumentality. Securities of an instrumentality are not insured by the U.S.
Government and there can be no assurance that the U.S. Government will support
an instrumentality it sponsors. Because the U.S. Government is not obligated by
law to provide support to an instrumentality it sponsors, the Government
Securities Fund will invest in the securities issued by such an instrumentality
only when the Adviser determines that the credit risk with respect to the
instrumentality does not make the securities of the instrumentality unsuitable
investments. The Adviser does not intend to invest in excess of 35% of the
Fund's assets in securities not supported by the full faith and credit of the
United States, nor does it intend to invest more than 20% of the portfolio in
securities issued by any single instrumentality not supported by the full faith
and credit of the United States.

13
<PAGE>
Securities of the sort owned by the Fund generally possess a high degree of
dependability with respect to timely payment of principal and interest. However,
such securities fluctuate in market price (but not in ultimate repayment
amount), primarily with interest rate levels and trends, rising when interest
rates decline and declining when interest rates rise. Consequently, the Fund's
net asset value will fluctuate in response to changing interest rates. The Fund
may invest in U.S. Government Securities of varying maturities and duration, and
the portfolio at times may hold a significant portion of its assets in
securities with longer durations. Long duration securities have greater price
movements in response to interest rate changes than movements in shorter
duration securities and may impact the Fund's net asset value accordingly. The
Adviser's determination of average duration reflects its outlook on interest
rates as well as its determination of best relative value in making investments.
Mortgage-backed securities have yield and maturity characteristics corresponding
to the underlying mortgage loans. Fluctuating prepayments of principal may
result from the refinancing or foreclosure of the underlying mortgage loans.
Because of the prepayment risks, these securities may have less potential for
capital appreciation during periods of declining interest rates than other
investments of comparable maturities, while having a comparable risk of decline
during periods of rising interest rates.

The Fund may invest in zero coupon treasury securities which consist of
stripped interest or principal components of U.S. Treasury bonds or notes
("STRIPs"). STRIPs involve the separation of the corpus (face amount) of the
bond or note from the coupon (interest portion). The U.S. Treasury redeems the
bond or note corpus (zero coupon bond or note) for the face value thereof at
maturity and redeems the stripped coupon (interest portion) beginning at the
date specified thereon. Zero coupon Treasury securities pay no interest to
holders during their life and usually trade at a deep discount from their face
or par value. They are subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities which make periodic distributions of interest. On the other hand,
zero coupon securities eliminate reinvestment risk and lock in a rate of return
to maturity. Stripped interests in U.S. Treasury securities that are not issued
through the U.S. Treasury's STRIPs program are not considered to be U.S.
Government Securities. The Fund will accrue and distribute income from zero
coupon securities on a current basis and may have to sell securities to generate
cash for distributions.

The Fund's assets will be managed so that the Fund is a permissible investment
for federal credit unions under the Federal Credit Union Act and rules and
regulations established by the National Credit Union Administration. To the
extent that any investment or investment practice under the Fund's investment
policies described herein or in the Statement of Additional Information are not
permissible for federal credit unions, the Fund shall refrain from purchasing
such investment or engaging in such practice. The Fund will notify shareholders
60 days before making any change to this policy. THE GOVERNMENT SECURITIES
FUND'S SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR ITS
AGENCIES OR INSTRUMENTALITIES, OR BY ANY OTHER PERSON OR ENTITY.

NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND. The Fund seeks high current
income. The Fund will, under normal market conditions, allocate its investments
among the three fixed income securities markets described below. The Adviser
believes that allocation of the Fund's investments among the three sectors will
better enable the Fund to achieve its objective and may reduce investment risk
and volatility. The Fund will, under normal market conditions, maintain at least
20% of its total assets in each of the three sectors and may not invest more
than 60% of its total assets in any one sector, and have substantially all of
the Fund's assets invested in the three market sectors. No more than 60% of the
Fund's assets may be invested in foreign issuers across all sectors. In the
past, the markets for U.S. Government Securities, high yield corporate fixed
income securities and debt securities of foreign issuers have tended to move
independently of each other and have at times moved in opposite directions.
There is no assurance that they will continue to do so in the future. The
Adviser believes that when financial markets exhibit a lack of correlation, the
ability to respond strategically to market forces by allocating the Fund's
assets among the sectors should result in lower price volatility than would be
experienced by investing exclusively in any one of the markets. See "Risk
Factors -- High Yield Securities and Foreign Investments."

The Adviser will determine the amount of assets to be allocated to each sector
based on its assessment of the maximum level of current income that can be
achieved without incurring undue risks to principal value. In making this
allocation, the Adviser will rely on its analysis of economic conditions,
interest rate risk, currency risk and its analysis of opportunities in each
sector based on current and historical market data. The Adviser will
continuously review its allocations and make adjustments as it deems
appropriate. The Fund's assets allocated to each sector will be managed in
accordance with the investment policies described below.

THE U.S. GOVERNMENT SECURITIES SECTOR. U.S. Government Securities are
considered among the most creditworthy of fixed income securities. For a
description of U.S Government Securities and their characteristics, including
mortgage-backed securities, see "Northstar Advantage Government Securities
Fund." The Fund may invest all or substantially all of this sector's assets in
U.S.

14
<PAGE>
Government Securities issued by a single agency or instrumentality. The Fund may
invest in varying maturities and may adjust the average maturity of the
investments held by the Fund from time to time based upon the Adviser's
assessment of relative yields of securities of different maturities and its
expectations of future changes in interest rates.

THE HIGH YIELD SECTOR. The High Yield sector will invest predominantly in
high yielding, higher risk, lower-rated or nonrated foreign government fixed
income securities and corporate fixed income securities traded in the U.S. high
yield corporate market. These securities are rated below investment grade (I.E.,
rated below Baa by Moody's or below BBB by S&P). The Fund may invest without
limitation in securities rated as low as Ca by Moody's or CC by S&P (or in
nonrated securities deemed to be of equivalent standing by the Adviser) and up
to 10% of the Fund's assets allocated to this sector may be in the lowest rating
categories (C by Moody's and D by S&P). The lowest rating categories include
bonds which are in default. High yield securities are subject to greater market
fluctuations, and may be less liquid and subject to greater risk of loss of
income and principal due to default by the issuer than are investments in lower
yielding, higher-rated debt instruments. Investment in these securities involves
special risks. See, "Risk Factors -- High Yield Securities" and the Appendix.

The Adviser will attempt to maximize income and reduce risk within the High
Yield sector through diversification of the sector's portfolio investments and
by credit analysis of each issuer, as well as by monitoring broad economic
trends and corporate developments. The Fund will not necessarily invest in the
highest yielding securities available if, in the Adviser's view, the differences
in yield are not sufficient to justify the accompanying higher risks, and may
invest in securities rated investment grade at the time of purchase.

The foreign government securities rated below investment grade in which the
Fund invests include securities issued or guaranteed by foreign national,
provincial, state or other governments with taxing power, or their agencies or
instrumentalities, and include securities issued by developing countries and
issuers located in developing countries. Such foreign government securities may
be denominated in U.S. dollars or other currencies. In selecting and allocating
assets among the countries in which the Fund will invest, the Adviser will
develop a long-term view of those countries and will engage in an analysis of
sovereign risk by focusing on factors such as a country's public finances,
monetary policy, external accounts, financial markets, stability of exchange
rate policy and labor conditions.

The high yield securities in which the Fund may invest will consist
predominantly of bonds, but may include to a lesser extent preferred stocks and
securities convertible into or exchangeable for equity securities, or which
carry the right, in the form of a warrant or as part of a unit with the
security, to acquire equity securities. The Fund intends to purchase such
securities for their yield characteristics rather than for the purpose of
exercising the associated rights to obtain equity securities. The Fund may
invest in debt securities of any maturity that pay fixed, floating or adjustable
interest rates. The Fund also may invest in debt securities issued at a discount
to face value, including zero coupon securities, and securities that pay
interest, at the issuer's option, in additional securities (pay-in-kind
securities). The values of debt securities generally fluctuate inversely with
changes in interest rates. This is less likely to be true for adjustable or
floating rate securities, since interest rate changes are more likely to be
reflected in changes in the rates paid on the securities. However, reductions in
interest rates also may translate into lower distributions paid by the Fund.
Additionally, because zero coupon and pay-in-kind securities do not pay interest
but the Fund nevertheless must accrue and distribute the income deemed to be
earned on a current basis, the Fund may have to sell other investments to raise
the cash needed to make income distributions.

