WINTHROP FOCUS FUNDS, 485APOS, 1995-12-29

WINTHROP FOCUS FUNDS
485APOS, 1995-12-29

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File No. 33-15253
811-5221

As filed with the Securities and Exchange Commission on December 29, 1995

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

FORM N-1A

[ ]
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ]
Pre-Effective Amendment No.
----- [X]

Post-Effective Amendment No. 14
----

[ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X]

Amendment No. 15
----

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

Winthrop Focus Funds
- ----------------------------------------------------------------------

(Exact name of registrant as specified in charter)
140 Broadway, NEW YORK, NEW YORK 10005
- ----------------------------------------------------------------------
(Address of principal executive offices)

Registrant's Telephone Number: 212-504-4000

Charles Hughes
140 Broadway
New York, New York 10005
- ----------------------------------------------------------------------
(Name and address of agent for service)
Copies To: Stephen K. West
125 Broad Street
New York, New York 10004

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

[ ] immediately upon filing pursuant to [ ]on (date) pursuant to
paragraph (b) of Rule 485. paragraph (b) of Rule 485.

[X] 60 days after filing pursuant to [ ] on (date) pursuant to
paragraph (a)(1) of Rule 485. paragraph (a)(1) of Rule 485.

[ ] 75 days after filing pursuant to [ ] on (date) pursuant to
paragraph (a)(2) of Rule 485. paragraph (a)(2) of Rule 485.
If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
amendment.
previously filed post-effective

Registrant registers an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice
for Registrant's most recent fiscal year was filed with the Commission on

November 15, 1995.

<PAGE>

Cross Reference Sheet (Pursuant to Rule 495)

Form N-1A Item No. Location in Prospectus
------------------ ----------------------

Part A
------

Item 1. Cover Cover Page
Item 2. Synopsis Summary of Fund Expenses

Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Investment Objectives and
Registrant Policies; General Information

Item 5. Management of the Fund Management; General
Information

Item 6. Capital Stock and Other General Information
Securities
Item 7. Purchase of Securities Purchases, Redemptions and
Being Offered Shareholder Services; Net
Asset Value; Expenses of
Winthrop

Item 8. Redemption or Repurchase Purchases, Redemptions and
Shareholder Services
Item 9. Legal Proceedings Not Applicable

Location in Statement of
Part B Additional Information
------ ----------------------

Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page

Item 12. General Information and Management; General
History Information
Item 13. Investment Objectives Investment Policies and
and Policies Restrictions

Item 14. Management of the Management
Registrant

Item 15. Control Persons and General Information
Principal Holders of
Securities
Item 16. Investment Advisory and Management; General
Other Services Information

Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other General Information
Securities

Item 19. Purchase, Redemption and Net Asset Value
Pricing of Securities
Being Offered

Item 20. Tax Status Investment Policies and
Restrictions; Dividends,
Distributions and Taxes
Item 21. Underwriters General Information

Item 22. Calculation of Computation of the Average
Performance Data Total Return; Computation of
Yield
Item 23. Financial Statements Financial Statements

Part C
------

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Post-Effective Amendment
to the Registration Statement.

<PAGE>

WINTHROP FOCUS FUNDS
________________________________________________________________________________
140 Broadway, New York, NY 10005. Toll Free (800) 225-8011.
________________________________________________________________________________

Winthrop Focus Funds ("Winthrop") is a diversified, open-end management
investment company designed to afford investors the opportunity to choose
between the separately managed pools of assets ("Funds") described below
which have differing investment objectives and policies.

A Diversified Selection of Investment Alternatives
Growth Fund--Seeks long-term growth of capital by investing principally in
equity securities with long-term capital appreciation potential.
Aggressive Growth Fund--Seeks a high level of growth of capital by investing
principally in equity securities selected on the basis, in the Adviser's
opinion, of their potential for a high level of growth of capital.
Fixed Income Fund--Seeks to provide as high a level of total return as is
consistent with capital preservation by investing principally in debt
securities.
Growth and Income Fund--Seeks long-term growth of capital and continuity of
income by investing principally in dividend-paying common stocks and other
equity securities.

Municipal Trust Fund--Seeks to provide as high a level of total return as is
consistent with capital preservation by investing principally in municipal
securities. This investment objective, unlike most other municipal bond
funds, is not to provide current income which is exempt from U.S. federal
---
and/or state income tax. Please read carefully "Investment Objectives and
Policies - Municipal Trust Fund", page 17.
There can, of course, be no assurance that the Funds will achieve their
respective investment objectives.
See "Investment Objectives and Policies", page 10, for a more detailed
description of the investment objectives and policies of each of the Funds.

Purchase Information
Shares of Winthrop may be purchased directly from Winthrop by using the
Share Purchase Application found in this Prospectus, or through Winthrop's
Distributor, Donaldson, Lufkin & Jenrette Securities Corporation.
The minimum initial investment in each Fund is $250 and the minimum for
subsequent investments is $25. Shareholder accounts established on behalf
of the following types of plans will be exempt from the Fund's minimum
initial investment and minimum subsequent investment requirements: (1)
retirement plans qualified under Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code"); (ii) plans described in section
403(b) of the Code; (iii) deferred compensation plans described in section
457 of the Code; (iv) simplified employee pension (SEP) plans; and (v)
salary reduction simplified employee pension (SARSEP) plans. Further
information can be obtained from Winthrop at the address and telephone
number shown above. See "Purchases, Redemptions and Shareholder Services",
page 27.

Each Fund offers two classes of shares: Class A shares, which are sold
subject to an initial sales charge of up to 4.75% and Class B shares, which
are sold without an initial sales charge but which are subject to a contingent
deferred sales charge ("CDSC") which declines from 4% during the first year
of investment to zero after four years. See "Purchases, Redemptions and
Shareholder Services", page 27.

Additional Information
This Prospectus sets forth concisely the information a prospective investor
should know before investing in Winthrop and should be retained for future
reference. A "Statement of Additional Information" dated February 28, 1996,
which provides a further discussion of certain topics in this Prospectus
and other matters which may be of interest to some investors, has been
filed with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write or call Winthrop at the address
or telephone number shown above.

________________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
________________________________________________________________________________

<PAGE>

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.
PROSPECTUS DATED FEBRUARY 28, 1996

Investors are advised to read this Prospectus and to retain it for
future reference.

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<PAGE>

This Page Intentionally Left Blank

-3-

<PAGE>
_______________________________________________________________________________
SUMMARY OF FUND EXPENSES
_______________________________________________________________________________

Aggressive Fixed
Growth Growth Income
Shareholder Transaction Expenses Fund Fund Fund
-------- ------- --------
Class Class
Class A B(3) Class A B(3) Class A B(3)
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.75% 0% 4.75% 0% 4.75% 0%
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of
offering price) . . . . . . . . . . 0% 0% 0% 0% 0% 0%
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, as applicable)
Year since Purchase Payment was made
First . . . . . . . . . . . . . . (1) 4% (1) 4% (1) 4%
Second . . . . . . . . . . . . . . (1) 3% (1) 3% (1) 3%
Third . . . . . . . . . . . . . . (1) 2% (1) 2% (1) 2%
Fourth . . . . . . . . . . . . . . (1) 1% (1) 1% (1) 1%
Fifth and thereafter . . . . . . . 0% 0% 0% 0% 0% 0%
Redemption Fees (as a percentage of
amount redeemed) . . . . . . . . . . 0% 0% 0% 0% 0% 0%
Exchange Fee . . . . . . . . . . . . . 0% 0% 0% 0% 0% 0%
Annual Fund Operating Expenses
(as a percentage of average daily net
assets at October 31, 1995)
Management Fees . . . . . . . . . . .75%* .75%* .82%* .82%* .63%* .63%*
12b-1 Fees** . . . . . . . . . . . . .30 1.00 .30 1.00 .30 1.00
Other Expenses, after expense reim-
bursement (Fixed Income Fund only) .38 .38 .32 .32 .07 (.63)
Total Fund Operating Expenses . . . 1.43 2.13 1.44 2.14 1.00(2) 1.00(2)
</TABLE>

The above percentages and those on the next page are based on expenses expected
to have been incurred if Class A shares and Class B shares had been outstanding
during the entire fiscal year ended October 31, 1995. Prior to February 25,
1996, only one class of shares was issued As a result, the above information is
based on restated data for each Fund's fiscal year ended October 31, 1995.
_____________
* Management Fees with respect to the Growth Fund are reduced to .50 of 1% on
net assets in excess of $100,000,000. Management Fees with respect to the
Aggressive Growth Fund are reduced to .75 of 1% with respect to net assets in
excess of $100,000,000 and to .625 of 1% with respect to net assets in excess of
$200,000,000. Management Fees with respect to the Fixed Income Fund are reduced
to .50 of 1% with respect to net assets in excess of $100,000,000.

** Winthrop has entered into a Distribution Agreement and 12b-1 Plan for each
Class of each Fund pursuant to which Winthrop pays a distribution services fee
each month at an annual rate of .30 of 1% of each Fund's Class A average
daily net assets and 1% of each Fund's Class B average daily net assets. Amounts
paid under the Agreement are used to compensate Winthrop's distributor for
expenses incurred. Long-term Class B shareholders may, over time, pay more in
12b-1 fees than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers, Inc. A portion of
the 12b-1 fees represents an asset-based sales charge. See "Expenses of
Winthrop--Distribution Agreement".

(1) Class A shareholders who received their shares upon conversion of shares
purchased prior to February 28, 1996, may be subject to a CDSC as described
under "Purchases, Redemptions and Shareholder Services--Contingent Deferred
Sales Charge on Class A Shares". A contingent deferred sales charge of 1% may
be imposed at the time of redemption on purchases of over $1,000,000 of Class A
shares purchased at net asset value and redeemed within 12 months of
purchase.

(2) Management fees for the Fixed Income Fund are based on actual expenses for
the year ended October 31, 1995. 12b-1 fees for the Fixed Income Fund are based
on expenses expected to have been incurred if Class A shares and Class B
shares had been outstanding during the entire fiscal year ended October 31,
1995. Other Expenses and Total Fund Operating Expenses have been adjusted to
reflect the most recent reimbursement agreement in effect. Total Fund
Operating Expenses, as so adjusted, reflect a voluntary assumption by the
Adviser of expenses amounting to .31% and 1.01% for Class A shares and Class B
shares, respectively, of the Fixed Income Fund. Absent such reimbursement, Other
Expenses and Total Fund Operating Expenses for the Fixed Income Fund would have
been 1.31% and 2.01%, for Class A shares and Class B shares, respectively.

(3) Class B shares will automatically convert to Class A shares approximately 8
years after purchase. See "Purchases, Redemptions and Shareholder Services -
Automatic Conversion of Class B Shares".

-4-

<PAGE>

Growth and Municipal
Income Trust
Fund Fund

Class
Shareholder Transaction Expenses Class A Class B(3) Class A B(3)
<S> <C> <C> <C> <C>

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . 4.75% 0% 4.75% 0%
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering
price) . . . . . . . . . . . . . . . . 0% 0% 0% 0%
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, as applicable)
Years since Purchase Payment was made
First . . . . . . . . . . . . . . . (1) 4% (1) 4%
Second . . . . . . . . . . . . . . . (1) 3% (1) 3%
Third . . . . . . . . . . . . . . . (1) 2% (1) 2%
Fourth . . . . . . . . . . . . . . . (1) 1% (1) 1%
Fifth and thereafter . . . . . . . . 0% 0% 0% 0%
Redemption Fees (as a percentage of
amount redeemed) . . . . . . . . . . . 0% 0% 0% 0%
Exchange Fee . . . . . . . . . . . . . . 0% 0% 0% 0%
Annual Fund Operating Expenses
(as a percentage of average daily net
assets at October 31, 1995)
Management Fees . . . . . . . . . . . .74%* .74%* .63%* .63%*
12b-1 Fees** . . . . . . . . . . . . . .30 1.00 .30 1.00
Other Expenses, after expense reim-
bursement (Municipal Trust Fund
only) . . . . . . . . . . . . . . . .34 .34 .07 (.63)
Total Fund Operating Expenses . . . . 1.38 2.08 1.00(2) 1.00(2)
</TABLE>

_____________

* Management Fees with respect to the Growth and Income Fund are reduced to
.50 of 1% with respect to net assets in excess of $75,000,000. Management Fees
with respect to the Municipal Trust Fund are reduced to .50 of 1% with
respect to net assets in excess of $100,000,000.

** Winthrop has entered into a Distribution Agreement and 12b-1 Plan for each
Class of each Fund pursuant to which Winthrop pays a distribution services fee
each month at an annual rate of .30 of 1% of each Fund's Class A average
daily net assets and 1% if each Fund's Class B average daily net assets. Amounts
paid under the Agreement are used to compensate Winthrop's distributor for
expenses incurred. Long-term Class B shareholders may, over time, pay more in
12b-1 Fees than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers, Inc. A portion of
the 12b-1 fees represents an asset-based sales charge. See "Expenses of
Winthrop--Distribution Agreement".

(1) Class A shareholders who received their shares upon conversion of shares
purchased prior to February 28, 1996 may be subject to a CDSC as described under
"Purchases, Redemptions and Shareholder Service--Contingent Deferred Sales
Charge on Class A Shares". A contingent deferred sales charge of 1% may be
imposed at the time of redemption on purchases of over $1,000,000 of Class A
shares purchased at net asset value and redeemed within 12 months of purchase.

(2) Management Fees for the Municipal Trust Fund are based on actual expenses
for the year ended October 31, 1995. 12b-1 fees for the Municipal Trust Fund are
based on expenses expected to have been incurred if Class A shares and Class B
shares had been outstanding during the entire fiscal year ended October 31,
1995. Other Expenses and Total Fund Operating Expenses have been adjusted to
reflect the most recent reimbursement agreement in effect. Total Fund
Operating Expenses, as so adjusted, reflect a voluntary assumption by the
Adviser of expenses amounting to .38% and 1.08% for Class A shares and Class B
shares, respectively, of the Municipal Trust Fund. Absent such reimbursement,
Other Expenses and Total Fund Operating Expenses for the Municipal Trust Fund
would have been 1.38 and 2.08%, for Class A shares and Class B shares,
respectively.

(3) Class B shares will automatically convert to Class A shares approximately 8
years after purchase. See "Purchases, Redemptions and Shareholder Services -
Automatic Conversion of Class B Shares".

-5-

<PAGE>

<TABLE><CAPTION>
1 3 5 10
Examples year years years years
-------- ---- ----- ----- -----
Growth Fund
Class A
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $61 $91 $122 $211
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $61 $91 $122 $211
Class B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $62 $87 $114 $228
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $22 $67 $114 $228

Aggressive Growth Fund
Class A
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period . . . . . . . $61 $91 $122 $212
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $61 $91 $122 $212

Class B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period . . . . . . . $62 $87 $115 $229
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $22 $67 $115 $229

Fixed Income Fund
Class A
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $57 $78 $100 $164
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $57 $78 $100 $164
Class B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $50 $52 $55 $122
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $10 $32 $55 $122

</TABLE>

-6-

<PAGE>

Growth and Income Fund
Class A
<S> <C> <C> <C> <C>

You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $61 $89 $119 $205
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $61 $89 $119 $205

Class B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $61 $85 $112 $223
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $21 $65 $112 $223

Municipal Trust Fund
Class A
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $57 $78 $100 $164
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $57 $78 $100 $164

Class B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period . . . . . $50 $52 $55 $122
You would pay the following expenses on the same
investment, assuming no redemptions . . . . . . . . . . $10 $32 $55 $122
</TABLE>

The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of Winthrop bear directly
or indirectly. See also "Expenses" and "Purchases, Redemptions and Shareholder
Services". The Example should not be considered a representation of past or
future expenses and actual expenses may be greater or lesser than those shown.

Ten year amounts assume conversion of Class B shares at the end of the eighth
year following the date of purchase.

Pursuant to the terms of the Investment Advisory Agreement, under certain
conditions the Adviser may reimburse Winthrop for certain of its expenses. See
"Management" in the Prospectus and the Statement of Additional Information.
Commencing July 1, 1994, the Adviser agreed to reimburse through
October 31, 1995 all operating expenses in excess of 1.000% of the average
daily net assets of the Fixed Income Fund and the Municipal Trust Fund. For
the period November 1, 1995 through October 31, 1996 the Adviser may, in its
sole discretion, determine to reduce its management fees by the amount that
Total Fund Operating Expenses exceed 1.000% of the average daily net assets
of each of the Fixed Income Fund and the Municipal Trust Fund or, it may
determine to discontinue this practice. As a result of the voluntary
assumption of expenses, the Adviser reimbursed (i) the Fixed Income Fund
$230,399 during the year ended October 31, 1995 and (ii) the Municipal Trust
Fund $208,045 during the year ended October 31, 1995.

-7-

<PAGE>

"Other Expenses" included fees paid to Winthrop's independent auditor,
legal counsel and trustees as well as expenses associated with registration
fees, reports to shareholders, franchise taxes and other miscellaneous
expenses. Such fees are not based on a percentage of Winthrop's average net
assets, but a fixed dollar cost.
The above example is based on expenses expected to have been incurred if
Class A shares and Class B shares had been in existence during the entire
fiscal year ended October 31, 1995. To determine the above Class A share
and Class B share amounts, the amounts for the class in existence during
the fiscal year ended October 31, 1995 have been restated to reflect the
12b-1 Plan applicable to Class A shares and Class B shares, respectively.

-8-

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights for the five fiscal years ended
October 31, 1995 have been audited by Ernst & Young LLP, the Fund's
independent auditors, whose unqualified report thereon appears in the
Statement of Additional Information. Financial statements and related notes
are included in the Statement of Additional Information, which is available
upon request. Additional information about the Fund's performance is
contained in the Fund's annual report to shareholders, which may be
obtained without charge.

Growth Fund
---------------------------------------------------------------------------------------

Fiscal Years Ended October 31,
---------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987*
---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

Net Asset Value,
Beginning of Period $10.820 $10.970 $11.100 $11.450 $ 9.200 $11.690 $10.490 $ 9.650 $10.000

Income From
Investment Operations:
Net Investment Income .037 .014 .061 .123 .148 .270 .276 .210 .044
Net Gains or Losses on
Securities (both
realized
and unrealized) . 1.190 .435 1.386 .418 2.512 (1.355) 1.832 .888 (.394)
----- ---- ------- ------- ------- ------- ------ ------- -------
Total From Investment
Operations . . . 1.227 .449 1.447 .541 2.660 (1.085) 2.108 1.098 (.350)

Less Distributions:
Dividends (from net
investment income) (.012) - (.077) (.163) (.198) (.244) (.437) (.051) -

Distributions (from
capital gains) . (.685) (.599) (1.500) (.728) (.212) (1.161) (.471) (.207) -
----- ----- ------- ------- ------- ------- -------- ------- ---------
Total Distributions (.697) (.599) (1.577) (.891) (.410) (1.405) (.908) (.258) -
----- ----- ------- ------- ------- ------- -------- -------- ---------

Net Asset Value,
End of Period . . $11.350 $10.820 $10.970 $11.100 $11.450 $ 9.200 $11.690 $10.490 $ 9.650
====== ======= ====== ====== ====== ======= ======= ======= ========

Total Return(2) . . 12.21% 4.15% 14.36% 4.66% 29.71% (11.05)% 21.72% 11.72% (3.99)%(1)

Ratios/Supplemental
Data:
Net Assets, End of
Period
(000's omitted) . $55,946 $52,455 $49,446 $48,678 $50,426 $42,937 $53,142 $52,626 $54,809
Ratio of expenses to
average net assets 1.63% 1.65% 1.36% 1.26% 1.34% 1.33% 1.37% 1.37% 1.69%(1)

Ratio of net investment
income
to average net assets
.35% .06% .56% 1.11% 1.40% 2.53% 2.53% 2.15% .60%(1)

Portfolio turnover rate 101.7% 28.2% 61.7% 65.7% 31.7% 68.2% 64.3% 42.3% 90.6%
</TABLE>

- ------------------------------------------------
* From December 15, 1986 (commencement of operations) to
October 31, 1987.
(1)
Annualized.

(2)
A Contingent Deferred Sales Charge may be imposed on certain
redemptions which would reduce total return shown above.

-9-

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

-10-

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights for the five fiscal years ended October
31, 1995 have been audited by Ernst & Young LLP, the Fund's independent
auditors, whose unqualified report thereon appears in the Statement of
Additional Information. Financial statements and related notes are included
in the Statement of Additional Information, which is available upon
request. Additional information about the Fund's performance is contained
in the Fund's annual report to shareholders, which may be obtained without
charge.

Fixed Income Fund
-----------------------------------------------------------------------------------

Fiscal Years Ended October 31,
-----------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987*
---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.66 $10.93 $10.40 $10.08 $ 9.57 $ 9.72 $ 9.52 $ 9.26 $10.00

Income From
Investment Operations:
Net Investment Income .588 .567 .622 .695 .773 .809 .830 .749 .554
Net Gains or Losses on
Securities (both
realized
and unrealized) . . .560 (1.027) .567 .320 .510 (.150) .200 .260 (.740)
---- ------- ------ ------- ------- ------- ------ ------- --------

Total From Investment
Operations . . . . 1.148 (.460) 1.189 1.015 1.283 .659 1.030 1.009 (.186)

Less Distributions:
Dividends (from net
investment income) (.588) (.567) (.622) (.695) (.773) (.809) (.830) (.749) (.554)
Distributions (from

capital gains) . . - (.243) (.037) - - - - - -
----- ----- ------- ---- ---- ----- ---- ---- ----

Total Distributions . (.588) (.810) (.659) (.695) (.773) (.809) (.830) (.749) (.554)
----- ----- ------- ------- ------- ------- ------- ------- -------

Net Asset Value,
End of Period . . . $10.22 $9.66 $10.93 $10.40 $10.08 $ 9.57 $ 9.72 $ 9.52 $ 9.26
===== ==== ===== ===== ===== ===== ===== ===== ======

Total Return(2) . . . 12.23% (4.37)% 11.79% 10.37% 13.92% 7.14% 11.42% 11.27% (2.15)%(1)

Ratios/Supplemental Data:
Net Assets, End of Period
(000's omitted) . . $53,885 $39,150 $40,881 $32,358 $23,783 $10,300 $ 5,861 $ 5,335 $ 4,697
Ratio of expenses to
average net assets(3) 1.00% .93% .83% .51% - - - .32% 1.00%(1)

-11-

<PAGE>

Ratio of net investment
income to average
net assets(3) . . . 5.90% 5.58% 5.79% 6.71% 7.75% 8.34% 8.74% 7.96% 6.60%(1)

Portfolio turnover rate 66.1% 55.9% 95.6% 62.8% 35.9% 37.9% 30.3% 48.2% 51.1%
</TABLE>

- ------------------------------------------------
* From December 15, 1986 (commencement of operations) to October 31, 1987.
(1) Annualized.

(2) A Contingent Deferred Sales Charge may be imposed on certain
redemptions which would reduce total return shown above.
(3) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets as follows: .51%, .67%, .58%, .98%,
2.19%, 2.92%, 2.91%, 1.68% and 1.00%, for the years ended October 31, 1995,
1994, 1993, 1992, 1991, 1990, 1989, 1988 and 1987, respectively.

-12-

<PAGE>
________________________________________________________________________________
FINANCIAL HIGHLIGHTS
________________________________________________________________________________

The following financial highlights for the fiscal years ended October 31,
1995, 1994 and 1993 and the period ended October 31, 1992 have been audited
by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report thereon appears in the Statement of Additional Information.
Financial highlights for the year ended June 30, 1992 were previously
audited by other auditors whose report thereon was unqualified. Financial
statements and related notes are included in the Statement of Additional
Information, which is available upon request. Additional information about
the Fund's performance is contained in the Fund's annual report to
shareholders, which may be obtained without charge.

Contained below is per share operating performance data for a Class A
share of beneficial interest outstanding, total investment return, ratios
to average net assets and other supplemental data for each period
indicated. Prior to the date hereof, Class A shares were not offered.
Accordingly, the data presented below has been derived from the financial
statements for the Fund's prior fiscal years. No financial information is
presented herein for Class B shares, which have also not been offered prior
to the date hereof.
_______________________________________________________________________________
Growth and Income Fund
- -------------------------------------------------------------------------------
<TABLE><CAPTION>
Fiscal Years Ended
October 31, Fiscal Years Ended June 30,
---------------------------------------------------------------
1995 1994 1993 1992* 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ----- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset
Value,
Beginning
of Period $13.38 $13.42 $12.35 $12.03 $11.70 $12.48 $12.68 $11.64 $14.58 $14.38 $13.10
Income From
Investment
Operations:
Net Investment
Income .234 .244 .270 .083 .320 .380 .565 .464 .423 .456 .560

Net Gains or
Losses on
Securities
(both realized
and unrealized) 1.769 .358 1.720 .572 .916 .010 .703 1.549 (2.016) 1.209 3.230
----- ---- ------ ------- ------- ------- ------- ------ ------- ------- ------
-
Total From
Investment
Operations 2.023 .602 1.990 .655 1.236 .390 1.268 2.013 (1.593) 1.665 3.790

Less
Distributions:
Dividends (from
net investment
income) (.266) (.223) (.271) (.165) (.234) (.386) (.562) (.577) (.415) (.365) (.548)

Distributions
(from capital
gains) (.567) (.419) (.649) (.170) (.672) (.784) (.906) (.396) (.932) (1.100)(1.962)
----- ------ ------ ------- ------- ------- ------- ------- ------ ------- ------
Total
Distribution (.833) (.642) (.920) (.335) (.906) (1.170) (1.468) (.973) (1.347) (1.465)(2.510)
----- ----- ------- ------- ------- ------- ------ ------ ------- ------ ------

Net Asset Value,
End of
Period $14.57 $13.38 $13.42 $12.35 $12.03 $11.70 $12.48 $12.68 $11.64 $14.58 $14.38
====== ===== ====== ====== ===== ====== ===== ===== ====== ===== ======

Total
Return(2) 16.10% 4.58% 16.93% 16.39%(1) 10.45% 3.86% 10.13% 18.36% (10.20)% 13.04% 29.67%

Ratios/Supplemental
Data:
Net Assets, End
of Perio
(000's
omitte d) $87,975 $67,020 $52,166 $46,457 $45,342 $47,340 $50,687 $52,337 $55,404 $70,753 $65,908

Ratio of
expenses to
average net
assets(3) 1.58% 1.64% 1.33% 1.32%(1) 1.35% 1.23% 1.21% 1.19% 1.17% 1.14% 1.17%

Ratio of net
investment
income to
average
3.93%
net assets(3) 1.94% 1.88% 2.12% 1.99%(1) 2.62% 3.25% 4.35% 3.92% 3.35% 3.23%

</TABLE>
-13-

<PAGE>

<TABLE>

Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
turnover rate 31.8% 36.4% 14.4% 29.0% 48.0% 41.0% 46.0% 38.0% 48.0% 90.0%
</TABLE>

- ------------------------------
* For the period July 1, 1992 to October 31, 1992.
(1) Annualized.
(2) Contingent Deferred Sales Charges may be imposed on redemptions which
would reduce total return shown above.
(3) Net of voluntary assumption by Adviser of expenses, expressed as a
percentage of average net assets as follows: .01%, .08%, .03%, .03%, and
.03% for the years ended June 30, 1992, 1991, 1990, 1989 and 1988,
respectively.

-14-

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights for the fiscal years ended October 31,
1995, 1994 and 1993 and the period ended October 31, 1992 have been audited
by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report thereon appears in the Statement of Additional Information.
Financial highlights for the year ended December 31, 1991 were previously
audited by other auditors whose report thereon was unqualified. Financial
statements and related notes are included in the Statement of Additional
Information, which is available upon request. Additional information about
the Fund's performance is contained in the Fund's annual report to
shareholders, which may be obtained without charge.

<TABLE><CAPTION>
Aggressive Growth Fund
--------------------------------------------------------------------------------------------

Fiscal Years Ended
October 31, Fiscal Years Ended December 31,
--------------------------------------------------------------------------------------------
1995 1994 1993 1992* 1991 1990 1989 1988 1987 1986
---- ---- ---- ----- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period
$15.65 $16.11 $14.00 $14.16 $10.16 $11.90 $12.64 $11.52 $13.351 $15.211
Income From
Investment
Operations:
Net Investment Income
Loss . . . . . . .035 .105 .123 .011 .023 .157 .062 .018 (.066) (.071)
Net Gains or Losses
on Securities (both
realized and
unrealized) 1.621 .603 3.195 1.482 5.090 (1.720) 1.962 3.391 (1.225) 1.467
----- ---- ------ ----- ----- ----- ----- ----- ----- -----
Total From Investment
Operations . . 1.656 .708 3.318 1.493 5.113 (1.563) 2.024 3.409 (1.291) 1.396

Less Distributions:
Dividends (from net
investment income)
- (.026) (.011) (.027) (.024) (.177) (.062) (.009) -- (.044)

Distributions (from
capital gains) (.696) (1.142) (1.197) (1.626) (1.089) (2.702) (2.280) (.540) (3.212)
----- ---- ------ ----- ----- ----- ----- ----- ----- -----
Total Distributions (.696) (1.168) (1.208) (1.653) (1.113) (.177) (2.764) (2.289) (.540) (3.256)
----- ---- ------ ----- ----- ----- ----- ----- ----- -----
Net Asset Value,
End of Period . $16.61 $15.65 $16.11 $14.00 $14.16 $10.16 $11.90 $12.64 $11.520 $13.351
===== ===== ====== ====== ====== ====== ====== ====== ====== ======

Total Return(2) . 11.10% 4.67% 25.34% 13.95%(1) 50.55% (13.12)% 16.25% 29.59% (10.61)% 8.53%

Ratios/Supplemental
Data:
Net Assets, End of
Period
(000's omitted) $202,730 $144,624 $77,903 $39,683 $32,340 $22,041 $24,999 $21,821 $21,081 $23,338

Ratio of expenses to
average net assets(3) 1.64% 1.70% 1.44% 1.74%(1) 1.89% 1.98% 1.84% 1.93% 1.69% 1.78%

-15-
<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios/Supple
mental Data:
Net Assets,
End of Period

Ratio of net
investment
income to average
net assets(3) . .23% (.04%) .32% .10%(1) .18% 1.45% .43% .13% (.49)% (.45)%
Portfolio turnover
rate . . . . . . 25.1% 31.6% 134.3% 164.1% 91.3% 87.6% 107.4% 107.9% 117.4% 73.7%
</TABLE>

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

* For the period January 1, 192 to October 31, 1992.

(1) Annualized.
(2) Contingent Deferred Sales Charges may be imposed on certain redemptions
which would reduce total return shown above.
(3) Net of voluntary assumption by Adviser of expenses, expressed as a
percentage of average net assets, as follows: .01% and .06% for the years
ended December 31, 1991 and 1990, respectively.

-16-

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights for the fiscal years ended October 31,
1995 and 1994 and the period from July 28, 1993 (commencement of
operations) through October 31, 1993 have been audited by Ernst & Young
LLP, the Fund's independent auditors, whose unqualified report thereon
appears in the Statement of Additional Information. Financial statements
and related notes are included in the Statement of Additional Information,
which is available upon request. Additional information about the Fund's
performance is contained in the Fund's annual report to shareholders, which
may be obtained without charge.
Contained below is per share operating performance data for a Class A
share of beneficial interest outstanding, total investment return, ratios
to average net assets and other supplemental data for each period
indicated. The data has been derived from the financial statements for the
Fund's prior fiscal years. No financial information is available for Class B
shares, which had not been offered as of the date of the financial
statements.

Municipal Trust Fund
--------------------------------------
Fiscal Years Ended Period Ended
October 31, 1994 October 31, 1993*
-------------------- -----------------
1995 1994

Net Asset Value, Beginning of
Period . . . . . . . . . . . . . $9.51 $ 10.10 $ 10.00

Income From Investment Operations:
Net Investment Income . . . . . . . .389 .365 .085
Net Gains or Losses on Securities
(both realized and unrealized) . .550 (.590) .100
-------- ---------- --------
Total From Investment Operations . .939 (.225) .185

Less Distributions:
Dividends (from net
investment income) . .. . . . . . (.389) (.365) (.085)
--------- -------- --------

Total Distributions . . . . . . . . (.389) (.365) (.085)
--------- -------- --------

Net Asset Value, End of Period . . $10.06 $ 9.51 $ 10.10
===== ====== =======

Total Return(2) . . . . . . . . . . 10.06% (2.27)% 7.15%(1)
Ratios/Supplemental Data:
Net Assets, End of Period
(000's omitted) . . . . . . . . . . $39,059 $34,470 $33,794
Ratio of expenses to
average net assets (3) . . . . . . 1.00% .83% .75%(1)

Ratio of net investment income to
average net assets (3) . . . . . 3.97% 3.71% 3.28%(1)
Portfolio turnover rate . . . . . . 49.3% 42.5% 0.0%

- ------------------------------------------------
* Commencement of operations was July 28, 1993.

(1) Annualized.

(2) A Contingent Deferred Sales Charge may be imposed on certain redemptions
which would reduce total return shown above.

(3) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets as follows: .58%, .77% and 1.15%
(annualized) for the years ended October 31, 1995 and 1994 and the period
July 28, 1993 through October 31, 1993, respectively.

-17-

<PAGE>

INTRODUCTION

Winthrop is a diversified, open-end among certain other affiliated mutual
management investment company funds in accordance with such
commonly known as a "mutual fund" shareholder's changing perceptions of
whose shares are offered in five the relative investment potential of
separate portfolios, collectively each investment alternative. (See
referred to as "Funds". Because "Purchases, Redemptions and
Winthrop offers multiple funds, it is Shareholder Services", page 29.)
known as a "series fund". Winthrop is Shareholders of all classes of a Fund
empowered to establish additional are entitled to their pro rata share
Funds with different investment of any dividends and distributions
objectives and policies and offer arising from that Fund's assets
additional classes of shares. except that with respect to each
Each of Winthrop's Funds is a Fund, each Class bears different
separate pool of assets constituting, distribution expenses. (See
in effect, a separate Fund with its "Dividends, Distributions and Taxes",
own investment objective and page 34.) Upon redeeming shares of a
policies. (See "Investment Objectives Fund, the shareholder will receive
and Policies" below.) A shareholder the next-determined net asset value
may utilize Winthrop's exchange of that Fund represented by the
privilege to transfer such redeemed shares less the applicable
shareholder's assets to the same contingent deferred sales charge, if
class in another Fund of Winthrop and any. (See "Purchases, Redemptions and
Shareholder Services", page 29.)

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives of each an investment will not compromise the
Fund are fundamental policies of that Growth Fund's investment objective.
Fund and may not be changed without It is the policy of the Growth Fund
the approval of that Fund's share- to invest principally in common
holders. Except as set forth in stock, securities convertible into
"Investment Restrictions", page 23, common stock and other equity
or as otherwise indicated below, the securities (i.e., preferred stock,
- -
investment policies of each Fund are interests in master limited
not fundamental policies and may be partnerships) of well-known and
changed by the Board of Trustees established companies (generally,
without a shareholder vote. companies in operation for more than
The investment objectives and three years) as well as new and
policies of each Fund are set forth unseasoned companies which, in the
below. There can be, of course, no opinion of the Adviser, have the
assurance that any of the Funds will potential for long-term capital
achieve its respective investment appreciation. Investments in new and
objective. unseasoned companies which have
limited operating histories may
The Funds involve risks not present in
Growth Fund The investment investments in established and
objective of the Growth Fund is well-known companies.
long-term capital appreciation. Under normal circumstances, the
Investments will be made based upon Growth Fund will have at least 65% of
their potential for long-term capital the value of its total assets
appreciation. However, the Growth invested in equity securities of
Fund may make an investment to earn companies which in the opinion of the
income when, in the opinion of the Adviser have long-term capital
Adviser, such appreciation potential. However, the
Growth Fund reserves the right when
the Adviser deter-

-18-

<PAGE>

mines it is appropriate to invest in domestic securities. While the Growth
investment grade short-term fixed Fund has no present intention of
income securities and other invest- investing any significant portion of
ment grade debt securities, enter its assets in foreign securities, it
into repurchase agreements and hold may invest up to 10% of the value of
cash for temporary defensive purposes its total assets in foreign
without regard for the above securities. Investments in foreign
limitation. In addition, under normal securities may be subject to special
circumstances the Growth Fund may risks, including changes in
invest up to 35% of the value of its restrictions on foreign currency
total assets in equity securities transactions and in rates of
selected on a basis other than exchange, variations in accounting
long-term capital appreciation and auditing standards, limited
potential, investment grade fixed public information about the issuer,
income securities, including bonds, future political and economic
debentures, notes, asset and developments and possible imposition
mortgage-backed securities and money of exchange controls or other foreign
market instruments such as commercial governmental laws and restrictions
paper and bankers acceptances and which generally are not present in
other financial instruments. (See investments in domestic securities.
"Additional General Investment The Growth Fund may invest in
Policies" below for a description of restricted securities and in
asset and mortgage-backed instruments having no ready market if
securities.) such purchases at the time thereof
The Growth Fund may only invest in would cause no more than 10% of the
debt securities of investment grade value of its net assets to be
quality. Investment grade quality invested in not readily marketable
debt securities are debt securities assets. (See "Investment
rated in one of the four highest Restrictions", page 23.)
rating categories by a nationally The Growth Fund may invest up to 5%
recognized statistical rating of its total assets in warrants which
organization and unrated debt entitle the holder to buy equity
securities believed by the Adviser securities at a specific price for a
(on the basis of criteria believed by specific period of time.
the Adviser to be comparable to that To minimize the effect of a market
applied by such rating agencies) to decline in the value of its
be of comparable quality to debt securities, the Growth Fund may write
securities so rated. (See "Additional covered call options on securities or
General Investment Policies" below stock indices. A call option on a
for a description of investment grade security gives the purchaser of the
debt securities.) The foregoing option, upon payment of a premium to
investment grade limitation applies the writer of the option, the right
only at the time of initial to purchase from the writer of the
investment and the Growth Fund may option a specified number of shares
determine to retain in its portfolio of a specified security on or before
securities the issuers of which have a fixed date, at a predetermined
had their credit characteristics price. A call option on a securities
downgraded. index represents the holder's right
Critical factors considered in the to obtain from the writer in cash a
selection of securities include the fixed multiple of the amount by which
economic and political outlook, the the exercise price is less than the
value of a particular security value of the underlying securities
relative to another security, trends index on the exercise date. So long
in the determinants of corporate as the Growth Fund remained obligated
profits, and management capability as a writer of covered call options,
and practices. Within this basic it would forego the opportunity to
framework, the policy of the Growth profit from increases in the market
Fund is to invest in any company or price of the underlying security or
industry believed to offer the index above the exercise price of the
opportunity for long-term capital option. The Growth Fund may not write
appreciation. The selection of a call option on a security unless at
securities on the basis of their all times during the option period it
appreciation possibilities provides owns either (i) the optioned
an opportunity for greater capital securities, or securities convertible
gain which may involve a into or carrying rights to acquire
corresponding greater risk of capital the optioned securities at no
loss than would the selection of a additional cost, or (ii) an
more conservative equity portfolio. offsetting call option on the same
The Growth Fund may invest in both securities at the same or a lower
listed and unlisted securities and in price.
foreign as well as

-19-

<PAGE>

When the Fund writes a call option on a in the opinion of the Adviser, have
securities index, it will establish a the potential for a high level of
segregated account with its custodian capital appreciation. Because of the
in which it will deposit cash or high Aggressive Growth Fund's policy of
quality short-term obligations or a selecting investments on the basis of
combination of both with a value their potential for a high level of
equal to or greater than the market growth of capital, a greater
value of the option and will maintain proportion of the Aggressive Growth
the account while the option is open. Fund's assets may from time to time
In addition, the Growth Fund may not be invested in new and unseasoned
write a call option if, as a result companies with speculative risk
thereof, the aggregate of the Growth characteristics as compared to an
Fund's portfolio securities subject investment company that does not
to outstanding call options (valued select securities on the basis of
at the lower of the option price or their potential for a high level of
market value of such securities) growth of capital. The Aggressive
or amount deposited in a segregated Growth Fund will not, however, invest
account would exceed 5% of its total more than 10% of its assets (at the
assets. time of purchase) in equity
If the Growth Fund desires to sell securities of companies (including
a particular security from its predecessors) that have less than
portfolio on which it has written an three years of operations. The
option, the Fund will seek to effect securities of such companies may be
a closing purchase transaction prior less marketable and more volatile
to or concurrently with the sale of than the securities of more
the security. The Fund may also enter established companies. Although the
into a closing purchase transaction Aggressive Growth Fund has adopted
in order to terminate its obligations the investment policies stated above,
under an option it has written. A it has in addition made undertakings
closing purchase transaction is to certain States which prohibit the
a transaction in which an investor purchase of securities of companies
who is obligated as a writer of an which have been in operation for less
option terminates his obligation by than three years.
purchasing an option on the same The Aggressive Growth Fund may also
security and same terms as the option invest in special situations, that
previously written. There can be no is, in securities the values of which
assurances a closing purchase may be affected by particular
transaction can be affected. The Fund developments unrelated to business
realizes a profit or loss from a conditions generally, and which may
closing purchase transaction if the fluctuate without relation to general
cost of the transaction is less or market trends. In general, a special
more than the premium received from situation company is a company whose
the writing of the option. The Fund securities could reasonably be
will not purchase call options except expected to be accorded market
in closing purchase transactions. recognition within a foreseeable
See the Statement of Additional period of time at an appreciated
Information for a more complete value solely by reason of a develop-
discussion of the Growth Fund's ment particularly or uniquely
investment practices and the risks applicable to that company. The
associated therewith. principal risk associated with
Aggressive Growth Fund The investment in special situation
investment objective of the companies is that if the anticipated
Aggressive Growth Fund is a high development does not occur, the
level of growth of capital. The investment is likely not to
Aggressive Growth Fund is not appreciate or may decline. Examples
intended for investors whose of special situations are companies
principal objective is assured income being reorganized or merged,
or preservation of capital. companies having unusual new products
It is the policy of the Aggressive or which enjoy particular tax advan-
Growth Fund to invest principally in tages, or acquire new management. In
common stock and securities addition, the Aggressive Growth Fund
convertible into common stock, but it may invest in the securities of
may when deemed appropriate by the companies that appear relatively
Adviser invest all or part of its under-priced in relation to future
assets in preferred stock, other prospects as assessed by the Adviser.
equity securities and in bonds and This would include investments in
other debt securities as described companies in industries where an
below. The Aggressive Growth Fund may important, positive change in outlook
invest in established companies appears probable or in companies
(generally, companies in operation where significant and identifiable
for more than three years) as well as internal changes have occurred but,
in new and unseasoned companies that, in

-20-

<PAGE>

the view of the Adviser, have yet to investment in equity securities of
be broadly identified by investors. small- to medium-size companies that
In addition to common stock and are believed by the Adviser to have
securities convertible into common the potential for a high level of
stock, the Aggressive Growth Fund may capital appreciation. This emphasis
invest in preferred stock, investment may be altered when, in the view of
grade debt securities (including the Adviser, some other emphasis is
bonds, debentures, notes, asset and more appropriate to the Aggressive
mortgage-backed securities and Growth Fund's investment objective.
convertible securities), U.S. Securities of small- and medium-size
Government securities (including companies may be less marketable and
securities issued or guaranteed by more volatile than securities of
agencies or instrumentalities of the larger companies. Smaller and
U.S. Government), municipal medium-size companies generally tend
securities (including general and to reinvest earnings rather than pay
special obligation securities and cash dividends. Dividend income
industrial revenue bonds) and money generally is not considered by the
market instruments (such as Adviser in the choice of portfolio
commercial paper and bankers' accept- securities for the Aggressive Growth
ances) and other financial Fund. The selection of securities on
instruments. (See "Additional General the basis of the potential for a high
Investment Policies" below for a level of capital appreciation
description of asset and provides an opportunity for a high
mortgage-backed securities.) level of capital gain and involves a
The Aggressive Growth Fund may only corresponding greater risk of capital
invest in debt securities of loss than would the selection of a
investment grade quality. Investment more conservative portfolio. There
grade quality debt securities are can be no assurance that the
debt securities rated in one of the Aggressive Growth Fund will achieve
four highest rating categories by a its investment objective.
nationally recognized statistical The Aggressive Growth Fund may
rating organization and unrated debt invest in securities listed on a
securities believed by the Adviser securities exchange and securities
(on the basis of criteria believed by traded in the over-the-counter
the Adviser to be comparable to that markets. It may also invest in
applied by such rating agencies) to foreign as well as domestic
be of comparable quality to debt securities. A greater proportion of
securities so rated. (See "Additional the securities in which the Fund
General Investment Policies" below invests may not be listed on any
for a description of investment grade national securities exchange as
debt securities.) The foregoing compared with an investment company
investment grade limitation applies that invests primarily in securities
only at the time of initial of larger companies. Securities not
investment and the Aggressive Growth listed on a national securities
Fund may determine to retain in its exchange may be less liquid and more
portfolio securities the issuers of volatile than listed securities. The
which have had their credit Aggressive Growth Fund may invest up
characteristics downgraded. to 20% of the value of its total
In selecting portfolio investments assets in foreign securities.
for the Aggressive Growth Fund, the Investments in foreign securities may
Adviser considers factors such as the be subject to special risks,
general economic and political including changes in restrictions on
outlook, the value of a particular foreign currency transactions and
security relative to the value for fluctuations in rates of exchange,
other securities, trends in variations in accounting and auditing
determinants of corporate profits and standards, limited public information
management capability and practices. about the issuer, future political
Within this basic framework, the and economic developments and
Adviser attempts to find relatively possible imposition of exchange
established companies in growth controls or other foreign
industries that have product, governmental laws or restrictions
management or similar advantages over which generally are not present in
other companies in such industries investments in domestic securities.
and that are believed by the Adviser The Aggressive Growth Fund may invest
to offer the potential for a high in instruments having no ready market
level of capital appreciation. The if such purchases at the time thereof
Aggressive Growth Fund presently would cause no more than 10% of the
intends to emphasize value of its net assets to be
invested in not readily marketable
assets. Although the Aggressive
Growth Fund has adopted

-21-

<PAGE>

this investment policy, it has in indices of securities as a means of
addition made undertakings to certain achieving additional return or of
States which limit to no more than 5% hedging the value of its portfolio.
of its total assets its investment in The Aggressive Growth Fund's success-
not readily marketable securities. ful purchase of options depends on
The Aggressive Growth Fund also may the ability of the Adviser to predict
invest up to 5% of its total assets the direction of the market and is
in warrants or rights which entitle subject to certain additional risks,
the holder to buy equity securities including generally greater
at a specific price during or at the volatility of options as compared to
end of a specific period of time. common stocks and the risk that an
The Aggressive Growth Fund may option will expire without value. A
engage in short-term portfolio call option is a contract that gives
transactions in an attempt to the holder of the option the right,
generate capital gains when deemed in return for a premium paid, to buy
appropriate by the Adviser under the from the seller the security
circumstances, taking into underlying the option at a specified
consideration the market analysis exercise price at any time during the
factors of any particular security term of the option or, in some cases,
and the technical conditions of the only at the end of the term of the
securities markets. In accordance option. The seller of the call option
with the investment policy of has the obligation upon exercise of
engaging in short-term portfolio the option to deliver the underlying
transactions, the Aggressive Growth security upon payment of the exercise
Fund has no restrictions with respect price. A put option is a contract
to portfolio turnover and the rate of that gives the holder of the option
portfolio turnover is not considered the right, in return for a premium,
a prohibitive factor by the Adviser to sell to the seller of the option
when considering short-term portfolio the underlying security at a
transactions. As a result of this specified price. The seller of the
policy, it is possible that the put, on the other hand, has the
Aggressive Growth Fund's annual obligation to buy the underlying
portfolio turnover rate may exceed security upon exercise at the
100%, although the Adviser exercise price.
anticipates that such rate will not If the Aggressive Growth Fund has
exceed 200%. Because it is difficult sold an option, it may terminate its
to predict accurately portfolio obligation by effecting a closing
turnover rates, actual turnover may purchase transaction. This is
be higher or lower. The portfolio accomplished by purchasing an option
turnover rate is computed by dividing of the same series as the option
the lesser of the amount of the previously sold. There can be no
securities purchased or the assurance that a closing purchase
securities sold by the average transaction can be effected when the
monthly value of securities owned Aggressive Growth Fund so desires.
during the year, excluding securities The purchaser of an option risks a
whose maturities at the time of total loss of the premium paid for
acquisition were one year or less. A the option if the price of the
high degree of portfolio turnover underlying security does not increase
results in increased transaction or decrease sufficiently to justify
costs. In addition, a high degree of exercise. The seller of an option, on
portfolio turnover will make it more the other hand, will recognize the
difficult for the Aggressive Growth premium as income if the option
Fund to qualify as a pass-through expires unexercised but forgoes any
entity for federal tax purposes due capital appreciation in excess of the
to a requirement under federal tax exercise price in the case of a call
law that a registered investment option and may be required to pay a
company, such as the Aggressive price in excess of current market
Growth Fund, obtain less than 30% of value in the case of a put option.
its gross income in any tax year from Options purchased and sold in private
gains on the sale of securities held transactions (other than on an
less than three months. The exchange) also impose on the
Aggressive Growth Fund intends to so Aggressive Growth Fund the credit
qualify as a pass-through entity. risk that the counterparty will fail
Failure to so qualify would result in to honor its obligations. The
federal taxation of the Aggressive Aggressive Growth Fund will not
Growth Fund at the standard effective purchase options if, as a result, the
corporate rate of up to 35%. aggregate cost of all outstanding
The Aggressive Growth Fund may options exceeds 10% of its assets.
purchase or sell options on The Aggressive Growth Fund may also
individual securities as well as on purchase and sell financial futures
contracts and options thereon for
hedging

-22-

<PAGE>

and risk management purposes. To the
extent that puts, calls, straddles (3) Obligations issued or
and similar investment strategies guaranteed by national or state
involve instruments regulated by the bank holding companies, which
Commodity Futures Trading Commission, obligations are not rated as a
the Aggressive Growth Fund is limited matter of policy by either Moody's
to an investment not in excess of 5% or S&P, but which, in the opinion
of its total assets. Although the of the Adviser (on the basis of
Aggressive Growth Fund has adopted criteria believed by the Adviser to
the investment policies stated above, be comparable to that used by
it has in addition made undertakings nationally recognized statistical
to certain States which (a) prohibit rating organizations for assigning
investment in commodities and ratings), meet the Fixed Income
commodity futures contracts, (b) Fund's investment objective; and
limit investment in options, (4) Commercial paper rated
financial futures and stock index Prime-1 by Moody's or A-1 + or A-1
futures to 5% of the value of its net by S&P.
assets and (c) prohibit investment in The Fixed Income Fund may also
interests in oil, gas, or other invest not more than 25% of its total
mineral exploration or development assets at the time of investment in
programs. debt securities rated Baa or MIG-2 by
See the Statement of Additional Moody's or BBB or SP-2 by S&P and in
Information for a more complete commercial paper rated Prime-2 by
description of the Aggressive Growth Moody's or A-2 by S&P, to the extent
Fund's investment practices and the that such investments would, in the
risks associated therewith. opinion of the Adviser, be consistent
Fixed Income Fund The investment with the Fixed Income Fund's
objective of the Fixed Income Fund is investment objective. (See
to provide as high a level of total "Additional General Investment
return as is consistent with capital Policies" below for a description of
preservation by investing principally securities rated BBB by S&P and Baa
in debt securities, including, by Moody's and of asset and
without limitation, convertible and mortgage-backed securities.)
nonconvertible debt securities of The Fixed Income Fund may enter
foreign and domestic companies, into repurchase agreements,
including both well-known and estab- terminable within seven days or less,
lished and new and lesser-known with respect to issues of the United
companies. Total return means the sum States Treasury, with member banks of
of interest income, dividend income the Federal Reserve System or primary
(if any) and capital gains less dealers in U.S. Government
capital losses. Capital preservation Securities, as long as such
means minimizing the risk of capital investments do not in the aggregate
loss in a period of falling prices exceed 15% of the total assets of the
(rising interest rates) for debt Fixed Income Fund (except where such
securities. investments are made for temporary
Specifically, the investment defensive purposes in which case no
policies of the Fixed Income Fund limit is applicable).
permit it to invest, without restric- As a matter of fundamental policy,
tion, in the following types of which cannot be changed without
securities: approval by the vote of a majority of
(1) Bonds, including municipal the Fixed Income Fund's outstanding
bonds (taxable and tax-exempt, voting securities (as defined in the
including, among others, special Statement of Additional Information),
and general obligation bonds and the Fixed Income Fund will invest at
industrial development bonds) and least 80% of the value of its total
other debt securities, which are assets at the time of investment in
rated Aaa, Aa, A or MIG-1 by debt securities. In normal
Moody's Investors Service, Inc. circumstances, the Fixed Income Fund
("Moody's"), or AAA, AA, A or SP-1 will invest at least 65% of the value
by Standard & Poor's Ratings Group of its total assets in fixed income
("S&P"); securities. However, the Fixed Income
(2) Marketable obligations of, Fund reserves the right to hold cash
or guaranteed by, the United States and short-term fixed income
Government, its agencies or securities and to enter into
instrumentalities ("U.S. Government repurchase agreements as necessary
Securities"); for temporary defensive or emergency
purposes as deter-

-23-

<PAGE>

mined by the Adviser without regard be no assurance that the Growth and
for the above limitations. Income Fund will achieve its
The Fixed Income Fund may also investment objective.
invest in restricted securities and The Growth and Income Fund may
in instruments having no ready market invest in common stock, securities
if such purchases at the time thereof convertible into common stock,
would not cause more than 10% of the preferred stock, debt securities
value of its net assets to be (including bonds, debentures, notes
invested in not readily marketable and asset and mortgage-backed
assets. (See "Investment securities), U.S. Government
Restrictions", page 23). securities (including securities
The Adviser intends to adjust the issued or guaranteed by agencies or
average maturity of the Fund's instrumentalities of the U.S.
portfolio depending upon its Government), municipal securities
assessment of the relative yields on (including general and special
debt securities of different obligation securities and industrial
maturities and its expectations of revenue bonds) and money market
future interest rate patterns. instruments, such as commercial
Because the change in market value of paper, bankers acceptances and other
a debt security generally is financial instruments. (See
inversely related to market interest "Additional General Investment
rates, the market value of the Fixed Policies" below for a description of
Income Fund's investments will tend asset and mortgage-backed
to decrease during periods of rising securities.) Although the Growth and
interest rates and to increase during Income Fund emphasizes investment in
periods of falling rates. The common stock, there is no fixed
magnitude of the fluctuations in proportion of the Growth and Income
market value of the Fund's portfolio Fund's assets that must be invested
as a result of fluctuations in in particular types of securities.
interest rates will generally be The proportion of assets to be
greater at times when the average invested in various types of
maturity of the Fund's portfolio is securities will be determined from
longer. The Fixed Income Fund will time to time by the Adviser.
invest and hold debt securities The Growth and Income Fund may only
which, in the opinion of the Adviser, invest in debt securities of
will maximize the total return of the investment grade quality. Investment
portfolio. grade debt securities are debt
See the Statement of Additional securities rated in one of the four
Information for a more complete highest rating categories by a
description of the Fixed Income nationally recognized statistical
Fund's investment practices and the rating organization and unrated debt
risks associated therewith. securities believed by the Adviser
Growth and Income Fund The (on the basis of criteria believed by
investment objective of the Growth the Adviser to be comparable to that
and Income Fund is long-term capital applied by such rating agencies) to
appreciation and continuity of be of comparable quality to debt
income. The Growth and Income Fund securities so rated. (See "Additional
pursues its investment objective by General Investment Policies" below
investing principally in for a description of investment grade
dividend-paying common stock and debt securities.) The foregoing
diversifying its investments among investment grade limitation applies
different industries and different only at the time of initial
companies. The Growth and Income investment and the Growth and Income
Fund's investment portfolio is Fund may determine to retain in its
structured with a view to combining portfolio securities the issuers of
an opportunity for long-term capital which have had their credit
appreciation with continuity of characteristics downgraded.
income. Accordingly, the Growth and The Growth and Income Fund may
Income Fund invests in securities on invest in both listed and unlisted
the basis of the Adviser's evaluation securities and in foreign as well as
of their investment merit and their domestic securities. Investments in
potential for appreciation in value foreign securities may be subject to
and/or income. The selection of special risks, including changes in
securities on the basis of their restrictions on foreign currency
capital appreciation or income transactions and in rates of
potential cannot ensure against exchange, variations in accounting
possible loss in value and there can and auditing standards, limited
public information about the issuer,
future political and economic
developments and possible imposition
of

-24-

<PAGE>

exchange controls or other option and will maintain the account
governmental laws or restrictions while the option is open. In
which generally are not present in addition, the Growth and Income Fund
investments in domestic securities. may not write a call option if, as a
The Growth and Income Fund may invest result thereof, the aggregate of the
in restricted securities and in other Growth and Income Fund's portfolio
investments having no ready market if securities subject to outstanding
such purchases at the time thereof call options (valued at the lower of
would cause no more than 10% of the the option price or market value of
value of its net assets to be such securities) or amount deposited
invested in not readily marketable in a segregated account would exceed
assets. (See "Investment 5% of its total assets.
Restrictions", page 23). If the Growth and Income Fund
Within the foregoing limits, the desires to sell a particular security
investments of the Growth and Income from its portfolio on which it has
Fund are diversified among as many written an option, the Fund will seek
different companies and industries as to effect a closing purchase
seem appropriate to the Adviser in transaction prior to or concurrently
light of conditions prevailing at any with the sale of the security. The
given time. Concentration or Fund may also enter into closing
diversification of assets does not purchase transaction in order to
eliminate the risk inherent in terminate its obligation under an
securities investments. option it has written. A
To minimize the effect of a market closing purchase transaction is a
decline in the value of its transaction in which an investor who
securities, the Growth and Income is obligated as a writer of an option
Fund may write covered call options terminates such investor's obligation
on securities or stock indices. A by purchasing an option on the same
call option on a security gives the security and same terms as the option
purchaser of the option, upon payment previously written. There can be no
of a premium to the writer of the assurance a closing purchase
option, the right to purchase from transaction can entered into. The
the writer of the option a specified Fund realizes a profit or loss from a
number of shares of a specified closing purchase transaction if the
security on or before a fixed date, cost of the transaction is less or
at a predetermined price. A call more than the premium received from
option on a securities index the writing of the option. The Fund
represents the holder's right to will not purchase call options except
obtain from the writer in cash a in closing purchase transactions.
fixed multiple of the amount by which Although the Growth and Income Fund
the exercise price is less than the has adopted the investment policies
value of the underlying securities described above, it has in addition
index on the exercise date. So long made undertakings to certain States
as the Growth and Income Fund which (a) prohibit the purchase of
remained obligated as a writer of securities of companies which have
covered call options, it would forego been in operation for less than three
the opportunity to profit from years, (b) limit to no more than 5%
increases in the market price of the of its total assets its investment in
underlying security or index above not readily marketable securities,
the exercise price of the option. The and (c) limit to no more than 5% of
Growth and Income Fund may not write its total assets its aggregate
a call option on a security unless at investment in puts, calls, straddles,
all times during the option period it spreads, and any combination thereof.
owns either (i) the optioned See the Statement of Additional
securities, or securities convertible Information for a more complete
into or carrying rights to acquire discussion of the Growth and Income
the optioned securities at no Fund's investment practices and the
additional cost, or (ii) an risks associated therewith.
offsetting call option on the same Municipal Trust Fund The investment
securities at the same or a lower objective of the Municipal Trust Fund
price. When the Fund writes a call is to provide as high a level of
option on a securities index, it will total return as is consistent with
establish a segregated account with capital preservation by investing
its custodian in which it will principally in high grade tax-exempt
deposit cash or high quality short- municipal securities. This investment
term obligations or a combination of
both with a value equal to or greater
than the market value of the

-25-

<PAGE>

objective, unlike most other MIG-2 by Moody's or BBB or SP-2 by
municipal bond funds, is not to S&P and in commercial paper rated
---
provide current income which is Prime-2 by Moody's or A-2 by S&P, to
exempt from federal and/or state the extent that such investments
income tax. Total return means the would, in the opinion of the Adviser,
sum of interest income and capital be consistent with the Municipal
gains less capital losses. The Trust Fund's investment objective.
Municipal Trust Fund intends to (See "Additional General Investment
distribute annually its net capital Policies" below for a description of
gains. Any such distributions will be securities rated BBB by S&P and Baa
---------------------
taxable to a shareholder as capital by Moody's.) Non-rated municipal
- -------
gain. See "Dividends, Distributions securities will also be considered
and Taxes" on p. __. for investment by the Municipal Trust
The Municipal Trust Fund attempts Fund when the Adviser believes that
to provide high total return by the financial condition of the
actively managing the maturities of issuers of such obligations and the
the bonds in the portfolio in protection afforded by the terms of
response to the Adviser's the obligations themselves limit the
anticipation of the movement of risk to the Fund to a degree
interest rates. The Fund will shorten comparable to that of rated
the portfolio's maturities when the securities which are consistent with
Adviser believes that interest rates the Fund's objective and policies.
will rise and lengthen maturities Municipal securities fall into two
when the Adviser believes that rates principal classes: bonds and notes.
will fall. To a lesser extent, the Municipal bonds, which are longer-
Municipal Trust Fund will also term debt obligations meeting long
attempt to enhance total return by term capital needs, fall into two
selecting municipal securities which general classifications: "general
the Adviser believes are undervalued. obligation" bonds or "revenue" bonds.
The success of these strategies Payment of principal and interest on
depends upon the Adviser's ability to general obligation bonds is secured
accurately forecast changes in by the issuing municipality's pledge
interest rates and to properly assess of its full faith, credit, and taxing
the value of municipal securities. power. Payment on revenue bonds is
The investor should be aware that met from the revenues derived from a
there can be no assurances that the certain facility, class of
Fund's investment strategies will be facilities, special excise or other
successful. tax, but not from general tax
Under normal circumstances, it is revenues. Variations on these two
the Municipal Trust Fund's policy to classifications exist, such as
invest at least 80% of the value of revenue bonds backed by a
its total assets at the time of municipality's general taxing power,
investment in tax-exempt municipal or general obligation bonds backed by
securities. However, the Municipal limited taxing power. Municipal notes
Trust Fund reserves the right to hold are short-term debt obligations
cash and short-term fixed income generally maturing in a year or less
securities and to enter into meeting short term capital needs and
repurchase agreements as necessary are also either "general obligation"
for temporary defensive or emergency or "revenue" debt securities. They
purposes as determined by the Adviser include tax anticipation notes,
without regard for the above revenue anticipation notes, bond
limitation. anticipation notes, construction loan
The Municipal Trust Fund seeks to notes and tax-exempt commercial
achieve its objective by investing paper.
primarily in a diversified portfolio Municipal securities may have
of high grade, intermediate term fixed, variable or floating rates of
municipal securities. The investment interest. Variable and floating rate
policies of the Municipal Trust Fund securities pay interest at rates that
permit it to invest, without are adjusted periodically, according
restriction, in tax-exempt municipal to a specified formula, in order to
bonds and notes which are rated Aaa, minimize fluctuation in the principal
Aa, A or MIG-1 by Moody's or AAA, AA, value of the securities. A "variable"
A or SP-1 by S&P. interest rate adjusts at
The Municipal Trust Fund may also predetermined intervals (e.g., daily,
invest not more than 25% of its total weekly, or monthly), while a
assets at the time of investment in "floating" interest rate adjusts
municipal securities rated Baa or whenever a specified benchmark rate
(such as the bank prime lending rate)
changes.

-26-

<PAGE>

The Adviser intends to adjust the minimum tax ("AMT-Subject Bonds").
average maturity of the Fund's Currently, existing tax law draws a
portfolio depending upon its distinction between municipal
assessment of the relative yields on securities issued to finance certain
municipal securities of different "private activities" and other
maturities and its expectations of municipal securities. Such private
future interest rate patterns. activity bonds include bonds issued
Because the change in market value of to finance such projects as airports,
a debt security generally is housing projects, resource recovery
inversely related to market interest programs, solid waste disposal
rates, the market value of the facilities, student loan programs,
Municipal Trust Fund's investments and water and sewage projects.
will tend to decrease during periods Interest income from such private
of rising interest rates and to activity bonds (AMT-Subject Bonds)
increase during periods of falling becomes an item of "tax preference"
rates. The magnitude of the which is subject to the alternative
fluctuations in market value of the minimum tax ("AMT") when received by
Fund's portfolio as a result of a person in a tax year during which
fluctuations in interest rates will he is subject to that tax. Because
generally be greater at times when interest income on AMT-Subject Bonds
the average maturity of the Fund's is taxable to certain investors, it
portfolio is longer. The Municipal is expected, although there can be no
Trust Fund will invest and hold debt guarantee, that such municipal
securities which, in the opinion of securities generally will provide
the Adviser, will maximize the total somewhat higher yields than other
return of the portfolio. municipal securities ("AMT-Exempt
The Municipal Trust Fund may enter Bonds") of comparable quality and
into repurchase agreements, maturity.
terminable within seven days or less, The dividends of the Municipal
with respect to issues of the United Trust Fund will consist of income
States Treasury, with member banks of exempt from federal income tax,
the Federal Reserve System or primary income subject to the federal AMT,
dealers in U.S. Government and taxable ordinary income and
Securities, as long as such capital gains. (See "Dividends,
investments do not in the aggregate Distributions and Taxes" on page __).
exceed 15% of the total assets of the See the Statement of Additional
Municipal Trust Fund (except where Information for a more complete
such investments are made for description of the Municipal Trust
temporary defensive purposes in which Fund's investment practices and the
case no limit is applicable). risks associated therewith.
The Municipal Trust Fund may also Additional General Investment
invest in restricted securities and Policies The following general
in instruments having no ready market investment policies supplement those
if such purchases at the time thereof set forth above for each Fund.
would not cause more than 15% of the Mortgage and Asset-Backed
value of its net assets to be Securities Except for the Municipal
invested in not readily marketable Trust Fund, the Funds may invest in
assets. (See "Investment mortgage and asset-backed securities.
Restrictions", page 22). "Mortgage-backed securities" are
Although the Municipal Trust Fund securities that directly or
has adopted the investment policies indirectly represent a participation
described above, it has in addition in, or are secured by and payable
made undertakings to certain States from, mortgage loans on real
which (a) prohibit the purchase of property, including pass-through
securities of companies which have securities such as Ginnie Mae, Fannie
been in operation for less than three Mae and Freddie Mac Certificates. The
years, (b) limit to no more than 10% yield and credit characteristics of
of its total assets its investment in mortgage-backed securities differ in
restricted securities and to no more a number of respects from traditional
than 5% of its total assets its fixed income securities. The major
investment in equity securities which differences typically include more
are not readily marketable and (c) frequent interest and principal
limit to no more than 5% of its total payments, usually monthly, and the
assets its aggregate investment in possibility that prepayment of
puts, calls, straddles, spreads, and principal may be made at any time.
any combinations thereof. Prepayment
The Municipal Trust Fund may invest
in municipal bonds that are subject
to the alternative

-27-

<PAGE>

rates are influenced by changes in Investment Grade Debt Securities
current interest rates and a variety The Funds may invest in debt
of other factors. In general, changes securities of investment grade
in the rate of prepayment on a quality. Investment grade debt
security will change the yield to securities are debt securities rated
maturity of the security. Under in one of the four highest rating
certain interest rate or prepayment categories by a nationally recognized
rate scenarios, a Fund may fail to statistical rating organization and
recoup fully its investment in such unrated debt securities believed by
securities notwithstanding the credit the Adviser (on the basis of criteria
quality of the issuers of such believed by the Adviser to be
securities. As a result of usual comparable to that applied by such
prepayment patterns, amounts rating agencies) to be of comparable
available for reinvestment are likely quality to debt securities so rated.
to be greater during a period of Debt securities rated Baa or higher
declining interest rates and, thus, by Moody's or BBB or higher by S&P
are likely to be invested at lower are investment grade securities.
interest rates, than during a period Securities rated BBB are regarded by
of rising interest rates. Mortgage- S&P as having an adequate capacity to
backed securities may decrease in pay interest and repay principal;
value as a result of increases in whereas such securities normally
interest rates and may benefit less exhibit adequate protection
than other fixed income securities parameters, adverse economic condi-
from declining interest rates because tions or changing circumstances are
of the risk of prepayment. Except for more likely, in the opinion of S&P,
the Municipal Trust Fund, the Funds to lead to a weakened capacity to pay
may also invest in private mortgage interest and repay principal for debt
pass-through securities. Such in this category than in higher rated
securities are not guaranteed by the categories. Securities rated Baa by
U.S. Government or its agencies or Moody's are considered by Moody's to
instrumentalities. In addition, the be medium grade obligations; they are
Aggressive Growth Fund may invest in neither highly protected nor poorly
securities representing interests in secured; interest payments and
a pool of mortgages or other assets principal security appear to be
the cash flow of which has been adequate for the present but certain
separated into its interest and protective elements may be lacking or
principal components, commonly known may be characteristically unreliable
as "IOs" (interest only) and "POs" over any great length of time; in the
(principal only), although the opinion of Moody's, they lack
Aggressive Growth Fund has no present outstanding investment charac-
intention to so invest. IOs and POs teristics and in fact have
issued by parties other than agencies speculative characteristics as well.
or instrumentalities of the U.S. For a more complete description of
Government are considered, under Moody's and S&P's ratings, see the
current guidelines of the staff of Appendix to the Statement of
the Securities and Exchange Additional Information incorporated
Commission, to be illiquid by reference into this Prospectus.
securities. Repurchase Agreements The Funds may
"Asset-backed securities" have enter into "repurchase agreements"
similar structural characteristics to with respect to U.S. Government
mortgage-backed securities, but the Securities. The Funds may enter into
underlying assets include assets such repurchase agreements with member
as motor vehicle installment sales or banks of the Federal Reserve System
installment loan contracts, leases of or "primary dealers" (as designated
various types of real and personal by the Federal Reserve Bank of New
property, and receivables from York) in such securities. Repurchase
revolving credit agreements, rather agreements permit a Fund to keep all
than mortgage loans or interests in of its assets at work while retaining
mortgage loans. Asset-backed "overnight" flexibility in pursuit of
securities present certain risks that investments of a longer-term nature.
are not present in mortgage-backed Winthrop requires continual
securities; primarily, these maintenance of collateral with the
securities do not have the benefit of Custodian in an amount equal to, or
the same security interest in the in excess of, the market value of the
related collateral. There is the securities which are the subject of a
possibility that recoveries of repurchase agreement. In the event a
repossessed collateral may not, in vendor defaults on its repurchase
some cases, be available to support obligation, the Fund might suffer a
payments on these securities. loss to the extent that the

-28-

<PAGE>

proceeds from the sale of the Government Securities maintained in
collateral were less than the an amount at least equal to the
repurchase price. If the vendor market value of the securities
becomes the subject of bankruptcy loaned. Accordingly, the Funds will
proceedings, the Fund might be continuously secure the lending of
delayed in selling the collateral. portfolio securities by collateral
Reverse Repurchase Agreements The held by the Custodian consisting of
Growth Fund, Aggressive Growth Fund, cash, cash equivalents or U.S.
Fixed Income Fund and Municipal Trust Government Securities maintained in
Fund each may also enter into reverse an amount at least equal to the
repurchase agreements. Under a market value of the securities
reverse repurchase agreement a Fund loaned. The Funds have the right to
would sell securities and agree to call such a loan and obtain the
repurchase them at a mutually agreed securities loaned at any time on five
upon date and price. At the time a days' notice. As is the case with any
Fund enters into a reverse repurchase extension of credit, loans of
agreement, it would establish and portfolio securities involve special
maintain with an approved custodian a risks in the event that the borrower
segregated account containing liquid should be unable to repay the loan,
high grade securities having a value including delays or inability to
not less than the repurchase price. recover the loaned securities or
Reverse repurchase agreements involve foreclose against the collateral. The
the risk that the market value of the aggregate value of securities loaned
securities subject to such agreement by a Fund may not exceed 25% of the
could decline below the repurchase value of its total assets.
price to be paid by a Fund for such When Issued, Delayed Delivery
securities. In the event the buyer of Securities and Forward Commitments
securities under a reverse repurchase The Funds may, to the extent
agreement filed for bankruptcy or consistent with their other
became insolvent, such buyer or investment policies and restrictions,
receiver would receive an extension enter into forward commitments for
of time to determine whether to the purchase or sale of securities,
enforce the Fund's obligations to including on a "when issued" or
repurchase the securities and the "delayed delivery" basis in excess of
Fund's use of the proceeds of the customary settlement periods for the
reverse repurchase could effectively type of security involved. In some
be restricted pending such decision. cases, a forward commitment may be
Reverse repurchase agreements create conditioned upon the occurrence of a
leverage, a speculative factor, but subsequent event, such as approval
are not considered borrowings or and consummation of a merger,
senior securities by the Funds or the corporate reorganization or debt
Securities and Exchange Commission to restructuring, i.e., a when, as and
the extent liquid high-grade assets if issued security. When such
are segregated in an amount at least transactions are negotiated, the
equal to the amount of the liability. price is fixed at the time of the
Securities Lending The Growth Fund, commitment, with payment and delivery
Aggressive Growth Fund, Fixed Income taking place in the future, generally
Fund and Municipal Trust Fund each a month or more after the date of the
may seek to receive or increase commitment. While the Funds will only
income by lending their respective enter into a forward commitment with
portfolio securities. Under present the intention of actually acquiring
regulatory policies, such loans may the security, the Funds may sell the
be made to member firms of the New security before the settlement date
York Stock Exchange and are required if it is deemed advisable.
to be secured continuously by Securities purchased under a
collateral held by the Custodian forward commitment are subject to
consisting of cash, cash equivalents market fluctuation, and no interest
or U.S. (or dividends) accrues to a Fund
prior to the settlement date. The
Funds will segregate with their
Custodian cash or liquid high-grade
debt securities in an aggregate
amount at least equal to the amount
of their respective outstanding
forward commitments.
Portfolio Turnover The portfolio
turnover rate for the Growth Fund,
the Fixed Income Fund, the Aggressive
Growth Fund, the Growth and Income
Fund and the Municipal Trust Fund for
the year ended October 31, 1995 was
101.7%, 66.1%, 25.1%, 31.8% and
49.3%, respectively.

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<PAGE>

INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

Winthrop has adopted certain
investment restrictions applicable to (4) Make loans of its assets to
each Fund which are fundamental any person, except for (i) the
policies and may not be changed with purchase of publicly distributed
respect to a Fund without the debt securities, (ii) the purchase
approval of the shareholders of that of non-publicly distributed
Fund. Briefly, these restrictions securities subject to paragraph 7,
provide that a Fund may not: (iii) the lending of portfolio
(1) Purchase the securities of securities, and (iv) the entering
any one issuer other than the of repurchase agreements.
United States Government or any of (5) Borrow money except for (i)
its agencies or instrumentalities, the short-term credits from banks
if immediately after such purchase referred to in paragraph 3 above
more than 5% of the value of the and (ii) borrowings from banks for
Fund's assets would be invested in temporary or emergency purposes,
such issuer or the Fund would own including the meeting of redemption
more than 10% of the outstanding requests which might require the
voting securities of such issuer, disposition of securities.
except that up to 25% of the value Borrowing in the aggregate may not
of the Fund's total assets may be exceed 15%, and borrowing for
invested without regard to such 5% purposes other than meeting
and 10% limitations. redemptions may not exceed 5% of
(2) Invest more than 25% of its the value of the Fund's total
total assets in the securities of assets (including all amounts
issuers conducting their principal borrowed) less liabilities (not
business activities in any one including all amounts borrowed) at
industry, provided that, for the time the borrowing is made.
purposes of this policy, consumer Outstanding borrowings in excess of
finance companies, industrial 5% of the value of the Fund's total
finance companies and gas, assets will be repaid before any
electric, water and telephone subsequent investments are made.
utility companies are each This restriction and asset
considered to be separate limitation on borrowing shall not
industries, and provided further, prohibit the Funds from entering
that there is no limitation for the into reverse repurchase agreements.
Fixed Income Fund, the Municipal (6) Mortgage, pledge or
Trust Fund, the Aggressive Growth hypothecate any of its assets,
Fund or the Growth and Income Fund except as may be necessary in
in respect of investments in U.S. connection with permissible
Government Securities or, for the borrowings mentioned in paragraph 5
Fixed Income Fund, the Municipal and except, with
Trust Fund and the Aggressive
Growth Fund, in municipal bonds
(including industrial development
bonds). A Fund may be deemed to be
concentrated to the extent that it
invests more than 25% of its total
assets in taxable municipal
securities issued by a single
issuer.
(3) Purchase securities on
margin, but a Fund may obtain such
short-term credits from banks as
may be necessary for the clearance
of purchases and sales of
securities.

-30-

<PAGE>

respect to the Aggressive Growth such purchase at the time thereof
Fund and the Growth and Income would cause more than 10% of the
Fund, in connection with hedging value of the total assets of the
transactions, short sales (against Fund to be invested in the
the box), when issued and forward securities of such issuer or
commitment transactions and similar issuers.
investment strategies. (10) With respect to the Growth
(7) Act as an underwriter of Fund, the Fixed Income Fund, the
securities of other issuers, except Municipal Trust Fund and the Growth
that a Fund may acquire restricted and Income Fund, purchase or retain
or not readily marketable the securities of any issuer if, to
securities under circumstances the knowledge of Winthrop's man-
where, if such securities were agement, those officers and
sold, the Funds or Winthrop might Trustees of Winthrop and its
be deemed to be an underwriter for Adviser who each own beneficially
purposes of the Securities Act of more than one-half of 1% of the
1933 and except, with respect to outstanding securities of such
the Aggressive Growth Fund, to the issuer together own more than 5% of
extent that in connection with the the securities of such issuer.
disposition of portfolio securities (11) With respect to the Growth
such Fund may be deemed to be an Fund, the Fixed Income Fund, the
underwriter. Municipal Trust Fund and the Growth
(8) Invest more than 10%, or 15% and Income Fund, invest more than
in the case of the Municipal Trust 5% of the value of its total assets
Fund, of the value of its net at the time an investment is made
assets in the aggregate in in the non-convertible preferred
restricted securities or other stock of issuers whose
instruments not having a ready non-convertible preferred stock is
market, including repurchase not readily marketable, subject to
agreements not terminable within the limitation in paragraph 8.
seven days; provided that the The Funds do not consider the
Aggressive Growth Fund will not segregation of assets in connection
invest in restricted securities. with any of their investment
Securities freely saleable among practices to be a mortgage, pledge or
qualified institutional investors hypothecation of such assets.
under special rules adopted by the
Securities and Exchange Commission
("Rule 144A Securities") are not
considered to be subject to legal
restrictions on transfer and may be
considered liquid if they satisfy
liquidity standards established by
the Board of Trustees. The
continued liquidity of such
securities is not as well assured
as that of publicly traded
securities, and accordingly, the
Board of Trustees will monitor
their liquidity. Restricted
securities will be valued in such
manner as the Trustees of Winthrop
in good faith deem appropriate to
reflect their value.
(9) With respect to the Growth
Fund, the Fixed Income Fund, the
Municipal Trust Fund and the Growth
and Income Fund, invest in the
securities of any issuer which has
a record of less than three years
of continuous operation (including
the operation of any predecessor)
if

-31-

<PAGE>

MANAGEMENT

Wood, Struthers & Winthrop Adviser and has been an employee of
Management Corp., a Delaware the Adviser since 1979.
corporation with principal offices at Roger W. Vogel is the portfolio
140 Broadway, New York, New York co-manager of the Growth Fund, the
10005 (the "Adviser"), has been Growth and Income Fund, and the
retained under an investment advisory Aggressive Growth Fund,a position he
agreement to provide investment has held since July, 1993, and a Vice
advice and to supervise the President of the Funds, and a Senior
management and investment programs of Vice President and Director of Equity
the Funds described above, subject to Research of the Adviser. He also
the general supervision and control chairs the Stock Selection Committee
of the Trustees of Winthrop. which is charged with the mandate of
The Adviser is a subsidiary of identifying undervalued stocks. Prior
Donaldson, Lufkin & Jenrette to becoming associated with the
Securities Corporation, which is a Funds, Mr. Vogel was a Vice President
member of the New York Stock Exchange and portfolio manager with Chemical
and a wholly-owned subsidiary of Don- Banking Corp.
aldson, Lufkin & Jenrette, Inc. Marybeth B. Leithead is the
("DLJ"), a major international portfolio manager of the Municipal
supplier of financial services. DLJ Trust Fund, a position she has held
is an independently operated, since the commencement of its
indirect subsidiary of The Equitable operations on July 28, 1993.
Companies Incorporated, a holding Ms. Leithead is also a Vice President
company controlled by AXA, a member of the Funds and of the Adviser and
of a large French insurance group. has been an employee of the Adviser
AXA is indirectly controlled by a since 1989. Prior to joining the
group of five French mutual insurance Adviser, Ms. Leithead was an employee
companies. of Citicorp Securities Markets Inc.
Various individuals are responsible Effective August, 1995, Hugh M.
for management of the Fund's Neuburger joined James A. Engle and
portfolio. Roger W. Vogel as co-portfolio
James A. Engle is the co-portfolio manager of the Growth Fund, the
manager of the Growth Fund (since Growth and Income Fund and the
March, 1993) and the Aggressive Aggressive Growth Fund. Mr. Neuburger
Growth Fund (since 1989, which is also a Senior Vice President of
includes its predecessor, the the Adviser and has been an employee
Neuwirth Fund, Inc.) and is a Vice of the Adviser since March, 1995.
President of the Funds. Mr. Engle is Prior to March, 1995, Mr. Neuburger
also co-portfolio manager of the was the president of Hugh M.
Growth and Income Fund (since July, Neuburger, Inc., a consulting firm
1993) prior to which he was its sole providing domestic and global
portfolio manager (since 1986, which tactical asset allocation advice and
includes its predecessor, the Pine other consulting services to large
Street Fund, Inc.). Mr. Engle is corporate and state pension plans.
also Chief Investment Officer and From 1986 through 1991, Mr. Neuburger
Managing Director of the Adviser, and was Managing director of Matrix
heads the Investment Committee which Capital Management, an investment
focuses its attention on identifying management firm. Prior thereto, Mr.
undervalued securities. He has been Neuburger was with the Prudential
an employee of the Adviser since Insurance Company of America managing
1983. asset allocation portfolios.
Cathy A. Jameson is the portfolio Under its Advisory Agreement with
manager of the Fixed Income Fund, a Winthrop, the Adviser provides
position she has held since the investment advisory services and
commencement of operations of the order placement facilities for each
Fixed Income Fund and is a Vice of the Funds
President of the Funds. Ms. Jameson
is also a Senior Vice President of
the

-32-

<PAGE>

and pays all compensation of Trustees October 31, 1996 the Adviser may, in
of Winthrop who are affiliated its sole discretion, determine to
persons of the Adviser. The Adviser reduce its management fees by the
or its affiliates also furnish amount that Total Fund Operating
Winthrop, without separate charge, Expenses exceed 1.000% of the average
management supervision and assistance daily net assets of the Fixed Income
and office facilities. Winthrop pays Fund or it may determine to
a fee to the Adviser at the following discontinue this practice. As a
annual percentage rates of the result of the voluntary assumption of
average daily net assets of each expenses, the Adviser reimbursed the
Fund: Growth Fund, .750 of 1% of the Fund $230,399 during the year ended
first $100,000,000, .500 of 1% of the October 31, 1995. Absent such
balance; Aggressive Growth Fund, .875 reimbursement, the Fixed Income
of 1% of the first $100,000,000, .750 Fund's total operating expenses for
of 1% of the next $100,000,000 and the year ended October 31, 1995 would
.625 of 1% of net assets in excess of have amounted to 1.51% of its average
$200,000,000; Fixed Income Fund, .625 daily net assets.
of 1% of the first $100,000,000, .500 Pursuant to the Advisory Agreement,
of 1% of the balance; Municipal Trust the Growth and Income Fund has paid
Fund, .625 of 1% of the first the Adviser an advisory fee of
$100,000,000, .500 of 1% of the $556,556, equivalent to .74% of the
balance; and Growth and Income Fund, average daily net assets for the year
.750 of 1% of the first $75,000,000, ended October 31, 1995. The Growth
.500 of 1% of the balance. The and Income Fund's total operating
advisory fees to be paid by the expenses for such period were
Growth Fund, the Aggressive Growth $1,188,201, which amounted to 1.58%
Fund and the Growth and Income Fund of its average daily net assets.
are higher than those paid by many Pursuant to the Advisory Agreement,
other mutual funds with similar the Municipal Trust Fund has paid the
investment objectives. Adviser an advisory fee of $224,300,
Pursuant to the Advisory Agreement, equivalent to .625% of the average
the Growth Fund has paid the Adviser daily net assets for the year ended
an advisory fee of $395,327, October 31, 1995. Commencing July 1,
equivalent to .750% of the average 1994 the Adviser agreed to reimburse
daily net assets for the year ended through October 31, 1995 all
October 31, 1995. The Growth Fund's operating expenses in excess of
total operating expenses for such 1.000% of the average daily net
period were $859,087, which amounted assets of the Fund. For the period
to 1.63% of its average daily net November 1, 1995 through October 31,
assets. 1996 the Adviser may, in its sole
Pursuant to the Advisory Agreement, discretion, determine to reduce its
the Aggressive Growth Fund has paid management fees by the amount that
the Adviser an advisory fee of Total Fund Operating Expenses exceed
$1,432,939, equivalent to .82% of the 1.000% of the average daily net
average daily net assets for the year assets of the Municipal Trust Fund or
ended October 31, 1995. The it may determine to discontinue this
Aggressive Growth Fund's total practice. As a result of the
operating expenses for such period voluntary assumption of expenses, the
were $2,861,129, which amounted to Adviser reimbursed the Fund $208,045
1.64% of its average daily net during the year ended October 31,
assets. 1995. Absent such reimbursement, the
Pursuant to the Advisory Agreement, Municipal Trust Fund's total
the Fixed Income Fund has paid the operating expenses for such period
Adviser an advisory fee of $281,997, would have amounted to 1.58% of its
equivalent to .625% of the average average daily net assets.
daily net assets for the year ended
October 31, 1995. The Fixed Income
Fund's total operating expenses for
such period were $681,594. Commencing
July 1, 1994, the Adviser reimbursed
through October 31, 1995 such
operating expenses in excess of
1.000% of the average daily net
assets of the Fixed Income Fund. For
the period November 1, 1995 through