The High Yield sector may also invest in participations in (i) entities
organized and operated for the purpose of restructuring the investment
characteristics of instruments issued or guaranteed by foreign governments of
emerging market countries ("Sovereign Debt Obligations"), and (ii) loans between
foreign governments and financial institutions. Sovereign Debt Obligations held
by the Fund generally will not be traded on securities exchanges. The Fund may
invest in Sovereign Debt Obligations customarily referred to as "Brady Bonds,"
which are created through the exchange of existing commercial bank loans to
foreign entities for new obligations in connection with debt restructuring.
Brady Bonds may be collateralized or uncollateralized and issued in various
currencies (although most are dollar denominated), and they are actively traded
in the over-the-counter secondary market. Dollar-denominated, collateralized
Brady Bonds, which may be fixed rate par bonds or floating rate discount bonds,
are generally collateralized in full as to principal due at maturity by U.S.
Treasury zero coupon obligations which have the same maturity as the Brady
Bonds.

The Fund's investments in loans are expected in most instances to be in the
form of loan participations and loan assignments from third parties. The Fund
may invest up to 15% of its net assets in participations, assignments and other
illiquid investments. See "Illiquid Securities." Both the government that is the
borrower on the loan and the bank selling the participation or assignment will
be considered to be the issuer of the participation or assignment, and the Fund
will acquire participations only if the lender has total assets of more than $25
billion and its senior unsecured debt is rated Baa or higher by Moody's or BBB
or higher by S&P.

15
<PAGE>
THE INTERNATIONAL SECTOR. The International Sector will invest in investment
grade (I.E . rated Baa or better by Moody's or BBB or better by S&P, or in
unrated securities that the Adviser determines to be of equivalent quality) debt
obligations, and other fixed income securities denominated in U.S. dollars and
other currencies (i) issued or guaranteed by foreign national, provincial,
state, or other governments with taxing authority, or by their agencies or
instrumentalities; and (ii) of supranational entities (described below). The
Fund may invest in any country where the Adviser believes there is the potential
for income.

Debt obligations may or may not be supported by the full faith and credit of a
foreign government. Supranational entities include international organizations
designated or supported by governmental entities to promote economic
reconstruction or development and international banking institutions and related
government agencies. Examples of supranational entities include the World Bank,
the Inter-American Development Bank and the European Bank for Reconstruction and
Development.

NORTHSTAR ADVANTAGE HIGH YIELD FUND. The investment objective of the Fund is
high current income. The Fund normally will be invested substantially in
long-term and intermediate-term fixed income securities, with emphasis on high
yield-high risk, lower-rated or nonrated corporate debt instruments of U.S. and
foreign issuers. Under normal market conditions, at least 65% of the Fund's
total assets will be invested in high yield bonds. The Fund may invest without
limitation in securities rated as low as Ca by Moody's or CC by S&P (or in
securities which are not rated but are considered to be of equivalent quality by
the Adviser), and may invest up to 1% of its assets in the lowest rating
categories (C for Moody's and D for S&P). The lowest rating categories include
bonds which are in default. High yield securities are subject to special risks,
typically are subject to greater market fluctuations and may be less liquid and
subject to greater risk of loss of income and principal due to default by the
issuer. See, "Risk Factors -- High Yield Securities" and the Appendix. The
Adviser will attempt to maximize income and reduce risk through diversification
of the portfolio and by credit analysis of each issuer, as well as by monitoring
broad economic trends and corporate developments.

The Fund may invest up to 35% of its assets in securities of foreign issuers,
10% of which may be of issuers which are not traded on a U.S. securities
exchange. See "Risk Factors -- Foreign Investments." The Fund may invest up to
25% of its assets in equity or equity-related securities, such as preferred
stocks (which may or may not have a dividend yield), convertible securities or
rights or warrants associated with debt instruments.

NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND. The investment objective of the
Fund is to seek high income. As an investment policy, the Fund, while investing
in income producing securities, will seek to maximize total return from a
combination of income and capital appreciation. The Fund, will pursue this
policy by taking advantage of equity participations, market developments, yield
disparities and variations in the creditworthiness of issuers.

Under normal market conditions, the Fund will seek to achieve its investment
objective by investing at least 65% of its total assets in higher-yielding,
lower-rated U.S. dollar-denominated debt securities of U.S. and foreign issuers,
which involve special risks and are predominantly speculative in character. The
Fund may invest up to 35% of its assets in non-U.S. Dollar denominated
securities. Investments in securities offering the high current income sought by
the Fund, while generally providing greater income and potential opportunity for
gain than investments in higher rated securities, also entail greater risk. The
value of high yield securities (and therefore the net asset value per share of
the Fund) can be expected to increase or decrease in response to changes in
interest rates, real or perceived changes in the credit risks associated with
its portfolio investments, and other factors affecting the credit markets
generally. The Fund is subject to a limit of 50% of its assets in securities of
foreign issuers, including a limit of 35% of such assets in emerging market
debt. Emerging markets are countries whose sovereign bonds generally are rated
below investment grade and whose financial markets are not well-developed. The
Fund intends to restrict its investments in emerging markets to those with sound
economies that are expected to experience strong growth with controlled
inflation, and therefore higher-than-average returns, over time. See "Risk
Factors -- Foreign Investments."

Most of the debt securities in which the Fund invests are lower rated, and may
include bonds in the lowest rating categories (C for Moody's and D for S&P) and
unrated bonds. Most of the securities will be rated at least Caa by Moody's or
at least CCC by S&P, or if not

16
<PAGE>
rated, are of equivalent quality in the opinion of the Adviser. The Fund may
invest up to 10%, and hold up to 25%, of its assets in securities rated below
Caa in the case of Moody's or CCC by S&P. Such debt securities are highly
speculative and may be in default of payment of interest and/or repayment of
principal may be in arrears. The issuers of such debt securities may be involved
in bankruptcy or reorganization proceedings and/or may be restructuring
outstanding debt. Investing in bankrupt and troubled companies involves special
risks. See "Risk Factors -- High Yield Securities" and the Appendix.

The Fund may invest in debt securities of any maturity that pay fixed,
floating or adjustable interest rates. The Fund also may invest in discount
obligations, including zero-coupon securities, which do not pay interest but,
rather, are issued at a significant discount to their maturity values, or
securities that pay interest, at the issuer's option, in additional securities
instead of cash (pay-in-kind securities). The values of debt securities
generally fluctuate inversely with changes in interest rates. This is less
likely to be true for adjustable or floating rate securities, since interest
rate changes are more likely to be reflected in changes in the rates paid on the
securities. However, reductions in interest rates also may translate into lower
distributions paid by the Fund. Additionally, because zero coupon and
pay-in-kind securities do not pay interest but the Fund nevertheless must accrue
and distribute the income deemed to be earned on a current basis, the Fund may
have to sell other investments to raise the cash needed to make income
distributions. To a lesser extent the Fund may invest in equity or
equity-related securities, including common stock, preferred stock, convertible
securities and rights and warrants attached to debt instruments. Typically the
Fund would purchase a high yield security that is convertible or exchangeable
for equity securities, or which carries the right in the form of a warrant or as
part of a unit with the security to acquire equity securities. The Fund would
ordinarily purchase these securities for their yield characteristics or capital
appreciation potential.

RISK FACTORS
- ----------------------------------------------------------------------

HIGH YIELD SECURITIES. Each of the Strategic Income Fund, High Yield Fund,
Income Fund and High Total Return Fund may invest in higher yielding securities
that carry lower investment grade ratings. These high yield high-risk securities
are rated below investment grade by the primary rating agencies (Moody's and
S&P). See the Appendix for a description of bond rating categories. The value of
lower rated securities generally is more dependent on the ability of the company
to meet interest and principal payments than is the case for higher rated
securities. Conversely, the value of higher rated securities may be more
sensitive to interest rate movements than lower rated securities. Companies
issuing high yield securities may not be as strong financially as those issuing
bonds with higher credit ratings. Investments in such companies are considered
to be more speculative than higher quality investments. In addition, the market
for lower rated securities is generally less liquid than the market for higher
rated securities, and adverse publicity and investor perceptions may also have a
greater negative impact on the market for these securities.

Companies issuing high yield bonds are more vulnerable to real or perceived
economic changes (such as rising interest rates), political changes or adverse
developments specific to the company. Adverse economic, political or other
developments may impair the company's ability to service principal and interest
obligations, to meet projected business goals and to obtain additional
financing, particularly if the company is highly leveraged. In the event of a
default, a Fund would experience a reduction of its income and could expect a
decline in the market value of the defaulted securities.