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<PAGE>

EXPENSES OF WINTHROP

General associated with the distribution of
In addition to the payments to the its shares. Under SEC regulations,
Adviser under the investment advisory some of the payments described below
agreement described above, Winthrop to be made by Winthrop could be
pays the other expenses incurred in deemed to be distribution expenses
its organization and operations, within the meaning of such rule.
including the costs of printing Thus, pursuant to Rule 12b-1,
prospectuses and other reports to Winthrop's Trustees, including a
existing shareholders; all expenses majority of its disinterested
and fees related to registration and Trustees, have adopted separate 12b-1
filing with the Securities and Plans to compensate the distributor
Exchange Commission ("SEC") and with for the expenses to be incurred in
state regulatory authorities; distributing each Fund's Class A
custody, transfer and dividend Shares (the "12b-1 Class A Plans")
disbursing expenses; legal and and Class B shares (the "12b-1 Class
auditing costs; clerical, accounting, B Plans" and collectively, the "12b-1
and other office costs; fees and Plans"), and Winthrop, on behalf of
expenses of Trustees who are not each Fund, has entered into a
affiliated with the Adviser; costs of Distribution Agreement (the
maintenance of existence; and "Agreement") with Donaldson, Lufkin &
interest charges, taxes, brokerage Jenrette Securities Corporation,
fees, and commissions. As to the Winthrop's distributor (the
obtaining of clerical and accounting "Distributor").
services not required to be provided With respect to each Fund, the
to Winthrop by the Adviser under the amount payable by a Fund under the
investment advisory agreement, Rule 12b-1 Class A Plans for
Winthrop may employ its own distributing Class A shares is .30 of
personnel. For such services, it also 1% of the average daily net assets of
may utilize personnel employed by the the Class A shares during the year
Adviser or by its affiliates. In such consisting of (i) an asset-based sales
event, the services shall be provided charge of .05 of 1% of the average
to Winthrop at cost and the payments daily net assets of the Class A
therefor must be specifically shares and (ii) a service fee of up
approved in advance by Winthrop's to .25 of 1% of the average daily net
Trustees, including a majority of its assets of the Class A shares. Under
disinterested Trustees. the Rule 12b-1 Class B Plans, the
The investment advisory agreement amount payable by a Fund for
provides that the Adviser will distributing Class B shares is 1% of
reimburse Winthrop for the expenses the average daily net assets of the
of any Fund (exclusive of interest, Class B shares during the year
taxes, brokerage, expenditures consisting of (i) an asset-based
pursuant to the distribution services sales charge of up to .75 of 1% of
agreement described below, and the average daily net assets of the
extraordinary expenses, all to the Class B shares and (ii) a service fee
extent permitted by applicable state of up to .25 of 1% of the average
law and regulations) which in any daily net assets of the Class B
year exceed the limits prescribed by shares. The Agreement but not the
any state in which shares of such Rule 12b-1 Plans terminate in the
Fund are qualified for sale. Winthrop event of assignment of the Agreement.
believes that presently the most Under the 12b-1 Plans, each Fund is
restrictive applicable expense ratio obligated to pay distribution and/or
limitation is 2 1/2% of the first $30 service fees to the Distributor as
million of average net assets and 2% compensation for its distribution and
of the next $70 million of average service activities, not as
net assets and 1 1/2% of average net reimbursement for specific expenses
assets in excess of $100 million. incurred. If the Distributor's
Distribution Agreement expenses exceed its distribution and
Rule 12b-1 adopted by the SEC under service fees, the Fund will not be
the Investment Company Act of 1940 obligated to pay any additional
permits an investment company expenses. If the Distributor's
directly or indirectly to pay expenses
expenses

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<PAGE>

are less than such distribution and shareholders. In addition to the
service fees, it will retain its full concession paid to dealers or agents,
fees and realize a profit. the Distributor will from time to
With respect to sales of a Fund's time pay additional compensation to
Class B shares through a broker- dealers or agents in connection with
dealer, the Distributor pays the the sale of shares. Such additional
broker-dealer a concession at the amounts may be utilized, in whole or
time of sale. In addition, an ongoing in part, in some cases together with
maintenance fee may be paid to other revenues of such dealers or
broker-dealers on sales of both Class agents, to provide additional
A shares and Class B shares. compensation to registered
Pursuant to the Rule 12b-1 Plans, the representatives of such dealers or
Distributor is then reimbursed for agents who sell shares of the Fund.
such payments with amounts paid from On some occasions, such compensation
the assets of such Fund. The will be conditioned on the sale of a
payments to the broker-dealer, specified minimum dollar amount of
although a Fund expense which is paid the shares of the Funds during a
by all shareholders, will only specific period of time. Such
directly benefit investors who incentives may take the form of
purchase their shares through a payment for meals, entertainment, or
broker-dealer rather than from the attendance at educational seminars
Funds. Broker-dealers who sell shares and associated expenses such as
of the Funds may provide services to travel and lodging. Such dealer or
their customers that are not agent may elect to receive cash
available to investors who purchase incentives of equivalent amounts in
their shares directly from the Funds. lieu of such payments.
Investors who purchase their shares The Trustees, including a majority
directly from the Funds will pay a of the disinterested trustees,
pro rata share of the Funds' expenses approved the 12b-1 Plans at a meeting
of encouraging broker-dealers to on October 19, 1995 and such 12b-1
provide such services but not receive Plans will not be effective until
any of the direct benefits of such February 28, 1996. Payments under the
services. The 12b-1 Fees will prior Rule 12b-1 plans and then
continue to be paid to these broker- existing distribution agreement for
dealers for as long as the related the year ended October 31, 1995 were
assets remain in the Funds. made in an amount equal to .50% of
In adopting the 12b-1 Plans, the each Fund's average daily net assets,
Trustees determined that there is a the maximum allowable under
reasonable likelihood that the 12b-1 provisions of the prior 12b-1 plans
Plans may benefit Winthrop and its and the agreement. Prior to February
shareholders. 28, 1996, the 12b-1 Plans operated as
Under the Agreement, the Adviser "reimbursement type" plans, that is,
may make payments to the Distributor the Distributor received payments
from the Adviser's own resources, under the 12b-1 Plans only to the
which may include the management fees extent it had properly expended
paid by Winthrop. Amounts paid under amounts on behalf of the Funds
the 12b-1 Plans and the Agreement are pursuant to the 12b-1 plans. See
used in their entirety to compensate "Distributor" in the Statement of
the Distributor for expenses incurred Additional Information.
to (i) promote the sale of shares of
each Fund by, for example, paying for
the preparation, printing and
distribution of prospectuses, sales
brochures and other promotional
materials sent to prospective
shareholders, by directly or
indirectly purchasing radio,
television, newspaper and other
advertising or by compensating the
Distributor's employees or employees
of the Distributor's affiliates for
their distribution assistance, (ii)
make payments to the Distributor to
compensate broker-dealers or other
persons for providing distribution
assistance and (iii) make payments to
compensate financial intermediaries
for providing administrative and
accounting services with respect to
Winthrop

-35-

<PAGE>

PURCHASES, REDEMPTIONS AND SHAREHOLDER SERVICES

Purchases Existing shareholders wishing to
Shares of each of the Funds will be purchase additional shares of a Fund
offered on a continuous basis may use the investment stub found at
directly by the Funds and by the the bottom of the Funds' Shareholder
Distributor, acting as agent for the Statement form or, if one is not
Funds, at the respective net asset available, they may send a check
value per share determined as of the payable to such Fund directly to
close of the regular trading session Winthrop's Transfer Agent, Fund/Plan
of the New York Stock Exchange (the Services, Inc. at the address
"NYSE"), currently 4:00 p.m., New indicated on the cover of this
York City time, following receipt of Prospectus. Any check for additional
a purchase order in proper form plus, shares sent directly to Winthrop
in the case of Class A shares of each should reference the account number
Fund, an initial sales charge imposed to which it should be credited.
at the time of purchase or, in the As a convenience to the investor
case of Class B shares of each Fund, and to avoid unnecessary expense to
subject to a contingent deferred Winthrop, share certificates
sales charge upon redemption. The representing shares of the Fund
investor should send a completed purchased are not issued except upon
Share Purchase Application (found in the written request of the share-
this Prospectus) and enclose a check holder. This facilitates later
in the amount of the initial redemption and relieves the
investment to the Transfer Agent, shareholder of the responsibility and
Fund/Plan Services, Inc., P.O. Box inconvenience of preventing the share
874, Conshohocken, PA 19428, Attn: certificates from becoming lost or
Winthrop Focus Funds. stolen. No certificates are issued
The initial minimum investment in for fractional shares (although such
each Fund is $250 and $25 for shares remain in the shareholder's
subsequent investments in a Fund. account on the books of Winthrop).
(For example, an investor wishing to Further information and assistance
make an initial investment in shares is available by contacting Winthrop
of two Funds would be required to at the address or telephone number
invest at least $250 in each Fund.) listed on the cover page of this
Full and fractional shares will be Prospectus.
credited to an investor's account in In selecting shares for purchase,
the amount of the investment. Each you should consider, among other
Fund reserves the right to reject any things, (i) the length of time you
Share Purchase Application in its expect to hold your shares, (ii) the
sole discretion. Shareholder accounts amount of any applicable sales charge
established on behalf of the (including the timing of such charge,
following types of plans will be i.e., whether it is imposed at time
----
exempt from the Fund's minimum of purchase or the time of
initial investment and minimum redemption), (iii) whether you
subsequent investment requirements: qualify for any reduction or waiver
(i) retirement plans qualified under of any applicable sales charge, (iv)
section 401(k) of the Code; (ii) the various exchange privileges
plans described in section 403(b) of between the difference classes (see
the Code; (iii) deferred compensation "Additional Shareholder Services --
plans described in section 457 of the Exchange Privilege") and (v) that
Code; (iv) simplified employee Class B shares automatically convert
pension (SEP) plans; and (v) salary to Class A shares approximately eight
reduction simplified employee pension years after purchase.
(SARSEP) plans. With respect to Class Redemptions
B Shares, an investor's maximum Shares of Winthrop may be redeemed
investment in such shares is at a redemption price equal to the
$250,000. net asset value per share, as next
computed following the receipt in
proper form by Winthrop of shares
tendered for

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<PAGE>

redemption, less any applicable fails to do so, Winthrop reserves
contingent deferred sales charge in the right to close such account and
the case of Class B shares and send the proceeds to the shareholder.
certain redemptions of Class A IRAs and other qualified retirement
shares. accounts are not subject to mandatory
The value of a shareholder's shares redemption.
on redemption may be more or less A Fund will not redeem
than the cost of such shares to the involuntarily any shareholder account
shareholder, depending upon the value with an aggregate balance of less
of the Fund's portfolio securities at than $250 based solely on the market
the time of such redemption or movement of such Fund's shares.
repurchase. (See "Dividends, The right of redemption may not be
Distributions and Taxes", page __, suspended or the date of payment upon
for a discussion of the tax redemption postponed for more than
consequences of a redemption.) seven days after shares are tendered
To redeem shares for which no share in proper form for redemption, except
certificates have been issued, the for any period during which the New
registered owner or owners should York Stock Exchange is closed (other
forward a letter to Winthrop's than customary weekend and holiday
Transfer Agent, Fund/Plan Services, closings) or during which trading on
Inc. containing a request for the exchange is deemed to be
redemption of such shares at the next restricted under rules of the SEC, or
determined net asset value per share. for any period during which an
Alternatively, the shareholder may emergency (as determined by the SEC)
elect the right to redeem shares by exists as a result of which disposal
telephone. (See "Additional by Winthrop of its portfolio
Shareholder Services--Telephone securities is not reasonably
Redemption and Exchange Privilege", practicable, or as a result of which
page 33.) it is not reasonably practicable for
If the total value of the shares Winthrop to determine the value of
being redeemed exceeds $50,000 its net assets, or for such other
(before deducting any applicable period as the SEC may by order permit
contingent deferred sales charge) or for the protection of shareholders.
a redemption request directs proceeds Generally, redemptions will be made
to a party other than the registered by payment in cash or by check. (See
account owner(s), the signature or the Statement of Additional
signatures on the letter or the Information.)
endorsement must be guaranteed by an For information concerning
"eligible guarantor institution" as circumstances in which redemptions
defined in Rule 17Ad-15 under the may be effected through the delivery
Securities Exchange Act of 1934. of in kind portfolio securities, see
Eligible guarantor institutions the Statement of Additional
include banks, brokers, dealers, Information.
credit unions, national securities
exchanges, registered securities Initial Sales Charge
associations, clearing agencies and
savings associations. A broker-dealer Class A shares of each Fund are
guaranteeing signatures must be a offered at net asset value next
member of a clearing corporation or determined plus a sales charge, as
maintain net capital of at least follows:
$100,000. Credit unions must be
authorized to issue signature guaran-
tees. Signature guarantees will be
accepted from any eligible guarantor
institution which participates in a
signature guarantee program.
Additional documents may be required
for redemption of corporate,
partnership or fiduciary accounts.
The requirement for a guaranteed
signature is for the protection of
the shareholder in that it is
intended to prevent an unauthorized
person from redeeming his shares and
obtaining the redemption proceeds.
Winthrop may request in writing
that a shareholder whose account in a
Fund has an aggregate balance of less
than $250 increase his account to at
least that amount within 60 days. If
the shareholder

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<PAGE>

<TABLE>
<S> <C>
Initial Sales Charge (4) an agent or broker of a dealer
Commission to that has a sales agreement with the
As a % of As a % of Dealer/Agent Distributor, for their own account or
Amount Net Amount Offering as a % of an account of a relative of any such
person, or any trust or individual
Purchased Invested Price Offering Price retirement account or self-employed
- --------- -------- ----- -------------- retirement plan for the benefit of
any such person or relative; or the
Less than estate of any such person or
relative, if such sales are made for
$50,000.. 4.99% 4.75% 4.25% investment purposes (such shares may
not be resold except to the Funds).
$50,000 to To qualify, the Distributor or
less than Transfer Agent must be notified at
$100,000 4.71 4.50 4.00 the time of purchase; and
$100,000 to
less than (5) shares purchased by registered
$250,000 3.90 3.75 3.25 investment advisors or broker-dealers
$250,000 to that have sales agreements with the
Funds and which shares have been
less than purchased on behalf of wrap fee
$500,000 2.56 2.50 2.25 client accounts for which such
$500,000 to registered investment advisors or
less than 1.78 1.75 1.60 broker-dealers charge a fixed fee and
$1,000,000
$1,000,000
or more.. 0 0 0

</TABLE>

On purchases of $1,000,000 or more,
perform advisory, custodial, record
there is no initial sales charge; the
keeping or other services.
Distributor may pay the dealer a fee
(6) shareholders of Neuwirth Fund,
of up to 1% as follows: 1% on
Inc., Pine Street Fund, Inc. and
purchases up to $2 million, plus .80%
deVegh Mutual Fund, Inc., which were
on the next $1 million up to $3
diversified, no-load open-end manage-
million, .50% on the next $47 million
ment investment companies to which
up to $50 million, .25% on purchases
the Adviser provided investment
over $50 million. In addition, Class
advisory services, provided such
A shares issued upon conversion of
shareholder purchased such shares for
other shares of the Fund are not
an account established upon the
subject to an initial sales charge.
conversion of pre-existing shares to
Sales at Net Asset Value Class A shares on February 28, 1996.
The initial sales charge will be
Reduced Sales Charges
waived for the following shareholders
A reduction of sales charge rates
or transactions:
in the tables above may be obtained
(1) investment advisory clients of for participants in any of the
the Adviser; following discount programs. These
programs allow an investor to receive
(2) officers and Trustees of the a reduced offering price based upon
Funds, directors or trustees of other the assets held or pledged by the
investment companies managed by the investor. The term "investor" refers
Adviser, officers, directors and to (i) an individual, (ii) an
full-time employees of the Adviser individual and spouse purchasing
and of its wholly-owned subsidiaries shares of the Fund for their own
or parent entities ("Related account or for the trust or custodial
Entities"); or the spouse, siblings, accounts of their minor children, or
children, parents or grandparents (iii) a fiduciary purchasing for any
(collectively, "relatives") of any one trust, estate or fiduciary
such person, or any trust or account, including employee benefit
individual retirement account or plans of a single employer.
self-employed retirement plan for the
benefit of any such person or Letter of Intent
relative; or the estate of any such By initially investing $250 and
person or relative, if such sales are submitting a Letter of Intent to the
made for investment purposes (such Funds' Distributor or Transfer Agent,
shares may not be resold except to an investor may purchase shares of
the Funds); the Fund over a 13-month period at
(3) certain employee benefit plans the reduced
for employees of the Adviser and
Related Entities;

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<PAGE>

sales charge applying to the
aggregate amount of the intended To qualify for a reduced sales
purchases stated in the Letter. The charge, the investor may combine
Letter may apply to purchases made up concurrent purchases of shares
to 90 days before the date of the purchased within the Winthrop Focus
Letter. It is the investor's Funds or shares of the Winthrop
responsibility to notify the Transfer Opportunity Funds. For example, if
Agent at the time the Letter is the investor concurrently invests
submitted that there are prior $25,000 in one Fund and $25,000 in
purchases that may apply. another, the sales charge would be
5% of the amount of the Letter will reduced to reflect a $50,000
be held in escrow by the Transfer purchase. In order to exercise the
Agent until the investment Concurrent Purchases privilege the
contemplated by the Letter is investor must notify the Distributor
completed within the 13-month period. or Transfer Agent.
The 13-month period begins on the
Combined Purchase Privilege
date of the earliest purchase. If the
intended investment is not completed, By combining the investor's
the Transfer Agent will redeem an holdings of shares within the
appropriate number of the escrowed Winthrop Focus Funds or with shares
shares in order to realize the held in the Winthrop Opportunity
difference between the sales charge Funds, the investor can reduce the
on the shares purchased at the initial sales charges on any
reduced rate and the sales charge additional purchases of Class A
applicable to the total shares shares. The investor may also use
purchased. these combinations under a Letter of
Intent. This allows the investor to
Right of Accumulation make purchases over a 13-month period
For investors who already have an and qualify the entire purchase for a
account with the Funds, reduced sales reduction in initial sales charges on
charges based upon the Funds' sales Class A shares. A combined purchase
charge schedule are applicable to of $1,000,000 or more may trigger the
subsequent purchases. The sales payment of a dealer's commission and
charge on each additional purchase is the applicability of a Limited CDSC,
determined by adding the current as defined below.
market value of the shares the
investor currently owns to the amount
being invested. The Right of Reinstatement Privilege
Accumulation is illustrated by the
The Reinstatement Privilege permits
following example: if a previous
shareholders to reinvest the proceeds
purchase currently valued in the
of each Fund's Class A shares
amount of $50,000 had been made
redeemed, within 120 days from the
subject to a sales charge and the
redemption, without an initial sales
shares are still held, a current
charge. It is the investor's
purchase of $50,000 will qualify for
responsibility to notify the Transfer
a 3.75% sales charge (i.e. the sales
Agent in order to exercise the
charge on a $100,000 purchase). The
Reinstatement Privilege.
reduced sales charge is applicable
only to current purchases. It is the Contingent Deferred Sales Charge on
investor's responsibility to notify Class B Shares
the Transfer Agent at the time of
A shareholder can purchase Class B
subsequent purchases that the account
shares at net asset value without an
is eligible for the Right of
initial sales charge. However a
Accumulation.
shareholder may pay a Contingent
To be entitled to a reduced sales Deferred Sales Charge ("CDSC") if
charge based upon shares already such shareholder redeems within four
owned, the investor must notify the years after purchase. The CDSC will
Distributor or the Transfer Agent at be assessed on an amount equal to the
the time of the purchase that he lesser of the then current net asset
wishes to take advantage of such value or the original purchase price
entitlement, and give the numbers of of the Class B shares being redeemed.
his accounts, and those accounts held Accordingly, no Class B CDSC will be
in the name of his spouse or for imposed on amounts representing
minor children, the age of any such increases in net asset value above
child and the specific relationship the initial purchase price of the
of each such person to the investor. shares identified for
Concurrent Purchases

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<PAGE>

redemption. In determining the Class semi-annual or annual basis are not
B CDSC, Class B shares are redeemed eligible for the waiver); and
in the following order: (i) those (4) liquidations, distributions
acquired pursuant to reinvestment of or loans from the following types
dividends or distributions, (ii) of retirement plan accounts: (i)
those held for over four years, and retirement plans qualified under
(iii) those held longest during the section 401(k) of the Code; (ii)
four-year period. plans described in section 403(b)
Where the charge is imposed, the of the Code and (iii) deferred
amount of the charge will depend on compensation plans described in
the number of years since the section 457 of the Code.
shareholder made the purchase
Redemptions effected by the Funds
according to the table below.
pursuant to their right to liquidate
Year Since Percentage a shareholder's account with a
Purchase Contingent current net asset value of less than
Payment Deferred $250 will not be subject to the CDSC.
Was Made Sales Charge
-------- ------------ Contingent Deferred Sales Charge
on Class A Shares
First ....................... 4%
A Limited Contingent Deferred Sales
Second ..................... 3% Charge ("Limited CDSC") will be
imposed by the Funds upon certain
Third ....................... 2% redemptions of Class A shares (or
shares into which such Class A shares
Fourth ...................... 1% are exchanged) made within 12 months
of purchase, if such purchases were
Fifth and thereafter ....... 0% made at net asset value and triggered
the payment by the Distributor of the
dealer's commission described above
The amount of any contingent
(i.e. purchases of $1,000,000 or
deferred sales charge will be paid by
more).
the shareholder to and retained by
the Distributor and will not offset The Limited CDSC will be paid to
the amounts which may be paid to the the Distributor and will be equal to
Distributor under the Agreement. For the lesser of 1% of (i) the net asset
federal income tax purposes, the value at the time of purchase of the
amount of the CDSC will reduce the Class A shares being redeemed or (ii)
gain or increase the loss, as the the net asset value of such Class A
case may be, recognized by a shares at the time of redemption. For
shareholder on the redemption of purposes of this formula, the "net
shares. asset value at the time of purchase"
will be the net asset value at the
The contingent deferred sales time of purchase of such Class A
charge will be waived for the shares even if those shares are later
following shareholders or exchanged and, in the event of an
transactions: exchange of such Class A shares, the
(1) shares received pursuant to "net asset value of such shares at
the exchange privilege which are the time of redemption" will be the
currently exempt from a contingent net asset value of the shares into
deferred sales charge; which the Class A shares have been
exchanged.
(2) redemptions as a result of
shareholder death or disability (as Redemptions of such Class A shares
defined in the Internal Revenue held for more than 12 months will not
Code of 1986, as amended) (the be subjected to the Limited CDSC and
"Code"); an exchange of such Class A shares
will not trigger the imposition of
(3) redemptions made pursuant to
the Limited CDSC at the time of such
a Fund's systematic withdrawal plan
exchange. The period a shareholder
pursuant to which up to 1% monthly
-------
owns shares into which Class A shares
or 3% quarterly of the account's
---------
are exchanged will count towards
total market value (excluding
satisfying the 12-month holding
dividend reinvestment) not to
period. The Funds will assess the
exceed 10% of total market value
Limited CDSC if such 12-month
over any 12 month rolling period
(systematic withdrawals elected on a

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<PAGE>

period is not satisfied irrespective increased through reinvestment of
of whether the redemption triggering dividends and capital gains
its payment is of the Class A shares distributions.
of the Funds or shares into which the The contingent deferred sales
Class A shares have been exchanged. charge on Class A shares issued upon
In determining whether a Limited conversion of Converted Shares will
CDSC is payable, it will be assumed be waived for the following
that shares not subject to the shareholders or transactions:
Limited CDSC are the first redeemed
(1) shareholders of Neuwirth
followed by other shares held for the
Fund, Inc., Pine Street Fund, Inc.
longest period of time. The Limited
and deVegh Mutual Fund, Inc., which
CDSC will not be imposed upon shares
were diversified, no-load open-end
representing reinvested dividends or
management investment companies to
upon amounts representing share
which the Adviser provided invest-
appreciation. All investments made
ment advisory services;
during a calendar month, regardless
of when during the month the (2) investment advisory clients
investment occurred, will age one of the Adviser;
month on the last day of that month
(3) officers and Trustees of
and each subsequent month.
Winthrop, directors or trustees of
The Limited CDSC will be waived for other investment companies managed
the shareholders and transactions by the Adviser, officers, directors
described above in "Contingent and full-time employees of the
Deferred Sales Charge" and "Sales at Adviser and of its wholly-owned
Net Asset Value." subsidiaries or parent entities
("Related Entities"); or the
Contingent Deferred Sales Charge on
spouse, siblings, children, parents
Converted Shares
or grandparents (collectively,
Class A shares issued upon "relatives") of any such person, or
conversion of shares of a Fund any trust or individual retirement
purchased prior to February 28, 1996, account or self-employed retirement
("Converted Shares") will be subject plan for the benefit of any such
to the same contingent deferred sales person or relative; or the estate
charge at the same rate and for the of any such person or relative, if
same periods of time as the Converted such sales are made for investment
Shares were subject to at the time of purposes (such shares may not be
purchase. This CDSC is similar in all resold except to Winthrop);
respects to the CDSC charged on Class (4) certain employee benefit
B shares except that the CDSC will plans for employees of the Adviser
not be imposed if the amount redeemed and Related Entities;
is derived from increases in the
value of the account in a Fund (5) an agent or broker of a
(whether from appreciation or dealer that has a sales agreement
reinvestment of dividends and capital with the Distributor, for their own
gains distributions) above the account or an account of a relative
amounts of purchase payments during of any such person, or any trust or
the past four years. individual retirement account or
self-employed retirement plan for
For purposes of the CDSC on Class A
the benefit of any such person or
shares issued upon conversion of
relative; or the estate of any such
Converted Shares, it is assumed that
person or relative, if such sales
the redemption is made from the
are made for investment purposes
earliest purchase payment from which
(such shares may not be resold
a redemption (or exchange) has not
except to the Funds). To qualify,
already been effected.
the Distributor or Transfer Agent
Because the contingent deferred must be notified at the time of
sales charge on Class A shares issued purchase;
upon conversion of Converted Shares (6) redemptions as a result of
is based on dollar value rather than shareholder death or disability (as
number of shares, it may be imposed defined in the Internal Revenue
even if the number of shares in the Code of 1986, as amended) ("the
investor's account has Code");

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<PAGE>

(7) redemptions made pursuant to anniversary after purchase before the
Winthrop's systematic withdrawal plan shares will automatically convert
up to 1% monthly or 3% quarterly of into Class A shares.
------- ---------
the account's total purchase payments Since annual distribution fees are
(excluding dividend reinvestment) not lower for Class A shares than for
to exceed 10% of total purchase Class B shares, the per share net
payments over any 12 month rolling asset value of Class A shares may be
period (systematic withdrawals higher than that of Class B shares at
elected on a semi-annual or annual the time of conversion. As a result,
basis are not eligible for the although the aggregate dollar amount
waiver); and of the Class A shares issued upon
(8) liquidations, distributions conversion of Class B shares will be
or loans from the following types the same as the aggregate dollar
of retirement plans established on amount of the Class B shares
or after February 1, 1995: (i) converted, a shareholder may receive
retirement plans qualified under a lesser number of Class A shares
section 401(k) of the Code; (ii) than the number of Class B shares
plans described in section 403(b) converted.
of the Code (iii) and deferred
All such automatic conversions of
compensation plans described in
Class B shares will constitute a tax-
section 457 of the Code.
free exchange for federal income tax
(9) shares purchased by purposes.
registered investment advisers or Additional Shareholder Services
broker-dealers that have sales
agreements with the Funds and which Exchange Privilege Shares of one
shares have been purchased on class of a Fund may be exchanged by
behalf of wrap fee client accounts mail or telephone (see "Telephone
for which such registered Redemption and Exchange Privilege",
investment advisers or broker- p. 32), for shares of the same class
dealers charge a fixed fee and of another Fund or for shares of
perform advisory, custodial, record Alliance Government Reserves or
keeping or other services. Alliance Municipal Trust
(collectively, the "Alliance Money
Redemptions effected by Winthrop
Market Funds"). The Alliance Money
pursuant to its right to liquidate a
Market Funds are no-load money market
shareholder's account with a current
funds which retain Alliance Capital
net asset value of less than $250
Management Company, Inc. as
will not be subject to the contingent
investment adviser.
deferred sales charge.
In addition, shares of each Fund
Automatic Conversion of Class B may be exchanged for shares of the
Shares same class of the Winthrop
Class B shares held for eight years Opportunity Funds, another investment
after purchase will be automatically company managed by the Adviser, which
converted into Class A shares. The is currently comprised of two separ-
Fund will effect conversions of Class ate portfolios, the Winthrop
B shares into Class A shares only Developing Markets Fund and the
four times in any calendar year, on Winthrop International Equity Fund.
the last business day of the second Each Winthrop Opportunity Fund
full week of March, June, September portfolio offers two classes of
and December (each, a "Conversion shares, Class A shares which are sold
Date"). If the eighth anniversary with a front-end sales charge of up
after a purchase of Class B shares to 5.75% and a 12b-1 Fee of .25%
falls on a Conversion Date, an annually and Class B shares which are
investor's Class B shares will be sold with a contingent deferred sales
converted on that date. If the charge which declines from 4% to zero
eighth anniversary occurs between depending on the period of time the
Conversion Dates, an investor's Class shares are held and a 12b-1 Fee of 1%
B shares will be converted on the annually. Class A shares subject to a
next Conversion Date after such contingent deferred sales charge as
anniversary. Consequently, if a described in "Contingent Deferred
shareholder's eighth anniversary Sales Charge on Class A Shares" and
falls on the day after a Conversion "Contingent Deferred Sales Charge on
Date, that shareholder will have to Converted Shares" which are exchanged
hold Class B shares for as long as an for Class A shares of the Winthrop
additional three months after the Opportunity Funds will continue to be
eighth subject to the same contingent
deferred sales

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<PAGE>

charge at the same rate and for the Shareholders should be aware that
same period of time as they were an exchange is treated for federal
prior to exchange. income tax purposes as a sale and
purchase of shares which may result
The exchange privilege for the
in recognition of gain or loss.
Funds, the Winthrop Opportunity
Funds, and the Alliance Money Market Automatic Monthly Investment Plan A
Funds is available only in states shareholder may elect on the Share
where shares of the relevant Fund, Purchase Application to make
Winthrop Opportunity Fund or Alliance additional investments in a Fund
Money Market Fund may be legally automatically, by authorizing
sold. Prospectuses for each of the Winthrop to draw on the shareholder's
Winthrop Opportunity Funds and account regularly by check.
Alliance Money Market Funds may be
A shareholder may change the date
obtained from Winthrop at the address
(either the 10th, 15th or 20th of
or telephone number listed on the
each month) or amount (subject to a
cover page of this Prospectus. An
minimum of $25) of the shareholder's
exchange is effected on the basis of
monthly investment at any time by
each Fund's relative net asset value
letter or telephone call to Winthrop
per share next computed following
at least three business days before
receipt of an order for such exchange
the change becomes effective. The
from the shareholder.
plan may be terminated at any time
Winthrop imposes no separate charge without penalty by the shareholder or
for exchanges. A shareholder will not Winthrop.
be assessed any sales charge at the Dividend Direction Option A
time of an exchange between the Funds shareholder may elect on the Share
or between any of the Funds and a Purchase Application to have his or
Winthrop Opportunity Fund or an her dividends paid to another
Alliance Money Market Fund. Any individual or directed for
applicable contingent deferred sales reinvestment in another series of
charge will be assessed when the Winthrop provided that an existing
shareholder redeems shares of the account in such other Fund is
Funds, the Winthrop Opportunity Funds maintained by the shareholder.
or of the Alliance Money Market
Funds. The period of time during Systematic Withdrawal Plan Any
which a shareholder owns shares in shareholder who owns or purchases
any of the Funds or the Winthrop shares of a Fund having a current net
Opportunity Funds will be credited to asset value of at least $10,000 may
such shareholders holding period in establish a systematic withdrawal
determining the applicable contingent plan under which the shareholder or a
deferred sales charge, if any. third party will receive payment by
However, the period of time during check in a stated amount of not less
which a shareholder's funds are held than $50 on a monthly or quarterly
in the Alliance Money Market Funds basis. A contingent deferred sales
will not be included in the holding charge which would otherwise be
period used to determine the imposed on a withdrawal/redemption
applicable contingent deferred sales will be waived in connection with
charge. redemptions made pursuant to
Winthrop's systematic withdrawal plan
The exchange privilege is intended
up to 1% monthly or 3% quarterly of
to provide shareholders with a
an account's total purchase payments
convenient way to switch their
(excluding dividend reinvestment) not
investments when their objectives or
to exceed 10% of total purchase
perceived market conditions suggest a
payments over any 12 month rolling
change. Winthrop reserves the right
period. See "Purchases, Redemptions
to reject any exchange request or
and Shareholder Services", page 29.
otherwise modify, restrict or
terminate the exchange privilege at Telephone Redemption and Exchange
any time upon at least 60 days prior Privilege A shareholder may elect on
written notice. the Share Purchase Application to be
eligible to make withdrawals from
Exchanges of shares are subject to such shareholder's account, via
the other requirements of the fund telephone orders (toll free) (800)
into which exchanges are made. Annual 225-8011 given to the Funds by the
fund operating expenses for such fund shareholder or the shareholder's
may be higher and a sales charge investment dealer of record. The
differential may apply. The Funds maximum amount of such withdrawals is
retain the right to revoke the $50,000 per day. A shareholder may
exchange privilege for retirement also transfer assets via telephone
plan accounts that exchange their from such shareholder's account
shares for shares of the Alliance
Money Market Funds.

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<PAGE>

to purchase shares of the same class Additional information concerning
of another fund in Winthrop or these Additional Shareholder Services
Winthrop Opportunity Funds or for may be obtained by contacting
shares of an Alliance Money Market Winthrop at the address or telephone
Fund. Each Fund will employ number listed on the cover page of
reasonable procedures to confirm that this Prospectus.
instructions communicated by
telephone are genuine. Such
procedures include the requirement
that redemption or transfer orders
must include the account name and the
account number as registered with
Winthrop. The minimum amount for a
wire transfer is $1,000. Proceeds of
telephone redemptions may also be
sent by automated clearing house
funds ("ACH") to a shareholder's
designated bank account. Neither
Winthrop, the Adviser, the Winthrop
Opportunity Funds, the Alliance Money
Market Funds nor any transfer agent
for any of the foregoing will be
responsible for following
instructions communicated by
telephone that are reasonably
believed to be genuine, accordingly,
investors bear the risk of loss.
The Telephone Exchange Privilege
will be offered automatically unless
a shareholder declines such option on
the Share Purchase Application or by
writing to the Fund's Transfer Agent
at the address listed in the back of
this Prospectus.

Timing of Redemptions and Exchanges
If a redemption or transfer order for
a Fund is received on a Fund Business
Day prior to the close of the regular
session of the New York Stock
Exchange, which is generally
4:00 p.m. New York City time, the
proceeds will be transferred as soon
as possible, and shares of each Fund
will be priced that Fund Business
Day. If the redemption or transfer
order is received after the close of
the regular session of the New York
Stock Exchange, shares of each Fund
will be priced the next Fund Business
Day and the proceeds will be
transferred as soon as possible after
pricing. A shareholder also may
request that proceeds be sent by
check to a designated bank. Transfers
are made without any charge by
Winthrop.
Purchases by check may not be
redeemed by a Fund until after a
reasonable time necessary to verify
that the purchase check has been paid
(approximately ten Fund Business Days
from receipt of the purchase check).
When a purchase is made by wire and
subsequently redeemed, the proceeds
from such redemption normally will
not be transmitted until two Fund
Business Days after the purchase by
wire. Bank acknowledgment of payment
initialled by the shareholder may
shorten delays.

-44-

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

-45-

<PAGE>

NET ASSET VALUE

The net asset value per share for approximately the amount of any
purchases and redemptions of shares accrued distribution services fee.
of each Fund is determined as of the
close of the regular session of the
New York Stock Exchange, which is
generally 4:00 p.m. New York City
time, on each day that trading is
conducted during such session on the
New York Stock Exchange. In
accordance with Winthrop's Agreement
and Declaration of Trust and By-Laws,
net asset value for each Fund is
determined separately for each class
by dividing the value of each class's
total assets, less its liabilities,
by the total number of each class's
shares then outstanding. For purposes
of this computation, the securities
in each Fund's portfolio are, except
as described below, valued at their
current market value determined on
the basis of market quotations or, if
such quotations are not readily
available, such other method as the
Trustees believe would accurately
reflect their fair value.
Short-term securities which mature
in more than 60 days are valued based
on current market quotations.
Short-term securities which mature in
60 days or less are valued at
amortized cost, if their original
maturity was 60 days or less, or by
amortizing their value on the 61st
day prior to maturity, if their
original term to maturity exceeded 60
days where it has been determined in
good faith under procedures approved
by the Board of Trustees that
amortized cost equals fair value. All
other assets are valued at fair value
as determined in good faith under
such valuation procedures approved by
the Board of Trustees.

Although the legal rights of each
class of shares are substantially
identical, the different expenses
attributable to each class will
result in different net asset values
and dividends. The net asset value of
Class B shares will generally be
lower than the net asset value of
Class A shares as a result of the
larger distribution services fee
imposed on Class B shares. It is
expected that the net asset value of
Class A shares and Class B shares
will tend to equate immediately after
the recording of dividends, if any,
which will differ by

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<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

-47-
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Funds have one transaction time Each of the Funds has qualified and
each Fund Business Day, which is as intends to qualify in the future as a
of the close of the regular session regulated investment company under
of the New York Stock Exchange, Subchapter M of the Internal Revenue
generally 4:00 p.m. New York City Code of 1986, as amended (the
time. If monies are received prior to "Code"). As a regulated investment
such time for any of the Funds, company, a Fund will not be subject
shares purchased are entitled to the to federal income taxes if at least
dividends, if any, for the next Fund 90% of its net investment income and
Business Day. If monies are received net short-term capital gains less any
after such time for any of the Funds, available capital loss carryforwards
they are invested at the next are distributed to shareholders
transaction time on the following within allowable time limits.
Fund Business Day and, accordingly, However, a Fund will be subject to
are entitled to the dividends for the tax on its income and gains to the
next Fund Business Day after such extent that it does not distribute to
investment. Shares earn dividends its shareholders an amount equal to
through the day a redemption is such income and gains. In addition,
effected. Dividends and distributions a Fund will be subject to a
payable in additional Fund shares nondeductible 4% excise tax to the
will be paid based on the net asset extent that it does not make
value of each class of shares on the distributions to its shareholders on
record date for such dividend or a basis such that they are taxed to
distribution, or such other date as shareholders in the same year in
the Board of Trustees may determine. which the related income or gain was
realized by such Fund. To the extent
Dividends on shares of the Fixed possible, each Fund intends to make
Income Fund and the Municipal Trust such distributions as may be
Fund are declared from its net necessary to avoid this excise tax.
investment income on each Fund
Business Day. The Fixed Income Fund Distributions of net investment
and the Municipal Trust Fund each income (which generally includes
declares dividends for Saturdays, dividends, interest, net short-term
Sundays and holidays on the previous capital gains and other income, other
business day. Dividends on shares of than Exempt-Interest Dividends, as
the Fixed Income Fund and the defined below, and net-long term
Municipal Trust Fund are paid after capital gains), if any, declared by
the close of business on the last Winthrop on the outstanding shares of
Fund Business Day of each month. any Fund will, at the election of
Winthrop intends to distribute to each shareholder, be paid in cash or
shareholders of the Growth Fund on a reinvested in additional full and
semi-annual basis, to shareholders of fractional shares of that Fund. Such
the Aggressive Growth Fund on an distributions will be taxable to a
annual basis and to shareholders of shareholder as ordinary income,
the Growth and Income Fund on a regardless of whether received in the
quarterly basis, substantially all of form of cash or reinvested in
such respective periods' net additional shares. Distributions of
investment income, if any, for the net long-term capital gains in excess
respective Funds. of any net short-term capital losses
("capital gains distributions") are
Capital gains (short-term and
taxable to shareholders as long-term
long-term), if any, realized by each
capital gains regardless of whether
of the Funds during a fiscal year of
received in the form of cash or
Winthrop will be distributed to the
reinvested in additional shares and
respective shareholders shortly after
irregardless of the length of time
the end of such fiscal year.
the shareholder has held

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<PAGE>

shares of the Fund. Shareholders stock can be reduced if certain
will be advised annually as to the extraordinary dividends are received.
federal tax status of dividends and Dividends paid by the Fixed Income
capital gains distributions made by Fund and the Municipal Trust Fund
each Fund for the preceding year. will generally not be eligible for
the dividends-received deduction.
An election to receive dividends
and distributions in cash or shares Distributions to shareholders out
is made at the time of the initial of tax-exempt interest income earned
investment and may be changed by by the Municipal Trust Fund ("Exempt-
notice received by Winthrop from a Interest Dividends") are not subject
shareholder at least 30 days prior to to federal income tax if, at the
(i) the record date for a particular close of each quarter of the
dividend or distribution on shares of Municipal Trust Fund's taxable year,
the Growth Fund, the Aggressive at least 50% of the value of the
Growth Fund or the Growth and Income Municipal Trust Fund's total assets
Fund, or (ii) the payable date for a consists of tax-exempt obligations.
particular dividend or distribution The Municipal Trust Fund intends to
on shares of the Fixed Income Fund meet this requirement. However, under
and the Municipal Trust Fund. There current tax law, some individuals and
is no charge in connection with the corporations may be subject for
reinvestment of dividends and capital federal income tax purposes to the
gains distributions. AMT on distributions to shareholders
out of income from the AMT-Subject
For federal income tax purposes, Bonds (as defined in "Investment
dividends that are declared by a Fund Objectives and Policies", page 12) in
in October, November or December as which the Municipal Trust Fund may
of a record date in such month and invest. Further, under current tax
actually paid in January of the law, certain corporate taxpayers may
following year will be treated as if be subject to the AMT based on their
they were paid on December 31 of the "adjusted current earnings".
year in which they were declared. Distributions from the Municipal
Therefore such dividends will Trust Fund that are excluded from
generally be taxable to a shareholder gross income and from alternative
in the year declared rather than the minimum taxable income will be
year paid. included in such corporation's
"adjusted current earnings" for
A dividend or capital gains
purposes of computation of the AMT.
distribution with respect to shares
of any Fund held by a tax-deferred or
qualified retirement plan, such as an Interest on indebtedness incurred
IRA, Keogh Plan or corporate pension by shareholders to purchase or carry
or profit sharing plan, will not be shares of the Municipal Trust Fund is
taxable to the plan. Distributions not deductible for federal income tax
from such plans will be taxable to purposes to the extent that the
individual participants under Municipal Trust Fund distributes
applicable tax rules without regard Exempt-Interest Dividends. The
to the character of the income earned amount of the interest on
by the qualified plan. indebtedness that is not deductible
is proportional to the amount of non-
Dividends paid by the Growth Fund, capital gains dividends received that
the Aggressive Growth Fund and the are Exempt-Interest Dividends. Under
Growth and Income Fund (other than rules of the Internal Revenue Service
capital gain distributions) will for determining when borrowed funds
generally be eligible, subject to are used for purchasing or carrying
certain limitations and regardless of particular assets, shares may be
whether received in the form of cash considered to have been purchased or
or reinvested in additional shares, carried with borrowed funds even
for the dividends- received deduction though those funds are not directly
available to corporate shareholders. linked to the shares. Further,
This deduction is only available to persons who are "substantial users"
the extent that the aggregate (or related persons) of facilities
dividends received by each Fund would financed by AMT-Subject Bonds should
be eligible for the consult their tax advisers before
dividends-received deduction if purchasing shares of the Municipal
received directly by the corporate Trust Fund.
shareholders. A corporate shareholder
may also be subject to the
extraordinary dividend provisions of
the Code under which a shareholder's
basis in

-49-

<PAGE>

Because the Municipal Trust Fund In that event, the basis of the
can invest in taxable municipal bonds shares acquired will be adjusted to
and other taxable securities as well reflect the disallowed loss.
as tax-exempt municipal bonds, the Some of the investment practices of
portion of its dividends that will be the Growth Fund, the Aggressive
exempt from or subject to regular Growth Fund and the Growth and Income
federal income taxes cannot be Fund are subject to special
predicted. Shareholders may be sub- provisions that, among other things,
ject to state and local taxes on may defer the use of certain losses
dividends from the Municipal Trust of such Funds and affect the holding
Fund, including dividends which are period of the securities held by the
exempt from federal income taxes. In Funds and the character of the gains
addition, for federal income tax or losses realized. These provisions
purposes, distributions of net short- may also require the Growth Fund, the
term capital gains are taxable to Aggressive Growth Fund and the Growth
shareholders of the Municipal Trust and Income Fund to mark to market
Fund as ordinary income and some of the positions in their
distributions of net long-term respective portfolios (i.e., treat
capital gains are taxable to such them as if they were closed out),
shareholders as long-term capital which may cause such Funds to
gains, regardless of the nature of recognize income without receiving
the investments made by the Fund. cash with which to make distributions
There is no fixed dividend rate and in amounts necessary to satisfy the
there can be no assurance that any distribution requirements for
Fund will pay any dividends or qualification as a regulated
realize any gains. The amount of any investment company and for avoiding
dividend or distribution paid by each income and excise taxes. Each Fund
Fund depends upon the realization by will monitor its transactions and may
the Fund of income and capital gains make certain tax elections in order
from that Fund's investments. All to mitigate the effect of these rules
dividends and distributions will be and prevent disqualification of the
made to shareholders of a Fund solely Fund as a regulated investment
from assets of that Fund. Since the company.
Funds are not treated as a single
Each Fund's ability to dispose of
entity for federal income tax
portfolio securities may be limited
purposes, the performance of one Fund
by the requirement for qualification
will have no effect on the income tax
as a regulated investment company
liability of shareholders of another
that less than 30% of a Fund's gross
Fund.
income be derived from the
Payment (either in cash or in disposition of securities held for
portfolio securities) received by a less than three months.
shareholder upon redemption of his Each Fund is required to withhold
shares, assuming the shares and remit to the U.S. Treasury 31% of
constitute capital assets in his the dividends or the proceeds of any
hands, generally will result in redemptions or exchanges of shares
long-term or short-term capital gains with respect to any shareholder who
(or losses) depending upon the share- fails to furnish Winthrop with a
holder's holding period and basis in correct taxpayer identification num-
respect of shares redeemed. Any loss ber, who has been notified by the
realized by a shareholder on the sale U.S. Treasury that he or she has
of Fund shares held for six months or underreported dividend or interest
less will be treated for federal income or who fails to certify to
income tax purposes as a long-term Winthrop that he or she is not
capital loss to the extent of any subject to such withholding. An
distributions of long-term capital individual's tax identification
gains received by the shareholder number is his or her social security
with respect to such shares. number.
In addition, no loss will be
The foregoing discussion is a
allowed on the sale or other
general summary of certain current
disposition of shares of a Fund if,
federal income tax laws regarding the
within a period beginning 30 days
Funds. The discussion does not
before the date of such sale or
purport to deal with all of the
disposition and ending 30 days after
federal income tax consequences
such date, the holder acquires (such
applicable to the Funds, or to all
as through dividend reinvestment)
categories of investors, some of whom
securities that are substantially
may be subject to special rules. Each
identical to the shares of such Fund.
prospective shareholder should
consult with his or her own
professional tax adviser

-50-

<PAGE>

regarding federal, state and local
tax consequences of ownership of
shares of the Funds.

-51-

<PAGE>

RETIREMENT PLANS

Each of Winthrop's Funds may be a Plan. This form of retirement plan is
suitable investment vehicle for part also available for investment in the
or all of the assets held in various Funds.
tax-sheltered retirement plans, such
as those listed below. Semper Trust
Company serves as custodian under Employer-Sponsored Retirement Plans
these prototype retirement plans and The Adviser has a prototype
charges an annual account maintenance retirement plan available which
of $15 per participant, regardless of provides for investment of plan
the number of Funds selected. Persons assets in shares of any one or more
desiring information concerning these Funds. The prototype retirement plan
plans should write or telephone may be used by sole proprietors and
Winthrop's Transfer Agent. While partnerships as well as corporations
Winthrop reserves the right to to establish a tax qualified profit
suspend sales of its shares in sharing plan or money purchase
response to conditions in the pension plan (or both) of their own.
securities markets or for other
reasons, it is anticipated that any Under the prototype retirement
such suspension of sales would not plan, an employer may make annual
apply to sales to the types of plans tax-deductible contributions for
listed below. allocation to the accounts of the
plan participants to the maximum
Individual Retirement Accounts
extent permitted by the federal tax
("IRA")
law for the type of plan
The Adviser has available a implemented.The Adviser has received
prototype form of IRA for investment favorable opinion letters from the
in shares of any one or more Funds. IRS that the prototype retirement
Under the Code, individuals may make plan is acceptable by qualified
IRA contributions of up to $2,000 employers.
annually. An individual with a Self-Directed Retirement Plans
non-working spouse may establish a
separate IRA for the spouse and Shares of Winthrop may be suitable
contribute a combined maximum of for self-directed IRA accounts and
$2,250 annually to one or both IRAs, prototype retirement plans such as
provided that no more than $2,000 may those developed by Donaldson, Lufkin
be contributed to the IRA of either & Jenrette Securities Corporation, an
spouse. Contributions to an IRA may affiliate of the Adviser and
be wholly or partly tax-deductible, Winthrop's Distributor.
depending upon the contributor's
income level and participation in an
employer-sponsored retirement plan.
The income earned on shares held in
an IRA is not subject to federal
income tax until withdrawn in
accordance with the Code. Investors
may be subject to penalties or
additional taxes on contributions to
or withdrawals from IRAs under
certain circumstances.
Simplified Employee Pension Plan
("SEP/IRA")

A SEP/IRA is available for
investment and may be established on
a group basis by an employer who
wishes to sponsor a tax-sheltered
retirement program by making IRA
contributions on behalf of all
eligible employees.
Salary Reduction Simplified Employee
Pension Plan ("SAR/SEP")

Offers employers with 25 or fewer
eligible employees the ability to
establish a SEP/IRA that permits
salary deferral contributors. An
employer may also elect to make
additional contributions to this

-52-

<PAGE>

GENERAL INFORMATION

Capitalization the Fund, the liquidation proceeds to
shareholders of Class B shares are
Winthrop was organized as a likely to be less than proceeds to
Massachusetts business trust under Class A shareholders. Shareholders
the laws of Massachusetts on November have no preemptive rights.
26, 1985. Winthrop has an unlimited
number of authorized shares of Portfolio Transactions
beneficial interest, par value $.01 Consistent with the Rules of Fair
per share, which may, without share- Practice of the National Association
holder approval, be divided into an of Securities Dealers, Inc. and
unlimited number of series and an subject to seeking best execution,
unlimited number of classes. Such Winthrop may consider sales of its
shares are currently divided into shares as a factor in the selection
several series, one series of shares of brokers and dealers to execute
for each Fund. Shares of each Fund portfolio transactions for Winthrop.
are divided into Class A shares and
Class B shares of each Fund and are Distributor
normally entitled to one vote (with Donaldson, Lufkin & Jenrette
proportional voting for fractional Securities Corporation, an affiliate
shares) for all purposes. Generally, of the Adviser, serves as Winthrop's
shares of all Funds vote as a single Distributor.
series on matters that affect all
Funds in substantially the same Custodian, Dividend Disbursing Agent
manner. As to matters affecting each and Transfer Agent
Fund separately, such as approval of Citibank, N.A. acts as Custodian
the investment advisory agreement, for the securities and cash of
shares of each Fund would vote as Winthrop, but plays no part in
separate series. With respect to each deciding on the purchase or sale of
Fund, each Class is identical in all portfolio securities. Fund/Plan
respects except that (i) each Class Services, Inc. acts as dividend
bears different distribution service disbursing agent, registrar and
fees, (ii) each Class has exclusive transfer agent.
voting rights with respect to its
Rule 12b-1 Plan, (iii) each Class has How Winthrop Calculates Performance
a different exchange privilege, and From time to time Winthrop may
(iv) only Class B shares have a advertise its total return (including
conversion feature. Winthrop will not "average annual" total return and
have annual meetings of shareholders "aggregate" total return) and yield
so long as at least two-thirds of the in advertisements or sales
Trustees then in office have been literature. Total return and yield
elected by the shareholders. Section are calculated separately for Class A
16(c) of the Investment Company Act and Class B shares. These figures are
of 1940 provides certain rights to based on historical earnings and are
shareholders which Winthrop will not intended to indicate future
honor regarding the calling of performance. The "total return" shows
meetings of shareholders and other how much an investment in a Fund
communications with shareholders. would have increased (decreased) over
Trustees also will call meetings of a specified period of time (i.e.,
shareholders from time to time as the one, five or ten years or since
Trustees deem necessary or desirable. inception of that Fund) assuming that
Shares of a Fund are freely all distributions and dividends by
transferable, are entitled to the Fund were reinvested on the
dividends as determined by the reinvestment dates during the period
Trustees and, in liquidation of and less all recurring fees. The
Winthrop, are entitled to receive the "aggregate" total return
net assets of that Fund. Since Class
B shares of each Fund are subject to
greater distribution services fees
than Class A shares of

-53-

<PAGE>

reflects actual performance over a
stated period of time. "Average
annual" total return is a
hypothetical rate of return that, if
achieved annually, would have
produced the same aggregate total
return if performance had been
constant over the entire period.
"Average annual" total return smooths
out variations in performance and
takes into account any applicable
initial or contingent deferred sales
charges. Neither "average annual"
total return nor "aggregate" total
return takes into account any federal
or state income taxes which may be
payable upon redemption. The "yield"
refers to the income generated by an
investment in a Fund over a one-month
or 30-day period. This income is then
"annualized"; that is, the amount of
income generated by the investment
during that 30-day period is assumed
to be generated each 30-day period
for twelve periods and is shown as a
percentage of the investment. The
income earned on the investment is
also assumed to be reinvested at the
end of the sixth 30-day period.
Winthrop may also include comparative
performance information in
advertising or marketing Winthrop's
shares. Such performance information
may include data from Lipper
Analytical Services, Inc.,
Morningstar Publications, Inc., other
industry publications, business
periodicals, and market indices.
Winthrop will include performance
data for each class of shares of a
Fund in any advertisement or
information including performance
data of that Fund. Further
performance information is contained
in Winthrop's annual and semi-annual
reports to shareholders, which may be
obtained without charge.
Information for Shareholders

Any shareholder inquiry regarding
Winthrop or the status of the
shareholder's account can be made to
Winthrop or to Fund/Plan Services,
Inc. by mail or by telephone at the
address or telephone number listed on
the cover of this Prospectus.
Following any purchase or
redemption, a shareholder will
receive a statement confirming the
transaction and setting forth the
total number of shares owned, their
net asset value and the contingent
deferred sales charge imposed, if
any. Annual audited and semi-annual
unaudited financial statements, which
include a list of investments held by
Winthrop, will be sent to
shareholders.

-54-

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

-55-

<PAGE>

This Page Intentionally Left Blank

-56-

<PAGE>

ADVISOR

Wood, Struthers & Winthrop Management Corp.
140 Broadway, New York, New York 10005

DISTRIBUTOR [Art]
Donaldson, Lufkin & Jenrette Securities Corporation
140 Broadway, New York, NY 10005

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

CUSTODIAN
Citibank, N.A.
111 Wall Street, New York, NY 10043

TRANSFER AGENT WINTHROP
Fund/Plan Services, Inc. FOCUS
P.O. Box 874 (#2 Elm Street), Conshohocken, FUNDS
PA 19428

COUNSEL
Sullivan & Cromwell
125 Broad Street, New York, NY 10004

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

TABLE OF CONTENTS

Summary of Fund Expenses 4
Financial Highlights 8

Introduction 17
Investment Objectives and
Policies 17
Investment Restrictions 28
Management 30
Expenses of Winthrop 32
Purchases, Redemptions and
Shareholder Services 34
Net Asset Value 43
Dividends, Distributions and
Taxes 44
Retirement Plans 47
General Information 48
- -------------------------------------- [Art]

This Prospectus does not constitute an
offering in any state in which such offering
may not lawfully be made.
Prospectus
WOOD, STRUTHERS & WINTHROP
February 28, 1996
ESTABLISHED 1871

[Logo] [Logo]

INVESTMENT MANAGEMENT SUBSIDIARY OF
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

WFF-MB-6 11818A 9/95

<PAGE>
WINTHROP FOCUS FUNDS
SHARE PURCHASE APPLICATION

<TABLE><CAPTION>
<S> <C>
WINTHROP FOCUS FUNDS For assistance in filling
c/o Fund/Plan Services, Inc. out this application call:
P.O. Box 874 (800) 225-8011
Conshohocken, PA 19428

(1) Type of Account Date , 199
------------- ---
-
[ ] New Account [ ] Existing Account #
---------------

- ----

(2) INVESTMENT SELECTION--Please indicate the dollar amount you wish to invest
in each Fund and make checks payable to Winthrop Mutual Funds. Please
select the class of shares you wish to purchase. If no class of shares is
selected, Class A shares will be purchased.

WINTHROP FUND NAME (FUND NUMBER) CLASS A OR B AMOUNT
-------------------------------- ------------ ------

B
- -

Growth Fund (530) $
-------- --------
Initial Investment Minimum
-------- --------
Fixed Income Fund (531) per Fund $250; Subsequent
--------- --------
Aggressive Growth Fund (534) Investment Minimum $25.
-------- --------
Growth and Income Fund (535) Minimums are waived for SEP,
-------- --------
Municipal Trust Fund (536) SARSEP, 401K, 403B and 457
-------- --------
plans.

Total

(3) SHARE REGISTRATION

[ ] Individual
-------------------------------------------------------- ----------------------------
Name *Joint Owner, if any

[ ] Gift to Minor as custodian for
----------------------------------------------------- ------------
Name of Custodian Name of minor

under the Uniform Gift to Minors Act. (Reference social security # of minor in
------------
State
space provided below)

[ ] Other
-------------------------------------------------------------------------------------------
Name of corporation, organization, trusts, etc.
Address
-----------------------------------------------------------------------------------------
Street City State Zip Code

Phone Number ( ) Social Security or Taxpayer ID #**
------------------------ ---------------------------

* In the event of co-owners, a joint tenancy with right of
survivorship will be assumed unless otherwise indicated.

** Required to open an account.
(4) TELEPHONE TRANSACTIONS

Telephone Exchange Privilege--I understand that unless I have checked the
box below, this privilege will automatically apply. (NOTE: Telephone
exchanges may only be processed between accounts that have identical
registrations.)

[ ] I do not elect the telephone exchange privilege.
Telephone Redemption Privilege--I hereby authorize the Funds or its transfer
agent to effect the redemption of Fund shares for my account according to my
telephone instructions or telephone instructions from my Broker/Agent as
follows:

[ ] Mail Redemption proceeds to the name and address in which my Fund
Account is registered.
[ ] Deposit via ACH to the commercial bank referenced in Section 10.
[ ] Wire Redemption proceeds to the Bank referenced in Section 10 and
charge my Fund account the applicable wire fee. (NOTE: The maximum
telephone redemption amount is $50,000. Telephone redemption checks
will only be mailed to the name and address of record; and the
address must have no change within the last 30 days.)
</TABLE>
-58-

<PAGE>

(5) SIGNATURE--Required by federal tax law to avoid 31% backup withholding: By
signing, I certify under penalties of perjury that the social security or
taxpayer identification number entered above is correct and that I have
not been notified by the IRS that I am subject to backup withholding
unless I have checked the box to the right. I am subject to backup
withholding.

By selecting any of the above telephone privileges, I agree that neither
Winthrop, the Adviser, the Winthrop Opportunity Funds, the Alliance Money
Market Funds nor any transfer agent for any of the foregoing will be
liable for any loss, injury, damage or expense as a result of acting upon
telephone instructions purporting to be on my behalf, that Winthrop
reasonably believes to be genuine, and that neither Winthrop nor any such
party will be responsible for the authenticity of such telephone
instructions. I understand that any or all of these privileges may be
discontinued by me or Winthrop at any time. I understand and agree than
Winthrop reserves the right to refuse any telephone instructions and that
my investment dealer or agent reserves the right to refuse to issue any
telephone instructions I may request.

I am of legal age and capacity and have received and read the Prospectus
and agree to its terms.

The person(s), if any, signing on behalf of the investor (i.e.
corporation, organization, trust, etc.) represent and warrant that they
are authorized to sign this application and purchase, redeem, or exchange
shares on behalf of such investor.

---------------------------------------- -----------------------------
Signature Date

(If an institution, please include documentation establishing authorized
signatories).

(6) FOR DEALER USE ONLY--We guarantee the signature(s) set forth in Section 5,
as well as the legal capacity of the shareholder.

Dealer Name Dealer No.
-------------------------------------- ---------------

Branch Office Name Branch Office No.
------------------------------- ---------

Branch Office Address
----------------------------------------------------------

Representative's Name Representative's No.
---------------------- --------------

Representative's Phone No. Authorized Signature
------------------ -------------

_________________

FOR DIVIDEND INSTRUCTIONS AND OTHER ACCOUNT OPTIONS, PLEASE COMPLETE THE
REVERSE SIDE OF THIS PURCHASE APPLICATION.

(7) DIVIDEND OPTIONS
Dividend Instructions--if no instructions are given, all distributions will
be reinvested.

INCOME DIVIDENDS: (select one)

<TABLE>

<S> <C> <C>
[ ] Reinvest dividends [ ] Pay dividends in cash [ ] Use Dividend Direction Option

CAPITAL GAINS DISTRIBUTION: (select one)

[ ] Reinvest capital gains [ ] Pay capital gains in cash [ ] Use Dividend Direction Option
</TABLE>

-59-

<PAGE>

[ ] Dividend Direction Option I/we hereby authorize and request that my/our
distributions be either (a) paid to the person and/or address designated
below or (b) reinvested into my/our account which we currently maintain in
another Winthrop Fund:

a) Name b) Winthrop Fund
----------------------------- ------------------

Account or Policy # Existing Acct. No.
----------------- -----------------
if applicable

Address
-----------------------------------
City, State, Zip
-----------------------------

(NOTE: Dividend checks that are returned "not forwardable" will be reinvested
in additional shares of the Fund at the current net asset value on the date
the check is received.)

(8) [ ] AUTOMATIC MONTHLY INVESTMENT PLAN*--I/we hereby authorize you to
draw on my/our bank account an amount of $ ($25 minimum) for an
----------
investment in the Funds beginning on the 10th, 15th or 20th (circle one) day
and continuing on that same day each month.

----------------------------------------- ---------------------------------
Fund Name(s) Bank Account Number

-----------------------------------------------------------------------------
Branch Name and Address of Bank
The Fund requires signatures of bank account owners exactly as they appear on
bank records:

-------------------------------- ------ -----------------------------------
Individual Account Owner Date Individual Account Owner

Date

*(ATTACH VOIDED CHECK--Include a blank check from the bank account from
which your investment will be made. Write "VOID" across the face of the
check, and attach it to this form.)

(9) [ ] SYSTEMATIC CASH WITHDRAWAL PLAN--(Minimum initial purchase
$10,000). The undersigned requests that the Funds, or any
transfer agent of the Funds, as their agent make withdrawals
beginning the 25th day (approximately of , 19 ).
------------- --
<TABLE><CAPTION>

FUND NAME AMOUNT
--------- ------
<S> <C> <C> <C> <C> <C>
[ ] monthly [ ] quarterly [ ] semi-annually [ ] annually
------------ ------------

[ ] monthly [ ] quarterly [ ] semi-annually [ ] annually
------------ ------------

[ ] monthly [ ] quarterly [ ] semi-annually [ ] annually
------------ ------------
</TABLE>

Payments under this Plan should be sent:
[ ] by check to the name and address in which my/our Fund account is
registered.

[ ] by automated clearing house "ACH" deposits to my Bank and account
referenced in Section 10.

[ ] by wire to the Bank and account referenced in Section 10 and
charge my Fund account the applicable wire fee.

[ ] by check to the Special Payee referenced below.

Name of Payee Account of Policy #
----------------------------- ----------------
if applicable

Address
-------------------------------------------------------------------------

-60-

<PAGE>

(10) BANK ACCOUNT INFORMATION* (To be completed if applicable under
Sections 4 or 9).

----------------------------------------- --------------------------
Name of Bank Branch if applicable

----------------------------------------- --------------------------
Name in which Bank Account is Established Bank Account Number

*(ATTACH VOIDED CHECK--Include a blank check from your bank account. Write
"VOID" across the face of the check, and attach it to this form.)

(11) CONSOLIDATED ACCOUNT STATEMENTS--If you prefer to receive one quarterly
combined statement instead of individual account statements please
reference the Winthrop Fund name and account numbers that you would
like consolidated.

----------------------------------------- --------------------------
Fund Name/Account Number Fund Name/Account Number

-61-

<PAGE>

WINTHROP FOCUS FUNDS

- ---------------------------------------------------------------------------
140 BROADWAY, NEW YORK, NEW YORK 10005

Toll Free (800) 225-8011
- ---------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

dated February 28, 1996

This Statement of Additional Information is not a prospectus and should be

read in conjunction with Winthrop's current Prospectus dated February 28,

1996, as supplemented from time to time, which is incorporated herein by

reference. A copy of the Prospectus may be obtained by contacting Winthrop

at the address or telephone number listed above.

TABLE OF CONTENTS

PAGE
----

Investment Policies and Restrictions . . . . . . . . . . . . . . . . . 1
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Expenses of Winthrop . . . . . . . . . . . . . . . . . . . . . . . . . 34
Purchases, Redemptions, Exchanges and
Systematic Withdrawal Plan . . . . . . . . . . . . . . . . . . . . 37
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . 47
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . 54
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 64
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . 80
Appendix A -- Securities Ratings . . . . . . . . . . . . . . . . . . . A-1

<PAGE>

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

INVESTMENT POLICIES AND RESTRICTIONS

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

The following investment policies and restrictions supplement,

and should be read in conjunction with, the information set forth under the

heading "Investment Objectives and Policies" in Winthrop's Prospectus.

Except as noted in the Prospectus, Winthrop's investment policies are not

fundamental and may be changed by the Trustees of Winthrop without

shareholder approval; however, shareholders will be notified prior to a

significant change in such policies. Winthrop's fundamental investment

restrictions may not be changed without shareholder approval as defined on

page 17.

Growth Fund, Aggressive Growth Fund and Growth and Income Fund
- --------------------------------------------------------------

It is the policy of the Growth Fund to invest principally in

equity securities with long-term capital appreciation potential; it is the

policy of the Aggressive Growth Fund to invest principally in equity

securities selected on the basis, in the Adviser's opinion, of their

potential for a high level of growth of capital; and it is the policy of

the Growth and Income Fund to invest principally in dividend paying common

stocks.

The Growth Fund and the Aggressive Growth Fund each may invest up

to 5% of their respective total assets in warrants. Warrants may be

considered more speculative than certain other types of investments in that

they do not entitle a holder to dividends or voting rights with respect to

the securities which may be purchased nor do they represent any rights in

the assets of the

<PAGE>

issuing company. Also, the value of a warrant does not necessarily change

with the value of the underlying securities and a warrant ceases to have

value if it is not exercised prior to the expiration date.

The Growth Fund may invest up to 10% of the value of its total

assets in foreign securities and the Aggressive Growth Fund and the Growth

and Income Fund may invest up to 20% of the value of their respective total

assets in foreign securities. Investment in foreign securities involves

certain risks not ordinarily associated with investments in securities of

domestic issuers. These risks include fluctuations in foreign exchange

rates, future political and economic developments, and the possible

imposition of exchange controls or other foreign governmental laws or

restrictions. In addition, with respect to certain countries, there is the

possibility of expropriation of assets, confiscatory taxation, political or

social instability or diplomatic developments which could adversely affect

investments in those countries.

There may be less publicly available information about a foreign

company than about a U.S. company, and foreign companies may not be subject

to accounting, auditing and financial reporting standards and requirements

comparable to or as uniform as those of U.S. companies. Non-U.S.

securities markets, while growing in volume, have, for the most part,

substantially less volume than U.S. markets, and securities of many foreign

companies are less liquid and their prices more volatile than securities of

comparable U.S. companies. Transaction costs of investing in non-U.S.

securi-

-2-

<PAGE>

ties markets are generally higher than in the U.S. There is generally less

government supervision and regulation of exchanges, brokers and issuers

than there is in the U.S. The Funds might have greater difficulty taking

appropriate legal action in non-U.S. courts. Non-U.S. markets also have

different clearance and settlement procedures which in some markets have at

times failed to keep pace with the volume of transactions, thereby creating

substantial delays and settlement failures that could adversely affect the

Funds' performance. Dividend and interest income from non-U.S. securities

will generally be subject to withholding taxes by the country in which the

issuer is located and may not be recoverable by the Funds or investors.

The Growth Fund may invest up to 35% of the value of its total

assets in investment grade fixed income securities and the Growth and

Income Fund, the Aggressive Growth Fund and the Fixed Income Fund may

invest in investment grade fixed income securities without limitation. In-

vestment grade obligations are those obligations rated BBB or better by

Standard and Poor's Ratings Group ("S&P") or Baa or better by Moody's

Investors Service ("Moody's") in the case of long-term obligations and

equivalently rated obligations in the case of short-term obligations, or

unrated instruments believed by the Adviser to be of comparable quality to

such rated instruments. Securities rated BBB by S&P are regarded by S&P as

having an adequate capacity to pay interest and repay principal; whereas

such securities normally exhibit adequate protection parameters, adverse

economic conditions or changing circumstances are

-3-

<PAGE>

more likely, in the opinion of S&P, to lead to a weakened capacity to pay

interest and repay principal for debt in this category than in higher rated

categories. Securities rated Baa by Moody's are considered by Moody's to

be medium grade obligations; they are neither highly protected nor poorly

secured; interest payments and principal security appear to be adequate for

the present but certain protective elements may be lacking or may be

characteristically unreliable over any great length of time; in the opinion

of Moody's, they lack outstanding investment characteristics and in fact

have speculative characteristics as well. Fixed income securities in which

the Funds may invest include asset and mortgage backed securities.

Prepayments of principal may be made at any time on the obligations

underlying asset and mortgage backed securities and are passed on to the

holders of the assets and mortgage backed securities. As a result, if a

Fund purchases such a security at a premium, faster than expected

prepayments will reduce and slower than expected prepayments will increase

yield to maturity. Conversely, if the Fund purchases these securities at a

discount, faster than expected prepayments will increase, while slower than

expected prepayments will reduce, yield to maturity.

The Growth Fund, the Growth and Income Fund and the Aggressive

Growth Fund each may write covered call options listed on one or more

national securities exchanges. When calls written by a Fund are exercised,

the Fund may be obligated to sell stocks below the current market price.

The writing of call options will therefore, involve a potential loss of

opportunity to sell

-4-

<PAGE>

securities at higher prices. In exchange for the premium received, the

writer of a fully covered call option assumes the full downside risk of the

securities subject to such option. In addition, the writer of the call

gives up the gain possibility of the stock protecting the call. Generally,

the opportunity for profit from the writing of options is higher, and

consequently the risks are greater, when the stocks involved are more

volatile. The actual return earned from writing a call option depends on

factors such as the amount of the transaction costs and whether or not the

option is exercised. Option premiums vary widely depending primarily on

supply and demand.

If a Fund desires to sell a particular security from its

portfolio on which it has written an option, the Fund will seek to effect a

closing purchase transaction prior to or concurrently with the sale of the

security. A closing purchase transaction is a transaction in which an

investor who is obligated as a writer of an option terminates his

obligation by purchasing an option of the same series as the option

previously written. (Such a purchase does not result in the ownership of

an option). A Fund may enter into a closing purchase transaction to

realize a profit on a previously written option or to enable the Fund to

write another option on the underlying security with either a different

exercise price or expiration date or both. A Fund realizes a profit or

loss from a closing purchase transaction if the cost of the transaction is

less or more, respectively, than the premium received from the

-5-

<PAGE>

writing of the option. The Growth Fund, the Growth and Income Fund may

not purchase call options except in closing purchase transactions.

The Aggressive Growth Fund may seek to increase its return

through the use of options on securities and securities indices and may

seek to hedge all or a portion of its portfolio investments through the use

of financial instruments currently or hereafter available, such as

securities index and financial future contracts and options thereon.

As discussed above, the Aggressive Growth Fund may write call

options on securities, which give the holder (i.e., purchaser thereof) the

right to buy the underlying security from the Fund at the stated exercise

price. The Aggressive Growth Fund may also write put options on

securities, which give the holder the right to sell the underlying security

to the Fund at the stated exercise price. The Aggressive Growth Fund will

write only covered or secured options, which means that so long as the Fund

is obligated as the writer of a call option, it will own the underlying

securities subject to the option or have an immediate right to acquire such

securities without additional consideration upon conversion or exchange of

portfolio securities, or, in the case of put options, that the Aggressive

Growth Fund will have on deposit with its custodian cash or high quality

short-term obligations or a combination of both with a value equal to or

greater than the exercise price of the underlying securities.

The Aggressive Growth Fund will receive a premium from writing a

put or call option, which increases the Fund's return on

-6-

<PAGE>

the underlying security in the event the option expires unexercised or is

closed out by the Aggressive Growth Fund at a profit. By writing a call

option, the Aggressive Growth Fund limits its opportunity to profit from an

increase in the market value of the underlying security above the exercise

price of the option for as long as the Fund's obligation as a writer

continues. By writing a put, the Aggressive Growth Fund will be obligated

to purchase the underlying security at a price that may be higher than the

market value of that security at the time of exercise for as long as the

option is outstanding. Thus, in some periods, the Aggressive Growth Fund

may receive less total return and in the other periods greater total return

in connection with its options transactions than it would have received

from the underlying securities had options not been written with respect

thereto.

The Aggressive Growth Fund may also purchase and sell securities

index options. The Growth Fund and the Growth and Income Fund may write

calls on a securities index. Securities index options are similar to

options on specific securities. However, because options on securities

indices do not involve the delivery of an underlying security, the option

represents the holder's right to obtain from the writer in cash a fixed

multiple of the amount by which the exercise price exceeds (in the case of

a put) or is less than (in the case of a call) the closing value of the

underlying securities index on the exercise date. When a Fund writes an

option on a securities index, it will establish a segregated account with

its custodian in which it will deposit cash

-7-

<PAGE>

or high quality short-term obligations or a combination of both with a

value equal to or greater than the market value of the option and will

maintain the account while the option is open.

On the futures markets, the Adviser may with respect to the

Aggressive Growth Fund adopt an overall strategy in response to expected

market movements. Such a strategy would involve the purchase or sale of

securities index futures contracts and related options traded on regulated

exchanges, to the extent permitted by the Commodity Futures Trading

Commission ("CFTC"), for bona fide hedging purposes or for other

appropriate risk management purposes permitted under regulations

promulgated by the CFTC. A securities index futures contract is an agree-

ment to take or make delivery of an amount of cash equal to the difference

between the value of the index at the beginning and at the end of the

contract period. The Aggressive Growth Fund may enter into securities

index futures contracts in anticipation of or during a market decline to

attempt to offset the decrease in market value of securities in its

portfolio that might otherwise result.

The Aggressive Growth Fund will only invest in futures contracts and

related options to the extent that the Fund would not be required to register

with the CFTC. The Aggressive Growth Fund will not engage in financial futures

or related options transactions for speculative purposes but only in an effort

to hedge portfolio risks as described above. In accordance with the foregoing,

under current regulations the Aggressive Growth Fund may not purchase or sell

futures contracts

-8-

<PAGE>

if, immediately thereafter, the sum of the amount of initial margin

deposits on the Fund's open futures positions and premiums on open

positions thereon would exceed 5% of the market value of the Aggressive Growth

Fund's total assets. Certain provisions of the federal tax laws may limit the

extent to which the Aggressive Growth Fund may engage in options and financial

futures transactions. Such transactions may also affect the amount, character

and timing of income, gain or loss recognized by the Fund for federal tax

purposes.

The Aggressive Growth Fund's successful use of options and financial

futures depends on the ability of the Adviser to predict the direction of the

market and is subject to various additional risks. The investment techniques

and skills required to use options and futures successfully are different from

those required to select equity and debt securities for investment. The

correlation between movements in the price of the option or future and the price

of the securities index futures and options declines, as the composition of

the Fund's portfolio diverges from the composition of the index underlying

such index futures and options. In addition, the ability of the Fund to

close out an option or futures position depends on a liquid secondary

market. There is no assurance that liquid secondary markets will exist for

any particular option or futures contract at any particular time.

New options and futures contracts and other financial products,

securities options, securities index futures contracts and options on

securities indices with respect to securities in which the Aggressive

Growth Fund may invest, and various combina-

-9-

<PAGE>

tions thereof, continue to be developed and the Aggressive Growth Fund may

invest in any such options, contracts and products as may be developed to

the extent consistent with its investment objective and policies and the

regulatory requirements applicable to the Fund. Although the Aggressive

Growth Fund has adopted the investment policies stated above, it has in

addition made under- takings to certain States which (a) prohibit investing

in commodities and commodity futures contracts and (b) limit investment in

options, financial futures and stock index futures to 5% of the value of

its net assets.

The Aggressive Growth Fund has a policy of investing in special

situations and accordingly may invest a substantial portion of its assets

in securities for which a tender or exchange offer has been made or

announced and in securities of companies for which a merger, consolidation,

liquidation or similar reorganization proposal has been announced if, in

the judgment of the Adviser, there is a reasonable prospect of capital

appreciation. The principal risk is that such offers or proposals may not

be consummated within the time and under the terms contemplated at the time

of the investment, in which case, unless such offers or proposals are

replaced by equivalent or increased offers or proposals which are consum-

mated, the Fund may sustain a loss.

The following additional policies have been adopted by the Growth

Fund and the Growth and Income Fund and may be changed by the Trustees

without shareholder approval:

-10-

<PAGE>

1. The Funds will not make or maintain a short position (other than

short sales against the box) or write, purchase or sell put,

calls, straddles, spreads or combinations thereof, provided,

however, the Growth Fund and Growth and Income Fund may write

covered call options and purchase call options in closing

purchase transactions.

2. The Funds will not invest in oil, gas or other mineral

exploration or development programs, but this shall not prohibit

the Funds from investing in securities of companies engaged in

oil, gas or mineral activities or investigations.

Fixed Income Fund
- -----------------

The Fixed Income Fund generally does not intend to acquire common

stocks or equity securities exchangeable for common stock or rights or

warrants to subscribe for or purchase common stock, except that with

respect to convertible debt securities, the Fund may acquire common stock

through the exercise of conversion rights in situations where it believes

such exercise is in the best interest of the Fixed Income Fund and its

shareholders. In such event, the Fixed Income Fund will sell the common

stock resulting from such conversion as soon as practical. The Fixed

Income Fund may, as set forth in the Prospectus, acquire debt securities,

including convertible and non-convertible debt securities which may have

voting rights, but in no case will the Fixed Income Fund acquire more than

10% of the voting securities of any one issuer. The relative size of the

Fixed Income Fund's investments in any

-11-

<PAGE>

grade or type of security will vary from time to time. Critical factors

which are considered in the selection of securities or other investment

alternatives include trends in the determinates of interest rates,

corporate profits and management capabilities and practices.

The Fixed Income Fund may use a variety of techniques in seeking

to attain its investment objective. In making investment decisions, for

example, the Fixed Income Fund seeks to balance favorable factors, such as

high yields to maturity and high current rates of income, against

unfavorable factors, such as increased risk which accompanies longer

maturities.

The Fixed Income Fund may use trading to attain its investment

objectives and policies. Trading may be used in anticipation of market

developments or to take advantage of yield disparities between major

sectors of the investment grade market. Examples of circumstances in which

the Fixed Income Fund may employ trading are (i) shortening of the average

maturity of the portfolio in anticipation of higher interest rates, (ii)

lengthening of the average maturity of the portfolio in anticipation of

lower interest rates, (iii) changing the average coupon of the portfolio

when yield disparities occur between debt securities selling at differing

levels of premium or discount, (iv) selling one type of debt security

(e.g., industrial bonds) and buying another type of debt security (e.g.,

Federal agency bonds or notes) when disparities arise in the relative value

of each, and (v) selling one class of fixed-income securities (e.g.,

preferred stocks) and buying another

-12-

<PAGE>

class (e.g., publicly offered utility bonds) when disparities arise in the

relative values of each.

Debt securities acquired for the Fixed Income Fund's portfolio

may be subject to call by the issuer prior to maturity, in which case the

Fixed Income Fund may be forced to sell such securities at prices below

market value. The Fixed Income Fund may seek protection against calls at

prices below market value. Such protection may be sought by (i) purchasing

securities with high call prices relative to their market prices, (ii)

purchasing securities with sinking fund features which are selling at

premium where the period before inception of the sinking fund payments is

relatively long, (iii) selling a security whose market price has risen

above its call price and purchasing another security of comparable quality

whose market price is below its call price and (iv) substituting for a

security with a refunding date a comparable security with a more distant

refunding date. Depending on market conditions, debt securities may be

purchased at a discount or premium from face value, producing a yield of

more or less than the coupon rate. The market value of the Fixed Income

Fund's assets will reflect yields generally available on debt securities of

similar quality. When such yields decline, the market value of the Fixed

Income Fund's assets already invested can be expected to rise. Similarly,

when such yields increase, the market value of the Fund's assets already

invested can be expected to decline.

Municipal Trust Fund
- --------------------

-13-

<PAGE>

Municipal securities include municipal bonds as well as short-

term (i.e., maturing in under one year to as much as three years) municipal

notes, demand notes and tax-exempt commercial paper. In the event the

Municipal Trust Fund invests in demand notes, the Adviser will continually

monitor the ability of the obligor under such notes to meet its

obligations. Typically, municipal bonds are issued to obtain funds used to

construct a wide range of public facilities, such as schools, hospitals,

housing, mass transportation, airports, highways and bridges. The funds

may also be used for general operating expenses, refunding of outstanding

obligations and loans to other public institutions and facilities.

Municipal bonds fall into two general classes: general

obligation bonds and revenue or special obligation bonds. Payment of

principal of and interest on general obligation bonds is secured by the

issuer's pledge of its faith, credit and taxing power. Payment on revenue

or special obligation bonds is met only from the revenues derived from a

particular facility or class of facilities or, in some cases, from the

proceeds of a special excise tax or other specific revenue source but not

from general tax and other unrestricted revenues of the issuer. The term

"issuer" means the agency, authority, instrumentality or other political

subdivision whose assets and revenues are available for the payment of

principal of and interest on the bonds. Certain types of private activity

bonds are also considered municipal bonds if the interest thereon is exempt

from federal income tax. Private activity bonds

-14-

<PAGE>

are issued by or on behalf of public authorities to obtain funds for

various privately-operated manufacturing facilities, airports, housing

projects, resource recovery programs, solid waste disposal facilities,

student loan programs and water and sewage disposal facilities.

Private activity bonds are in most cases revenue bonds and do not

generally constitute the pledge of the credit or taxing power of the issuer

of such bonds. The payment of the principal and interest on such

industrial revenue bonds depends solely on the ability of the user of the

facilities financed by the bonds to meet its financial obligations and the

pledge, if any, of real and personal property so financed as security for

such payment.

Municipal notes in which the Municipal Trust Fund may invest

include demand notes, which are tax-exempt obligations that have stated

maturities in excess of one year, but permit the holder to sell back the

security (at par) to the issuer within 1 to 7 days' notice. The payment of

principal and interest by the issuer of these obligations will ordinarily

be guaranteed by letters of credit offered by banks. The interest rate on

a demand note may be based upon a known lending rate, such as a bank's

prime rate, and may be adjusted when such rate changes, or the interest

rate on a demand note may be a market rate that is adjusted at specified

intervals.

Other short-term obligations constituting municipal notes include

tax anticipation notes, revenue anticipation notes and bond anticipation

notes, and tax-exempt commercial paper.

-15-

<PAGE>

Tax anticipation notes are issued to finance working capital

needs of municipalities. Generally, they are issued in anticipation of

various seasonal tax revenues, such as income, sales, use and business

taxes. Revenue anticipation notes are issued in expectation of receipt of

other types of revenues, such as federal revenues available under the

Federal Revenue Sharing Programs. Bond anticipation notes are issued to

provide interim financing until long-term financing can be arranged. In

most such cases, the long-term bonds provide the money for the repayment of

the notes.

Tax-exempt commercial paper is a short-term obligation with a

stated maturity of 365 days or less (however, issuers typically do not

issue such obligations with maturities longer than seven days). Such

obligations are issued by state and local municipalities to finance

seasonal working capital needs or as short-term financing in anticipation

of longer-term financing.

There are, of course, variations in the terms of, and the

security underlying, municipal securities, both within a particular rating

classification and between such classifications, depending on many factors.

The ratings of Moody's and S&P represent their opinions of the quality of

the municipal securities rated by them. It should be emphasized that such

ratings are general and are not absolute standards of quality.

Consequently, municipal securities with the same maturity, coupon and

rating may have different yields, while the municipal securities of the

same maturity and coupon, but with different ratings may have the same

yield. The

-16-

<PAGE>

Adviser appraises independently the fundamental quality of the securities

included in the Fund's portfolio.