Weighted average composition of the following Funds' portfolios at the end of
their 1995 fiscal year was:

<TABLE>
<CAPTION>
STRATEGIC HIGH TOTAL
INCOME HIGH YIELD RETURN INCOME
--------------- ----------- ---------- ----------

<S> <C> <C> <C> <C>
Investment Grade....................................... --% --% % 17.7%
BB..................................................... 26.8 37.1 21.8 16.2
B...................................................... 29.5 60.2 51.3 5.0
CCC.................................................... -- 1.4 7.7
CC..................................................... -- -- --
C...................................................... -- -- --
D...................................................... -- -- --
Nonrated............................................... 4.3 1.3 15.2 4.4
U.S. Governments, equities, and other.................. 39.4 -- 4.0 56.7
------ ----------- ---------- ----------
TOTAL.................................................. 100% 100% 100% 100%
------ ----------- ---------- ----------
------ ----------- ---------- ----------
</TABLE>

This table does not reflect the current or future composition of any of the
Fund's portfolios.

17
<PAGE>
FOREIGN INVESTMENTS. Each Fund, except the U.S. Government Securities Fund,
may invest in securities of foreign issuers. Securities of some foreign
companies and governments may be traded in the U.S., but many foreign securities
are traded primarily in foreign markets. In addition to generally higher
transaction costs associated with foreign investing, risks of foreign investing
include:

CURRENCY RISKS. A Fund must buy the local currency when its buys a foreign
security, and it sells local currency when it sells the security. The value of a
foreign security held by the Fund will be affected by the value of the local
currency relative to the U.S. dollar, causing the Fund to lose money at times,
despite an increase in the value of the security.

POLITICAL AND ECONOMIC RISK. Political and economic risks may exist,
particularly in underdeveloped or developing countries which may have relatively
unstable governments and economies based on only a few industries. In some
countries, there is the risk that the government may take over the assets or
operations of a company or that the government may impose taxes or limits on the
removal of a Fund's assets from that country.

REGULATORY RISK. There is generally less government supervision of foreign
markets, and issuers are not subject to the uniform accounting, auditing and
financial reporting standards and practices applicable to domestic issuers.
There also may be less publicly available information about foreign issuers.

OTHER INVESTMENT TECHNIQUES
- ----------------------------------------------------------------------
Unless otherwise stated, each of the following strategies and techniques may
be utilized by each of the Funds. The Funds may, but do not currently intend to,
engage in certain additional investment techniques not described in this
Prospectus. These techniques and additional information on the securities and
techniques described in the Prospectus are contained in the Statement of
Additional Information.

OPTIONS AND FUTURES TRANSACTIONS. Each Fund may enter into futures contracts
on securities and financial indices and options on such contracts and may invest
in options on securities, financial indices and foreign currencies, and forward
contracts (collectively "derivative instruments"). The Funds intend to use
derivative instruments primarily to hedge the value of their portfolios against
potential adverse movements in securities price, foreign currency markets or
interest rates. To a limited extent, the Funds may also use derivative
instruments for non-hedging purposes such as increasing a Fund's income or
otherwise enhancing return. When a Fund invests in a derivative instrument, it
may be required to segregate cash and other high-grade liquid assets or
portfolio securities to "cover" the Fund's position. Assets segregated or set
aside may limit the Fund's portfolio management activities while the Fund
maintains the positions, which could diminish the Fund's return due to foregoing
other potential investments with such assets.

The use of options and futures strategies involves certain other risks,
including the risk that no liquid market will exist and that the Fund will be
unable to effect closing transactions at any particular time or at an acceptable
price, and the risk of imperfect correlation between movements in options and
futures prices and movements in the price of securities which are the subject of
the hedge. The successful use of options and futures strategies depends on the
ability of the Adviser to forecast correctly rate movements and general stock
market price movements. Expenses and losses incurred as a result of these
hedging strategies will reduce the current return of the Fund. See the Statement
of Additional Information.

REPURCHASE AGREEMENTS. A Fund may invest in repurchase agreements, either for
temporary defensive purposes or to generate income from its cash balances. Under
a repurchase agreement, the Fund buys a security from a bank or dealer, which is
obligated to buy it back at a fixed price and time. The security is held in a
separate account at the Fund's custodian and constitutes the Fund's collateral
for the bank's or dealer's repurchase obligation. Additional collateral may be
added so that the obligation will at all times be fully collateralized. However,
if the bank or dealer defaults or enters into bankruptcy, the Fund may
experience costs and delays in liquidating the collateral, and may experience a
loss if it is unable to demonstrate its right to the collateral in a bankruptcy
proceeding. Repurchase agreements maturing more than seven days in the future
are considered illiquid, and a Fund will invest no more than 5% of its net
assets in such repurchase agreements at any time. Each Fund, under normal market
conditions, does not intend to invest more than 15% of its assets in repurchase
agreements.

WHEN ISSUED SECURITIES. The Funds may acquire securities on a "when-issued"
basis by contracting to purchase securities for a fixed price on a date beyond
the customary settlement time with no interest accruing until settlement. If
made through a dealer, the contract is dependent on the dealer completing the
sale. The dealer's failure could deprive the Fund of an advantageous yield or
price.

18
<PAGE>
These contracts may be considered securities and involve risk to the extent that
the value of the underlying security changes prior to settlement. A Fund may
realize short-term profits or losses if the contracts are sold. Transactions in
when-issued securities may be limited by certain Internal Revenue Code
requirements.

ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities or private placements. An
illiquid security is a security that cannot be sold quickly in the normal course
of business. Some securities cannot be sold to the U.S. public because of their
terms or because of SEC regulations. The Adviser may determine that securities
that cannot be sold to the U.S. public, but that can be sold to institutional
investors ("Rule 144A" securities) or on foreign markets, are liquid, following
guidelines established by the Trustees of each Fund.

TRADING AND PORTFOLIO TURNOVER. Each Fund generally intends to purchase
securities for long-term investment. However, a Fund may purchase a security in
anticipation of relatively short-term price gains and short-term transactions
may result from liquidity needs, securities having reached a price or yield
objective, changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the initial
investment decision. Portfolio turnover rates are usually not a factor in making
buy and sell decisions. A Fund may also sell one security and simultaneously
purchase the same or comparable security to take advantage of short-term
differentials in yield or price. Increased portfolio turnover may result in
higher costs for brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Short term trading may also
be restricted by certain tax rules.

TEMPORARY INVESTMENTS. In periods of unusual market conditions, for temporary
and defensive purposes, when the Adviser considers it appropriate, a Fund may
maintain part or all of its assets in cash, or may invest part or all of its
assets in U.S. government securities, commercial paper, bankers' acceptances,
repurchase agreements and certificates of deposit.

INVESTMENT RESTRICTIONS. For information on certain fundamental and
non-fundamental investment restrictions applicable to each Fund, see "Investment
Restrictions" in the Statement of Additional Information.

PERFORMANCE INFORMATION
- ----------------------------------------------------------------------
The Funds may, from time to time, include their yield and total returns in
advertisements or reports to shareholders or prospective investors. Both yield
and total return figures are computed separately for each class of shares of
each Fund in accordance with formulas specified by the Securities and Exchange
Commission. Both yield and total return figures are based on historical earnings
and are not intended to indicate future performance. The yield for each class of
a Fund (which shows the rate of income a Fund earned on its investment as a
percentage of a Fund's share price) will be computed by dividing (a) net
investment income over a 30-day period by (b) an average value of invested
assets (using the average number of shares entitled to receive dividends and the
maximum offering price per share or the maximum redemption price per share) at
the end of the period, as appropriate, all in accordance with applicable
regulatory requirements. Such amounts will be compounded for six months and then
annualized for a twelve-month period to derive the yield of each class.

Standardized quotations of average annual total return for each class of
shares will be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the class of shares over a period of 1, 5
and 10 years (or up to the life of the class of shares). Total return is the
percentage increase or decrease in the value of an investment over a stated
period of time. Standardized total return quotations reflect the deduction of a
proportional share of expenses (on an annual basis) of a class, deduction of the
maximum initial sales load or the maximum CDSC applicable to a complete
redemption of the investment, as appropriate, and assume that all dividends and
distributions are reinvested when paid. The Funds also may quote a supplementary
rate of total return over different periods of time or by non-standardized
means.