Yields on municipal securities are dependent on a variety of

factors, including the general conditions of the municipal securities

market, the size of a particular offering, the maturity of the obligation

and the rating of the issue. Municipal securities with longer maturities

tend to produce higher yields and are generally subject to greater price

movements than obligations with shorter maturities. An increase in

interest rates generally will reduce the market value of portfolio

investments, and a decline in interest rates generally will increase the

value of portfolio investments. The achievement of the Fund's investment

objectives depends in part on the continuing ability of the issuers of

municipal securities in which the Fund invests to meet their obligations

for the payment of principal and interest when due. Municipal securities

historically have not been subject to registration with the Securities and

Exchange Commission, although from time to time there have been proposals

which would require registration in the future.

After purchase by the Municipal Trust Fund, a municipal security

may cease to be rated or its rating may be reduced below the minimum

required for purchase by the Municipal Trust Fund. Neither event requires

sales of such security by the Municipal Trust Fund, but the Adviser will

consider such event in its determination of whether the Municipal Trust

Fund should continue to hold the security. To the extent that the ratings

given by Moody's

-17-

<PAGE>

or S&P may change as a result of changes in such organizations or their

rating systems, the Adviser will attempt to use such changed ratings in a

manner consistent with the Fund's quality criteria as described in the

Prospectus.

Obligations of issuers of municipal securities are subject to the

provisions of bankruptcy, insolvency, and other laws affecting the rights

and remedies of creditors, such as the Federal Bankruptcy Code. In

addition, the obligations of such issuers may become subject to laws

enacted in the future by Congress, state legislatures, or referenda

extending the time for payment of principal and/or interest, or imposing

other constraints upon enforcement of such obligations or upon the ability

of municipalities to levy taxes. There is also the possibility that, as a

result of litigation or other conditions, the ability of any issuer to pay,

when due, the principal or the interest on its municipal bonds may be

materially affected.

From time to time, proposals have been introduced before Congress

for the purpose of restricting or eliminating the federal income tax

exemption for interest on municipal securities. It can be expected that

similar proposals may be introduced in the future. If such a proposal were

enacted, the availability of municipal securities for investment by the

Fund and the value of the Fund's portfolio would be affected.

Additionally, the Fund would reevaluate its investment objectives and

policies.

Additional General Investment Policies
- --------------------------------------

-18-

<PAGE>

The following general investment policies supplement those set

forth above for each Fund.

Subchapter M Qualification
- --------------------------

In accordance with the requirements for qualification as a

regulated investment company under the Internal Revenue Code of 1986, as

amended (the "Code"), it is the policy of each Fund to limit its short-term

trading so that less than 30% of its annual gross income (including all

dividends and interest income and gross realized capital gains, both short-

and long-term, without offset for realized capital losses) will be derived

from gross gains realized on the sale or other disposition of securities

held for less than three months.

Short Sales ("Against the Box")
- -------------------------------

Except for the Municipal Trust Fund, a Fund may effect short

sales "against the box". While a short sale is a sale of a security the

Fund does not own, it is "against the box" if at all times during which a

short position is open, the Fund owns an equal amount of the securities,

or, by virtue of the ownership of securities, has the right, without

further consideration, to obtain an equal amount of the securities sold

short. No more than 10% of each Fund's net assets (taken at the then

current market value) will be held as collateral for its short sales at any

time. Neither the Growth Fund, the Fixed Income Fund nor the Growth and

Income Fund have an intention to enter into short sales against the box in

the foreseeable future. Any gains on short sale transactions will

generally be short-term, capital gains to a Fund. A

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<PAGE>

Fund's ability to enter into short sale transactions will be limited by the

requirement for qualification as a regulated investment company that less

than 30% of a Fund's annual gross income be derived from the sale or other

disposition of securities held for less than three months. See "Dividends,

Distributions and Taxes" in the Prospectus and herein.

Repurchase Agreements
- ---------------------

A Fund may enter into repurchase agreements with respect to U.S.

Government Securities (as defined in the Prospectus). While the maturities

of the underlying securities may exceed one year, the term of the

repurchase agreement is always less than one year. Repurchase agreements

often are for short periods such as one day or a week, but may be longer.

In the event that a vendor defaults on its repurchase obligation, a Fund

might suffer a loss to the extent that the proceeds from the sale of the

collateral were less than the repurchase price. If the vendor becomes the

subject of bankruptcy proceedings, a Fund might be delayed in selling the

collateral. The Growth Fund, Aggressive Growth Fund, Fixed Income Fund and

the Municipal Trust Fund each may also enter into reverse repurchase

agreements as described in the Prospectus.

Restricted Securities
- ---------------------

The Growth Fund, the Growth and Income Fund, the Fixed Income

Fund and the Municipal Trust Fund may invest in restricted securities and

all of the Funds may invest in other assets having no ready market if such

purchases at the time thereof would not cause more than 10% (or 15% in the

case of the Municipal Trust

-20-

<PAGE>

Fund) of the value of a Fund's net assets to be invested in not readily

marketable assets. However, the Adviser presently intends that not more

than 5% of the net assets of any Fund will be so invested. Additionally,

the Aggressive Growth Fund and the Growth and Income Fund have made

undertakings to certain states that would limit such investments in not

readily marketable assets to no more than 5% of the value of each Fund's

net assets. The Municipal Trust Fund has made undertakings to certain

states that would limit to no more than 10% of its total assets its

investment in restricted securities and to no more than 5% of its total

assets its investment in equity securities which are not readily market-

able. Restricted securities may be sold only in privately negotiated

transactions, in a public offering with respect to which a registration

statement is in effect under the Securities Act of 1933 or pursuant to Rule

144 promulgated under such Act. Where registration is required, Winthrop

may be obligated to pay all or part of the registration expense, and a

considerable period may elapse between the time of the decision to sell and

the time Winthrop may be permitted to sell a security under an effective

registration statement. If during such a period adverse market conditions

were to develop, Winthrop might obtain a less favorable price than that

which prevailed when it decided to sell. Securities salable without

restriction among qualified institutional investors pursuant to rules

(e.g., Rule 144A) promulgated under the Securities Act of 1933 are not
- -

considered to be subject to legal restrictions on transfer and may be

considered liquid if they

-21-

<PAGE>

satisfy liquidity standards established by the Board of Trustees. The

continued liquidity of such securities is not as well assured as that of

publicly traded securities, and accordingly the Board of Trustees will

monitor their liquidity. Restricted securities will be valued in such

manner as the Trustees of Winthrop in good faith deem appropriate to

reflect their fair value.

State Undertakings
- ------------------

The Funds have also made undertakings to certain States which (a)

limit investment in warrants to not more than 5% of the value of each

Fund's net assets (only 2% of the value of each Fund's net assets may be

invested in warrants not listed on the New York or American Stock

Exchange), (b) generally prohibit any investment in oil, gas and other

mineral leases, and (c) prohibit purchases or sales of real property

(including limited partnership interests, but excluding readily marketable

interests in real estate investment trusts or readily marketable securities

of companies which invest in real estate).

Additional Fundamental Investment Restrictions
- ----------------------------------------------

The following fundamental investment restrictions are applicable

to each of the Funds as indicated and may not be changed with respect to a

Fund without the approval of a majority of the shareholders of that Fund,

which means the affirmative vote of the holders of (a) 67% or more of the

shares of that Fund represented at a meeting at which more than 50% of the

outstanding shares of the Fund are represented or (b) more than 50% of the

outstanding shares of that Fund, whichever is less. The following

fundamental

-22-

<PAGE>

investment restrictions are in addition to those set forth in the

Prospectus.

A Fund may not:

1. With respect to the Growth Fund, the Fixed Income Fund, the

Municipal Trust Fund and the Growth and Income Fund, participate

on a joint or joint and several basis in any securities trading

account;

2. Issue any senior security within the meaning of the Investment

Company Act of 1940 (except to the extent that when-issued

securities transactions, forward commitments, stand-by

commitments or reverse repurchase agreements may be considered

senior securities and except, with respect to the Aggressive

Growth Fund and the Growth and Income Fund, that the hedging

transactions in which such Funds may engage and similar

investment strategies are not treated as senior securities);

3. Invest in real estate (other than money market securities secured

by real estate or interests therein or money market securities

issued by companies which invest in real estate or interests

therein and, with respect to the Aggressive Growth Fund and the

Growth and Income Fund, other than mortgage-backed securities and

similar instruments), or commodities or commodity contracts

except, with respect to the Aggressive Growth Fund, for hedging

purposes.

-23-

<PAGE>

4. With respect to the Growth Fund, the Fixed Income Fund, the

Municipal Trust Fund and the Growth and Income Fund, invest in

the securities of other investment companies or investment trusts

except by purchase in the open market where no commission or

profit to a sponsor or dealer results from such purchase other

than the customary broker's commission, or except when such

purchase, though not in the open market, is part of a plan of

merger, acquisition or transfer of assets, or consolidation and

except, with respect to the Growth and Income Fund, for purchases

of securities of money market funds; or

5. Invest in companies for the purpose of exercising control or

management.

6. With respect to the Municipal Trust Fund, make short sales of

securities.

The following fundamental investment restrictions are applicable

only to the Fixed Income Fund and may not be changed with respect to the

Fixed Income Fund without the approval of the shareholders of the Fixed

Income Fund (as described above).

The Fixed Income Fund may not:

1. Write, purchase or sell puts, calls, straddles or spreads, or

combinations thereof;

2. Invest in oil, gas or other mineral exploration or development

programs.

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

MANAGEMENT

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

The Trustees and principal officers of Winthrop, their ages and their

primary occupations during the past five years are set forth below. Unless

otherwise specified, the address of each of such persons is 140 Broadway,

New York, New York 10005. Those Trustees whose names are preceded by an

asterisk are "interested persons" of Winthrop as defined by the Investment

Company Act of 1940.

*CARL B. MENGES, 65, Chairman of the Board of Trustees and

President of Winthrop, is Chairman of the Board of Wood, Struthers &

Winthrop Management Corp. (the "Adviser") with which he has been associated

since before 1987. He is also Vice Chairman of Donaldson, Lufkin &

Jenrette, Inc. with which he has been associated since prior to 1990.

*G. MOFFETT COCHRAN, 45, Trustee of Winthrop, is President and

Chief Executive Officer of the Adviser with which he has been associated

since 1992. Prior to his association with Winthrop and the Adviser, Mr.

Cochran was a Senior Vice President with Bessemer Trust Companies.

*JAMES A. ENGLE, 36, Vice President and Trustee of Winthrop, is a

Managing Director and Chief Investment Officer of the Adviser with which he

has been associated since prior to 1990.

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<PAGE>

ROGER W. VOGEL, 38, is Vice President of Winthrop, and a Senior

Vice President of the Adviser, positions he has held since July, 1993.

Prior to his becoming associated with Winthrop and the Adviser, Mr. Vogel

was a Vice President with Chemical Banking Corp.

CATHY A. JAMESON, 41, Vice President of Winthrop, is a Senior

Vice President of the Adviser with which she has been associated since

prior to 1990.

SAM M. D'AGOSTINO, 70, Vice President of Winthrop, is a Vice

President and Mutual Fund Compliance Director of Alliance Capital

Management Corporation, with which he has been associated since prior to

1990. His address is 1345 Avenue of the Americas, New York, New York

10105.

MARTIN JAFFE, 49, Vice President, Treasurer and Secretary of

Winthrop, is a Managing Director, Treasurer and Chief Operating Officer of

the Adviser, with which he has been associated since prior to 1990.

MARYBETH B. LEITHEAD, 32, Vice President of Winthrop, is also a

Vice President of the Adviser, with which she has been associated since

1990.

HUGH M. NEUBURGER, 52, Vice President of Winthrop, is a Senior

Vice President of the Adviser, with which he has been associated since

March, 1995. Prior to his association with Winthrop and the Adviser,

Mr. Neuburger was the President of Hugh M. Neuburger, Inc., a consulting

firm.

ROBERT L. BAST, 70, Trustee of Winthrop, is Of Counsel to Reed

Smith Shaw & McClay, with which he has been

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<PAGE>

associated since prior to 1990. His address is 110 Spruce Lane, Ambler, PA

19002.

JOHN J. HALSEY, 76, Trustee of Winthrop, is a private investor

and retired Director of Management Sciences, General Foods Corp. with which

he had been associated since prior to 1990. His address is 61 Winding Wood

Road, Rye Brook, NY 10573.

STIG HOST, 69, Trustee of Winthrop, is Chairman of the Board of

Kriti Exploration, Inc., Kriti Properties and Development Corp. and

International Marine Sales, Inc., a Trustee of Alliance International Fund,

Alliance Global Environmental Fund, Alliance New Europe Fund, Alliance All-

Asia Investment Fund and Alliance Developing Markets Fund and a Director of

Florida Fuels, Inc. His address is 103 Oneida Drive, Greenwich, CT 06830.

PETER F. KROGH, 58, Trustee of Winthrop, Dean Emeritus and

Distinguished Professor of International Affairs, School of Foreign

Service, Georgetown University, Washington, D.C. since prior to 1987. He

is moderator of "Great Decisions", a foreign affairs television series,

author of numerous articles relating to international issues for

professional publications and serves on the board of the Carlisle Companies

and several world affairs organizations. His address is 3417 N. Street NW,

Washington, DC 20007.

DENNIS G. LITTLE, 60, Trustee of Winthrop, is the former

Executive Vice President and Chief Financial Officer of Textron Inc. (con-

glomerate). His address is 28 Rumstick Drive, Barrington, RI 02806.

-27-

<PAGE>

WILLIAM H. MATHERS, 81, Trustee of Winthrop, Of Counsel to the

law firm of Chadbourne & Parke, with which he had been associated since

prior to 1990. His address is c/o Gordon Farm, RR #1-Box 83, Sutton, VT

05867.

JAMES L. MCCABE, 52, Trustee of Winthrop, is President of McCabe

Capital Managers, Ltd. (registered investment adviser) with which he has

been associated since prior to 1990. His address is 101 Williamson Road,

Bryn Mawr, PA 19010.

JOHN J. SHEEHAN, 65, Trustee of Winthrop, consultant to Financial

Data Processing with which he has been associated since prior to 1990. His

address is 4 Bennington Place, Newton, PA 18940.

WILLIAM C. SIMPSON, 76, Trustee of Winthrop, former President and

Director of Royal Insurance Companies with which he has been associated

since prior to 1990. His address is 123 Cove Neck Road, Oyster Bay, NY

11771.

*STEPHEN K. WEST, 67, Trustee of Winthrop, is a partner of

Sullivan & Cromwell, counsel to Winthrop, with which he has been associated

since prior to 1990. His address is 42 Old Wood Road, Bernardsville, NJ

07924.

-28-

<PAGE>

Compensation Table

<TABLE><CAPTION>
Compensation Table

Total
Pension or Compensation
Retirement From Trust
Aggregate Benefits Accrued Estimated Annual and Fund
Compensation As Part of Trust Benefits Upon Complex Paid
Name and Position From Trust Expenses Retirement to Trustees
----------------- ------------- ------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Robert L. Bast $6,000 None None $6,000
(Trustee)

John J. Halsey $7,500 None None $7,500
(Trustee)

Stig Host $7,500 None None $7,500
(Trustee)

Peter F. Krogh $7,500 None None $7,500
(Trustee)

Dennis G. Little $4,800 None None $4,800
(Trustee)

William H. Mathers $7,500 None None $7,500
(Trustee)

James L. McCabe $4,800 None None $4,800
(Trustee)

John J. Sheehan $6,000 None None $6,000
(Trustee)

William C. Simpson $6,000 None None $6,000
(Trustee)

Stephen K. West $6,000 None None $6,000
(Trustee)
</TABLE>

The Trustees of Winthrop who are officers or employees of the

Adviser or any of its affiliates receive no remuneration from Winthrop.

Each of the Trustees who are not affiliated with the Adviser will be paid a

$1,200 fee for each board meeting attended and $500 for each Audit

Committee meeting attended. For the year ended October 31, 1995, such

remuneration totalled $63,600. Messrs. Halsey, Host, Krogh, and Mathers

are members of the Audit Committee. Messrs. Bast, Mathers and Menges are

members of the

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<PAGE>

Dividend Committee whose function is to declare dividends on behalf of the

Trustees. All of the Trustees who are not "interested persons" of Winthrop

as defined by the Investment Company Act of 1940 are members of the

Nominating Committee. Messrs. Host and Menges are members of the Valuation

Committee whose function is to value the securities of each Fund in

emergency situations. Messrs. Bast, Halsey, Menges, McCabe, Sheehan, and

West are former Directors of the Neuwirth Fund, Inc. Messrs. Engle,

Little, Mathers, Menges, and Simpson are former Directors of the Pine

Street Fund, Inc. The Neuwirth Fund, Inc. and the Pine Street Fund, Inc.

were subject to a plan of reorganization and a transfer of assets and

liabilities to the Aggressive Growth Fund and the Growth and Income Fund,

respectively, two portfolios of the Winthrop Focus Funds on July 10, 1992.

As of December 6, 1995, the Trustees and officers of Winthrop as a

group owned beneficially 1.5% of the shares of the Aggressive Growth Fund, 2.6%

of the shares of the Fixed Income Fund, 1.1% of the shares of the Municipal

Trust Fund and less than 1.0% of the shares of the Growth Fund and the Growth

and Income Fund.

To the best of the Fund's knowledge as of December 6, 1995, no

shareholder owned 5% or more of the outstanding shares of the Growth Fund,

the Fixed Income Fund, or the Growth and Income Fund. The Adviser manages

accounts over which it has discretionary power to vote or dispose of

securities held in such accounts and which accounts hold in the aggregate,

as of December 6, 1995, 1,301,114 shares (10.5%) of the Aggressive Growth

Fund. As of

-30-

<PAGE>

December 6, 1995, Robert Winthrop, c/o Wood, Struthers & Winthrop

Management Corp., 140 Broadway, New York, New York 10005, is a shareholder

of record and beneficial owner of 218,014 shares (5.5%) of the Municipal

Trust Fund.

Adviser
- -------

Wood, Struthers & Winthrop Management Corp., a Delaware

corporation with principal offices at 140 Broadway, New York, New York

10005 (the "Adviser"), has been retained under an Investment Advisory

Agreement as Winthrop's investment adviser (see "Management" in the

Prospectus). The Adviser was established in 1871, as a private concern to

manage money for the Winthrop family of Boston.

The Adviser is (since 1977) a wholly-owned subsidiary of

Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ Securities"), the

distributor of the Fund's shares, which is a wholly-owned subsidiary of

Donaldson, Lufkin & Jenrette, Inc., which is in turn an independently

operated, indirect subsidiary of The Equitable Companies Incorporated

("ECI"), a holding company controlled by AXA, a French insurance holding

company. The Adviser is an integral part of the DLJ Securities family, and

as one of the oldest money management firms in the country, it maintains a

tradition of personalized service and performance.

AXA owns 60.5% of the outstanding voting shares of common stock

of ECI. AXA is a member of a group of companies (the "AXA Group") that is

the second largest insurance group in France and one of the largest

insurance groups in Europe. Principally engaged

-31-

<PAGE>

in property and casualty insurance and life insurance in Europe and

elsewhere in the world, the AXA Group is also involved in real estate

operations and certain other financial services, including mutual fund

management, lease financing services and brokerage services. Based on

information provided by AXA, as of January 1, 1995, 42.3% of the issued

shares (representing 54.7% of the voting power) of AXA are owned by Midi

Participations, a French corporation that is a holding company. The voting

shares of Midi Participations are in turn owned 60% by Finaxa, a French

corporation that is a holding company, and 40% by subsidiaries of

Assicurazioni Generali S.p.A., an Italian corporation principally engaged

in the transaction of insurance and reinsurance ("Generali"). As of

January 1, 1995, 62.1% of the issued shares (representing 75.7% of the

voting power) of Finaxa are owned by five French mutual insurance companies

(the "Mutuelles AXA"), and 26.5% of the issued shares (representing 16.6%

of the voting power) of Finaxa are owned by Compagnie Financiere de

Paribas, a French financial institution engaged in banking and related

activities ("Paribas"). Acting as a group, the Mutuelles AXA control AXA,

Midi Participations and Finaxa. The Mutuelles AXA have approximately 1.5

million policyholders. The address of Donaldson, Lufkin & Jenrette, Inc.

is 140 Broadway, New York, New York 10005. The address of ECI is 787

Seventh Avenue, New York, New York 10019.

The Investment Advisory Agreement became effective on July 22,

1992. The Investment Advisory Agreement replaced an

-32-

<PAGE>

earlier, substantially identical agreement (the "First Advisory Agreement")

that terminated because of its technical assignment as a result of AXA's

acquisition of control over ECI. In anticipation of the assignment of the

First Advisory Agreement, on February 12, 1992, the Trustees approved the

Investment Advisory Agreement and on June 15, 1992, a majority of the

outstanding voting securities of Winthrop approved the Investment Advisory

Agreement. The Investment Advisory Agreement was approved with respect to

the Municipal Trust Fund by the Trustees on June 16, 1993 and by the then

sole shareholder, the Adviser, on July 26, 1993 and became effective with

respect to the Municipal Trust Fund on the same date. The Investment

Advisory Agreement continues in force for successive twelve month periods

computed from the first day of each fiscal year of Winthrop provided that

such continuation is specifically approved at least annually by a majority

vote of the Trustees who neither are interested persons of Winthrop nor

have any direct or indirect financial interest in the Investment Advisory

Agreement, cast in person at a meeting called for the purpose of voting on

such approval. The Investment Advisory Agreement was continued until

October 31, 1996 at a meeting of the Trustees on October 19, 1995.

Under the Investment Advisory Agreement, Winthrop has agreed to

change its name to one that does not suggest an affiliation with the

Adviser in the event the Adviser ceases to act as Winthrop's investment

adviser. Pursuant to the terms of the Investment Advisory Agreement, the

Adviser may retain, at its own

-33-

<PAGE>

expense, a sub-adviser to assist in the performance of its services to

Winthrop, although such an arrangement is not currently contemplated.

Certain other clients of the Adviser may have investment

objectives and policies similar to those of Winthrop. The Adviser may,

from time to time, make recommendations which result in the purchase or

sale of a particular security by its other clients simultaneously with

Winthrop. If transactions on behalf of more than one client during the

same period increase the demand for securities being purchased or the

supply of the securities being sold, there may be an adverse effect on

price. It is the policy of the Adviser to allocate advisory

recommendations and the placing of orders in a manner which is deemed

equitable by the Adviser to the accounts involved, including Winthrop.

When two or more of the clients of the Adviser (including Winthrop) are

purchasing the same security on a given day from the same broker-dealer,

such transactions may be averaged as to price.

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

EXPENSES OF WINTHROP

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

Distribution Plan
- -----------------

Pursuant to Rule 12b-1 adopted by the Securities and Exchange Commission

under the Investment Company Act of 1940, Winthrop has adopted a

Distribution Agreement (the "Distribution Agreement") and 12b-1 Plans for

each Class of shares of each Fund

-34-

<PAGE>

to permit Winthrop to compensate the Distributor for activities associated

with the distribution of shares.

Pursuant to the Distribution Agreement and the 12b-1 Plans, the

officers, Adviser or Distributor of Winthrop reports the amounts expended

under the Distribution Agreement and the purposes for which such expendi-

tures were made to the Trustees of Winthrop on a quarterly basis. Also,

the 12b-1 Plans provide that the selection and nomination of disinterested

Trustees (as defined in the Investment Company of Act of 1940) are

committed to the discretion of the disinterested Trustees then in office.

The Distribution Agreement and 12b-1 Plans may be continued annually if ap-

proved by a majority vote of the Trustees, including a majority of the

Trustees who neither are interested persons of Winthrop nor have any direct

or indirect financial interest in the Distribution Agreement, the 12b-1

Plans or in any other agreements related to the 12b-1 Plans, cast in person

at a meeting called for the purpose of voting on such approval. The

Distribution Agreement and 12b-1 Plans were initially approved by the

Trustees, including a majority of the disinterested Trustees, on October

19, 1995. The Class A 12b-1 Plans were approved by shareholders at a

special meeting on February 7, 1996. The Class B 12b-1 Plans were approved

by the sole Class B shareholder of each Fund on [Date]. Prior to February

28, 1996, the Funds operated under 12b-1 Plans pursuant to which each Fund

reimbursed the Distributor up to .50 of 1% of the average daily net assets

of such Fund. All material amendments to the 12b-1 Plans must be approved

by a vote of the Trustees, including

-35-

<PAGE>

a majority of the Trustees who neither are interested persons of Winthrop

nor have any direct or indirect financial interest in the 12b-1 Plans or

any related agreement, cast in person at a meeting called for the purpose

of voting on such approval. In addition to such Trustee approval, the

12b-1 Plans may not be amended in order to increase materially the costs

which the Funds may bear pursuant to the 12b-1 Plans without the approval

of a majority of the outstanding shares of such Funds. The 12b-1 Plans may

be terminated without penalty at any time by a majority vote of the

disinterested Trustees, by a majority vote of the outstanding shares of

Winthrop or by the Adviser. Any agreement related to the 12b-1 Plans may

be terminated at any time, without payment of any penalty, by a majority

vote of the independent Trustees or by majority vote of the outstanding

shares of Winthrop on not more than 60 days notice to any other party to

the agreement, and will terminate automatically in the event of assignment.

For the year ended October 31, 1995, distribution fees paid or

payable amounted to $263,552 for the Growth Fund, $225,597 for the Fixed

Income Fund, $872,316 for the Aggressive Growth Fund, $376,789 for the

Growth and Income Fund and $179,440 for the Municipal Trust Fund.

Distribution fees paid were used to compensate broker-dealers and other

persons for providing distribution assistance. As disclosed in the

Prospectus, during the year ended October 31, 1995, the Adviser reimbursed

the Fixed Income Fund $230,399 and the Municipal Trust Fund $208,045, for

operating expenses.

-36-

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

PURCHASES, REDEMPTIONS, EXCHANGES AND

SYSTEMATIC WITHDRAWAL PLAN

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

The following information supplements that set forth in Winthrop's

Prospectus under the heading "Purchases, Redemptions and Shareholder

Services".

Purchases
- ---------

Shares of the Funds are offered at the respective net asset value

per share next determined following receipt of a purchase order in proper

form by Winthrop or by the Distributor plus, in the case of Class A shares

of each Fund, an initial sales charge imposed at the time of Purchase or,

in the case of Class B Shares of each Fund, subject to a contingent

deferred sales charge upon redemption. The Funds calculate net asset value

per share as of the close of the regular session of the New York Stock

Exchange, which is generally 4:00 p.m. New York City time on each day that

trading is conducted on the New York Stock Exchange.

Orders for the purchase of shares of a Fund become effective at

the next transaction time after Federal funds or bank wire monies become

available to Citibank, N.A. ("Citibank") for a shareholder's investment.

Federal funds are a bank's deposits in a Federal Reserve Bank. These funds

can be transferred by Federal Reserve wire from the account of one member

bank to that of another

-37-

<PAGE>

member bank on the same day and are considered to be immediately available

funds; similar immediate availability is accorded monies received at

Citibank by bank wire. Investors should note that their banks may impose a

charge for this service. Money transmitted by a check drawn on a member of

the Federal Reserve System is converted to Federal Funds in one business

day following receipt. Checks drawn on banks which are not members of the

Federal Reserve System may take longer. All payments (including checks

from individual investors) must be in United States dollars.

All shares purchased are confirmed to each shareholder and are

credited to such shareholder's account at net asset value and with respect

to Class A shares, less any applicable sales charge. To avoid unnecessary

expense to Winthrop and to facilitate the immediate redemption of shares,

share certificates are not issued except upon the written request of a

shareholder for which no charge is made. Certificates are not issued for

fractional shares.

Redemptions
- -----------

Payment of the redemption price may be made either in cash or in

portfolio securities (selected in the discretion of the Trustees and taken

at their value used in determining the redemption price), or partly in cash

and partly in portfolio securities. However, payments will be made wholly

in cash unless the Trustees believe that economic conditions exist which

would make such a practice detrimental to the best interest of Winthrop.

Winthrop has filed a formal election with the Securities and Exchange

-38-

<PAGE>

Commission pursuant to which Winthrop will only effect a redemption in

portfolio securities where the particular shareholder of record is

redeeming more than $250,000 or 1% of Winthrop's total net assets,

whichever is less, during any 90 day period. In the opinion of Winthrop's

management, however, the amount of a redemption request would have to be

significantly greater than $250,000 or 1% of total net assets before a

redemption wholly or partly in portfolio securities would be made. If

payment for shares redeemed is made wholly or partly in portfolio

securities, brokerage costs may be incurred by the investor in converting

the securities to cash. See the Prospectus for a description of the con-

tingent deferred sales charge which may be applicable to certain

redemptions.

To redeem shares represented by share certificates, investors

should forward the appropriate share certificates, endorsed in blank or

with blank stock powers attached, to Winthrop with the request that the

shares represented thereby or a specified portfolio thereof be redeemed at

the next determined net asset value per share. The share assignment form

on the reverse side of each share certificate surrendered to Winthrop for

redemption must be signed by the registered owner or owners exactly as the

registered name appears on the face of the certificate or, in the alterna-

tive, a stock power signed in the same manner may be attached to the share

certificate or certificates, or, where tender is made by mail, separately

mailed to Winthrop. The signature or signatures

-39-

<PAGE>

on the assignment form must be guaranteed in the manner described below.

If the total value of the shares being redeemed exceeds $50,000

(before deducting any applicable contingent deferred sales charge) or a

redemption request directs proceeds to a party other than the registered

account owner(s), the signature or signatures on the letter or the endorse-

ment must be guaranteed by an "eligible guarantor institution" as defined

in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible

guarantor institutions include banks, brokers, dealers, credit unions,

national securities exchanges, registered securities associations, clearing

agencies and savings associations. A broker-dealer guaranteeing signatures

must be a member of a clearing corporation or maintain net capital of at

least $100,000. Credit unions must be authorized to issue signature

guarantees. Signature guarantees will be accepted from any eligible

guarantor institution which participates in a signature guarantee program.

Additional documents may be required for redemption of corporate,

partnership or fiduciary accounts.

The requirement for a guaranteed signature is for the protection

of the shareholder in that it is intended to prevent an unauthorized person

from redeeming his shares and obtaining the redemption proceeds.

Exchanges
- ---------

Shares of one Class of a Fund may be exchanged for shares of the

same Class of another Fund of Winthrop or of two affiliated no-load money

market funds: Alliance Government Reserves

-40-

<PAGE>

and Alliance Municipal Trust (collectively, the "Alliance Money Market

Funds"). In addition, shares of each Fund may be exchanged for shares of

the same class of the Winthrop Opportunity Funds, another investment

company managed by the Adviser, which is currently comprised of two

separate portfolios, the Winthrop Developing Markets Fund and the Winthrop

International Equity Fund. Each Winthrop Opportunity Fund portfolio offers

two classes of shares, Class A shares which are sold with a front-end sales

charge of up to 5.75% and a 12b-1 Fee of .25% annually and Class B shares

which are sold with a contingent deferred sales charge which declines from

4% to zero depending on the period of time the shares are held and a 12b-1

Fee of 1% annually. Class A shares subject to a contingent deferred sales

charge, as described in the prospectus, which are exchanged for Class A

shares of the Winthrop Opportunity Funds will continue to be subject to the

same contingent deferred sales charge at the same rate and for the same

period of time as they were prior to such exchange. Shareholders may also

exchange shares by telephone or telegram. The Telephone Exchange Privilege

will be offered automatically unless a shareholder declines such option on

the Share Purchase Application found in the Funds' Prospectus, or by

writing to the Funds' Transfer Agent, Fund/Plan Services, Inc.,

P.O. Box 874, Conshocken, PA 19428, Attn.: Winthrop Focus Funds.

In the case of each of the Winthrop Opportunity Funds and

Alliance Money Market Fund, the exchange privilege is available only in

those jurisdictions where shares of the relevant Fund may

-41-

<PAGE>

be legally sold. In addition, the exchange privilege is available only

when payment for the shares to be redeemed has been made and the shares

exchanged are held by the Transfer Agent or Distributor.

Only those shareholders who have had shares in a Fund for at

least seven days may exchange all or part of those shares for shares of

another Fund or one of the Winthrop Opportunity Funds or Alliance Money

Market Funds, and no partial exchange may be made if, as a result, the

shareholders' interest in a Fund would be reduced to less than $250. The

minimum initial exchange into another Fund is $250.

All exchanges into either of the Winthrop Opportunity Funds or

Alliance Money Market Funds are subject to the minimum investment

requirements and any other applicable terms set forth in the Prospectus for

the relevant Winthrop Opportunity or Alliance Money Market Fund whose

shares are being acquired. If for these or other reasons the exchange

cannot be effected, the shareholder will be so notified.

A shareholder of Winthrop who has exchanged shares for shares of

either the Winthrop Opportunity Funds or Alliance Money Market Funds will

have all of the rights and privileges of a shareholder of the relevant

Winthrop Opportunity or Alliance Money Market Fund except in the case of

the Alliance Money Market Funds, the check-writing and the systematic

withdrawal privilege will not be available. Winthrop provides its share-

holders with a systematic withdrawal plan (see below).

-42-

<PAGE>

The exchange privilege is intended to provide shareholders with a

convenient way to switch their investments when their objectives or

perceived market conditions suggest a change. The exchange privilege is

not meant to afford shareholders an investment vehicle to play short term

swings in the stock market by engaging in frequent transactions in and out

of the Funds, the Winthrop Opportunity Funds or the Alliance Money Market

Funds. Shareholders who engage in such frequent transactions may be

prohibited from or restricted in placing future exchange orders.

Systematic Withdrawal Plans
- ---------------------------

Shares of Winthrop owned by a participant in Winthrop's

systematic withdrawal plan will be redeemed as necessary to meet withdrawal

payments. A contingent deferred sales charge which would otherwise be

imposed will be waived in connection with redemptions made pursuant to

Winthrop's systematic withdrawal plan up to 1% monthly or 3% quarterly of

an account's total purchase payments (excluding dividend reinvestments) not

to exceed 10% of total purchase payments over any 12 month rolling period;

however, the contingent deferred sales charge will not be waived for

systematic withdrawals elected on a semi-annual or annual basis. See the

Prospectus for a description of the contingent deferred sales charge. The

systematic withdrawal plan may be terminated at any time by the shareholder

or Winthrop.

Redemption of shares for withdrawal purposes may reduce or even

liquidate an account. While an occasional lump sum investment may be made

by a shareholder who is maintaining a systematic

-43-

<PAGE>

withdrawal plan, such investment should normally be an amount equivalent to

three times the annual withdrawal or $5,000 whichever is less.

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

NET ASSET VALUE

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

Net asset value per share is computed each Fund Business Day in

accordance with Winthrop's Agreement and Declaration of Trust and By-Laws.

For this purpose, a Fund Business Day is any day on which the New York

Stock Exchange is open for business, typically, Monday through Friday

exclusive of New Year's Day, Washington's Birthday, Memorial Day,

Independence Day, Labor Day, Thanksgiving Day, Christmas Day and Good

Friday.

The net asset value of the shares of the Funds is determined as

of the close of the regular session on the New York Stock Exchange, which

is generally at 4:00 p.m., New York City time, on each day that trading is

conducted on the New York Stock Exchange. The net asset value per share is

calculated by taking the sum of the value of the Fund's investments and any

cash or other assets, subtracting liabilities, and dividing by the total

number of shares outstanding. All expenses, including the fees payable to

the Adviser, are accrued daily.

The net asset value is calculated separately for each class.

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

For purposes of the computation of net asset value, each of the

Funds value securities held in their respective portfolios

-44-

<PAGE>

as follows: readily marketable portfolio securities listed on the New York

Stock Exchange are valued, except as indicated below, at the last sale

price at the close of the New York Stock Exchange on the business day as of

which such value is being determined. If there has been no sale on such

day, the securities are valued at the mean of the closing bid and asked

prices on such day. If no bid or asked prices are quoted on such day, then

the security is valued by such method as the Trustees of Winthrop shall

determine in good faith to reflect its fair value.

Readily marketable securities, including certain options, not

listed on the New York Stock Exchange but listed on other national

securities exchanges or admitted to trading on the National Association of

Securities Dealers Automatic Quotations, Inc. ("NASDAQ") National List (the

"List") are valued in like manner. Portfolio securities traded on more

than one national securities exchange are valued at the last sale price on

the business day as of which such value is being determined at the close of

the exchange representing the principal market for such securities.

Readily marketable securities, including certain options traded

only in the over-the-counter market and listed securities whose primary

market is believed by the Adviser to be over-thecounter (excluding those

admitted to trading on the List) are valued at the mean of the current bid

and asked prices as reported by NASDAQ, or in the case of securities not

quoted by NASDAQ, the National Quotation Bureau or such other comparable

sources as the Trustees of the Fund deem appropriate to reflect their fair

market

-45-

<PAGE>

value. However, fixed-income securities (except short-term securities) may

be valued on the basis of prices provided by a pricing service when such

prices are believed by the Adviser to reflect the fair market value of such

securities. The prices provided by a pricing service are determined

without regard to bid or last sale prices but take into account

institutional size trading in similar groups of securities and any develop-

ments related to specific securities. The money market securities in which

each Fund invests are traded primarily in the over-the-counter market and

are valued at the mean between most recent bid and asked prices as obtained

from dealers that make markets in such securities, except for securities

having 60 days or less remaining until maturity which are stated at

amortized cost. Portfolio securities underlying listed call options will

be valued at their market price and reflected in net assets accordingly.

Premiums received on call options written by the Fund will be included in

the liability section of the Statement of Assets and Liabilities as a

deferred credit and subsequently adjusted (marked-to-market) to the current

market value of the option written. Investments for which market

quotations are not readily available are valued at fair value as determined

in good faith by the Trustees of Winthrop.

-46-

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

DIVIDENDS, DISTRIBUTIONS AND TAXES

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

Winthrop intends that each Fund will meet the requirements for

qualification as a regulated investment company ("RIC") under the Code.

Because each Fund intends to qualify and to distribute all of its net

investment income and capital gains to shareholders, it is expected that

each Fund will not be required to pay Federal income taxes.

A Fund normally will distribute substantially all of its net

investment income and net capital gain, if any, to shareholders in the form

of dividends to be paid from time to time. Any dividends or distributions

paid shortly after the purchase of shares by an investor may have the

effect of reducing the per share value of the shares owned by the investor

by the per share amount of the dividends or distributions. Furthermore,

such dividends and distributions, although in effect a return of capital,

are subject to income taxes.

In the event that total distributions (including distributed or

designated net capital gain) of a Fund for a taxable year exceed its

investment company taxable income and net capital gain, a portion of each

distribution generally will be treated as a return of capital. Dis-

tributions treated as a return of capital reduce a shareholder's basis in

its shares and could result in a capital gain tax either when a

distribution is in excess of basis or, more likely, when a shareholder

redeems shares.

-47-

<PAGE>

Shareholders will be notified annually by the Funds as to the

Federal tax status of dividends and distributions paid during the calendar

year. Dividends and distributions may also be subject to state and local

taxes. State and local tax treatment may vary according to applicable

laws.

To maintain qualification as a RIC under the Code, each Fund will

endeavor to limit gains from the sale or other disposition of its portfolio

securities and certain other assets held for less than three months to less

than 30% of annual gross income.

Dividends distributed by a Fund will be eligible for the

dividends-received deduction available to corporate shareholders only to

the extent of the portion of the Fund's gross income which consists of

dividends received on equity securities issued by domestic corporations

with respect to which such Fund meets the same holding period, risk of

loss, and borrowing limitations applicable to the Fund's shareholders.

Section 246 of the Code generally permits the dividends-received deduction

to corporate shareholders only if the shares with respect to which the

dividends were paid have been held for more than 45 days. If the holding

period is not satisfied, the dividends-received deduction is disallowed,

regardless of whether the shares with respect to which the dividends were

paid have been sold or otherwise disposed of. The holding period

requirements are separately applicable to each block of shares acquired,

including each block of shares received in payment of the Fund's dividends.

The Internal Revenue Service ("IRS") has specific regulations governing the

identification of

-48-

<PAGE>

shares to be redeemed by a shareholder that wishes to redeem some, but not

all, of its shares. For purposes of determining whether this holding

period requirement has been met, the day of acquisition and any day after

the first 45 days after the date on which such shares become ex-dividend

must be disregarded. In addition, the holding period is suspended during

periods in which the stock is subject to diminished risk of loss including,

for example, because the holder has acquired a put option or sold a call

option (other than certain covered call options where the exercise price is

not substantially below the selling price) or otherwise hedged his

position. Under proposed legislation, a corporate shareholder would not be

entitled to a dividends-received deduction for dividends paid after January

31, 1996 unless the 45 day holding period were satisfied over a period

immediately before or immediately after the shareholder became entitled to

receive the dividend.

The dividends-received deduction will also be reduced, for

shareholders who incur indebtedness in order to purchase shares, by the

percentage of the cost of such shares that is debt-financed. Generally,

this limitation applies only if the debt is directly attributable to the

purchase of shares and depends on the particular facts and circumstances of

each situation and accordingly shareholders are urged to consult their tax

advisers.

Under section 1059 of the Code, a corporation which receives an

"extraordinary dividend" and disposes of the stock with respect to which

such dividend was paid is required to reduce its

-49-

<PAGE>

basis in such stock (but not below zero) by the amount of the dividend

which was not taxed because of the dividends-received deduction, with such

basis reduction generally being treated as having occurred immediately

before the sale or disposition of such stock unless such stock has not been

held for at least two years prior to the date of declaration, announcement

or agreement about the extraordinary dividend. To the extent such untaxed

amount exceeds the shareholder's basis, such excess will be taxed as gain

upon sale or disposition of such stock. An extraordinary dividend

generally is any dividend that equals or exceeds 10% of the shareholder's

basis in the stock (5% in the case of preferred stock). For this purpose,

generally, all dividends having ex-dividend dates within any 85-day period

and, if such dividends total more than 20% of the shareholder's basis in

its stock, all dividends having ex-dividend dates within one year, must be

aggregated. The shareholder may elect to determine the status of

extraordinary dividends by reference to the fair market value of the stock

as of the date before the ex-dividend date, rather than by reference to the

adjusted basis of such stock (provided the shareholder establishes the fair

market value to the satisfaction of the Commissioner of the IRS). In

determining whether the above mentioned two-year holding period has been

met, the same rules apply as are applicable to the 45-day holding period

requirement for the dividends-received deduction.