Performance for Class B and Class C shares typically will be less favorable
than that for Class A and Class T shares due to the higher expense ratios for
Class B and Class C shares. Performance for Class T shares will be less
favorable than Class A shares due to higher distribution and service fees. For a
complete description of the methods used to determine yield and total return for
the Funds, see the Statement of Additional Information.

19
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
- ----------------------------------------------------------------------
All purchases, redemptions and exchanges are processed at the net asset value
("NAV") per share next calculated after your request is received and approved.
In order to receive a day's price, your order must be received by 4:00 p.m. EST.
NAV fluctuates and is determined separately for each class as of the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m. EST) each day
the Exchange is open. NAV is computed by dividing the total value of a Fund's
securities and other assets, less all liabilities, by the total number of shares
outstanding. The specific expenses borne by each class of shares will be
deducted from that class and will result in different NAVs and dividend
payments. The NAV of a Class B, Class C or Class T share will generally be lower
than that of a Class A share because of the higher distribution fees or certain
other class specific expenses borne by these classes. However, the net asset
value per share of each class will tend to converge immediately after the
payment of dividends.

Under normal market conditions, daily prices for securities are obtained from
independent pricing services determined by them in accordance with the
Registration Statement for each Fund. Securities are valued at market value or,
if a market quotation is not readily available, at their fair value determined
in good faith under procedures established by and under the supervision of the
Trustees. Money market instruments maturing within 60 days are valued at
amortized cost, which approximates market value. See the Statement of Additional
Information.

MANAGEMENT OF THE FUNDS
- ----------------------------------------------------------------------
THE TRUSTEES. The Trustees of each Fund ("Trustees") oversee the operations
of the Fund and perform the various duties imposed on trustees by the laws of
the Commonwealth of Massachusetts and the 1940 Act. The Trustees meet quarterly
to review the Funds' investment policies, performance, expenses and other
business affairs and elect the officers of each Fund annually. The Trustees
delegate day to day management of the Funds to the officers of the respective
Funds.

THE ADVISER AND AFFILIATED SERVICE PROVIDERS. Pursuant to an Investment
Advisory Agreement with each Fund, Northstar Investment Management Corporation
acts as the investment adviser to each Fund. In this capacity, the Adviser,
subject to the authority of the Trustees, is responsible for furnishing
continuous investment supervision to the Funds and is responsible for the
management of the Funds' portfolios. Northstar Administrators Corporation, an
affiliate of the Adviser, furnishes certain administrative, compliance and
accounting services to each Fund. Employees of the Adviser and Administrator
serve as officers of the Funds, and the Adviser provides office space for the
Funds and pays the salaries of all Fund officers and Trustees who are affiliated
with the Adviser. Northstar Distributors, Inc., also an affiliate of the
Adviser, serves as principal underwriter of the shares of each Fund, conducting
a continuous offering pursuant to a "best efforts" arrangement requiring it to
take and pay for only such securities as may be sold to the public through
investment dealers.

The Adviser and its affiliates are indirect, majority owned subsidiaries of
ReliaStar Financial Corp. ("ReliaStar"). ReliaStar's address is 20 Washington
Avenue South, Minneapolis, MN 55401. Combined minority interests held by members
of senior management currently equal 20%. ReliaStar is a publicly traded holding
company whose subsidiaries specialize in the life and health insurance
businesses. Through Northwestern National Life Insurance Company and other
subsidiaries, ReliaStar issues and distributes individual life insurance,
annuities and mutual funds, group life and health insurance and life and health
reinsurance, and provides related investment management services. Prior to June
2, 1995, the Northstar Advantage Special, Growth, Income, High Yield, Strategic
Income and Government Securities Funds were managed by Boston Security
Counsellors, Inc. ("BSC").

The Adviser's fee is accrued daily against the value of each Fund's net assets
and is payable by each Fund monthly at an annual rate of 0.75% on the first $250
million of each Fund's average daily net assets in the case of the Northstar
Advantage Income and Growth and High Total Return Funds, scaled down to 0.55%
for assets over $1 billion, and at the following rates for the other Northstar
Advantage Funds: Government Securities Fund -- 0.65%; High Yield Fund -- 0.45%;
Income Fund -- 0.65%; Growth Fund -- 0.75%; Special Fund -- 0.75%; Strategic
Income Fund -- 0.65% (each of which may be subject to voluntary waiver or
reimbursement by the Adviser). The investment advisory fees paid by Income and
Growth Fund, High Total Return Fund, Growth Fund and Special Fund are higher
than the fees paid by most mutual funds. The Administrator's fee is accrued
daily against the value of each Fund's net assets and is payable monthly at an
annual rate of .10% of each Fund's average daily net assets. The Administrator
also charges an annual account service fee of $5.00 for each account of
beneficial holders of shares in a Fund for providing certain shareholder
services and assisting broker-dealers in servicing Fund accounts. Until June 2,
1997 the Administrator will receive no administrative or account fees from the
Special, Growth, Income, High Yield, Strategic Income and Government Securities
Funds.

20
<PAGE>
The Adviser places all orders for the purchase and sale of portfolio
securities. In selecting brokers, the Adviser may consider research and
brokerage services furnished to it. The Adviser also advises other accounts that
may purchase and hold securities in which the Funds may invest and certain
persons affiliated with the Adviser may purchase and hold, directly or
indirectly, securities in which the Funds or other accounts invest, subject to
internal guidelines regarding conflicts of interest. In allocating trades among
accounts for which the Adviser recommends the purchase or sale of the same
security, the Adviser follows procedures designed to ensure that such trades are
executed on a basis that is fair and equitable to each account.

INVESTMENT PERSONNEL OF ADVISER. Thomas Ole Dial has served as portfolio
manager of the High Total Return Fund since its inception in November 1993, and,
since October 1995 as co-manager of the Strategic Income Fund. Mr. Dial is a
Vice President of each Fund and Executive Vice President and Chief Investment
Officer -- Fixed Income of the Adviser. Mr. Dial also serves as manager of the
Northstar High Yield Bond Fund and Northstar Multi-Sector Bond Fund, series of a
separate open-end management investment company sponsored by the Adviser. Prior
to employment by the Adviser in October 1993, Mr. Dial served as Executive Vice
President and Chief Investment Officer -- Fixed Income of National Securities &
Research Corporation, and as portfolio manager for National Bond Fund, National
Asset Reserve, and National Multi-Sector Fixed Income Fund. Prior to National,
Mr. Dial managed high yield securities portfolios through Dial Capital
Management and various financial institutions. Mr. Dial also manages investments
for T.D. Partners, a limited partnership for which the Adviser serves as
subadviser.

Ernest Mysogland has served as portfolio manager of the Income and Growth Fund
since its inception in November 1993. Mr. Mysogland is a Vice President of the
Fund and Executive Vice President and Chief Investment Officer -- Equities of
the Adviser. Mr. Mysogland also serves as manager of the Northstar Income and
Growth Fund, and prior to February 1, 1996, served as a manager of the Northstar
Growth Fund, series of a separate open-end management investment company
sponsored by the Adviser. Prior to employment by the Adviser, Mr. Mysogland
served as Senior Vice President and Chief Investment Officer -- Equities for
National Securities and Research Corporation ("National"), and was portfolio
manager for National Income and Growth Fund, National Total Return Fund, and
National Worldwide Opportunities Fund. Prior to National, Mr. Mysogland served
as an investment manager for Reinoso Asset Management, Gintel Equity Management,
L.F. Rothschild Asset Management, Wertheim Asset Management and Kemper Financial
Services.

Geoffrey Wadsworth has served as portfolio manager of the Growth Fund since
January 1996 and served as co-manager of the Income and Growth Fund from
inception through January 1996. Mr. Wadsworth is a Vice President of the Funds
and the Adviser. He was formerly a Vice President of National, serving as
portfolio manager of the National Stock Fund, and assistant manager of
National's other equity funds.

Margaret D. Patel is the portfolio manager of the Government Securities Fund
and the Income Fund. Ms. Patel is a Vice President of the Funds and of the
Adviser and, prior to June 2, 1995, was Senior Vice President of BSC. She has
been primarily responsible for the day-to-day management of the Government
Securities Fund since 1988, and of the Income Fund since October 1995.

Prescott B. Crocker, C.F.A., is the portfolio manager of the High Yield Fund
and co-manager of the Strategic Income Fund. Mr. Crocker is a Vice President of
the Funds and of the Adviser and, until June 2, 1995, was Senior Vice President
and Director of Fixed Income Investments at BSC. Prior to joining BSC in 1993,
Mr. Crocker served for eighteen years in various capacities, including Group
Head for corporate and international fixed income, at Colonial Management
Associates, Inc. He has been primarily responsible for the day-to-day management
of the High Yield Fund since December 1993, and for the Strategic Income Fund
since its inception in 1994.

SUBADVISER; INVESTMENT PERSONNEL OF SUBADVISER. Navellier Fund Management,
Inc. ("Navellier"), a registered investment adviser, serves as subadviser to the
Special Fund pursuant to a Subadvisory Agreement dated February 1, 1996, between
the Adviser and Navellier. Navellier is a newly-formed company which is
wholly-owned by Louis G. Navellier. The principal address of Navellier is 920
Incline Way, Incline Village, NV 89450. Mr. Navellier, who has managed
investments since 1986, is also the sole shareholder of two other registered
investment advisory firms which, on a combined basis, manage approximately $1.2
billion of assets for individuals, institutions and a Navellier-sponsored
open-end management investment company, the Navellier Series Fund. Louis G.
Navellier will serve as portfolio manager for the Fund, with primary
responsibility for the day-to-day investment management. For its services,
Navellier will receive a fee equal to 0.48% of the average daily net assets of
the Fund. The Adviser is responsible for overseeing the investment management
provided by Navellier, and assumes all costs and expenses of the subadvisory
arrangement.

OTHER SERVICE PROVIDERS. The custodian for the Income and Growth and High
Total Return Funds is Custodial Trust Company, a bank organized under the laws
of New Jersey, located at 101 Carnegie Center, Princeton, New Jersey 08540-6231.
The custodian and fund accounting agent for the Special, Growth, Income, High
Yield, Strategic Income and Government Securities Funds is State Street Bank and
Trust Company, located at 225 Franklin Street, Boston, Massachusetts 02110. The
transfer agent and Blue Sky administrator

21
<PAGE>
for all Funds, and the fund accounting agent for the Income and Growth and High
Total Return Funds, is First Data Investor Services Group ("First Data" or the
"Transfer Agent"), located at One Exchange Place, Boston, Massachusetts, 02109.
Advest Transfer Services, Inc., One Commercial Plaza, 280 Trumbull Street,
Hartford, Connecticut 06103, serves as the sub-transfer agent for the Funds
offering Class T shares.

HOW TO PURCHASE SHARES
- ----------------------------------------------------------------------
Each Fund continuously offers three classes of shares. Each class is described
below under "Alternative Purchase Arrangements." Shares of each Fund, excluding
Class T shares, may be purchased from the Fund or from investment dealers having
a sales agreement with the Underwriter. Orders received in good form prior to
4:00 p.m. Eastern time or placed with a financial service firm before such time
and transmitted before the Fund processes that day's share transactions, will be
processed at that day's closing NAV, plus any applicable sales charge. The
minimum initial purchase is $2,500, except IRA accounts, for which the minimum
is $250; additional investments for as little as $100 ($25 for IRA accounts) may
be made at any time through an investment dealer or by sending a check payable
to The Northstar Advantage Funds, c/o First Data Investor Services, P.O. Box
9756, Providence, RI 02940, for the purchase of full and fractional shares. Most
shareholders choose not to hold their shares in certificate form because account
transactions such as exchanges and redemptions cannot be completed until the
certificate has been returned to the Funds and certificate holders may not
participate in certain shareholder services, such as telephone exchanges and
redemptions, check-writing and the withdrawal program. Certificates will be
issued only upon written request. Shareholders requesting certificates may incur
a fee for lost or stolen certificates and no certificates are issued for
fractional shares (which shares remain in the shareholder's account in book
entry form). The Fund or the Underwriter may refuse any purchase order for
shares.

At various times, the Underwriter implements programs under which (a) a
dealer's sales force may be eligible to win cash or material awards for certain
sales efforts or under which (b) the Underwriter will reallow an amount not
exceeding the total applicable sales charges on the sales generated by the
dealer during such programs to any dealer that (i) sponsors sales contests or
recognition programs conforming to criteria established by the Underwriter or
(ii) participates in sales programs sponsored by the Underwriter. Pursuant to a
Purchase Agreement that was entered into in connection with the assumption of
management of the Funds by the Adviser, the Underwriter has agreed to provide
Advest, Inc. ("Advest") with certain additional compensation until June 2, 1998.
Any additional compensation is payable annually and is based upon (a)(i) the
level of sales by Advest of shares of the Funds during each year and (ii) the
rate of redemption of Class T shares during such year and (b) the level of sales
of those Funds previously distributed through Advest by persons other than
Advest. Such compensation, which is paid out of the assets of the Underwriter
and not the Funds, is in addition to the compensation otherwise payable to a
dealer in connection with sale of the Funds' shares. Sales personnel of
broker-dealers distributing shares of the Funds may receive differing
compensation for selling different classes of shares.

ALTERNATIVE SALES ARRANGEMENTS
- ----------------------------------------------------------------------
The alternative purchase arrangements permit an investor to choose among three
methods (each a class) of purchasing shares. Each class is described below.
Which class is more beneficial to an investor depends on the amount and intended
length of the investment. Large investments qualifying for a reduced Class A
sales charge avoid the higher distribution fee. Investments in Class B and Class
C shares have 100% of the purchase invested immediately. Purchases of $250,000
or more must be for Class A shares. Please consult your financial service firm.

Prior to June 5, 1995, the Growth, Special, Income, Government Securities,
High Yield and Strategic Income Funds each offered only one Class of shares,
currently designated as "Class T" shares. Class T shares are no longer offered
for sale by a Fund, except in connection with reinvestment of dividends and
other distributions, upon exchanges of Class T shares of another Fund, and upon
exchange of shares from the Class T Account of the Money Market Portfolio. When
Class T shares are redeemed within four years after their purchase, a contingent
deferred sales load will be imposed at rates declining from a maximum of 4% of
the lesser of the net asset value or total cost of shares redeemed within a year
of purchase to 1% of such amount for shares redeemed after three years.

All contingent deferred sales charges are deducted from the redemption
proceeds, not the amount remaining in the account. No contingent deferred sales
charge is imposed on shares acquired through reinvestment of dividends and
distributions, or on amounts representing appreciation. In determining whether a
contingent deferred sales charge is applicable to a redemption, the calculation

22
<PAGE>
will be determined in the manner that results in the lowest possible rate being
charged. Accordingly, in determining whether a contingent deferred sales charge
will be payable and, if so, the percentage charge applicable, shares acquired
through reinvestment and then shares held the longest will be considered the
first to be redeemed.

Class B and Class T shares automatically convert to Class A shares after eight
years from purchase in the case of Class B shares, and on the later of May 31,
1998 or eight years after purchase in the case of Class T shares. The purpose of
the conversion is to relieve the holders from the burden of higher distribution
fees once the Underwriter had been reimbursed for most of its distribution
related expenses. For purposes of conversion to Class A shares, shares purchased
through the reinvestment of dividends and distributions paid in respect of Class
B or Class T shares in a shareholder's Fund account will be considered to be
held in a separate subaccount. Each time any Class B or Class T shares in the
shareholder's Fund account (other than those in the subaccount) convert to Class
A, an equal pro rata portion of the Class B or Class T shares in the subaccount
will also convert to Class A.

As set forth below, the initial or contingent deferred sales charges may be
reduced or eliminated for certain persons or organizations purchasing Fund
shares alone or in combination with other Northstar Advantage Funds. See the
Statement of Additional Information for more details regarding waivers and
purchases at net asset value.

Investors choosing the initial sales charge alternative may under certain
circumstances be entitled to pay reduced sales charges. The sales charge varies
with the size of the purchase and reduced charges apply to the aggregate of
purchases of a Fund made at one time by any "Purchaser," which term includes (i)
an individual and his/her spouse and their children under the age of 21, (ii) a
trustee or fiduciary purchasing for a single trust, estate or single fiduciary
account (including pension, profit-sharing or other employee benefit trusts
created pursuant to a plan qualified under Section 401 of the Internal Revenue
Code, a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension Accounts ("SARSEP")) and 403(b) and 457 plans,
although more than one beneficiary or participant is involved; and (iii) any
other organized group of persons, whether incorporated or not, provided the
organization has been in existence for at least six months and has some purpose
other than the purchase at a discount of redeemable securities of a registered
investment company. The circumstances under which "Purchasers" may pay reduced
sales charges are described below.