Each Fund intends to declare and pay dividends and capital gains

distributions so as to avoid imposition of a 4% Federal

-50-

<PAGE>

excise tax. To do so, each Fund expects to distribute during the calendar

year an amount at least equal to (i) 98% of its calendar year net

investment income, (ii) 98% of its capital gain net income (the excess of

short and long-term capital gain over short and long-term capital loss) for

each one-year period ending October 31, and (iii) 100% of any undistributed

net investment income or capital gain from the prior year which has not

been distributed by such Fund. Dividends declared in October, November, or

December and made payable to shareholders of record in such a month would

be deemed paid by the Fund and taxable to its shareholders on December 31

of such year provided that such dividends are actually paid during or

before January of the following year. A Fund may make a deemed distribu-

tion with respect to its net capital gain by paying the tax with respect to

the net capital gain and then designating, but not distributing, all or a

portion of such gain as a capital gain dividend. Such Fund's shareholders

will treat such designated amounts as net capital gain on their income tax

returns, but they will receive a credit or refund equal to Federal income

taxes paid by such Fund with respect to such capital gains. In addition,

shareholders will increase their basis in the Fund's shares by 65% of the

amount subject to tax. If a capital gain dividend is paid with respect to

any shares of a Fund which are sold at a loss after being held for less

than six months, any loss realized upon the sale of such shares will be

treated as long-term capital loss to the extent of such capital gain

dividend. There

-51-

<PAGE>

are special rules for determining holding periods for the purpose of the

preceding sentence.

Some of the investment practices of the Growth Fund, Aggressive

Growth Fund and the Growth and Income Fund are subject to special

provisions that, among other things, may defer the use of certain losses of

such Funds and affect the holding period of the securities held by the

Funds and the character of the gains or losses realized. These provisions

may also require the Growth Fund, the Aggressive Growth Fund and the Growth

and Income Fund to mark to market some of the positions in its portfolio

(i.e., treat them as if they were closed out), which may cause such Funds

to recognize income without receiving cash with which to make distributions

in amounts necessary to satisfy the distribution requirements for quali-

fication as a regulated investment company and for avoiding income and

excise taxes. Each Fund will monitor its transactions and may make certain

tax elections in order to mitigate the effect of these rules and prevent

disqualification of the Fund as a regulated investment company.

Dividend and interest income from non-U.S. equity and debt

securities may be subject to a withholding tax imposed by the country in

which the issuer is located. Each Fund expects to claim a deduction or

foreign tax credit with respect to any such withholding tax, to the extent

allowable under the Code, regulations thereunder, or an applicable treaty.

Since Winthrop's investment policies would preclude it from investing more

than 50% of the value of the total assets of any Fund in non-U.S. equity

and debt

-52-

<PAGE>

securities, shareholders are not expected to be eligible for a pass-through

of the credit for foreign taxes paid.

For shareholders' Federal income tax purposes, distributions to

shareholders out of tax-exempt interest income (less expenses applicable

thereto) earned by the Municipal Trust Fund are not subject to Federal

income tax if, at the close of each quarter of the Municipal Trust Fund's

taxable year, at least 50% of the value of the Municipal Trust Fund's total

assets consists of tax-exempt obligations. The Municipal Trust Fund

intends to meet this requirement. However, under current tax law, some

individuals and corporations may be subject to an alternative minimum tax

(the "AMT") with respect to their receipt of certain distributions of tax-

exempt interest income from the Municipal Trust Fund. Distributions out of

taxable interest income, other investment income, and short-term capital

gains are taxable to shareholders as ordinary income. Since the Municipal

Trust Fund's investment income is derived from interest rather than

dividends, no portion of such distributions is eligible for the dividends-

received deduction available to corporations. Long-term capital gains, if

any, distributed by the Municipal Trust Fund to a shareholder are taxable

to the shareholder as long-term capital gain, regardless of the length of

time he may have held his Municipal Trust Fund's shares.

-53-

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

PORTFOLIO TRANSACTIONS

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

Subject to the general supervision of the Board of Trustees of

Winthrop, the Adviser is responsible for the investment decisions and the

placing of the orders for portfolio transactions for Winthrop. Portfolio

transactions for the Municipal Trust Fund and the Fixed Income Fund occur

primarily with issuers, underwriters or major dealers acting as principals,

while transactions for the Growth Fund, the Aggressive Growth Fund and the

Growth and Income Fund are normally effected by brokers.

Winthrop has no obligation to enter into transactions in

portfolio securities with any broker, dealer, issuer, underwriter or other

entity. In placing orders, it is the policy of Winthrop to obtain the best

price and execution for its transactions. Where best price and execution

may be obtained from more than one broker or dealer, the Adviser may, in

its discretion, purchase and sell securities through brokers and dealers

who provide research, statistical and other information to the Adviser.

Such services may be used by the Adviser for all of its investment advisory

accounts, and accordingly, not all such services may be used by the Adviser

in connection with Winthrop. If Winthrop determines in good faith that the

amount of transaction costs charged by a broker or dealer is reasonable in

relation to the value of the brokerage and research and statistical

services provided by the executing broker or dealer, Winthrop may utilize

such broker or dealer

-54-

<PAGE>

although the transaction costs of another broker or dealer are lower. The

supplemental information received from a broker or dealer is in addition to

the services required to be performed by the Adviser under the Investment

Advisory Agreement, and the expenses of the Adviser will not necessarily be

reduced as a result of the receipt of such information.

Neither Winthrop nor the Adviser has entered into agreements or

understandings with any broker or dealer regarding the placement of

securities transactions. Because of research or information to the Adviser

for use in rendering investment advice to Winthrop, such information may be

supplied at no cost to the Adviser and, therefore, may have the effect of

reducing the expenses of the Adviser in rendering advice to Winthrop.

While it is impossible to place an actual dollar value on such investment

information, its receipt by the Adviser probably does not reduce the

overall expenses of the Adviser to any material extent.

The investment information provided to the Adviser is of the

types described in Section 28(e)(3) of the Securities Exchange Act of 1934

and is designed to augment the Adviser's own internal research and

investment strategy capabilities. Research and statistical services fur-

nished by brokers through which Winthrop effects securities transactions

are used by the Adviser in carrying out its investment management

responsibilities with respect to all its client accounts but not all such

services may be utilized by the Adviser in connection with Winthrop.

-55-

<PAGE>

The Growth Fund, the Aggressive Growth Fund and the Growth and

Income Fund may deal in some instances in equity securities which are not

listed on a national securities exchange but are traded in the

over-the-counter market. In addition, most transactions for the Municipal

Trust Fund and the Fixed Income Fund are executed in the over-the-counter

market. Where transactions are executed in the over-the-counter market,

Winthrop seeks to deal with the primary market-makers; but when necessary

in order to obtain the best price and execution, it utilizes the services

of others. In all cases, Winthrop will attempt to negotiate best

execution.

Winthrop may from time to time place orders for the purchase or

sale of securities (including listed call options) with DLJ Securities,

Winthrop's Distributor, or other affiliates in accordance with the

provisions of Section 11(a) of the Securities Exchange Act of 1934 referred

to below. With respect to orders placed with DLJ Securities for execution

on a national securities exchange, commissions received must conform to

Section 17(e)(2)(A) of the Investment Company Act of 1940 and Rule 17e-1

thereunder, which permit an affiliated person of a registered investment

company (such as Winthrop), or any affiliated person of such person, to

receive a brokerage commission from such registered investment company

provided that such commission is reasonable and fair compared to the

commissions received by other brokers in connection with comparable

transactions involving similar securities during a comparable period of

time.

-56-

<PAGE>

Pursuant to Section 11(a) of the Securities Exchange Act of 1934,

DLJ Securities and its affiliates are restricted as to the nature and

extent of the brokerage services they may perform for Winthrop. The

Securities and Exchange Commission has adopted rules under Section 11(a)

which permit an investment adviser to a registered investment company, or

the adviser's affiliates, to receive compensation for effecting, on a

national securities exchange, transactions in portfolio securities of such

investment company, including causing such transactions to be transmitted,

executed, cleared and settled and arranging for unaffiliated brokers to

execute such transactions.

To the extent permitted by such rule, DLJ Securities and its

affiliates may receive compensation relating to transactions in portfolio

securities of Winthrop provided that Winthrop enters into a written

agreement, as required by such rules, with that firm authorizing it to

retain compensation for such services. The Trustees of Winthrop have

granted authorization conforming to the requirements of Section 11(a) to

the Adviser to effect transactions in portfolio securities of Winthrop

through its affiliates, DLJ Securities and Autranet, Inc.

The Growth Fund incurred brokerage commissions of $126,561,

$53,166 and $124,640 during its fiscal years ended October 31, 1993, 1994

and 1995 of which $12,749, $12,491 and $20,641, respectively, or

approximately 10.1%, 23.5% and $16.6%, respectively, was paid to Autranet,

Inc. In addition, of the brokerage commissions incurred in 1995, $63,217

-57-

<PAGE>

approximately 50.7% was paid to Donaldson, Lufkin & Jenrette Securities

Corporation.

For the fiscal years ended October 31, 1995, 1994 and 1993, the

Aggressive Growth Fund incurred brokerage commissions of $248,826, $216,506

and $380,099, respectively, of which $31,035, $28,518 and $32,344 or

approximately 12.5%, 13.2% and 8.5%, respectively, was paid to Autranet,

Inc.

For the fiscal years ended October 31, 1995, 1994 and 1993, the

Growth and Income Fund incurred brokerage commissions of $85,577, $47,707

and $62,326, respectively, of which $33,120, $13,152 and $3,996, or

approximately 38.7%, 27.6% and 6.4%, respectively, was paid to Autranet,

Inc.

Computation of Winthrop's Average Annual Total Return
- -----------------------------------------------------

The average annual total return for the one and five year periods

ended October 31, 1995 was 8.21% and 12.65% for the Growth Fund and 8.23%

and 8.57% for the Fixed Income Fund, respectively. The average annual

total return for the period December 15, 1986 (commencement of operations)

through October 31, 1995 was 8.82% and 7.91% for the Growth Fund and Fixed

Income Fund, respectively. The average annual total return for the one,

five and ten year periods ended October 31, 1995 for the Aggressive Growth

Fund (which includes its predecessor, the Neuwirth Fund, Inc.) and the

Growth and Income Fund (which includes

-58-

<PAGE>

its predecessor, the Pine Street Fund, Inc.) was 7.10%, 21.66% and 13.39%

for the Aggressive Growth Fund and 12.10%, 14.05% and 11.52% for the Growth

and Income Fund. The average annual total return for the one year period

ended October 31, 1995 for the Municipal Trust Fund was 6.06% and 2.12% for

the period July 28, 1993 (commencement of operations) through October 31,

1995. These amounts were computed by assuming a hypothetical initial

investment of $1,000. It was then assumed that all of the dividends and

distributions by each of the Funds over the relevant time periods were

reinvested. It was then assumed that at the end of these periods, the

entire amount was redeemed and the appropriate sales load, if any, was

deducted. We note that for the one year period ending October 31, 1995,

the applicable deferred sales load charged was 4% for each of the Growth

Fund, Fixed Income Fund, Aggressive Growth Fund, the Growth and Income Fund

and the Municipal Trust Fund and 2% for the Municipal Trust Fund for the

period July 28, 1993 (commencement of operations) through October 31, 1995.

No deferred sales load applied to the return of the Aggressive Growth Fund

and the Growth and Income Fund for the five and ten year period ended

October 31, 1995, or to the return of the Growth Fund and Fixed Income Fund

for the five year period ended October 31, 1995 or for the period December

15, 1986 (commencement of operations) through October 31, 1995. The

average annual total return was then calculated by using the annual rate

required for the initial payment to grow to the amount which would have

been received upon redemption (i.e., the average annual

-59-

<PAGE>

compounded rate of return). The results shown should not be considered an

indication of future performance from an investment in the Winthrop Fund

today.

Computation of the Fixed Income Fund's and Municipal Trust Fund's 30-Day
- ------------------------------------------------------------------------
Yield Quotation
- ---------------

The 30-day yield for each of the Fixed Income Fund and the

Municipal Trust Fund for the period ended October 31, 1995 was 5.34% and

3.71%, respectively. The Fund's yield is based on a 30-day period and is

computed by dividing the net investment income per share earned during the

period by the maximum offering price per share on the last day of the

period, according to the following formula:

YIELD = 2[(a-b/cd+1)6-1]

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

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

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

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

-60-

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

GENERAL INFORMATION

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

Organization and Capitalization
- -------------------------------

The Trust was formed on November 26, 1985 as a "business trust" under the

laws of The Commonwealth of Massachusetts. Under Massachusetts law,

shareholders of a business trust, unlike shareholders of a corporation,

could be held personally liable as partners for the obligations of the

trust under certain circumstances. The Agreement and Declaration of Trust,

however, provides that shareholders of Winthrop shall not be subject to any

personal liability for the acts or obligations of Winthrop and that every

written obligation, contract, instrument or undertaking made by Winthrop

shall contain a provision to that effect. Upon payment of any liability,

the shareholder will be entitled to reimbursement from the general assets

of the appropriate Fund. The Trustees intend to conduct the operation of

Winthrop, with the advice of counsel, in such a way as to avoid, to the

extent possible, ultimate liability of the shareholders for liabilities of

Winthrop.

The Agreement and Declaration of Trust further provide that no

Trustee, officer, employee or agent of Winthrop is liable to Winthrop or to

a shareholder, nor is any Trustee, officer, employee or agent liable to any

third persons in connection with the affairs of Winthrop, except as such

liability may arise from his or its own bad faith, willful misfeasance,

gross negligence or reckless disregard of his or its duties. It also pro-

vides that all

-61-

<PAGE>

third parties shall look solely to the property of Winthrop or the property

of the appropriate Fund for satisfaction of claims arising in connection

with the affairs of Winthrop or of the particular Fund, respectively. With

the exceptions stated, the Agreement and Declaration of Trust permits the

Trustees to provide for the indemnification of Trustees, officers,

employees or agents of Winthrop against all liability in connection with

the affairs of Winthrop.

All shares of Winthrop when duly issued will be fully paid and

non-assessable. The Trustees are authorized to re-classify and issue any

unissued shares to any number of additional series or classes without

shareholder approval. Accordingly, the Trustees in the future, for reasons

such as the desire to establish one or more additional Funds with different

investment objectives, policies or restrictions, may create additional

series or classes of shares. Any issuance of shares of such additional

series or classes would be governed by the Investment Company Act of 1940

and the laws of The Commonwealth of Massachusetts.

Counsel and Auditors
- --------------------

Sullivan & Cromwell, 125 Broad Street, New York, New York 10004,

serves as legal counsel for Winthrop.

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

have been appointed as independent auditors for Winthrop.

Additional Information
- ----------------------

This Statement of Additional Information does not contain all the

information set forth in the Registration Statement filed by Winthrop with

the Securities and Exchange Commission under the

-62-

<PAGE>

Securities Act of 1933. Copies of the Registration Statement may be

obtained at a reasonable charge from the Commission or may be examined,

without charge, at the offices of the Commission in Washington, D.C.

-63-
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995

- --------------------------------------------------------------------------------
WINTHROP GROWTH FUND
COMMON STOCKS--95.6%
BASIC MATERIALS--5.8% SHARES VALUE
---------- -----------
CHEMICALS-2.8%
Air Products & Chemicals,
Inc...................... 2,000 $ 103,250
Industrial gases,
equipment, chemicals
Dow Chemical Co. ........ 21,300 1,461,712
-----------
Chemicals, metals,
plastics, packaging......
1,564,962
-----------
METALS & MINING-1.4%
Aluminum Company of
America.................... 6,400 326,400
Leading U.S. aluminum
producer
Barrick Gold Corp.......... 19,500 450,938
-----------
Gold production in
U.S./Canada
777,338
-----------
PAPER-1.6%
Mead Corp.................. 16,100 927,762
-----------
Manufacturer of paper,
lumber & wood products
3,270,062
-----------
CAPITAL GOODS--8.1%

AEROSPACE-2.2%
Loral Corp................. 40,800 1,208,700
-----------
Military electronic
systems

BUILDING &
CONSTRUCTION-0.5%
Fluor Corp................. 4,700 265,550
-----------
Engineering and
construction with coal,
lead

ELECTRICAL EQUIPMENT-1.3%
Emerson Electric Co........ 10,200 726,750
-----------
Manufacturer of
electric/electronic
products

ENVIRONMENTAL CONTROL-0.5%
Browning Ferris Industries,
Inc....................... 10,000 291,250
-----------
Solid & liquid waste
management service

MACHINERY-3.6%
Deere & Co................. 14,300 1,278,062
Largest manufacturer of
farm equipment:
construction machinery
Ingersoll-Rand Co.......... 21,300 753,488
-----------
Standard machinery,
equipment: bearings, tools
2,031,550
-----------
4,523,800
-----------
CONSUMER CYCLICAL--13.0%
APPAREL/TEXTILE-1.0%
V F Corp................... 12,000 574,500
-----------
Apparel manufacturer

AUTO & TRUCKS-1.2%
General Motors Corp........ 15,000 656,250
-----------
Largest manufacturer of
automotive products

AUTO RELATED-1.6%
Echlin, Inc................ 18,800 672,100
Auto electronics, brake
replacement parts
Goodyear Tire & Rubber
Co........................ 6,400 243,200
-----------
Manufacturer of tires &
rubber products
915,300
-----------

SHARES VALUE
---------- -----------
HOUSEHOLD
FURNITURE/APPLIANCES-0.5%
Singer Co. N.V............. 12,000 $ 282,000
-----------
Manufacturer of sewing
machines/electrical
products

LEISURE RELATED-2.7%
Capital Cities/ABC, Inc.... 11,500 1,364,188
Radio/TV broadcasting and
publishing
Hasbro, Inc................ 5,000 152,500
-----------
Manufacturer of toys &
games 1,516,688
-----------

PHOTO & OPTICAL-1.0%
Eastman Kodak Co........... 9,200 576,150
-----------
Photograph apparatus,
chemicals

PRINTING & PUBLISHING-0.9%
Belo (A.H.) Corp........... 6,000 207,750
Newspaper publishing:
broadcasting Gannett Co. . 5,000 271,875
-----------
Newspapers: TV/radio:
advertising 479,625
-----------

RETAIL-GENERAL-4.1%
May Department Stores
Co........................ 24,800 973,400
Large department store
chain
Sears Roebuck & Co......... 39,000 1,326,000
-----------
Large retailer of general
merchandise: insurance
2,299,400
-----------
7,299,913
-----------
CONSUMER STAPLES--22.0%

BEVERAGES-5.1%
Pepsico, Inc............... 54,100 2,853,775
-----------
Provides soft drinks/food
services

DRUGS-6.9%
Pfizer, Inc................ 31,700 1,818,787
Healthcare, consumer
products, special
chemicals
Schering-Plough Corp....... 38,200 2,048,475
-----------
Pharmaceutical/consumer
products
3,867,262
-----------

FOODS-3.0%
Campbell Soup Co........... 16,700 874,663
Canned soup & other foods
ConAgra, Inc............... 21,000 811,125
-----------
Prepared foods:
agricultural products
1,685,788
-----------

HOSPITAL SUPPLIES &
SERVICES-3.1%
Columbia/HCA Healthcare
Corp...................... 29,600 1,454,100
Health care
facilities/services
Health Management
Association Cl. A*........ 13,000 279,500
-----------
Operates acute care
hospitals
1,733,600
-----------

RETAIL-FOOD-0.8%
Safeway, Inc.*............. 10,000 472,500
-----------
Food supermarket chain

SOAPS & TOILETRIES-3.1%
Procter & Gamble Co........ 21,300 1,725,300
-----------
Household, personal care,
food products
12,338,225
-----------

See notes to financial statements.
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995 (continued)
- --------------------------------------------------------------------------------
WINTHROP GROWTH FUND
SHARES VALUE
---------- -----------
ENERGY--10.5%

OIL-DOMESTIC-5.2%
Amoco Corp................. 17,000 $ 1,085,875
Domestic integrated oil
Kerr-McGee Corp............ 29,500 1,626,188
Petroleum, chemicals, coal
Unocal Corp................ 7,800 204,750
-----------
Holding co.; integrated
domestic oil
2,916,813
-----------
OIL-INTERNATIONAL-5.3%
Exxon Corp................. 38,400 2,932,800
-----------
World's leading oil
company
5,849,613
-----------
FINANCIAL--12.0%

BANKING-6.9%
First Bank System, Inc..... 39,400 1,960,150
Comm. banking: MN and
Upper Midwest
Wells Fargo & Co........... 9,100 1,912,138
-----------
Commercial banking: CA
3,872,288
-----------
FINANCIAL SERVICES-3.1%
Capital One Financial...... 14,100 345,450
Bank card issuer/services
Federal Home Loan Mortgage
Corp...................... 20,200 1,398,850
-----------
Provides residential
mortgage funds
1,744,300
-----------
INSURANCE-2.0%
American International
Group, Inc................. 12,900 1,088,437
-----------
International insurance
holding company
6,705,025
TECHNOLOGY--18.4%

ELECTRONICS-3.2%
Intel Corp................. 4,500 314,438
Semiconductor memory
circuits
Molex, Inc................. 10,000 330,000
Terminals, connectors,
switches
Motorola, Inc.............. 9,000 590,625
Semiconductors:
communication equipment
National Semiconductor
Corp.*.................... 23,000 560,625
-----------
Integrated circuits &
transistors
1,795,688
-----------
OFFICE
EQUIPMENT/SERVICE-6.6%
Cisco Systems, Inc.*....... 5,900 457,250
Manufacturer of computer
network products
Compaq Computer Corp.*..... 27,000 1,505,250
Portable personal
computers
Microsoft Corp.*........... 10,000 1,000,000
Software for
microcomputers
Oracle Systems Corp.*...... 16,500 719,812
-----------
Markets database
management software
3,682,312
-----------

SHARES VALUE
---------- -----------
TELECOMMUNICATIONS-8.6%
Cellular Communications,
Inc. Cl. A*............... 47,575 $ 2,551,209
U.S. non-wireline cellular
licensee
MCI Communications Corp.... 76,800 1,915,200
Telecommunications
network, services
WorldCom, Inc.*............ 10,000 326,250
-----------
Long distance
telecommunication services 4,792,659
-----------

10,270,659
-----------

TRANSPORT & SERVICE--1.7%

AIRLINES-0.4%
Delta Air Lines, Inc....... 3,600 236,250
-----------
Domestic & international
air service

RAILROADS-1.3%
CSX Corp................... 8,300 695,125
-----------
Railroad, oil/gas,
trucking, mining
931,375
-----------
MISCELLANEOUS--4.1%

DIVERSIFIED-4.1%
ITT Corp................... 6,700 820,750
Diversified international
concern
Loews Corp................. 10,000 1,466,250
-----------
Tobacco; hotels; insurance
subsidiary
2,287,000
-----------

TOTAL COMMON STOCKS
(cost $43,733,912)........ 53,475,672
-----------

PRINCIPAL
AMOUNT
----------
COMMERCIAL PAPER--3.0%
Ford Motor Credit Corp.
5.710%, 11/03/95.......... $ 380,000 379,879
Ford Motor Credit Corp.
5.730%, 11/06/95.......... 360,000 359,714
Ford Motor Credit Corp.
5.720%, 11/07/95.......... 540,000 539,485
General Electric Capital
Corp.
5.700%, 11/10/95.......... 185,000 184,736
General Electric Capital
Corp.
5.720%, 11/14/95.......... 230,000 229,525
-----------

TOTAL COMMERCIAL PAPER
(amortized cost
$1,693,339)................ 1,693,339
-----------
TOTAL INVESTMENTS--98.6%
(cost $45,427,251)........ 55,169,011
-----------

CASH AND OTHER ASSETS
NET OF
LIABILITIES--1.4%.......... 777,139
-----------

NET ASSETS--100%........... $55,946,150
===========

* Non-income producing

See notes to financial statements.
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995

- --------------------------------------------------------------------------------
WINTHROP GROWTH AND INCOME FUND
COMMON STOCKS--87.7%
BASIC MATERIALS--7.5% SHARES VALUE
---------- -----------
CHEMICALS-3.0%
Crompton & Knowles
Corp. ..................... 66,700 $ 842,088
Special chemicals,
industry machinery
Dupont (E.I.) De Nemours &
Co. ...................... 19,800 1,235,025
Large chemical co: oil &
gas
Monsanto Co. .............. 5,000 523,750
-----------
Major chemical producer
2,600,863
-----------
OIL & GAS-4.5%
Amoco Corp. ............... 40,000 2,555,000
Integrated domestic oil
Dorchester Hugoton,
Ltd. ...................... 25,500 312,375
U.S. natural gas reserves
San Juan Basin Royalty
Trust..................... 180,000 1,102,500
-----------
Royalty gas interest in
New Mexico
3,969,875
-----------
6,570,738
-----------
CAPITAL GOODS/
CONSTRUCTION--6.4%
AEROSPACE-4.1%
Loral Corp. ............... 62,800 1,860,450
Military electronic
systems
United Technologies
Corp. .................... 19,500 1,730,625
-----------
Aerospace, climate control
systems
3,591,075
-----------
BUILDING &
CONSTRUCTION-0.2%
RPM, Inc. Ohio............. 10,000 193,750
-----------
Protective coatings

ELECTRICAL EQUIPMENT-1.6%
Premier Industrial
Corp. .................... 56,500 1,405,438
-----------
Electronics and industrial
distribution

ENVIRONMENTAL CONTROL-0.5%
Wheelabrator Tech.,
Inc. ..................... 29,000 416,875
-----------
Converting refuse into
energy
5,607,138
-----------
CONSUMER PRODUCTS
& SERVICES--31.2%
AUTO-0.4%
Armor All Products
Corp. .................... 22,000 363,000
-----------
Produces auto cleaners and
protectants

BEVERAGES & TOBACCO-7.1%
American Brands, Inc. ..... 10,000 428,750
Tobacco, life insurance
Guinness PLC ADRs.......... 18,100 724,000
Distiller, brewer and
distributor of distilled
spirits and malt beverages
Panamerican Beverages, Inc.
Cl. A...................... 27,900 763,762
Soft drink bottler, Latin
America
Pepsico, Inc. ............. 31,000 1,635,250
Provides soft drinks/food
services
Philip Morris Cos.,
Inc. ..................... 9,000 760,500
Tobacco, brewing, soft
drinks
RJR Nabisco Holdings
Corp. .................... 33,000 1,014,750
Manufactures tobacco and
food products
UST, Inc. ................. 30,000 900,000
-----------
Snuff, tobacco, wine,
spirits
6,227,012
-----------

SHARES VALUE
---------- -----------
CONTAINERS-0.7%
Bemis Co................... 24,000 $ 624,000
-----------
Packaging/adhesive
products

DRUGS-3.5%
Pfizer, Inc. .............. 30,700 1,761,412
Healthcare consumer
products, special
chemicals
Schering-Plough Corp. ..... 24,100 1,292,362
-----------
Pharmaceutical/consumer
products
3,053,774
-----------

FOODS-0.5%
Archer-Daniels-Midland
Co. ...................... 28,100 453,113
-----------
Process soybeans: flour
mills

HOSPITAL SUPPLIES &
SERVICES-2.5%
Caremark International,
Inc....................... 58,500 1,206,562
Alternate site healthcare
services
Columbia/HCA Healthcare
Corp. .................... 20,000 982,500
-----------
Health care
facilities/services
2,189,062
-----------

LEISURE-3.9%
Capital Cities/ABC,
Inc. ...................... 15,000 1,779,375
Radio/TV broadcasting and
publishing
Cedar Fair L.P. ........... 45,000 1,417,500
Owns and operates
amusement parks
Jostens, Inc. ............. 10,000 226,250
-----------
School class rings,
yearbooks
3,423,125
-----------

PRINTING & PUBLISHING-4.5%
Commerce Clearing House,
Inc. Cl. A................. 11,000 255,750
Tax & business law reports
Commerce Clearing House,
Inc. Cl. B................. 13,000 299,000
Tax & business law reports
Donnelley (R.R.) & Sons,
Inc. ...................... 48,700 1,777,550
Large commercial printer
Dun & Bradstreet Corp. .... 27,000 1,613,250
-----------
Business information:
publishing: marketing: TV
3,945,550
-----------

RETAIL-FOOD & DRUGS-1.8%
Walgreen Co. .............. 54,800 1,561,800
-----------
Major retail drug chain

RETAIL-GENERAL-1.5%
Federated Department
Stores, Inc.*.............. 54,000 1,370,250
-----------
Operates department stores
in U.S.

SOAPS & TOILETRIES-4.8%
Gillette Co. .............. 44,000 2,128,500
Shaving, personal care
products
Procter & Gamble Co. ...... 26,000 2,106,000
-----------
Household, personal care,
food products
4,234,500
-----------
27,445,186
-----------
ENERGY--1.7%

OIL-SUPPLIES &
CONSTRUCTION-1.7%
Western Atlas, Inc.*....... 34,000 1,491,750
-----------
Oilfield information
service/automation system

See notes to financial statements.

<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995 (continued)
- --------------------------------------------------------------------------------
WINTHROP GROWTH AND INCOME FUND
SHARES VALUE
---------- -----------
FINANCIAL--15.2%
BANKING-8.7%
First Bank System, Inc. ... 53,532 $ 2,663,217
Commercial banking: MN and
Upper Midwest
Mellon Bank Corp. ......... 20,000 1,002,500
Commercial banking: PA
Regions Financial Corp. ... 12,000 478,500
Commercial banking: AL
Republic New York Corp. ... 26,100 1,530,113
Commercial banking: NY &
worldwide
Wells Fargo & Co. ......... 9,200 1,933,150
-----------
Commercial banking: CA
7,607,480
-----------
INSURANCE-3.8%
American International
Group, Inc. ............... 31,800 2,683,125
International insurance
holding company
Hartford Steam Boiler
Insp. & Ins. Co. ......... 15,000 699,375
-----------
Insurance/engineering
services
3,382,500
-----------
OTHER-2.7%
Federal National Mortgage
Assn. ..................... 22,400 2,349,200
-----------
Provides residential
mortgage funds
13,339,180
-----------
PUBLIC UTILITIES--5.4%

ELECTRIC-1.5%
CIPSCO, Inc. .............. 30,200 1,106,075
Holding co.: Central IL
public service
Potomac Electric Power
Co. ...................... 10,000 250,000
-----------
Electric service DC, MD, VA
1,356,075
-----------
GAS-1.8%
Consolidated Natural Gas
Co. ...................... 21,000 798,000
Integrated natural gas
systems
New Jersey Resources
Corp. .................... 31,600 790,000
-----------
Supplies gas in New Jersey
1,588,000
-----------
TELEPHONE-2.1%
GTE Corp. ................. 45,000 1,856,250
-----------
Telephone holding company;
manufacturing
4,800,325
-----------
SCIENCE & TECHNOLOGY--6.3%

ELECTRONICS-1.6%
Motorola, Inc. ............ 22,300 1,463,437
-----------
Semiconductors:
communications equipment

TELECOMMUNICATIONS-4.7%
Cellular Communications,
Inc. Cl. A*................ 43,000 2,305,875
U.S. non-wireline cellular
licensee
International Cabletel,
Inc.*...................... 13,333 353,325
Telecommunications
services

SHARES VALUE
---------- -----------
Vodafone Group ADRs........ 35,326 $ 1,443,950
-----------

British cellular operator
4,103,150
-----------

5,566,587
-----------

TRANSPORT & SERVICE--3.2%
PROFESSIONAL SERVICE-1.4%
United Healthcare Corp. ... 24,000 1,275,000
-----------
Manages health maintenance
services
RAILROADS-1.8%
CSX Corp. ................. 18,500 1,549,375
-----------
Railroad, oil/gas,
trucking, mining
2,824,375
-----------
MISCELLANEOUS--10.8%
DIVERSIFIED-8.0%
Corning, Inc. ............. 30,000 783,750
Specialty material,
communications, consumer
products/services
ITT Corp. ................. 13,600 1,666,000
Diversified international
concern
Loews Corp. ............... 22,000 3,225,750
Tobacco; hotels; insurance
subsidiary
Tyco International Ltd. ... 22,300 1,354,725
-----------
Fire protection systems:
cable, solar
7,030,225
-----------
LIMITED
PARTNERSHIP-TIMBER-2.0%
Plum Creek Timber Co.
L.P. ..................... 73,000 1,752,000
-----------
Lumber and wood products
REAL ESTATE INVESTMENT
TRUST-0.8%
General Growth Properties,
Inc. ..................... 35,000 704,375
-----------
Real estate investment
trust
9,486,600
-----------
TOTAL COMMON STOCKS
(cost $59,687,878)........ 77,131,879
-----------

CONVERTIBLE
PREFERRED STOCK--2.4%
Corning, Inc. Mips, Cv.
Pfd. 6.000%................ 15,000 675,000
Specialty material,
communications, consumer
products/services
RJR Nabisco Holdings Corp.,
Cv. Pfd. ................. 230,000 1,437,500
-----------
Manufactures tobacco and
food products
TOTAL PREFERRED STOCKS
(cost $2,245,000)......... 2,112,500
-----------

PRINCIPAL
CONVERTIBLE BONDS--1.0% AMOUNT
----------
(cost $817,500)
Browning Ferris Ind.,
Inc. ..................... $ 900,000 895,500
-----------
Cv. Sub. Deb. 6.250%,
08/15/12
Solid and liquid waste
mgmt. service

See notes to financial statements.
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995 (continued)

- --------------------------------------------------------------------------------
WINTHROP GROWTH AND INCOME FUND
PRINCIPAL
CORPORATE BONDS--3.7% AMOUNT VALUE
---------- -----------
Xerox Corp., 8.125%,
04/15/02................... $1,000,000 $ 1,091,250
Copiers & duplicators;
services
Ford Motor Credit Co.,
7.750%, 11/15/02........... 1,000,000 1,070,000
Second largest auto maker
Stanley Works, 7.375%,
12/15/02.................. 1,000,000 1,058,750
-----------
Manufacturer of full line
hardware products

TOTAL CORPORATE BONDS
(cost $3,041,613)......... 3,220,000
-----------
U.S. GOVERNMENT AGENCIES--3.6%
Federal Home Loan Bank
7.310%, 06/16/04.......... 1,000,000 1,064,260
Federal National Mortgage
Assn. 7.400%, 07/01/04.... 1,000,000 1,070,410
Federal Home Loan Bank
7.460%, 09/09/04.......... 1,000,000 1,077,700
-----------

TOTAL U.S. GOVERNMENT
AGENCIES
(cost $2,944,463)......... 3,212,370
-----------
PRINCIPAL
COMMERCIAL PAPER--3.8% AMOUNT VALUE
---------- -----------
Ford Motor Credit Corp.
5.760%,
11/03/95.................. $ 640,000 $ 639,795
General Electric Capital
Corp.
5.740%, 11/06/95.......... 910,000 909,274
Ford Motor Credit Corp.
5.750%, 11/07/95.......... 1,813,000 1,811,263
-----------

TOTAL COMMERCIAL PAPER
(amortized cost
$3,360,332)............... 3,360,332
-----------

TOTAL INVESTMENTS--102.2%
(cost $72,096,786)........ 89,932,581
-----------

CASH AND OTHER ASSETS
NET OF
LIABILITIES-(2.2%)......... (1,957,678)
-----------
NET ASSETS--100.0%......... $87,974,903
===========

* Non-income producing

- --------------------------------------------------------------------------------
WINTHROP AGGRESSIVE GROWTH FUND
COMMON STOCKS--98.8%
BASIC MATERIALS--4.9% SHARES VALUE
---------- ------------
CHEMICALS-4.9%
Crompton & Knowles
Corp..................... 141,500 $ 1,786,438
Special chemicals,
industrial machinery
Furon Co................. 101,200 1,568,600
Manufacturer of
non-metallic industrial
products
LeaRonal, Inc............. 110,600 2,516,150
Electroplating process
M.A. Hanna Co............. 149,000 3,818,125
Special chemicals,
polymers
O'Sullivan Corp. ......... 28,200 306,675
-----------
Manufacturer molded
plastic products
9,995,988
-----------

CAPITAL GOODS/
CONSTRUCTION--25.0%
AEROSPACE-2.9%
Teleflex, Inc. ........... 103,000 4,364,625
Aerospace controls;
medical products
Whittaker Corp.* ......... 71,600 1,423,050
-----------
Aerospace: fluid
control/electric systems
5,787,675
-----------

BUILDING &
CONSTRUCTION-13.0%
Applied Power, Inc.
Cl. A.................... 116,100 3,526,537
Manufactures hydraulic
industrial/construction
equipment materials
Carlisle Companies,
Inc. .................... 104,900 4,314,013
Manufactures rubber,
plastic, metal products
Clarcor, Inc. ............ 131,050 2,981,387
Manufactures
filtration/consumer
products
ESSEF Corp.*.............. 92,700 1,691,775
Manufactures reinforced
plastic products

SHARES VALUE
---------- ------------
Lydall, Inc.*............. 217,100 $ 4,939,025
Engineered fiber
materials
Osmonics, Inc.*........... 176,000 2,992,000
Reverse
osmosis/ultrafiltration
Regal Beloit Corp. ....... 187,700 3,378,600
Manufactures tools and
power transmissions
RPM, Inc., Ohio........... 127,800 2,476,125
-----------
Protective coatings
26,299,462
-----------

ELECTRICAL EQUIPMENT-5.8%
AptarGroup, Inc. ......... 16,600 568,550
Manufacturer of packaging
components: pumps, valves
Bearings, Inc. ........... 58,200 2,109,750
Distributor bearings &
power transmission
Belden, Inc. ............. 105,200 2,537,950
Manufacturer electrical
wire, cable
EG & G, Inc. ............. 91,300 1,700,462
Scientific equipment,
systems & services
Woodhead Industries,
Inc. .................... 226,800 3,231,900
Electrical specialty
products
X-Rite, Inc. ............. 105,400 1,646,875
-----------
Quality control
instruments
11,795,487
-----------

ENVIRONMENTAL CONTROL-1.9%
Donaldson, Inc. .......... 142,500 3,473,438
Engine air cleaners,
mufflers
Harding Associates,
Inc.*.................... 67,300 462,687
-----------
Hazardous waste
consultant services
3,936,125
-----------

MACHINERY-1.4%
Commercial Intertech
Corp..................... 170,050 2,869,594
-----------
Engineers metal
components
50,688,343
-----------

SHARES VALUE
---------- ------------
CONSUMER CYCLICAL--28.1%

APPAREL/TEXTILE-3.3%
Interface, Inc. Cl. A...... 18,800 $ 284,350
Manufacturer carpet/tile
Oxford Industries, Inc. ... 100,000 1,625,000
Manufactures wearing
apparel
Unitog Co.*................ 152,500 3,583,750
Rent/sell industrial
uniforms
Worldtex, Inc.*............ 228,100 1,254,550
-----------
Manufactures covered
elastic yarn
6,747,650
-----------
AUTO RELATED-6.9%
Amcast Industrial Corp. ... 133,100 2,262,700
Technology--intensive
metal products
Armor All Products
Corp. ..................... 124,000 2,046,000
Produces auto cleaners and
protectants
Augat, Inc. ............... 98,100 1,545,075
Manufactures
electromechanical
components
Donnelly Corp. Cl. A....... 169,600 2,416,800
Manufactures auto glass
products
Modine Manufacturing Co.... 72,900 2,004,750
Auto parts: heating:
air-conditioning
Myers Industries, Inc. .... 174,075 2,502,328
Tire services/plastic
products
R & B, Inc.*............... 20,000 157,500
Markets replacement auto
parts
Thompson PBE, Inc.*........ 62,400 1,138,800
-----------
Distributor auto
paints/supplies
14,073,953
-----------
FOOD SERVICE/LODGING-2.9%
Marcus Corp. .............. 77,100 2,669,587
Hotels: restaurants:
theatres
Sbarro, Inc. .............. 151,800 3,168,825
-----------
Italian fast food
restaurant
5,838,412
-----------
HOUSEHOLD
FURNITURE/APPLIANCE-5.7%
Chromcraft Revington,
Inc.*...................... 115,800 2,779,200
Designs/manufactures
furniture
Crown Crafts, Inc. ........ 129,000 1,644,750
Manufactures home
furnishing products
Ekco Group, Inc. .......... 296,300 1,666,687
Manufactures
kitchen/household products
HON Industries, Inc. ...... 51,500 1,429,125
Manufacturer office
furniture/home building
products
Lechters, Inc.*............ 98,000 906,500
Housewares & kitchen items
Stanhome, Inc. ............ 101,000 3,080,500
-----------
Consumer
products/household items
11,506,762
-----------
LEISURE RELATED-1.5%
Anthony Industries,
Inc. ..................... 163,200 3,039,600
-----------
Snow skis, fish tackle,
industrial products

PHOTO & OPTICAL-0.2%
Holson Burnes Group,
Inc.*..................... 104,500 391,875
-----------
Manufacturer/distributor
of photograph albums

SHARES VALUE
---------- ------------
PRINTING & PUBLISHING-6.3%
Advo System, Inc. ......... 131,000 $ 3,340,500
Direct mail advertising
services
American Business Products,
Inc. ...................... 175,000 3,828,125
Business forms and
supplies
Banta Corp. ............... 63,800 2,759,350
Printing/graphic/video
services
Lee Enterprises, Inc. ..... 68,100 2,715,488
-----------
Newspaper publishing:
radio, TV
12,643,463
-----------
RETAIL-GENERAL-1.3%
Arbor Drugs, Inc. ......... 106,750 1,974,875
Operates drugstores in
Michigan
Burlington Coat Factory
Warehouse Corp.*.......... 65,650 730,356
-----------
Off-price apparel stores
2,705,231
-----------

56,946,946
-----------

CONSUMER STAPLES--12.4%
DRUGS-1.0%
West Co., Inc. ............ 81,700 2,022,075
-----------
Pharmaceutical packaging
FOODS-4.4%
Bob Evans Farms, Inc. ..... 180,000 3,240,000
Sausage
products/restaurants
Flowers Industries,
Inc. ..................... 79,900 1,727,837
Baked, convenience, snack
food
Longhorn Steaks, Inc.*..... 115,000 1,926,250
Operates full-service
restaurants
Sanfilippo (John B. & Son),
Inc....................... 187,500 1,968,750
-----------
Processes/packages/distributes
snacks
8,862,837
-----------

HOSPITAL SUPPLIES &
SERVICES-4.3%
Beckman Instruments,
Inc. ...................... 120,200 3,981,625
Manufactures laboratory
instruments
Invacare Corp. ............ 79,700 2,012,425
Home healthcare medical
equipment
SpaceLabs Medical, Inc.*... 110,400 2,842,800
-----------
Manufactures patient
monitoring products
8,836,850
-----------

RETAIL-FOOD & DRUGS-2.7%
Hannaford Brothers Co...... 133,600 3,490,300
Distributor:
food/supermarkets
Luby's Cafeterias, Inc. ... 97,800 2,029,350
-----------
Cafeteria style
restaurants
5,519,650
-----------

25,241,412
-----------

ENERGY--1.9%

OIL-DOMESTIC-0.3%

Wiser Oil Co............... 55,000 605,000
-----------
Exploration and production
of oil and gas in fifteen
states

OIL-SUPPLIES &
CONSTRUCTION-1.6%
Tidewater, Inc. ........... 128,000 3,376,000
-----------
Offshore service vessels
3,981,000
-----------

See notes to financial statements.