RIGHTS OF ACCUMULATION. A Purchaser may qualify for reduced initial sales
charges based upon the Purchaser's existing investment in shares of the Funds at
the time of purchase. The applicable sales charge is determined by aggregating
the dollar amount of the new purchase and the greater of the Purchaser's total
(i) net asset value or (ii) cost of all shares owned in the Funds sold subject
to a front-end sales charge and/or designated as "Class A" shares then held by
such Purchaser, and applying the sales charge applicable to such aggregate.

In order to obtain this discount, the Underwriter (if a purchase is made
through an investment dealer) or Transfer Agent (if made by mail) must be
provided with sufficient information, including the Purchaser's total cost at
the time of purchase, to permit verification that the Purchaser qualifies for a
cumulative quantity discount, and confirmation of the order is subject to such
verification. The privilege of cumulative quantity discounts may be modified or
discontinued at any time.

LETTER OF INTENT. Purchasers may also qualify for reduced sales charges by
signing a Letter of Intent ("LOI"). This enables the Purchaser to aggregate
purchases over a 13-month period of all Funds sold subject to a front-end sales
charge and/or designated as "Class A" shares. The sales charge is based on the
total amount invested during the 13-month period. A 90-day back-dated period can
be used to include earlier purchases (with a partial retroactive downward
adjustment in an amount equal to the commission paid to the broker-dealer); the
13-month period would then begin on the date of the first purchase during the
90-day period. No retroactive adjustment will be made if purchases exceed the
amount indicted in the LOI. A shareholder must notify the Transfer Agent
whenever a purchase is being made pursuant to a LOI.

The LOI is not a binding obligation on the investor to purchase the full
amount indicated; however, on the initial purchase, if required (or on
subsequent purchases if necessary), 5% of the dollar amount specified in the
Statement will be held in escrow by the Transfer Agent in shares registered in
the shareholder's name in order to assure payment of the proper sales charge. If
total purchases pursuant to the LOI (less any dispositions and exclusive of any
distributions on such shares automatically reinvested) are less than the amount
specified, the investor will be requested to remit to the Underwriter an amount
equal to the difference between the sales charge paid and the sales charge
applicable to the aggregate purchases actually made. If not remitted within 20
days after written request, an appropriate number of escrowed shares will be
redeemed in order to realize the difference.

CDSC WAIVERS. The contingent deferred sales charge is waived on redemptions
of Class B and Class C shares (a) following the death or disability, as defined
in Section 72(m)(7) of the Internal Revenue Code, of a shareholder if redemption
is made within one year of the death or disability of the shareholder, as
relevant; (b) in connection with redemptions of shares made pursuant to a

23
<PAGE>
shareholder's participation in any systematic withdrawal plan adopted by the
Funds provided, however, that such withdrawals shall not exceed in any calendar
year 7% (9% in the case of the High Total Return Fund and the High Yield Fund)
of the original principal amount invested (any excess being assessed the
applicable deferred sales charge, if any), and provided further that the
redeeming shareholder reinvests all dividends and capital gain distributions
during his/her participation in the withdrawal plan; (c) in connection with a
partial or complete redemption in connection with distributions under Individual
Retirement Accounts ("IRAs") or other qualified retirement plans in connection
with a lump-sum or other form of distribution following retirement, or after
attaining the age of 59 1/2 in the case of an IRA, Keogh plan or custodial
account pursuant to Section 403(b)(7) of the Internal Revenue Code, or on any
redemption resulting from the tax-free return of an excess contribution pursuant
to Section 408(d)(4) or (5) of the Code; and (d) in connection with the exercise
of certain exchange privileges among Class B or Class C shares of the Funds,
including shares of the Class B or Class C Account of the Money Market
Portfolio.

CLASS A SHARES. Class A shares are offered at net asset value plus an initial
or a contingent deferred sales charge as set forth below. Class A shares bear a
0.25% annual service fee and a .05% annual distribution fee.

<TABLE>
<CAPTION>
% OF NET % OF AMOUNT RETAINED BY
AMOUNT OFFERING DEALERS AS A % OF
AMOUNT PURCHASED INVESTED PRICE OFFERING PRICE
- ----------------------------------------------------------------------------- ----------- ----------- ---------------------
<S> <C> <C> <C>
Up to $99,999................................................................ 4.99% 4.75% 4.00%
$100,000 to 249,999.......................................................... 3.9 3.75 3.1
250,000 to 499,999........................................................... 2.83 2.75 2.3
500,000 to 999,999........................................................... 2.04 2 1.7
*1,000,000 and above......................................................... -- -- --
</TABLE>

- ------------------------
* The Underwriter pays investment dealers or financial service firms a
commission from its own resources of up to 1.00% of the amount invested for
amounts from $1,000,000 to $2,499,999, up to 0.50% on amounts of $2,500,000 to
$4,999,999 and up to 0.25% on amounts of $5 million and above. Purchases of
over $1 Million are subject to a maximum contingent deferred sales charge of
1% (scaled down to 0.50% for amounts of $2.5 million or more, and 0.25% on
amounts over $5 million) on redemptions made within eighteen months.

CLASS B SHARES. Class B shares are offered at net asset value, without an
initial sales charge, subject to a .75% annual distribution fee for
approximately 8 years (at which time they convert to Class A shares bearing only
a .05% annual distribution fee), a 0.25% annual service fee and a contingent
deferred sales charge if shares are redeemed within five years after purchase.
As set forth below, the amount of the deferred sales charge varies depending on
the number of years after purchase that the redemption occurs. For determining
the date of purchase, all payments during a month will be aggregated and deemed
to have been made on the last day of the month. The deferred sales charge will
be assessed on an amount equal to the lesser of the current market value or the
cost of the shares being redeemed.

The Underwriter currently pays investment dealers a sales commission of 4% of
the sale price of Class B shares sold by the dealers, subject to future
amendment or termination. The Underwriter will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by shareholders
on the redemption of shares to reimburse the Underwriter in whole or in part for
the payment of such sales commission, plus financing costs and related marketing
expenses.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------------- -------------------
<S> <C>
First............................................................................................ 5%
Second........................................................................................... 4%
Third............................................................................................ 3%
Fourth........................................................................................... 2%
Fifth............................................................................................ 2%
Thereafter....................................................................................... 0%
</TABLE>

To provide an example, assume an investor purchased 100 shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net asset
value per share is $12 and, during such time, the investor has acquired 10
additional shares upon dividend reinvestment. If, at such time the investor
makes his first redemption of 50 shares (proceeds of $600), 10 shares will not
be

24
<PAGE>
subject to charge because of dividend reinvestment. With respect to the
remaining 40 shares, the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share. Therefore,
$400 of the $600 redemption proceeds will be charged at a rate of 4% (the
applicable rate in the second year after purchase).

CLASS C SHARES. Investors choosing Class C shares purchase shares at net
asset value without a sales charge at the time of purchase, subject to a 0.75%
annual distribution fee, a 0.25% annual service fee, and a 1.00% contingent
deferred sales charge on redemptions made within one year from the first day of
the month after purchase.

The Underwriter currently pays investment dealers a sales commission of 1% of
the sale price of Class C shares sold by such dealers, subject to future
amendment or termination. The Underwriter will retain the distribution fee
assessed against Class C shareholders in the first year of investment, and the
entire amount of the contingent deferred sales charge paid by Class C
shareholders upon redemption in year one, in order to compensate the Underwriter
for providing distribution related services to the Funds in connection with the
sale of Class C shares, and to reimburse the Underwriter in whole or in part for
the commissions (and any related financing costs) paid to dealers at the time of
purchase. There is no conversion feature associated with Class C shares;
therefore, Class C shareholders will be subject to the higher distribution fee
associated with such shares for the life of the shareholder's investment.

INVESTOR SERVICES AND ACCOUNT POLICIES
- ----------------------------------------------------------------------
An account will be opened for each investor after an initial investment is
made. Account services are described below. Class T shareholders wishing to add
to their investment or to purchase shares of another Fund must opt to purchase
Class A, Class B or Class C shares of the Fund, and the Transfer Agent will
establish a new account for the shareholder in another Class of a Fund selected
by the shareholder. Shares purchased will be held in the shareholder's account
by the Transfer Agent. Requests for account assistance or additional information
should be directed to Northstar at (800) 595-7827.

The Funds will send you a confirmation statement after every transaction that
affects your account balance or your account registration. Information regarding
the tax status of income dividends and capital gains distribution will be mailed
to shareholders on or before January 31st of each year. Account tax information
will also be sent to the IRS. Financial reports for the Funds will be mailed
semiannually to shareholders. To reduce expenses, only one copy of most Fund
reports will be mailed to accounts listed under the same social security number
or to households for multiple accounts with the same surname. Please contact
Northstar to request additional copies of shareholder reports.

DIVIDEND AND DISTRIBUTION REINVESTMENT OPTIONS. Shareholders of Class A,
Class B and Class C shares may direct that income dividends and capital gain
distributions be paid to them through any one of the following options: income
dividends and capital gain distributions both paid in additional shares of the
same class of a designated Fund at net asset value; income dividends paid in
cash and capital gain distributions paid in additional shares of the same class
of a designated Fund at net asset value; or income dividends and capital gain
distributions both paid in cash. If a shareholder does not indicate which option
is preferred upon the opening of an account, both income dividends and capital
gain distributions will be paid in additional shares of the Fund from which the
investor earned such distributions. Class T shareholders may elect only to
receive all distributions in cash or to reinvest in additional shares,
regardless of whether such distribution is an income dividend or a capital gains
distribution. In addition, Class T shareholders opting to reinvest dividends and
capital gains may only invest such proceeds in the Fund making the distribution.
Payment options may be changed at any time by notifying Northstar in writing.

AUTOMATIC INVESTMENT PLAN. Shareholders may elect to purchase shares through
the establishment of an Automatic Investment Plan, in which case the minimum
investment in order to open an account is $25. An Automatic Investment
Authorization Form (available on request from Northstar) provides for funds to
be automatically drawn on a shareholder's bank account and deposited in his or
her Fund account ($25 per month minimum). The shareholder's bank may charge a
nominal fee in connection with the establishment and use of automatic deposit
services. The Automatic Investment Plan is not available for Class T share
accounts.

WITHDRAWAL PROGRAM. A shareholder owning $5,000 or more worth of shares of a
Fund in book-entry form may establish a withdrawal program with the Fund and
provide for the payment monthly or quarterly of any requested dollar amount ($25
minimum per payment) from the account to his or her order. Withdrawal programs
are not available for Class T share accounts. A sufficient number of full and
fractional shares will be redeemed to make the designated payment. The purchase
of shares while participating in a withdrawal program will ordinarily be
disadvantageous to the investor, since a sales charge will be paid by the
investor on the

25
<PAGE>
purchase of shares at the same time the shares are being redeemed in the case of
Class A shares. For this reason, shareholders may not maintain an Automatic
Investment Plan while participating in the withdrawal program. In the case of
shares subject to a contingent deferred sales charge, unless the investor
qualifies for a waiver, the investor may incur a sales charge at the time of
each withdrawal. A Fund may terminate an investor's withdrawal program if the
account value falls below $5,000 due to the transfer or redemption of shares
from the account. See the enclosed application form.

TAX-SHELTERED RETIREMENT PLANS. Shares of the Funds may be offered in
connection with the following qualified prototype retirement plans: IRA and
Rollover IRA, SEP-IRA, Profit-Sharing and Money Purchase Pension Plans which can
be adopted by self-employed persons ("Keogh") and by corporations. Call or write
Northstar for further information.

EXCHANGE PRIVILEGES. Shareholders may exchange shares of a Fund for the same
class of shares of another Fund or for shares of The Cash Management Fund of
Salomon Brothers Investment Series (an open-end management investment company
comprised of various portfolios, hereafter referred to as "Money Market
Portfolio," that is not one of the Funds, but is available by purchase or
exchange through the Underwriter). Exchange requests in proper form will be
honored prior to 4:00 p.m. Eastern time. For telephone exchanges or
authorization forms, contact Northstar at 1-800-595-7827. Exchanges will be
based upon each Fund's NAV per share next computed following receipt of a
properly executed exchange request, without a sales charge; provided, however,
in the case of exchanges after a direct purchase into the Money Market Portfolio
from Class A shares of a Fund, a sales charge will be imposed in accordance with
the sales charge table that is applicable to direct purchases. Collection of the
contingent deferred sales charge will be deferred on shares subject to a charge
that are exchanged for shares of the same class of another Fund, or converted to
shares of the Money Market Portfolio. Under these circumstances, the combined
holding period of shares in each Fund, or in a Fund and the Money Market
Portfolio, shall be used to calculate the conversion period, if applicable, and
to determine the deferred sales charge due upon redemption, if any. The exchange
of shares from one Fund to another is treated as a sale of the exchanged shares
and a purchase of the acquired shares for Federal income tax purposes.
Shareholders may, therefore, realize a taxable gain or loss. See "Exchanges" and
"Dividends, Distributions and Taxes" in the Statement of Additional Information.

Each Fund reserves the right to terminate or modify its exchange privileges at
any time upon prominent notice to shareholders. Such notice will be given at
least 60 days in advance. Each Fund and the Money Market Portfolio has different
investment objectives and policies. Shareholders should obtain and review the
prospectus of the Fund into which the exchange is to be made before any exchange
requests are made.

TELEPHONE TRANSACTIONS. Shareholders holding shares in book-entry form may
authorize the Funds to accept telephone redemptions and exchanges. Telephone
transactions are not available for Class T share accounts. Shareholders may
redeem up to $50,000 worth of their shares by telephoning Northstar prior to
4:00 p.m. Eastern time. Redemption proceeds must be payable to the record holder
of the shares and mailed to the shareholder's address of record or wire
transferred to the shareholder's account at a domestic commercial bank that is a
member of the Federal Reserve System, normally within one business day, but in
no event longer than three days after the request. The minimum amount for a wire
transfer is $1,000. If at any time the Funds shall determine that it is
necessary to terminate or modify telephone transaction privileges, shareholders
would be promptly notified. Information on these services is included in the
Application and is available from Northstar. Neither the Adviser, the
Underwriter nor the Funds will be liable for any loss, damages, expense or cost
arising out of any telephone transaction effected in accordance with the Funds'
procedures, upon instructions believed to be genuine. Shareholders who utilize
telephone privileges bear the risk of any loss, damages, expense or cost arising
from their election, including risk of unauthorized use; provided, however that
the Funds shall employ reasonable procedures to confirm that all telephone
instructions are genuine. For this purpose, the Fund or its agent will require
all individuals delivering telephone instructions to provide specific
information to identify themselves as the account holder, such as the name in
which the account is registered, the account holder's social security number,
account number, and broker of record. In the absence of such procedures, or
should the Fund or its agents for any reason fail to follow such procedures, the
Fund or its agents may be liable for losses due to unauthorized or fraudulent
telephone instructions.

INVOLUNTARY REDEMPTIONS. Due to the high cost of maintaining accounts with
small account values, each Fund reserves the right to close all accounts that
have been in existence for at least one year and have a value that is less than
$500. Shareholders will receive 60 days' written notice during which time they
may bring the value up to $500 or more. If the account value is not raised
during that time, the Fund will redeem all shares in the account and send the
proceeds to the shareholder's address of record.

Each Fund reserves the right to close all accounts of a shareholder who has
failed to provide a social security number or other taxpayer identification
number and certification (if required) that such number is correct, or if a
shareholder is deemed to engage in activities which are illegal or otherwise
detrimental to the Funds.

26
<PAGE>
REINSTATEMENT PRIVILEGE. Shareholders have a one time privilege of
reinstating their investment into any of the Funds, subject to the terms of
exchange (see "Exchange Privileges") at the NAV next determined after the
request for reinstatement is made. For Federal income tax purposes, a redemption
and reinstatement will be treated as a sale and purchase of shares; special
rules may apply in computing the amount of gain or loss in these situations. See
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
A written request for reinstatement must be received by the Underwriter within
30 days of the redemption accompanied by payment for the shares (not in excess
of the redemption). Shareholder accounts will be credited with an amount equal
to the deferred sales charge (or pro rata portion thereof) paid upon redemption.