<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995 (continued)
- --------------------------------------------------------------------------------
WINTHROP AGGRESSIVE GROWTH FUND
SHARES VALUE
---------- ------------
FINANCIAL--9.7%
BANKS-5.8%
Baybanks, Inc.............. 20,700 $ 1,676,700
Commercial banking: MA
First American Corp. of
Tennessee.................. 97,900 4,295,363
Commercial banking: TN
First Commerce Corp........ 92,800 2,876,800
Commercial banking: LA, MS
FirstMerit Corp. .......... 105,000 2,835,000
------------
Commercial banking: OH
11,683,863
------------
INSURANCE-3.9%
Hartford Steam Boiler Insp.
& Ins. Co. ................ 65,700 3,063,263
Insurance/engineering
services
HCC Insurance Holdings,
Inc.*..................... 96,700 3,360,325
Underwrites property &
casualty insurance
Poe & Brown, Inc. ......... 60,400 1,472,250
------------
General insurance agency
7,895,838
------------
19,579,701
------------
PUBLIC UTILITIES--0.7%

GAS-0.7%
WICOR, Inc. ............... 47,250 1,399,781
------------
Utility holding: Wisconsin
gas
TECHNOLOGY--9.0%
ELECTRONICS-4.3%
DH Technology, Inc.*....... 93,700 1,850,575
Manufactures dot matrix
printheads
Methode Electronics, Inc.
Cl. A...................... 161,100 3,705,300
Electronic component
devices
Pioneer Standard
Electronics, Inc. ......... 234,450 3,252,994
------------
Distributor: electronic
components
8,808,869
------------
OFFICE EQUIPMENT-4.2%
Hunt Manufacturing
Corp. ..................... 190,700 3,337,250
Manufactures & distributes
office and art products
Wallace Computer Services,
Inc. ...................... 31,450 1,772,994
Business forms: commercial
printing
Zero Corp. ................ 219,000 3,339,750
------------
Electronics enclosures
8,449,994
-----------
TELECOMMUNICATIONS-0.5%
Cellular Communications,
Inc. Cl. A*................ 18,000 965,250
------------
U.S. non-wireline cellular
licensee
18,224,113
------------

SHARES VALUE
---------- ------------
TRANSPORT & SERVICE--5.8%

PROFESSIONAL SERVICES-3.8%
CDI Corp.*................. 133,400 $ 1,967,650
Engineering & technical
services
Interim Services, Inc.*.... 72,700 2,162,825
Temporary help services
Jacobs Engineering Group,
Inc.*...................... 45,050 985,469
Full service engineering
organization
Rollins, Inc............... 123,500 2,593,500
------------
Protective services/pest
control
7,709,444
-----------
TRUCKING & SHIPPING-2.0%
Wabash National Corp. ..... 37,200 943,950
Manufacturer/market truck
trailers
Werner Enterprises,
Inc. ..................... 162,100 3,039,375
------------
Motor carrier: general
freight
3,983,325
------------

11,692,769
------------

MISCELLANEOUS--1.3%

DIVERSIFIED-1.3%
Brady (W.H.) Cl. A......... 35,900 2,602,750
------------
Manufactures adhesives &
coatings

TOTAL COMMON STOCKS
(cost $177,703,439)....... 200,352,803
------------

PRINCIPAL
AMOUNT
----------

COMMERCIAL PAPER--1.0%
General Electric Capital
Corp.
5.600%, 11/02/95.......... $1,510,000 1,509,765
Ford Motor Credit Corp.
5.750%, 11/06/95.......... 460,000 459,633
------------

TOTAL COMMERCIAL PAPER
(amortized cost
$1,969,398)............... 1,969,398
------------
TOTAL INVESTMENTS--99.8%
(cost $179,672,837)....... 202,322,201
------------

CASH AND OTHER ASSETS NET OF LIABILITIES-
NET OF LIABILITIES-0.2%... 407,428
------------

NET ASSETS--100.0%......... $202,729,629
============

* Non-income producing

See notes to financial statements.
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995

- --------------------------------------------------------------------------------
WINTHROP FIXED INCOME FUND
U.S. GOVERNMENT PRINCIPAL
OBLIGATIONS--51.6% AMOUNT VALUE
---------- ------------
United States Treasury
Bills
5.330%, 03/07/96.......... $1,500,000 $ 1,471,901
United States Treasury
Notes
8.625%, 08/15/97.......... 750,000 787,867
United States Treasury
Notes
8.875%, 11/15/97.......... 250,000 265,410
United States Treasury
Notes
7.250%, 02/15/98.......... 900,000 930,204
United States Treasury
Notes
7.875%, 04/15/98.......... 950,000 997,566
United States Treasury
Notes
9.000%, 05/15/98.......... 500,000 538,960
United States Treasury
Notes
8.250%, 07/15/98.......... 1,000,000 1,063,480
United States Treasury
Notes
9.250%, 08/15/98.......... 500,000 545,230
United States Treasury
Notes
8.000%, 08/15/99.......... 750,000 806,355
United States Treasury
Notes
6.000%, 10/15/99.......... 2,000,000 2,017,380
United States Treasury
Notes
7.500%, 10/31/99.......... 4,000,000 4,242,599
United States Treasury
Notes
7.750%, 01/31/00.......... 2,500,000 2,680,950
United States Treasury
Notes
8.500%, 02/15/00.......... 500,000 550,540
United States Treasury
Notes
6.250%, 08/31/00.......... 2,000,000 2,041,480
United States Treasury
Notes
7.750%, 02/15/01.......... 2,000,000 2,173,300
United States Treasury
Notes
8.000%, 05/15/01.......... 1,400,000 1,541,302
United States Treasury
Notes
7.500%, 11/15/01.......... 2,500,000 2,704,600
United States Treasury
Notes
6.375%, 08/15/02.......... 300,000 308,010
United States Treasury
Notes
7.250%, 05/15/04.......... 1,000,000 1,082,530
United States Treasury
Notes
7.250%, 08/15/04.......... 1,000,000 1,082,870
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS
(cost $26,914,451)........ 27,832,534
------------
U.S. GOVERNMENT
AGENCIES--25.9%
Federal Home Loan Mortgage
Corp.
7.000%, 07/01/99.......... 1,406,780 1,425,244
Federal National Mortgage
Assn.
8.550%, 08/30/99.......... 400,000 435,532
Federal Home Loan Mortgage
Corp.
8.750%, 10/01/01.......... 76,217 78,433
Tennessee Valley Power
Authority
7.450%, 10/15/01.......... 1,500,000 1,575,000
Federal National Mortgage
Assn.
7.900%, 04/10/02.......... 650,000 665,333
Federal National Mortgage
Assn.
Pool #76368 9.250%,
09/01/03................... 171,938 180,589
Federal National Mortgage
Assn.
Pool #76378 9.250%,
09/01/03................... 294,791 309,622
Federal National Mortgage
Assn.
7.600%, 04/14/04.......... 1,000,000 1,018,840
Federal Home Loan Bank
7.360%, 07/01/04.......... 500,000 535,260
Federal National Mortgage
Assn.
8.250%, 10/12/04.......... 600,000 638,358
Federal Home Loan Mortgage
Corp.
8.800%, 11/17/04.......... 500,000 526,350
Federal National Mortgage
Assn.
8.550%, 12/10/04.......... 1,000,000 1,043,480

PRINCIPAL
AMOUNT VALUE
---------- ------------
Government National
Mortgage Assn.
9.500%, 01/15/10.......... $ 437,898 $ 465,814
Federal Home Loan Mortgage
Corp.
5.000%, 12/15/12.......... 1,000,000 980,680
Federal Home Loan Mortgage
Corp.
10.000%, 04/01/16......... 211,609 229,066
Federal National Mortgage
Assn.
9.000%, 09/01/17.......... 776,805 812,489
Federal Home Loan Mortgage
Corp.
7.779%, 10/01/19.......... 1,262,332 1,298,624
Federal National Mortgage
Assn.
9.000%, 09/01/20.......... 292,498 305,935
Government National
Mortgage Assn.
9.500%, 09/15/20.......... 24,647 26,357
Federal National Mortgage
Assn.
7.417%, 12/01/21.......... 1,392,090 1,419,062
------------
TOTAL U.S. GOVERNMENT
AGENCIES
(cost $13,740,479)........ 13,970,068
------------
CORPORATE BONDS--19.6%
CANADIAN & FOREIGN-4.3%
Province of Ontario Canada
7.750%, 06/04/02.......... 1,500,000 1,606,875
Province of Ontario Canada
7.000%, 08/04/05.......... 700,000 720,125
------------
2,327,000

------------
FINANCIAL-9.8%
First Bank System Floating
Rate
5.763%, 02/05/96.......... 1,000,000 999,886
Nationsbank Corp. Floating
Rate
6.170%, 06/23/99.......... 1,000,000 1,000,000
Ford Motor Credit Co.
7.750%, 11/15/02.......... 350,000 374,500
Household Finance Corp. Sr.
Note
8.000%, 08/01/04.......... 600,000 654,000
American General Corp.
7.750%, 04/01/05.......... 2,050,000 2,208,875
------------
5,237,261
------------
INDUSTRIAL-1.8%
Dupont (E.I.) De Nemours &
Co.
8.500%, 02/15/03.......... 900,000 984,375
------------
PUBLIC UTILITIES-1.9%
Southwestern Bell Telephone
6.250%, 10/15/02.......... 1,000,000 997,500
------------
TRANSPORTATION-1.8%
Union Pacific Corp.
6.000%, 09/01/03.......... 1,000,000 965,000
------------
TOTAL CORPORATE BONDS
(cost $10,384,272)........ 10,511,136
------------
COMMERCIAL PAPER--0.5%
(amortized cost $279,911)
Ford Motor Credit Corp.
5.730%, 11/03/95.......... 280,000 279,911
------------
TOTAL INVESTMENTS--97.6%
(cost $51,319,113)........ 52,593,649
------------
CASH AND OTHER ASSETS
NET OF LIABILITIES-2.4%... 1,291,137
------------

NET ASSETS--100%........... $ 53,884,786
------------
------------

See notes to financial statements.
<PAGE>
WINTHROP FOCUS FUNDS--STATEMENT OF INVESTMENTS October 31, 1995

- --------------------------------------------------------------------------------
WINTHROP MUNICIPAL TRUST FUND
PRINCIPAL
MUNICIPAL BONDS--97.8% AMOUNT VALUE
---------- ------------
ARIZONA-3.7%
Arizona State Wastewater
Management Authority
6.000%, 07/01/00......... $ 600,000 $ 636,750
Arizona State University
Refunding Ser. A
6.500%, 07/01/01......... 750,000 829,687
------------

1,466,437
------------
CALIFORNIA-3.6%
Los Angeles County
California Ser. A
6.750%, 07/01/11......... 1,250,000 1,412,500
------------
GEORGIA-5.9%
Georgia State General Obligation Ser.
B
5.500%, 04/01/99...........1,200,000
1,246,500
De Kalb County, Georgia
Water & Sewer Revenue
5.600%, 10/01/01......... 1,000,000 1,053,750
------------

2,300,250
------------

ILLINOIS-9.5%
Illinois State Toll
Highway Authority
6.850%, 01/01/98......... 500,000 512,050
Chicago, Illinois Met.
Wtr. Reclamation Dist.
5.750%, 12/01/01......... 1,000,000 1,067,500
Chicago, Illinois
5.800%, 01/01/08......... 1,000,000 1,042,500
Chicago, Illinois Met.
Wtr. Reclamation Dist.
6.300%, 12/01/09......... 1,000,000 1,073,750
------------

3,695,800
------------
INDIANA-2.9%
Indiana University Revenue
Student Fee Ser. K
6.500%, 08/01/05......... 1,000,000 1,117,500
------------
IOWA-2.7%
Iowa Student Loan
Liquidation Corp.
6.800%, 03/01/05......... 1,000,000 1,075,000
------------
KENTUCKY-3.6%
Kentucky State Turnpike
Authority
6.500%, 07/01/07......... 1,250,000 1,409,375
------------
MARYLAND-3.1%
Washington Suburban
Sanitary District Water
Supply
6.500%, 11/01/11......... 1,075,000 1,202,656
------------
MASSACHUSETTS-8.0%
Massachusetts State Water
Resources Ser. B
5.700%, 11/01/02......... 1,000,000 1,058,750
Massachusetts Bay Transit
Authority
5.300%, 03/01/04......... 1,000,000 1,036,250
Massachusetts State
Refunding Ser. B
5.500%, 11/01/07......... 1,000,000 1,033,750
------------
3,128,750
------------

MISSOURI-3.5%
Missouri State Environment
Import & Energy Resources
5.250%, 01/01/05......... 1,325,000 1,374,688
------------
NEVADA-2.9%
Nevada Municipal Bond Bank
Project
7.000%, 01/01/04......... 1,000,000 1,143,750
------------
NEW JERSEY-2.8%
University Medicine &
Dentistry
New Jersey Ser. E
6.400%, 12/01/07......... 1,000,000 1,076,430
------------

PRINCIPAL
AMOUNT VALUE
---------- ------------
NEW MEXICO-2.7%
Bernalillo County, New
Mexico
5.800%, 08/01/98......... $1,000,000 $ 1,042,500
------------
NEW YORK-2.9%
New York State Local
Assistance Corp. Ser. B
7.125%, 04/01/03......... 1,000,000 1,130,000
------------
OHIO-7.6%
Columbus, Ohio Sewer
Refunding
6.200%, 06/01/04......... 740,000 812,150
Ohio State Water
Development Authority
Revenue
5.750%, 06/01/04......... 2,000,000 2,140,000
------------

2,952,150
------------

PUERTO RICO-2.6%
Puerto Rico Commonwealth
Refunding
5.100%, 07/01/02......... 1,000,000 1,028,750
------------
SOUTH CAROLINA-2.6%
South Carolina State
Capital Improvement
5.500%, 03/01/98......... 1,000,000 1,031,250
------------
TEXAS-19.9%
University of Texas,
Permanent University
Funding
5.500%, 07/01/99......... 1,000,000 1,047,500
San Antonio, Texas Water
Revenue
6.100%, 05/15/02......... 1,000,000 1,092,500
Houston, Texas Refunding
Ser. C
5.900%, 03/01/03......... 750,000 800,625
Tarrant County, Texas
Junior College
District Refunding Ser. A
6.375%, 02/15/04......... 1,500,000 1,629,375
Eanes, Texas Independent
School District Refunding
6.500%, 08/01/04......... 1,000,000 1,068,750
Dallas, Texas
5.500%, 02/15/08......... 1,000,000 1,028,750
Texas State Refunding Ser.
A
6.000%, 10/01/08......... 1,000,000 1,096,250
------------

7,763,750
------------
VIRGINIA-2.6%
Arlington County
5.250%, 08/01/98......... 1,000,000 1,030,000
------------
WASHINGTON-4.7%
King County, Washington
School District #401
5.000%, 12/01/01......... 750,000 764,062
Tacoma, Washington
Electric System Revenue
Ser. B
6.000%, 01/01/06......... 1,000,000 1,067,500
------------
1,831,562
------------
TOTAL MUNICIPAL BONDS
(cost $37,308,075)....... 38,213,098
------------
TOTAL INVESTMENTS--97.8%
(cost $37,308,075)....... 38,213,098
------------
CASH AND OTHER ASSETS
NET OF
LIABILITIES--2.2%......... 845,680
------------

NET ASSETS--100%.......... $ 39,058,778
============

See notes to financial statements.

<PAGE>
STATEMENT OF ASSETS AND LIABILITIES October 31, 1995
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
GROWTH AND AGGRESSIVE FIXED MUNICIPAL
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND TRUST FUND
----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value (cost $45,427,251,
$72,096,786, $179,672,837,
$51,319,113 and $37,308,075
respectively)............... $55,169,011 $89,932,581 $202,322,201 $52,593,649 $38,213,098
Cash............................ 25,860 23,055 63,668 138,418 65,715
Receivable for investment
securities sold............... 2,230,996 -- 1,478,636 2,011,397 1,607,663
Receivable for capital stock
sold.......................... 533,873 323,771 1,848,426 1,583,102 106,000
Dividends and interest
receivable.................... 31,782 285,016 54,840 697,387 702,176
Reimbursement due from
advisor....................... -- -- -- 26,399 22,994
Deferred organization costs
(Note A)...................... -- -- -- -- 58,092
----------- ----------- ------------ ----------- -----------
Total assets................ 57,991,522 90,564,423 205,767,771 57,050,352 40,775,738
----------- ----------- ------------ ----------- -----------
LIABILITIES:
Payable to investment advisor... 35,600 53,250 139,827 -- 59,891
Payable for investment
securities purchased.......... 1,780,860 2,090,757 2,032,769 3,013,768 1,103,452
Payable for capital stock
redeemed...................... 50,000 213,880 589,624 75,321 523,192
Dividend payable................ -- -- -- 75,999 30,425
Accrued expenses and other
liabilities................... 178,912 231,633 275,922 478 --
----------- ----------- ------------ ----------- -----------
Total liabilities........... 2,045,372 2,589,520 3,038,142 3,165,566 1,716,960
----------- ----------- ------------ ----------- -----------
NET ASSETS:
Applicable to 4,927,103,
6,036,931, 12,204,330,
5,274,893 and 3,883,837 shares
outstanding, respectively..... $55,946,150 $87,974,903 $202,729,629 $53,884,786 $39,058,778
----------- ----------- ------------ ----------- -----------
----------- ----------- ------------ ----------- -----------
NET ASSETS CONSIST OF:
Capital paid-in................. $42,200,065 $67,896,975 $190,048,225 $52,822,440 $39,052,710
Undistributed net investment
income........................ 159,043 126,699 405,162 -- --
Accumulated net realized gain
(loss) on investments......... 3,845,282 2,115,434 (10,373,122) (212,190) (898,955)
Net unrealized appreciation of
investments................... 9,741,760 17,835,795 22,649,364 1,274,536 905,023
----------- ----------- ------------ ----------- -----------
$55,946,150 $87,974,903 $202,729,629 $53,884,786 $39,058,778
----------- ----------- ------------ ----------- -----------
----------- ----------- ------------ ----------- -----------
Net asset value and offering price
per share....................... $11.35 $14.57 $16.61 $10.22 $10.06
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>

See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS for the Year Ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
GROWTH AND AGGRESSIVE FIXED MUNICIPAL
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND TRUST FUND
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................... $ 827,652 $ 1,826,181 $2,571,391 $ -- $ --
Interest............................ 215,823 824,086 694,900 3,113,349 1,785,549
----------- ----------- ----------- ----------- ----------
Total investment income......... 1,043,475 2,650,267 3,266,291 3,113,349 1,785,549
----------- ----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fees (Note B)... 395,327 556,556 1,432,939 281,997 224,300
Distribution fees (Note B).......... 263,552 376,789 872,716 225,597 179,440
Legal fees.......................... 20,000 26,000 72,000 18,000 17,000
Transfer agent fees................. 66,000 87,000 204,000 50,000 36,000
Custodian fees...................... 47,000 59,000 120,000 41,000 35,000
Auditing fees....................... 12,000 18,000 37,000 14,000 10,000
Printing fees....................... 16,000 18,000 29,000 14,000 13,000
Trustees' fees...................... 11,000 12,000 17,000 10,000 8,000
Miscellaneous....................... 28,208 34,856 76,474 27,000 23,000
Amortization of organization costs
(Note A).......................... -- -- -- -- 21,184
----------- ----------- ----------- ----------- ----------
859,087 1,188,201 2,861,129 681,594 566,924
Less expenses reimbursed by
investment advisor............ -- -- -- (230,399 ) (208,045)
----------- ----------- ----------- ----------- ----------
Net expenses.................... 859,087 1,188,201 2,861,129 451,195 358,879
----------- ----------- ----------- ----------- ----------
NET INVESTMENT INCOME.................. 184,388 1,462,066 405,162 2,662,154 1,426,670
----------- ----------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS--Note C:
Net realized gain (loss) on
investments....................... 3,855,434 2,114,892 4,891,763 221,384 (559,335)
Net change in unrealized
appreciation on investments....... 2,214,074 8,320,026 13,889,695 2,303,777 2,549,446
----------- ----------- ----------- ----------- ----------
Net realized and unrealized gain on
investments....................... 6,069,508 10,434,918 18,781,458 2,525,161 1,990,111
----------- ----------- ----------- ----------- ----------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $6,253,896 $11,896,984 $19,186,620 $5,187,315 $3,416,781
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------

See notes to financial statements.
</TABLE>

STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>

GROWTH AND
GROWTH FUND INCOME FUND
------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/95 10/31/94 10/31/95 10/31/94
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income............................ $ 184,388 $ 32,723 $1,462,066 $1,088,804
Net realized gain on investments................. 3,855,434 3,314,787 2,114,892 2,850,323
Net change in unrealized appreciation on
investments.................................... 2,214,074 (1,419,110 ) 8,320,026 (1,512,330 )
----------- ----------- ----------- -----------
Increase in net assets from operations........... 6,253,896 1,928,400 11,896,984 2,426,797
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income................................ (58,068 ) -- (1,501,908 ) (971,199 )
Realized gains on investments.................... (3,314,586 ) (2,678,311 ) (2,851,832 ) (1,646,857 )
CAPITAL STOCK TRANSACTIONS--(NET) NOTE D............ 610,099 3,759,172 13,411,750 15,044,680
----------- ----------- ----------- -----------
Total increase in net assets..................... 3,491,341 3,009,261 20,954,994 14,853,421
NET ASSETS:
Beginning of year................................ 52,454,809 49,445,548 67,019,909 52,166,488
----------- ----------- ----------- -----------
End of year (including undistributed net
investment income of $159,043 and $32,723 for
the Growth Fund at 10/31/95 and 10/31/94,
respectively, and $126,699 and $166,541 for the
Growth and Income Fund at 10/31/95 and
10/31/94, respectively)...................... $55,946,150 $52,454,809 $87,974,903 $67,019,909
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
AGGRESSIVE
GROWTH FUND FIXED INCOME FUND
--------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/95 10/31/94 10/31/95 10/31/94
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 405,162 $ (48,201) $2,662,154 $2,150,296
Net realized gain (loss) on investments......... 4,891,763 6,163,077 221,384 (436,132 )
Net change in unrealized appreciation on
investments................................... 13,889,695 (2,663,912) 2,303,777 (3,401,570 )
------------ ------------ ----------- -----------
Increase (decrease) in net assets from
operations.................................... 19,186,620 3,450,964 5,187,315 (1,687,406 )
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income............................... -- (122,111) (2,662,154 ) (2,150,296 )
Realized gains on investments................... (6,165,603) (5,363,488) -- (916,068 )
CAPITAL STOCK TRANSACTIONS--(NET) NOTE D........... 45,084,159 68,756,345 12,209,472 3,022,495
------------ ------------ ----------- -----------
Total increase (decrease) in net assets......... 58,105,176 66,721,710 14,734,633 (1,731,275 )
NET ASSETS:
Beginning of year............................... 144,624,453 77,902,743 39,150,153 40,881,428
------------ ------------ ----------- -----------
End of year (including undistributed net
investment income of $405,162 for the
Aggressive Growth Fund at 10/31/95)........... $202,729,629 $144,624,453 $53,884,786 $39,150,153
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
</TABLE>

<TABLE><CAPTION>
MUNICIPAL
TRUST FUND
---------------------------
YEAR ENDED YEAR ENDED
10/31/95 10/31/94
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income.............................................. $ 1,426,670 $ 1,303,489
Net realized loss on investments................................... (559,335) (338,883 )
Net change in unrealized appreciation on investments............... 2,549,446 (1,903,318 )
----------- ------------
Increase (decrease) in net assets from operations.................. 3,416,781 (938,712 )
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income.................................................. (1,426,670) (1,303,489 )
CAPITAL STOCK TRANSACTIONS--(NET) NOTE D.............................. 2,598,461 2,918,893
----------- ------------
Total increase in net assets....................................... 4,588,572 676,692
NET ASSETS:
Beginning of year.................................................. 34,470,206 33,793,514
----------- ------------
End of year........................................................ $39,058,778 $34,470,206
----------- ------------
----------- ------------
</TABLE>

See notes to financial statements.
<PAGE>

WINTHROP FOCUS FUNDS--NOTES TO FINANCIAL STATEMENTS October 31, 1995
- --------------------------------------------------------------------------------

NOTE (A) SIGNIFICANT ACCOUNTING POLICIES. Winthrop Focus Funds ("Winthrop" or
"Funds") operates as a series company currently issuing five classes of shares
of beneficial interest: Winthrop Growth Fund, Winthrop Growth and Income Fund,
Winthrop Aggressive Growth Fund, Winthrop Fixed Income Fund, and Winthrop
Municipal Trust Fund. Winthrop, organized as a Massachusetts business trust on
November 26, 1985, constitutes a diversified, open-end investment company which
is registered under the Investment Company Act of 1940, as amended ("Act"). Wood
Struthers & Winthrop Management Corp. (the "Advisor" ) is a wholly-owned
subsidiary of Donaldson, Lufkin & Jenrette Securities Corporation, which is a
subsidiary of Donaldson, Lufkin and Jenrette, Inc. ("DLJ"). DLJ is an
independently operated, indirect subsidiary of The Equitable Companies
Incorporated. The following is a summary of significant accounting policies
consistently followed by Winthrop.

(1) SECURITY VALUATION: Securities and options traded on national exchanges
and over-the-counter securities listed in the NASDAQ National Market System
are valued at the last reported sales price at the close of the New York Stock
Exchange. Securities for which there have been no sales on such day are valued
at the mean of the current bid and asked prices. Over-the-counter securities
not listed on the NASDAQ National Market System are valued at the mean of the
current bid and asked prices. Fixed-income securities, except short-term
securities, may be valued on the basis of prices provided by a pricing service
when such prices are believed by the Advisor to reflect the fair market value
of such securities. The prices provided by a pricing service are determined
without regard to bid or last sale prices but take into account institutional
size, trading in similar groups of securities and any developments related to
the specific securities. Short-term investments, those with a remaining
maturity of 60 days or less, are valued at amortized cost, which approximates
market value.

(2) REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements with
financial institutions, deemed to be creditworthy by the Funds' Advisor,
subject to the seller's agreement to repurchase and the Funds' agreement to
resell such securities at a mutually agreed-upon price. Securities purchased
subject to repurchase agreements are deposited with the Funds' custodian and,
pursuant to the terms of the repurchase agreement, must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. If the value of the underlying securities falls below
the value of the repurchase price plus accrued interest, the Funds will
require the seller to deposit additional collateral by the next business day.
If the request for additional collateral is not met, or the seller defaults on
its repurchase obligation, the Funds maintain the right to sell the underlying
securities at market value and may claim any resulting loss against the
seller.

(3) FEDERAL INCOME TAXES: The Funds intend to be treated as "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and to
distribute substantially all of their net taxable and tax-exempt income.
Accordingly, no provisions for Federal income taxes have been made in the
accompanying financial statements.

(4) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is recorded
on the ex-dividend date. Security transactions are accounted for on the date
securities are purchased or sold. Security gains and losses are determined on
the identified cost basis. Interest income, which includes amortization of
premiums and discounts, is recorded on the accrual basis.

(5) DIVIDENDS AND DISTRIBUTIONS: Dividends and distributions to shareholders
are recorded on the ex-dividend date. The Winthrop Fixed Income Fund and
Winthrop Municipal Trust Fund each declare dividends on a daily basis. Such
dividends are paid monthly.

(6) DEFERRED ORGANIZATION COSTS: The Municipal Trust Fund will reimburse the
Advisor for costs incurred in connection with the Municipal Trust Fund's
organization. The costs are being amortized on a straight-line basis over five
years commencing July 28, 1993.

NOTE (B) ADVISORY AND DISTRIBUTION SERVICES AGREEMENT: Under its Advisory
Agreement with Winthrop, the Advisor will provide investment advisory services
and order placement facilities for Winthrop and
<PAGE>
WINTHROP FOCUS FUNDS--NOTES TO FINANCIAL STATEMENTS October 31, 1995 (continued)
- --------------------------------------------------------------------------------
pay all compensation of Trustees of Winthrop who are affiliated persons of the
Advisor. The Advisor or its affiliates will also furnish Winthrop, without
charge, management supervision and assistance and office facilities. Winthrop
will pay the Advisor at the following annual percentage rates of the average
daily net assets of each Fund: Growth Fund, .750 of 1% of the first
$100,000,000, .500 of 1% of the balance; Growth and Income Fund, .750 of 1% of
the first $75,000,000, .500 of 1% of the balance; Aggressive Growth Fund, .875
of 1% of the first $100,000,000, .750 of 1% of the next $100,000,000 and .625 of
1% of net assets in excess of $200,000,000; Fixed Income Fund, .625 of 1% of the
first $100,000,000, .500 of 1% of the balance; and Winthrop Municipal Trust
Fund, .625 of 1% of the first $100,000,000, .500 of 1% of the balance. Such fees
will be accrued daily and paid monthly.

The Advisory Agreement provides that the Advisor will reimburse Winthrop for its
expenses (exclusive of interest, taxes, brokerage, distribution services fees
and extraordinary expenses, all to the extent permitted by applicable state
securities law and regulations) which in any year exceed the limits prescribed
by any state in which shares of Winthrop are qualified for sale. Winthrop
believes that presently the most restrictive applicable expense ratio limitation
imposed on Winthrop by any state is 2 1/2% of average net assets of the first
$30 million, 2% of average net assets of the next $70 million and 1 1/2% of
average net assets in excess of $100 million. Commencing July 1, 1994, the
Advisor has agreed to reimburse through October 31, 1995 all operating expenses
in excess of 1.00% of the average daily net assets of the Fixed Income Fund and
the Municipal Trust Fund. For the period November 1, 1995 through October 31,
1996, the Advisor may, in its sole discretion, determine to reduce its
management fees by the amount that Total Fund Operating Expenses exceed 1.00% of
the average daily net assets of each of the Fixed Income Fund and the Municipal
Trust Fund. The Advisor may, in its sole discretion, determine to discontinue
this practice with respect to both or either of such Funds. As a result of the
voluntary assumption of expenses, the Advisor reimbursed the Fixed Income Fund
and Municipal Trust Fund $230,399 and $208,045, respectively, during the year
ended October 31, 1995.

Pursuant to Rule 12b-1 under the Act, Winthrop has entered into a Distribution
Services Agreement (the "Agreement") with Donaldson, Lufkin & Jenrette
Securities Corporation, Winthrop's Distributor, under which Winthrop pays a
distribution services fee to the Distributor at an annual rate of up to .50% of
each Fund's aggregate average daily net assets. The Agreement provides that the
Distributor will use amounts payable under the Agreement in their entirety for
(i) payments to broker/dealers and other financial intermediaries for
distribution assistance and to banks and other depository institutions for
administrative and accounting services, and (ii) otherwise in promoting the sale
of shares of Winthrop such as by paying for the preparation, printing and
distribution of prospectuses, sales brochures and other promotional materials
sent to prospective shareholders and by directly or indirectly purchasing radio,
television, newspaper and other advertising. The Agreement also provides that
the Advisor may use its own resources including fees from investment companies
(including Winthrop) to finance the distribution of Winthrop's shares.

Each Trustee who is not an affiliated person receives an attendance fee of
$1,200 per meeting. In addition, each unaffiliated Trustee who is a member of
the audit committee receives an attendance fee of $500 per meeting.

NOTE (C) INVESTMENT TRANSACTIONS: For federal income tax purposes, the cost of
securities owned at October 31, 1995, was substantially the same as the cost of
securities for financial statement purposes. At October 31, 1995, the components
of the net unrealized appreciation on investments were as follows:

<TABLE>
<CAPTION>
GROWTH GROWTH & INCOME AGGRESSIVE GROWTH FIXED INCOME MUNICIPAL TRUST
FUND FUND FUND FUND FUND
----------- --------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Gross appreciation (investments
having an excess of value over
cost)........................ $10,878,765 $19,201,560 $30,779,318 $ 1,381,000 $ 933,066
Gross depreciation (investments
having an excess of cost over
value)....................... (1,137,005) (1,365,765) (8,129,954) (106,464 ) (28,043)
----------- --------------- -------- ------------ -------
Net unrealized appreciation of
investments................... $ 9,741,760 $17,835,795 $22,649,364 $ 1,274,536 $ 905,023
----------- --------------- -------- ------------ -------
----------- --------------- -------- ------------ -------
</TABLE>

<PAGE>
WINTHROP FOCUS FUNDS--NOTES TO FINANCIAL STATEMENTS October 31, 1995 (continued)
- --------------------------------------------------------------------------------
For the year ended October 31, 1995, total aggregate purchases and sales of
portfolio securities, excluding short-term securities, were as follows:

<TABLE>
<CAPTION>
GROWTH GROWTH & INCOME AGGRESSIVE GROWTH FIXED INCOME MUNICIPAL TRUST
FUND FUND FUND FUND FUND
----------- --------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Purchases....................... $52,892,711 $37,992,480 $96,922,800 $40,717,657 $20,943,951
Sales........................... 50,124,821 23,261,731 40,989,987 28,040,147 17,155,314
</TABLE>

NOTE (D) SHARES OF BENEFICIAL INTEREST: There is an unlimited number of shares
($0.01 par value) authorized. During 1994, with respect to the Aggressive Growth
Fund, accumulated investment losses of $12,894 were reclassified to capital
paid-in. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
GROWTH FUND GROWTH & INCOME FUND
----------------------------------------------------------- ------------------------------------------
YEAR ENDED
YEAR ENDED YEAR ENDED YEAR ENDED OCTOBER
OCTOBER 31, 1995 OCTOBER 31, 1994 OCTOBER 31, 1995 31, 1994
--------------------------- --------------------------- --------------------------- ----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
---------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold........... 532,740 $ 5,466,192 490,202 $ 5,372,687 1,461,068 $ 19,316,205 1,350,735
Shares issued through
reinvestment of
dividends............ 287,842 2,878,417 210,986 2,259,663 263,368 3,373,871 137,579
---------- ------------ ---------- ------------ ---------- ------------ ----------
820,582 8,344,609 701,188 7,632,350 1,724,456 22,690,076 1,488,314
---------- ------------ ---------- ------------ ---------- ------------ ----------
Shares redeemed....... (743,608) (7,734,510) (357,176) (3,873,178) (697,917) (9,278,326) (365,123)
---------- ------------ ---------- ------------ ---------- ------------ ----------
Net increase.......... 76,974 $ 610,099 344,012 $ 3,759,172 1,026,539 $ 13,411,750 1,123,191
---------- ------------ ---------- ------------ ---------- ------------ ----------
---------- ------------ ---------- ------------ ---------- ------------ ----------

<CAPTION>
AMOUNT
------------
<S> <C>
Shares sold........... $ 18,132,567
Shares issued through
reinvestment of
dividends............. 1,822,413
------------
19,954,980
------------
Shares redeemed....... (4,910,300)
------------
Net increase.......... $ 15,044,680
------------
------------
</TABLE>

AGGRESSIVE GROWTH FUND FIXED INCOME FUND
----------------------------------------------------------- ------------------------------------------
YEAR ENDED
YEAR ENDED YEAR ENDED YEAR ENDED OCTOBER
OCTOBER 31, 1995 OCTOBER 31, 1994 OCTOBER 31, 1995 31, 1994
--------------------------- --------------------------- --------------------------- ----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
---------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold........... 4,656,242 $ 72,414,139 4,672,514 $ 73,246,012 2,205,344 $ 21,904,065 1,112,714
Shares issued through
reinvestment of
dividends............ 382,815 5,692,460 322,012 4,852,722 178,087 1,772,956 200,340
---------- ------------ ---------- ------------ ---------- ------------ ----------
5,039,057 78,106,599 4,994,526 78,098,734 2,383,431 23,677,021 1,313,054
---------- ------------ ---------- ------------ ---------- ------------ ----------
Shares redeemed....... (2,074,286) (33,022,440) (589,769) (9,342,389) (1,159,789) (11,467,549) (1,002,473)
---------- ------------ ---------- ------------ ---------- ------------ ----------
Net increase.......... 2,964,771 $ 45,084,159 4,404,757 $ 68,756,345 1,223,642 $ 12,209,472 310,581
---------- ------------ ---------- ------------ ---------- ------------ ----------
---------- ------------ ---------- ------------ ---------- ------------ ----------

AMOUNT
------------
<S> <C>
Shares sold........... $ 11,204,524
Shares issued through
reinvestment of
dividends............. 2,048,817
------------
13,253,341
------------
Shares redeemed....... (10,230,846)
------------
Net increase.......... $ 3,022,495
------------
------------
</TABLE>

MUNICIPAL TRUST FUND
-----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold........... 1,175,181 $ 11,478,178 1,525,475 $ 15,174,345
Shares issued through
reinvestment of
dividends............ 112,223 1,098,286 98,883 968,442
---------- ------------ ---------- ------------
1,287,404 12,576,464 1,624,358 16,142,787
---------- ------------ ---------- ------------
Shares redeemed....... (1,030,022) (9,978,003) (1,344,417) (13,223,894)
---------- ------------ ---------- ------------
Net increase.......... 257,382 $ 2,598,461 279,941 $ 2,918,893
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------

</TABLE>

NOTE (E) PRIOR YEAR FINANCIAL STATEMENT PRESENTATION: During the year ended
October 31, 1993, Winthrop, upon further review, determined that the objectives,
policies and other factors affecting the determination of the surviving entity
with respect to Neuwirth Fund, Inc. and Pine Street Fund, Inc. did not change
and that the reorganization of these Funds on July 10, 1992 should be reported
with those Funds as the surviving entities. Accordingly, the financial
highlights for the period ended October 31, 1992 of both Funds have been
restated.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The table below sets forth financial data for a share of capital stock
outstanding throughout each period presented.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
NET
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS NET NET ASSETS,
VALUE, NET GAINS OR FROM NET FROM ASSET VALUE, END OF
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT CAPITAL END TOTAL PERIOD
OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++ (000 OMITTED)
--------- ---------- ------------ ---------- ------------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH FUND--YEARS ENDED OCTOBER 31,

1995 $ 10.82 $0.037 $ 1.190 $ (0.012) $(0.685) $11.35 12.21% $ 55,946
1994 10.97 0.014 0.435 -- (0.599) 10.82 4.15 52,455
1993 11.10 0.061 1.386 (0.077) (1.500) 10.97 14.36 49,446
1992 11.45 0.123 0.418 (0.163) (0.728) 11.10 4.66 48,678
1991 9.20 0.148 2.512 (0.198) (0.212) 11.45 29.71 50,426
GROWTH AND INCOME FUND--YEARS ENDED OCTOBER 31,
1995 $ 13.38 $0.254 $ 1.769 $ (0.266) $(0.567) $14.57 16.10% $ 87,975
1994 13.42 0.244 0.358 (0.223) (0.419) 13.38 4.58 67,020
1993 12.35 0.270 1.720 (0.271) (0.649) 13.42 16.93 52,166
1992* 12.03 0.083 0.572 (0.165) (0.170) 12.35 16.39(1) 46,457
YEARS ENDED JUNE 30,
1992 11.70 0.320 0.916 (0.234) (0.672) 12.03 10.45 45,342
1991 12.48 0.380 0.010 (0.386) (0.784) 11.70 3.86 47,340
AGGRESSIVE GROWTH FUND--YEARS ENDED OCTOBER 31,
1995 $ 15.65 $0.035 $ 1.621 $ -- $(0.696) $16.61 11.10% $ 202,730
1994 16.11 0.105 0.603 (0.026) (1.142) 15.65 4.67 144,624
1993 14.00 0.123 3.195 (0.011) (1.197) 16.11 25.34 77,903
1992** 14.16 0.011 1.482 (0.027) (1.626) 14.00 13.95(1) 39,683
YEARS ENDED DECEMBER 31,
1991 10.16 0.023 5.090 (0.024) (1.089) 14.16 50.55 32,340
1990 11.90 0.157 (1.720) (0.177) -- 10.16 (13.12) 22,041
FIXED INCOME FUND--YEARS ENDED OCTOBER 31,
1995 $ 9.66 $0.588 $ 0.560 $ (0.588) $ -- $10.22 12.23% $ 53,885
1994 10.93 0.567 (1.027) (0.567) (0.243) 9.66 (4.37) 39,150
1993 10.40 0.622 0.567 (0.622) (0.037) 10.93 11.79 40,881
1992 10.08 0.695 0.320 (0.695) -- 10.40 10.37 32,358
1991 9.57 0.773 0.510 (0.773) -- 10.08 13.92 23,783
MUNICIPAL TRUST FUND--YEARS ENDED OCTOBER 31,
1995 $ 9.51 $0.389 $ 0.550 $ (0.389) $ -- $10.06 10.06% $ 39,059
1994 10.10 0.365 (0.590) (0.365) -- 9.51 (2.27) 34,470
1993+ 10.00 0.085 0.100 (0.085) -- 10.10 7.15(1) 33,794

RATIO OF
RATIO NET INVESTMENT
OF EXPENSES INCOME TO PORTFOLIO
TO AVERAGE AVERAGE NET TURNOVER
NET ASSETS(2) ASSETS(2) RATE
------------- -------------- ---------
<S> <C> <C> <C>
GROW
1995 1.63% 0.35% 101.7%
1994 1.65 0.06 28.2
1993 1.36 0.56 61.7
1992 1.26 1.11 65.7
1991 1.34 1.40 31.7
GROW
1995 1.58% 1.94% 31.8%
1994 1.64 1.88 25.9
1993 1.33 2.12 36.4
1992 1.32(1) 1.99(1) 14.4

1992 1.35 2.62 29
1991 1.23 3.25 48
AGGR
1995 1.64% 0.23% 25.1%
1994 1.70 (0.04) 31.6
1993 1.44 0.32 134.3
1992 1.74(1) 0.10(1) 164.1

1991 1.89 0.18 91.3
1990 1.98 1.45 87.6
FIXE
1995 1.00% 5.90% 66.1%
1994 0.93 5.58 55.9
1993 0.83 5.79 95.6
1992 0.51 6.71 62.8
1991 -- 7.75 35.9
MUNI
1995 1.00% 3.97% 49.3%
1994 0.83 3.71 42.5
1993 0.75(1) 3.28(1) 0
</TABLE>

* For the period 7/1/92 to 10/31/92.

** For the period 1/1/92 to 10/31/92.

+ Commencement of operations for the Municipal Trust Fund was July 28, 1993.

++ A contingent deferred sales charge may be imposed on redemptions which would
reduce total return shown above.