HOW TO SELL SHARES
- ----------------------------------------------------------------------
Shareholders may sell their shares back to the Fund at the NAV next determined
after the Fund receives a redemption request with any other required
documentation in proper form. Investors will be subject to the applicable
deferred sales charge, if any, for such shares. The Transfer Agent requires a
written request, with the signature guaranteed by a bank, a national stock
exchange member or other eligible guarantor institution. The Transfer Agent may
waive the signature guarantee requirement in the case of book-entry share
redemption requests of less than $50,000 if the proceeds are payable to the
account as registered and mailed to the address of record. Redemption requests
must be signed by each person in whose name the account is registered.
Shareholders may also sell shares back to a Fund through dealers who are members
of the selling group. The redemption price in such a case will be the price as
of the close of the New York Stock Exchange on that day, provided the order is
received by the dealer prior to the close of the Exchange and is transmitted to
the Underwriter prior to the close of its business. The dealer is responsible
for the timely transmission of orders to the Underwriter. No service charge is
made by a Fund on redemptions, but shares tendered through investment dealers
may be subject to a service charge by such dealers. Payment for shares redeemed
is normally made within three days. However, for shares recently purchased by
check, the Fund cannot send proceeds until the check has cleared, which may take
up to 15 days.

Redemptions by corporations, partnerships or other organizations, executors,
administrators, trustees, custodians, guardians, or from IRA's or other
retirement plans may require additional documentation. To avoid delay in
redemption or transfer, shareholders having questions about specific
requirements, including eligible guarantor institutions, should contact
Northstar at (800) 595-7827. Redemption requests will not be honored until all
required documents in the proper form have been received.

DISTRIBUTION PLANS
- ----------------------------------------------------------------------
Each Fund has adopted a distribution plan under Rule 12b-1 of the 1940 Act for
each class of shares of that Fund (collectively, the "Plans"). The Plans permit
each Fund to compensate the Underwriter in connection with activities intended
to promote the sale of shares of each class of shares of the Fund. Pursuant to
the Plans, each Fund shall pay the Underwriter 0.30% annually of the average
daily net assets of each Fund's Class A shares, 1.00% annually of the average
daily net assets of each Fund's Class B and Class C shares, and 0.95% annually
of the average daily net assets of each Fund's Class T shares in the case of the
Growth Fund, Special Fund and Strategic Income Fund, 0.75% annually of the
average daily net assets of the Class T shares in the case of the Income Fund
and 0.65% annually of the average daily net assets of the Class T shares in the
case of the Government Securities Fund and High Yield Fund. Under the NASD
rules, fees of this type are limited to 0.75% annually for distribution fees and
0.25% annually for service fees, subject to aggregate limits. The Underwriter
uses the fee to defray the costs of commissions and service fees paid to
financial service firms which have sold Fund shares, and to defray other
expenses such as sales literature, prospectus printing and distribution,
shareholder servicing costs and compensation to wholesalers. Should the fees
exceed the Underwriter's expenses in any year, the Underwriter would realize a
profit. With respect to the Class T Plan, it is anticipated that all of the
payments received by the Underwriter under the Plan will be paid to Advest as
compensation for servicing Class T shareholder accounts and reimbursement for
its prior distribution and shareholder servicing activities in connection with
Class T shares.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- ----------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS INTENDED FOR GENERAL INFORMATION ONLY. EACH
INVESTOR SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR AS TO THE TAX
CONSEQUENCES OF AN INVESTMENT IN A FUND.

Each Fund intends to continue to qualify annually and elect to be treated as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"). To qualify, each Fund must meet certain income, distribution and
diversification requirements. In any year in which a Fund qualifies as a
regulated investment company and timely distributes all of its taxable income,
the Fund generally will not pay any U.S. federal income or excise tax.

27
<PAGE>
Each Fund intends to distribute to shareholders substantially all of its net
investment income and any net capital gains at least annually. It is intended
that dividends from net investment income will be paid monthly on the High Total
Return Fund, the Government Securities Fund, the High Yield Fund and the
Strategic Income Fund, annually on the Special Fund, and quarterly on the Income
and Growth, Growth, and Income Funds' shares.

Dividends paid out of a Fund's investment company taxable income (including
dividends, interest and net short-term capital gains) will be taxable to a
shareholder as ordinary income. If a portion of the Fund's income consists of
dividends paid by U.S. corporations, a portion of the dividends paid by the Fund
may be eligible for the corporate dividends-received deduction. Distributions of
net capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, designated as capital gain dividends are taxable as
long-term capital gains, regardless of how long the shareholder has held the
Fund's shares. Dividends are taxable to shareholders in the same manner whether
received in cash or reinvested in additional Fund shares.

Each year the Fund will notify shareholders of the tax status of dividends and
distributions. Each Fund may be required to withhold U.S. federal income tax at
the rate of 31% of all taxable distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the IRS that they are
subject to backup withholding.

Investors who purchase shares of a Fund just before the distribution will pay
full price for the shares and receive a portion of the purchase price back as a
taxable distribution. Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for tax purposes
even though you may not have participated in the increase in the net asset value
of the Fund. Further information relating to tax consequences is contained in
the Statement of Additional Information. Fund distributions also may be subject
to state, local and foreign taxes. Fund distributions that are derived from
interest on obligations of the U.S. Government and certain of its agencies,
authorities and instrumentalities may be exempt from state and local taxes in
certain states.

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

Investments in zero coupon securities will result in income to a Fund each
year equal to a portion of the excess of the face value of the securities over
their issue price, even though the Fund receives no cash interest payments from
the securities.

Upon the sale or other disposition of shares of a Fund, a shareholder may
realize a capital gain or loss which will be long-term or short-term, generally
depending upon the shareholder's holding period for the shares.

GENERAL INFORMATION
- ----------------------------------------------------------------------

ORGANIZATION OF THE FUNDS. The Northstar Advantage Trust (the "Trust") and
each separate Fund is organized under Massachusetts law as a business trust. The
Trust was organized in 1993; the Special, Growth, Income and Government
Securities Funds in 1986; the High Yield Fund in 1989; and the Strategic Income
Fund in 1994. The Trust's Declaration of Trust, as amended, and each Fund's
Amended and Restated Declaration of Trust provides that the Trustees are
authorized to create an unlimited number of series and, with respect to each
series, to issue an unlimited number of full and fractional shares of one or
more classes and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
series. All shares have equal voting rights, except that only shares of the
respective series or separate classes within a series are entitled to vote on
matters concerning only that series or class. As of the date of this Prospectus,
each Fund within the Trust has three classes of shares; each of the remaining
Funds has four classes of shares.

Neither the Trust nor the Funds are required to hold shareholder meetings, but
special meetings may be called under certain circumstances. Meetings of the
shareholders will be called upon written request of shareholders holding in the
aggregate not less than 10% of the outstanding shares of the affected Fund or
class having voting rights.

REGISTRATION STATEMENT. This prospectus does not contain all the information
included in the Registration Statement filed for each Fund with the Securities
and Exchange Commission under the Securities Act of 1933 and the 1940 Act, with
respect to the securities offered hereby, certain portions of which have been
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. Each Registration Statement, including the exhibits filed therewith,
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.

28
<PAGE>
APPENDIX
- --------------------------------------------------------------------------------
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") CORPORATE BOND
RATINGS

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

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

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

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

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds which are rated 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: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Note: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

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

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S ("S&P") CORPORATE DEBT RATINGS

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 small degree.

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

BBB: Debt rated BBB is regarded as having adequate capacity to pay interest
and repay principal. Whereas it normally exhibits 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 for debt in higher-rated categories.

BB, B, CCC, CC, C: Debt rated BB, B, CCC, CC and C is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and C the highest degree of speculation. 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 rating CI is reserved for income bonds on which no interest is being
paid.

D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

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.

A-1
<PAGE>
[LOGO]

PRINCIPAL UNDERWRITER
Northstar Distributors, Inc.
Two Pickwick Plaza
Greenwich, CT 06830

INVESTMENT ADVISER
Northstar Investment Management Corporation
Two Pickwick Plaza
Greenwich, CT 06830

TRANSFER AGENT
First Data Investor Services Group
53 State Street
Boston, MA 02109-2873

1-800-595-7827

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
state in which, or to any person to whom it is unlawful to make such an offer.
Neither the delivery of this prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that information herein is correct at
any time subsequent to its date.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Expense Information............................. 2
Financial Highlights............................ 7
Investment Objectives and Policies of the
Funds.......................................... 12
Risk Factors.................................... 17
Other Investment Techniques..................... 18
Performance Information......................... 19
How Net Asset Value is Determined............... 20
Management of the Funds......................... 20

<CAPTION>
PAGE
---
<S> <C>
How to Purchase Shares.......................... 22
Alternative Sales Arrangements.................. 22
Investor Services and Account Policies.......... 25
How to Sell Shares.............................. 27
Distribution Plans.............................. 27
Dividends, Distributions and Taxes.............. 27
General Information............................. 28
Appendix........................................ A-1
</TABLE>