(1) Annualized

(2) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets, as follows: Growth and Income Fund, .01%
and .08%, for the years ended 6/30/92, and 91, respectively; Aggressive
Growth Fund, .01% and .06% for the years ended 12/31/91 and 90,
respectively; Fixed Income Fund, .51%, .67%, .58%, .98%, and 2.19% for the
years ended 10/31/95, 94, 93, 92, and 91, respectively; and Municipal Trust
Fund, .58%, .77% and 1.15% (annualized) for the years ended 10/31/95, 94 and
93, respectively.
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

To the Shareholders and Board of Trustees of Winthrop Focus Funds:

We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Winthrop Focus Funds (comprising, respectively,
the Winthrop Growth Fund, the Winthrop Growth and Income Fund, the Winthrop
Aggressive Growth Fund, the Winthrop Fixed Income Fund and the Winthrop
Municipal Trust Fund) as of October 31, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended and the financial highlights,
with respect to the Winthrop Growth Fund, Winthrop Fixed Income Fund and
Winthrop Municipal Trust Fund, for each of the periods indicated therein and,
with respect to the Winthrop Aggressive Growth Fund and Winthrop Growth and
Income Fund, for each of the four years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights of Winthrop Aggressive Growth Fund (formerly Neuwirth Fund, Inc.) for
the year ended December 31, 1991 and each of the two years in the period then
ended and Winthrop Growth and Income Fund (formerly Pine Street Fund, Inc.) for
the year ended June 30, 1992 and each of the two years in the period then ended,
were audited by other auditors whose reports thereon dated January 27, 1992 and
August 3, 1992 respectively, expressed an unqualified opinion on such financial
highlights.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above and audited by us present fairly, in all material respects, the financial
position of each of the respective Funds constituting the Winthrop Focus Funds
at October 31, 1995, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended and financial highlights, with respect to the Winthrop Growth Fund,
Winthrop Fixed Income Fund and Winthrop Municipal Trust Fund, for each of the
indicated periods and, with respect to the Winthrop Aggressive Growth Fund and
Winthrop Growth and Income Fund for each of the four years in the period then
ended, in conformity with generally accepted accounting principles.

Ernst & Young LLP

New York, New York
November 28, 1995

<PAGE>

APPENDIX
--------

SECURITIES RATINGS

Bond Ratings
- ------------

Municipal and Corporate Bonds. The four highest ratings of

Moody's Investors Service, Inc. ("Moody's") for municipal corporate bonds

are Aaa, Aa, A and Baa. Bonds rated Aaa are judged by Moody's to be of the

best quality. Bonds rated Aa are judged to be of high quality by all

standards. Together with the Aaa group, they comprise what are generally

known as high-grade bonds. Moody's states that Aa bonds 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. Bonds which are rated

A are judged by Moody's to possess many favorable investment attributes and

are considered "upper medium grade obligations". Factors giving security

to principal and interest of A-rated bonds are considered adequate, but

elements may be present which suggest a susceptibility to impairment

sometime in the future. Bonds rated Baa are considered as medium grade

obligations, i.e., they are neither highly protected nor poorly secured.

Interest payments and principal appear adequate for the present but certain

protective elements may be lacking or may be characteristically unreliable

over any great length of time.

A-1

<PAGE>

Such bonds lack outstanding investment characteristics and in fact have

speculative characteristics as well. The generic ratings Aa through Baa

may be modified by the addition of the numerals 1, 2 or 3. The modifier 1

indicates that the security ranks in the higher end of the rating category;

the modifier 2 indicates a mid-range rating; and the modifier 3 indicates

that the issue ranks in the lower end of such rating category.

Moody's highest rating for short-term municipal loans is MIG-1.

Moody's states that short-term municipal securities rated MIG-1 are of the

best quality, enjoying strong protection from established cash flows of

funds for their servicing and broad-based access to the market for

refinancing, or both. Loans bearing the MIG-2 designation are of judged

to be of high quality, with margins of protection ample although not so

large as in the MIG-1 group.

The four highest ratings of Standard & Poor's Ratings Group

("S&P") for municipal and corporate bonds are AAA, AA, A and BBB. Bonds

rated AAA have the highest rating assigned by S&P to a debt obligation and

indicate an extremely strong capacity to pay interest and repay principal.

Bonds rated AA also qualify as high-quality debt obligations and have a

very strong capacity to pay interest and repay principal and in the

majority of instances differ from AAA issues only in a small degree. Bonds

rated A have a strong capacity to pay interest and repay principal although

they are

A-2

<PAGE>

somewhat more susceptible to the adverse effects of changes in

circumstances and economic conditions than bonds in higher rated

categories. The BBB rating, which is the lowest "investment grade"

security rating of S&P, indicates an adequate capacity to pay principal and

interest. Whereas they normally exhibit adequate protection parameters,

adverse economic conditions or changing circumstances are more likely to

lead to a weakened capacity to pay principal and interest for bonds in this

category than for bonds in the A category. The ratings AA through BBB may

be modified by the addition of a plus (+) or minus (-) sign to show

relative standing within such rating categories.

In July 1984, S&P assigned new rating symbols to new municipal

note issues. Notes rated SP-1 have a very strong capacity to pay principal

and interest. Those issues determined by S&P to possess overwhelming

safety characteristics are given an SP-1+ rating. Notes rated SP-2 have a

satisfactory capacity to pay principal and interest. Notes rated SP-3 have

a speculative capacity to pay principal and interest. The rating scale for

notes is closely related to long-term bond ratings; notes rated SP-1+

compare with bonds rated AAA, AA+, AA and AA-; notes rated SP-1 compare

with bonds rated A+, A and A-; and notes rated SP-2 compare with bonds

rated BBB+, BBB and BBB-.

Other Municipal Securities and Commercial Paper
- -----------------------------------------------

A-3

<PAGE>

"Prime-1" is the highest rating assigned by Moody's for other

short-term municipal securities and commercial paper, and "A-1+" and "A-1"

are the two highest ratings for commercial paper assigned by S&P (S&P does

not rate short-term tax-free obligations). Moody's uses the numbers 1, 2

and 3 to denote relative strength within its highest classification of

"Prime", while S&P uses the numbers 1+, 1, 2 and 3 to denote relative

strength within the highest classification of "A". Issuers rated "Prime"

by Moody's have the following characteristics: their short-term debt

obligations carry the smallest degree of investment risk, margins or

support for current indebtedness are large or stable with cash flow and

asset protection well assured, current liquidity provides ample coverage of

near-term liabilities and unused alternative financing arrangements are

generally available. While protective elements may change over the

intermediate or longer term, such changes are most unlikely to impair the

fundamentally strong position of short-term obligations. Commercial paper

issuers rated "A" by S&P have the following characteristics: liquidity

ratios are better than industry average, long-term debt rating is A or

better, the issuer has access to at least two additional channels of

borrowing, and basic earnings and cash flow are in an upward trend.

Typically, the issuer is a strong company, is in a well-established

industry and has superior management.

A-4

<PAGE>

PART C
Other Information

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements
--------------------

Included in the Prospectus:
Financial Highlights

Included in the Statement of Additional Information:

For Year Ended October 31, 1995

Statement of Investments, October 31, 1995
Statement of Operations for Year Ended October 31, 1995
Statement of Changes in Net Assets for Each of the Years
Ended October 31, 1994 and 1995
Statement of Assets and Liabilities, October 31, 1995
Notes to Financial Statements
Financial Highlights
Report of Ernst & Young LLP, Independent Auditors

Included In Part C of the Registration Statement:

None
(b) Exhibits
--------

(1) Amended and Restated Declaration of Trust
(2) Bylaws1
(3) Not Applicable
(4) Specimen Stock Certificates
a. Growth Fund and Fixed Income Fund2
b. Aggressive Growth Fund3
c. Growth and Income Fund4
d. Municipal Trust Fund8
(5) Investment Advisory Contract
a. Growth Fund, Fixed Income Fund, Aggressive Growth Fund
and Growth and Income Fund3
b. Municipal Trust Fund9
(6) Form of Distribution Agreement
(7) Not Applicable
(8) Custodial Services Agreement5
(9) Shareholder Services Agreement5
(10) Legal Opinion2
(11) Consent of Independent Auditors
(12) Not Applicable
(13) Investment Representation Letter6
(14) Prototype Retirement Plans7
(15) Rule 12b-1 Plan
a. Form of Class A Rule 12b-1 Plan
b. Form of Class B Rule 12b-1 Plan
(16) Schedules for Computation of Performance Quotation
(17) Financial Data Schedule10
(18) Rule 18F-3 Plan

Other Exhibit: Power of Attorney (attached to signature page)
__________________
1 Incorporated herein by reference to Registration Statement of Winthrop
Focus Funds on Form N-1A (File No. 3706) filed March 4, 1986.

<PAGE>

2 Incorporated herein by reference to Pre-Effective Amendment No. 2 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on November 3, 1986.
3 Incorporated herein by reference to Post-Effective Amendment No. 8 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 24, 1992.
4 Incorporated herein by reference to Post-Effective Amendment No. 7 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 3, 1992.
5 Incorporated herein by reference to Post-Effective Amendment No. 9 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on December 31, 1992.
6 Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on October 21, 1986.
7 Incorporated herein by reference to Post-Effective Amendment No. 2 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 26, 1988.
8 Incorporated herein by reference to Post-Effective Amendment No. 10 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File
No. 3706) filed on April 22, 1993.
9 Incorporated herein by reference to Post-Effective Amendment No. 12
to Registration Statement of Winthrop Focus Funds on Form N-1A (File
No. 3706) filed on January 28, 1994.
10 Incorporated herein by reference to Winthrop's Annual Report for the
year ended October 31, 1995.

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

Not Applicable

Item 26. NUMBER OF HOLDERS OF SECURITIES
Number of Record Holders
Title of Class as of November 30, 1995
-------------- ---------------------------

Growth Fund Shares
par value $.01 per share Class A: 2,725
Class B:

Aggressive Growth Fund Shares
par value $.01 per share Class A: 9,535
Class B:

Fixed Income Fund Shares
par value $.01 per share Class A: 1,273
Class B:

Growth and Income Fund Shares
par value $.01 per share Class A: 3,985
Class B:

Municipal Trust Fund Shares
par value $.01 per share Class A: 439
Class B:

Item 27. INDEMNIFICATION

Registrant's Agreement and Declaration of Trust provides that the
Trust (or the appropriate Fund) shall indemnify each person who is or has
been

C-2

<PAGE>

a trustee or officer of the Trust (including persons who serve, or have
served, at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise) against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel
fees, incurred in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such person may be or may have
been threatened, while in office or thereafter, by reason of being or
having been such a person, except with respect to any matter as to which it
has been determined that such person (i) did not act in good faith in the
reasonable belief that his action was in or not opposed to the best
interests of the Trust or (ii) had acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.

The Advisory Agreement between Registrant and Wood, Struthers &
Winthrop Management Corp. provides that Wood, Struthers & Winthrop
Management Corp. will not be liable thereunder for any mistake of judgment
or in any event whatsoever except for lack of good faith and that nothing
therein shall be deemed to protect Wood, Struthers & Winthrop Management
Corp. against any liability to Registrant or its security holders to which
it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties thereunder, or by
reason of reckless disregard of its duties and obligations thereunder.

The Distribution Services Agreement between the Registrant and
Donaldson, Lufkin & Jenrette Securities Corporation provides that
Registrant will indemnify, defend and hold Donaldson, Lufkin & Jenrette
Securities Corporation, and any other person who controls it within the
meaning of Section 15 of the Investment Company Act of 1940, free and
harmless from and against any and all claims, demands, liabilities and
expenses which Donaldson, Lufkin & Jenrette Securities Corporation or any
controlling person may incur arising out of or based upon any alleged
untrue statement of a material fact contained in Registrant's Registration
Statement, Prospectus or Statement of Additional Information or arising out
of, or based upon any alleged omission to state a material fact required to
be stated in any one of the foregoing or necessary to make the statements
in any one of the foregoing not misleading.

The foregoing summaries are qualified by the entire text of
Registrant's Agreement and Declaration of Trust, the Advisory Agreement
between Registrant and Wood, Struthers & Winthrop Management Corp. and the
Distribution Services Agreement between Registrant and Donaldson, Lufkin &
Jenrette Securities Corporation. The Registrant's Amended and Restated
Agreement and Declaration of Trust is filed herewith. The Advisory
Agreement and Distribution Services Agreement are incorporated by reference
herein as Exhibits 5 and 6, in response to Item 24.

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

C-3

<PAGE>

against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

The Equitable Life Assurance Society of the United States (the
parent of Adviser's parent) carries for itself and its subsidiaries
Directors and Officers Liability Insurance. Coverage under this policy has
been extended to directors and officers of the investment companies managed
by Wood, Struthers & Winthrop Management Corp. Under this policy, outside
directors would be covered up to the limits specified for any claim against
them for acts committed in their capacities as members of the Board.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The description of Wood, Struthers & Winthrop Management Corp.
under the caption "Management" in the Prospectus and in the Statement of
Additional Information constituting Parts A and B, respectively, of this
Registration Statement are incorporated by reference herein.

The following are Directors and Officers of the Adviser including
their other business connections which are of a substantial nature.

POSITION WITH OTHER BUSINESS
NAME THE ADVISER CONNECTIONS
---- ------------- --------------
Carl B. Menges Chairman of the Board of Vice Chairman of Donaldson,
Directors Lufkin & Jenrette, Inc.;
President and Chairman of
Winthrop Focus Funds.

Martin Jaffe Managing Director, Chief President, International
Operating Officer and Association for Financial
Treasurer Planning, New York Chapter;
Vice President, Secretary
and Treasurer of Winthrop
Focus Funds; Vice President
of Donaldson Lufkin &
Jenrette Securities
Corporation.

G. Moffett President and Chief Director of Palmer National
Cochran Executive Officer Bank; Trustee of Winthrop
Focus Funds.

Guy S. Waltman Vice Chairman Chairman, Winthrop Trust
Company

Thomas E. Siegler Secretary ----

Item 29. PRINCIPAL UNDERWRITERS

(a) Donaldson, Lufkin & Jenrette Securities Corporation, the
Registrant's Distributor (Underwriter) also acts as Distributor
for the following investment companies:

None

C-4

<PAGE>

(b) The following are the Directors and Officers of Donaldson,
Lufkin & Jenrette Securities Corporation, none of whom hold any
post or office with the Registrant. Donaldson, Lufkin and
Jenrette

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
OFFICERS AND DIRECTORS
----------------------------------------------------

OFFICE
------

Richard S. Pechter Director, Managing Director (Chairman - DLJ
Financial Services Group) Chief Executive Officer

Theodore P. Shen Director, Managing Director (Chairman - DLJ
Capital Markets Group)

James L. Alexandre Senior Vice President (Managing Director -
Institutional Equities

Michael J. Campbell Senior Vice President (Managing Director -
Investment Services Group

Anthony R. Chidoni Senior Vice President (Managing Director -
Investment Services Group

Robert W. Diemer Senior Vice President (Chief Finacial Officer -
DLJFSG and Managing Director - Pershing)

Joseph D. Donnelly Senior Vice President and Associate General
Counsel (Managing Director/General Counsel -
Pershing)

C-5

<PAGE>

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
OFFICERS AND DIRECTORS
----------------------------------------------------

Frank L. Hohmann, III Senior Vice President (Managing Director - Equity
Derivatives
Division)

David S. Moore Senior Vice President (Managing Director -
Research Department)

Stuart M. Robbins Senior Vice President (Managing Director -
Instututional Equities Division)

C-6

<PAGE>

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
OFFICERS AND DIRECTORS
----------------------------------------------------

Item 30. LOCATION OF ACCOUNTS AND RECORDS

The majority of accounts, books and other documents required to
be maintained by Section 31(a) of the Investment Company Act of 1940 and
the rules thereunder are maintained at the offices of Wood, Struthers &
Winthrop Management Corp., 140 Broadway, New York, New York 10005 (see
"Investment Adviser" in the Prospectus). Additional records are maintained
at the offices of Citibank, N.A., the Registrant's Custodian, 111 Wall
Street, New York, New York 10043.

Item 31. MANAGEMENT SERVICES

Not Applicable

Item 32. UNDERTAKINGS

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered, a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

C-7

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment to
its Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York and the State of New York on the 29th day of December 1995.

Winthrop Focus Funds

By: Carl B. Menges*
---------------
Carl B. Menges
President

Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:

Signature Title Date
--------- ----- ----
Carl B. Menges* President and December 29, 1995
------------------ Chairman of the Board
Carl B. Menges

/s/ Martin Jaffe Treasurer December 29, 1995
------------------
Martin Jaffe

Robert L. Bast* Trustee December 29, 1995
------------------
Robert L. Bast

G. Moffet Cochran* Trustee December 29, 1995
------------------
G. Moffet Cochran

James Engle* Trustee December 29, 1995
------------------
James Engle

John J. Halsey* Trustee December 29, 1995
------------------
John J. Halsey

Stig Host* Trustee December 29, 1995
------------------
Stig Host

Peter F. Krogh* Trustee December 29, 1995
------------------
Peter F. Krogh
Trustee
------------------
Dennis Little

William H. Mathers* Trustee December 29, 1995
------------------
William H. Mathers

James L. McCabe* Trustee December 29, 1995
------------------
James L. McCabe

John J. Sheehan* Trustee December 29, 1995
------------------
John J. Sheehan

William C. Simpson* Trustee December 29, 1995
------------------
William C. Simpson

Stephen K. West* Trustee December 29, 1995
------------------
Stephen K. West

*By:
/s/ Martin Jaffe
----------------------------
Martin Jaffe
(Attorney-in-fact)
Pursuant to Power of Attorney attached hereto

C-8
<PAGE>

Exhibit Index
-------------

A complete list of exhibits is included in Part C, Item 24(b) of
the registration Statement. The following exhibits are filed herewith:

Page
----
(1) Amended and Restated Declaration of Trust
(6) Form of Distribution Agreement
(11) Consent of Independent Auditors
(15)(a) Form of Class A Rule 12b-1 Plan
(15)(b) Form of Class B Rule 12b-1 Plan
(16) Schedule for Computation of Performance Quotation
(18) Rule 18f-3 Plan

EXHIBIT (1)

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST

WINTHROP FOCUS FUNDS

THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST of
Winthrop Focus Funds made this _____ of _______, 1995 by the parties
signatory hereto, as trustees (such persons, so long as they shall continue
in office in accordance with the terms of this Declaration of Trust, and
all other persons who at the time in question have been duly elected or
appointed as trustees in accordance with the provisions of this Declaration
of Trust and are then in office, being hereinafter called the "Trustees")

W I T N E S S E T H T H A T:
------------------- -------

WHEREAS, the Trustees are authorized to employ any funds coming
into their hands or the hands of their successor or successors as such
Trustees, to carry on the business of an investment company, and as such of
buying, selling, investing in or otherwise dealing in and with stocks,
bonds, debentures, warrants, options, futures contracts and other
securities and interests therein, or calls or puts with respect to any of
the same, or such other and further investment media and other property as
the Trustees may deem advisable, which are not prohibited by law or the
terms of this Declaration; and

WHEREAS, the assets held by the Trustees are and may in the
future be divided into separate funds, each with its own separate
investment portfolio, investment objectives, policies and purposes, and
that the beneficial interest in each such fund shall be divided into
transferable Shares of Beneficial Interest, a separate Series of Shares for
each fund, all in accordance with the provisions hereinafter set forth; and

WHEREAS, it is desired that the trust established hereby (the
"Trust") be managed and operated as a trust with transferable shares under
-----
the laws of Massachusetts, of the type commonly known as and referred to as
a Massachusetts business trust, in accordance with the provisions herein-
after set forth;

NOW, THEREFORE, the Trustees hereby declare and agree for
themselves and for all Persons who shall hereafter become holders of Shares
of Beneficial Interest of the Trust, of any Series, that the Trustees will
hold cash,

<PAGE>

securities and other property of every type and description which they may
in any way acquire in their capacity as such Trustees, together with the
income therefrom and the proceeds thereof, IN TRUST NEVERTHELESS, to manage
and dispose of the same for the benefit of the holders from time to time of
the Shares of Beneficial Interest of the several Series being issued and to
be issued hereunder and in the manner and subject to the provisions hereof,
to wit:

ARTICLE I
---------

THE TRUST
---------

SECTION 1.1. Name. The name of the Trust shall be
----

"WINTHROP FOCUS FUNDS",
--------------------

and so far as may be practicable the Trustees shall conduct the Trust's
activities, execute all documents and sue or be sued under that name, which
name (and the word "Trust" wherever used in this Agreement and Declaration
-----
of Trust, except where the context otherwise requires) shall refer to the
Trustees in their capacity as Trustees, and not individually or personally,
and shall not refer to the officers, agents or employees of the Trust or of
such Trustees, or to the holders of the Shares of Beneficial Interest of
the Trust, of any Series. If the Trustees determine that the use of such
name is not practicable, legal or convenient at any time or in any
jurisdiction, or if the Trust is required to discontinue the use of such
name pursuant to Section 10.5 hereof, then subject to that Section, the
Trustees may use such other designation, or they may adopt such other name
for the Trust as they deem proper, and the Trust may hold property and
conduct its activities under such designation or name.

SECTION 1.2. Location. The Trust shall have an office in
--------
Boston, Massachusetts, unless changed by the Trustees to another location
in Massachusetts or elsewhere, but such office need not be the sole or
principal office of the Trust. The Trust may have such other offices or
places of business as the Trustees may from time to time determine to be
necessary or expedient.

SECTION 1.3. Nature of Trust. The Trust shall be a trust with
---------------
transferable shares under the laws of The Commonwealth of Massachusetts, of
the type referred to in Section 1 of Chapter 182 of the Massachusetts
General Laws and commonly termed a Massachusetts business trust. The

-2-

<PAGE>

Trust is not intended to be, shall not be deemed to be, and shall not be
treated as, a general partnership, limited partnership, joint venture,
corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in
that capacity in accordance with the rights conferred upon them hereunder.

SECTION 1.4. Definitions. As used in this Agreement and
-----------
Declaration of Trust, the following terms shall have the meanings set forth
below unless the context thereof otherwise requires:

"Accounting Agent" shall have the meaning designated in Section
----------------
5.2(g) hereof.

"Administrator" shall have the meaning designated in Section
-------------
5.2(b) hereof.

"Affiliated Person" shall have the meaning assigned to it in the
-----------------
1940 Act.

"By-Laws" shall mean the By-Laws of the Trust, as amended from
-------
time to time.

"Certificate of Designation" shall have the meaning designated in
--------------------------
Section 6.1 hereof.

"Certificate of Termination" shall have the meaning designated in
--------------------------
Section 6.1 hereof.

"Class" shall mean one of the classes of Shares authorized by the
-----
Trustees to represent the beneficial interest in any one of the Portfolios.

"Commission" shall have the same meaning as in the 1940 Act.
----------

"Contracting Party" shall have the meaning designated in the
-----------------
preamble to Section 5.2 hereof.

"Covered Person" shall have the meaning designated in Section 8.4
--------------
hereof.

"Custodian" shall have the meaning designated in Section 5.2(d)
---------
hereof.

"Declaration" and "Declaration of Trust" shall mean this
----------- --------------------
Agreement and Declaration of Trust and all amendments or modifications
thereof as from time to time in effect. References in this Agreement and
Declaration of

-3-

<PAGE>

Trust to "hereof", "herein" and "hereunder" shall be deemed to refer to the
------ ------ ---------
Declaration of Trust generally, and shall not be limited to the particular
text, Article or Section in which such words appear.

"Disabling Conduct" shall have the meaning designated in Section
-----------------
8.4 hereof.

"Distributor" shall have the meaning designated in Section 5.2(c)
-----------
hereof.

"Dividend Disbursing Agent" shall have the meaning designated in
-------------------------
Section 5.2(e) hereof.

"General Items" shall have the meaning defined in Section 6.2(a)
-------------
hereof.

"Investment Advisor" shall have the meaning stated in Section
------------------
5.2(a) hereof.

"Majority of the Trustees" shall mean a majority of the Trustees
------------------------
in office at the time in question. At any time at which there shall be
only one (1) Trustee in office, such term shall mean such Trustee.

"Majority Shareholder Vote," as used with respect to the election
-------------------------
of any Trustee at a meeting of Shareholders, shall mean the vote for the
election of such Trustee of a plurality of all outstanding Shares of the
Trust, without regard to Series or Class voted in person or by proxy and
entitled to vote thereon, provided that a quorum (as determined in
accordance with the By-Laws) is present, and as used with respect to any
other action required or permitted to be taken by Shareholders, shall mean
the vote for such action of the holders of that majority of all outstanding
Shares (or, where a separate vote of Shares of any particular Series or
Class is to be taken, the affirmative vote of that majority of the
outstanding Shares of that Series or Class, respectively) of the Trust
which consists of: (i) a majority of all Shares (or of Shares of the
particular Series or Class) represented in person or by proxy and entitled
to vote on such action at the meeting of Shareholders at which such action
is to be taken, provided that a quorum (as determined in accordance with
the By-Laws) is present; or (ii) if such action is to be taken by written
consent of Shareholders, a majority of all Shares (or of Shares of the
particular Series or Class) issued and outstanding and entitled to vote on
such action; provided, that (iii) as used with respect to any action
--------
requiring the affirmative vote of "a majority of the outstanding voting
securities", as the quoted phrase is defined in the 1940

-4-
<PAGE>

Act, of the Trust or of any Series or Class, "Majority Shareholder Vote"
-------------------------
means the vote for such action at a meeting of Shareholders of the smallest
majority of all outstanding Shares of the Trust (or of Shares of the
particular Series or Class) entitled to vote on such action which satisfies
such 1940 Act voting requirement.

"NASD" shall have the meaning designated in Section 6.1(e)(2)(a)
----
hereof.

"1940 Act" shall mean the provisions of the Investment Company
--------
Act of 1940 and the rules and regulations thereunder, both as amended from
time to time, and any order or orders thereunder which may from time to
time be applicable to the Trust.

"Person" shall mean and include individuals, as well as
------
corporations, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, banks, trust companies, land
trusts, business trusts or other organizations established under the laws
of any jurisdiction, whether or not considered to be legal entities, and
governments and agencies and political subdivisions thereof.

"Portfolio" or "Portfolios" shall mean one or more of the
--------- ----------
separate components of the assets of the Trust which are now or hereafter
established and designated under or in accordance with the provisions of
Article VI hereof.

"Portfolio Assets" shall have the meaning defined in Section
----------------
6.2(a) hereof.

"Principal Underwriter" shall have the meaning designated in
---------------------
Section 5.2(c) hereof.

"Prospectus," as used with respect to any Portfolio or Series of
----------
Shares, shall mean the prospectus relating to such Portfolio or Series
which constitutes part of the currently effective Registration Statement of
the Trust under the Securities Act of 1933, as such prospectus may be
amended or supplemented from time to time.

"Securities" shall mean any and all bills, notes, bonds,
----------
debentures or other obligations or evidences of indebtedness, certificates
of deposit, bankers' acceptances, commercial paper, repurchase agreements
or other money market instruments; stocks, shares or other equity ownership
interests; and warrants, options or other instruments representing rights
to subscribe for, purchase, receive or otherwise acquire or to sell,
transfer, assign or otherwise

-5-

<PAGE>

dispose of, and scrip, certificates, receipts or other instruments
evidencing any ownership rights or interests in, any of the foregoing and
"when issued" and "delayed delivery" contracts for securities, issued,
guaranteed or sponsored by any governments, political subdivisions or
governmental authorities, agencies or instrumentalities, by any
individuals, firms, companies, corporations, syndicates, associations or
trusts, or by any other organizations or entities whatsoever, irrespective
of their forms or the names by which they may be described, whether or not
they be organized and operated for profit, and whether they be domestic or
foreign with respect to The Commonwealth of Massachusetts or the United
States of America.

"Securities of the Trust" shall mean any Securities issued by the
-----------------------
Trust.

"Series" shall mean one or more of the series of Shares
------
authorized by the Trustees to represent the beneficial interest in one or
more of the Portfolios.

"Settlor" shall have the meaning stated in the first "Whereas"
-------
clause set forth above.

"Shareholder" shall mean as of any particular time any Person
-----------
shown of record at such time on the books of the Trust as a holder of
outstanding Shares of any Series, and shall include a pledgee into whose
name any such Shares are transferred in pledge.

"Shareholder Servicing Agent" shall have the meaning designated
---------------------------
in Section 5.2(f) hereof.

"Shares" shall mean the transferable units into which the
------
beneficial interest in the Trust and each Portfolio of the Trust (as the
context may require) shall be divided from time to time, and includes
fractions of Shares as well as whole Shares. All references herein to
"Shares" shall be deemed to be to Shares of any or all Series or of a
single Class of a Series or all Classes of a Series, as the context may
require.

"Single Class Voting," as used with respect to any matter to be
-------------------
acted upon at a meeting or by written consent of Shareholders, shall mean a
style of voting in which each holder of one or more Shares shall be
entitled to one vote on the matter in question for each Share standing in
his name on the records of the Trust, irrespective of Series, and all
outstanding Shares of all Series vote as a single class.

-6-

<PAGE>

"Statement of Additional Information," as used with respect to
-----------------------------------
any Portfolio or Series of Shares, shall mean the statement of additional
information relating to such Portfolio or Series, which constitutes part of
the currently effective Registration Statement of the Trust under the
Securities Act of 1933, as such statement of additional information may be
amended or supplemented from time to time.

"Transfer Agent" shall have the meaning defined in Section 5.2(e)
--------------
hereof.

"Trust" shall have the meaning stated in the fourth "Whereas"
-----
clause set forth above.

"Trust Property" shall mean, as of any particular time, any and
--------------
all property which shall have been transferred, conveyed or paid to the
Trust or the Trustees, and all interest, dividends, income, earnings,
profits and gains therefrom, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in whatever form
the same may be, and which at such time is owned or held by, or for the
account of, the Trust or the Trustees, without regard to the Portfolio to
which such property is allocated.

"Trustees" shall mean, collectively, all individuals who at the
--------
time in question have been duly elected or appointed as Trustees of the
Trust in accordance with the provisions hereof and who have qualified and
are then in office. At any time at which there shall be only one (1)
Trustee in office, such term shall mean such single Trustee.

SECTION 1.5. Real Property to be Converted into Personal
-------------------------------------------
Property. Notwithstanding any other provision hereof, any real property at
- --------
any time forming part of the Trust Property shall be held in trust for sale
and conversion into personal property at such time or times and in such
manner and upon such terms as the Trustees shall approve, but the Trustees
shall have power until the termination of this Trust to postpone such
conversion as long as they in their uncontrolled discretion shall think
fit, and for the purpose of determining the nature of the interest of the
Shareholders therein, all such real property shall at all times be
considered as personal property.

ARTICLE II
----------

-7-

<PAGE>

PURPOSE OF THE TRUST
--------------------

The purpose of the Trust shall be to engage in the business of being
an investment company, and as such of subscribing for, purchasing or
otherwise acquiring, holding for investment or trading in, borrowing,
lending and selling short, selling, assigning, negotiating or exchanging
and otherwise disposing of, and turning to account, realizing upon and
generally dealing in and with, in any manner, (a) Securities of all kinds,
(b) precious metals and other minerals, contracts to purchase and sell, and
other interests of every nature and kind in, such metals or minerals, and
(c) rare coins and other numismatic items, and all as the Trustees in their
discretion shall determine to be necessary, desirable or appropriate, and
to exercise and perform any and every act, thing or power necessary,
suitable or desirable for the accomplishment of such purpose, the
attainment of any of the objects or the furtherance of any of the powers
given hereby which are lawful purposes, objects or powers of a trust with
transferable shares of the type commonly termed a Massachusetts business
trust; and to do every other act or acts or thing or things incidental or
appurtenant to or growing out of or in connection with the aforesaid
objects, purposes or powers, or any of them, which a trust of the type
commonly termed a Massachusetts business trust is not now or hereafter
prohibited from doing, exercising or performing.

ARTICLE III
-----------

POWERS OF THE TRUSTEES
----------------------

SECTION 3.1. Powers in General. The Trustees shall have,
-----------------
without other or further authorization, full, entire, exclusive and
absolute power, control and authority over, and management of, the business
of the Trust and over the Trust Property, to the same extent as if the
Trustees were the sole owners of the business and property of the Trust in
their own right, and with such powers of delegation as may be permitted by
this Declaration, subject only to such limitations as may be expressly
imposed by this Declaration of Trust or by applicable law. The enumeration
of any specific power or authority herein shall not be construed as
limiting the aforesaid power or authority or any specific power or
authority. Without limiting the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the conduct
of the business and affairs of the Trust and may amend and repeal them to
the extent that such By-Laws do not reserve

-8-

<PAGE>

that right to the Shareholders; they may select, and from time to time
change, the fiscal year of the Trust; they may adopt and use a seal for the
Trust, provided, that unless otherwise required by the Trustees, it shall
--------
not be necessary to place the seal upon, and its absence shall not impair
the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust; they may from time to time in
accordance with the provisions of Section 6.1 hereof establish one or more
Portfolios to which they may allocate such of the Trust Property, subject
to such liabilities, as they shall deem appropriate, each such Portfolio to
be operated by the Trustees as a separate and distinct investment medium
and with separately defined investment objectives and policies and distinct
investment purposes, all as established by the Trustees, or from time to
time changed by them; they may as they consider appropriate elect and
remove officers and appoint and terminate agents and consultants and hire
and terminate employees, any one or more of the foregoing of whom may be a
Trustee; they may appoint from their own number, and terminate, any one or
more committees consisting of one or more Trustees, including without
implied limitation an Executive Committee, which may, when the Trustees are
not in session and subject to the 1940 Act, exercise some or all of the
power and authority of the Trustees as the Trustees may determine; in
accordance with Section 5.2 they may employ one or more Investment
Advisors, Administrators and Custodians and may authorize any Custodian to
employ subcustodians or agents and to deposit all or any part of such
assets in a system or systems for the central handling of Securities,
retain Transfer, Dividend Disbursing, Accounting or Shareholder Servicing
Agents or any of the foregoing, provide for the distribution of Shares by
the Trust through one or more Distributors, Principal Underwriters or
otherwise, set record dates or times for the determination of Shareholders
entitled to participate in, benefit from or act with respect to various
matters; and in general they may delegate to any officer of the Trust, to
any Committee of the Trustees and to any employee, Investment Advisor,
Administrator, Distributor, Custodian, Transfer Agent, Dividend Disbursing
Agent, or any other agent or consultant of the Trust, such authority,
powers, functions and duties as they consider desirable or appropriate for
the conduct of the business and affairs of the Trust, including without
implied limitation the power and authority to act in the name of the Trust
and of the Trustees, to sign documents and to act as attorney-in-fact for
the Trustees. Without limiting the foregoing and to the extent not
inconsistent with the 1940 Act or other applicable law, the Trustees shall
have power and authority:

-9-

<PAGE>

(a) Investments. To invest and reinvest cash and other
-----------
property; to buy, for cash or on margin, and otherwise acquire and
hold, Securities created or issued by any Persons, including
Securities maturing after the possible termination of the Trust; to
make payment therefor in any lawful manner in exchange for any of the
Trust Property; and to hold cash or other property uninvested without
in any event being bound or limited by any present or future law or
custom in regard to investments by trustees;

(b) Disposition of Assets. Upon such terms and conditions as
---------------------
they deem best, to lend, sell, exchange, mortgage, pledge,
hypothecate, grant security interests in, encumber, negotiate, convey,
transfer or otherwise dispose of, and to trade in, any and all of the
Trust Property, free and clear of all trusts, for cash or on terms,
with or without advertisement, and on such terms as to payment,
security or otherwise, all as they shall deem necessary or expedient;

(c) Ownership Powers. To vote or give assent, or exercise any
----------------
and all other rights, powers and privileges of ownership with respect
to, and to perform any and all duties and obligations as owners of,
any Securities or other property forming part of the Trust Property,
the same as any individual might do; to exercise powers and rights of
subscription or otherwise which in any manner arise out of ownership
of Securities, and to receive powers of attorney from, and to execute
and deliver proxies or powers of attorney to, such Person or Persons
as the Trustees shall deem proper, receiving from or granting to such
Person or Persons such power and discretion with relation to
Securities or other property of the Trust, all as the Trustees shall
deem proper;

(d) Form of Holding. To hold any Security or other property in
---------------
a form not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of the Trust,
or of the Portfolio to which such Securities or property belong, or in
the name of a Custodian, subcustodian or other nominee or nominees, or
otherwise, upon such terms, in such manner or with such powers, as the
Trustees may determine, and with or without indicating any trust or
the interest of the Trustees therein;

(e) Reorganization, etc. To consent to or participate in any
--------------------
plan for the reorganization,

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<PAGE>

consolidation or merger of any corporation or issuer, any Security of
which is or was held in the Trust or any Portfolio; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any Security forming part of the Trust Property;

(f) Voting Trusts, etc. To join with other holders of any
-------------------
Securities in acting through a committee, depository, voting trustee
or otherwise, and in that connection to deposit any Security with, or
transfer any Security to, any such committee, depository or trustee,
and to delegate to them such power and authority with relation to any
Security (whether or not so deposited or transferred) as the Trustees
shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depository or trustee
as the Trustees shall deem proper;

(g) Contracts, etc. To enter into, make and perform all such
---------------
obligations, contracts, agreements and undertakings of every kind and
description, with any Person or Persons, as the Trustees shall in
their discretion deem expedient in the conduct of the business of the
Trust, for such terms as they shall see fit, whether or not extending
beyond the term of office of the Trustees, or beyond the possible
expiration of the Trust; to amend, extend, release or cancel any such
obligations, contracts, agreements or understandings; and to execute,
acknowledge, deliver and record all written instruments which they may
deem necessary or expedient in the exercise of their powers;

(h) Guarantees etc. To endorse or guarantee the payment of any
---------------
notes or other obligations of any Person; to make contracts of
guaranty or suretyship, or otherwise assume liability for payment
thereof; and to mortgage and pledge the Trust Property or any part
thereof to secure any of or all such obligations;

(i) Partnerships, etc. To enter into joint ventures, general or
------------------
limited partnerships and any other combinations or associations;

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<PAGE>

(j) Insurance. To purchase and pay for entirely out of Trust
---------
Property such insurance as they may deem necessary or appropriate for
the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
consultants, Investment Advisors, managers, Administrators,
Distributors, Principal Underwriters, or other independent
contractors, or any thereof (or any Person connected therewith), of
the Trust, individually, against all claims and liabilities of every
nature arising by reason of holding, being or having held any such
office or position, or by reason of any action alleged to have been
taken or omitted by any such Person in any such capacity, including
any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify
such Person against such liability;

(k) Pensions, etc. To pay pensions for faithful service, as
--------------
deemed appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase, savings,
thrift and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the
Trust;

(l) Power of Collection and Litigation. To collect, sue for and
----------------------------------
receive all sums of money coming due to the Trust, to employ counsel,
and to commence, engage in, prosecute, intervene in, join, defend,
compound, compromise, adjust or abandon, in the name of the Trust, any
and all actions, suits, proceedings, disputes, claims, controversies,
demands or other litigation or legal proceedings relating to the
Trust, the business of the Trust, the Trust Property, or the Trustees,
officers, employees, agents and other independent contractors of the
Trust, in their capacity as such, at law or in equity, or before any
other bodies or tribunals, and to compromise, arbitrate or otherwise
adjust any dispute to which the Trust may be a party, whether or not
any suit is commenced or any claim shall have been made or asserted;

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<PAGE>

(m) Issuance and Repurchase of Shares. To issue, sell,
---------------------------------
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in Shares of any Series, and,
subject to Article VI hereof, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares of any
Series, any of the Portfolio Assets belonging to the Portfolio to
which such Series relates, whether constituting capital or surplus or
otherwise, to the full extent now or hereafter permitted by applicable
law; provided, that any Shares belonging to the Trust shall not be
--------
voted, directly or indirectly;

(n) Offices. To have one or more offices, and to carry on all
-------
or any of the operations and business of the Trust, in any of the
States, Districts or Territories of the United States, and in any and
all foreign countries, subject to the laws of such State, District,
Territory or country;

(o) Expenses. To incur and pay any and all such expenses and
--------
charges as they may deem advisable (including without limitation
appropriate fees to themselves as Trustees), and to pay all such sums
of money for which they may be held liable by way of damages, penalty,
fine or otherwise;

(p) Agents, etc. To retain and employ any and all such
------------
servants, agents, employees, attorneys, brokers, investment advisers,
accountants, architects, engineers, builders, escrow agents,
depositories, consultants, ancillary trustees, custodians, agents for
collection, insurers, banks and officers, as they think best for the
business of the Trust or any Portfolio, to supervise and direct the
acts of any of the same, and to fix and pay their compensation and
define their duties;

(q) Accounts. To determine, and from time to time change, the
--------
method or form in which the accounts of the Trust shall be kept;

(r) Valuation. Subject to the requirements of the 1940 Act, to
---------
determine from time to time the value of all or any part of the Trust
Property and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and from
time to time to revalue all or any part of the Trust Property in
accordance with such appraisals or other

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<PAGE>

information as is, in the Trustees' sole judgment, necessary and
satisfactory;

(s) Indemnification. In addition to the mandatory
---------------
indemnification provided for in Article VIII hereof and to the extent
permitted by law, to indemnify or enter into agreements with respect
to indemnification with any Person with whom this Trust has dealings,
including, without limitation, any independent contractor, to such
extent as the Trustees shall determine; and

(t) General. To do all such other acts and things and to
-------
conduct, operate, carry on and engage in such other lawful businesses
or business activities as they shall in their sole and absolute
discretion consider to be incidental to the business of the Trust or
any Portfolio as an investment company, and to exercise all powers
which they shall in their discretion consider necessary, useful or
appropriate to carry on the business of the Trust or any Portfolio, to
promote any of the purposes for which the Trust is formed, whether or
not such things are specifically mentioned herein, in order to protect
or promote the interests of the Trust or any Portfolio, or otherwise
to carry out the provisions of this Declaration.

SECTION 3.2. Borrowings; Financings; Issuance of Securities.
----------------------------------------------
The Trustees have power to borrow or in any other manner raise such sum or
sums of money, and to incur such other indebtedness for goods or services,
or for or in connection with the purchase or other acquisition of property,
as they shall deem advisable for the purposes of the Trust, in any manner
and on any terms, and to evidence the same by negotiable or non-negotiable
Securities which may mature at any time or times, even beyond the possible
date of termination of the Trust; to issue Securities of any type for such
cash, property, services or other considerations, and at such time or times
and upon such terms, as they may deem advisable; and to reacquire any such
Securities. Any such Securities of the Trust may, at the discretion of the
Trustees, be made convertible into Shares of any Series, or may evidence
the right to purchase, subscribe for or otherwise acquire Shares of any
Series, at such times and on such terms as the Trustees may prescribe.

SECTION 3.3. Deposits. Subject to the requirements of the 1940
--------
Act, the Trustees shall have power to deposit any moneys or Securities
included in the Trust Property with any one or more banks, trust companies
or other banking institutions, whether or not such deposits

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<PAGE>

will draw interest. Such deposits are to be subject to withdrawal in such
manner as the Trustees may determine, and the Trustees shall have no
responsibility for any loss which may occur by reason of the failure of the
bank, trust company or other banking institution with which any such moneys
or Securities have been deposited, other than liability based on their
gross negligence or willful fault.

SECTION 3.4. Allocations. The Trustees shall have power to
-----------
determine whether moneys or other assets received by the Trust shall be
charged or credited to income or capital, or allocated between income and
capital, including the power to amortize or fail to amortize any part or
all of any premium or discount, to treat any part or all of the profit
resulting from the maturity or sale of any asset, whether purchased at a
premium or at a discount, as income or capital, or to apportion the same
between income and capital, to apportion the sale price of any asset
between income and capital, and to determine in what manner any expenses or
disbursements are to be borne as between income and capital, whether or not
in the absence of the power and authority conferred by this Section 3.4
such assets would be regarded as income or as capital or such expense or
disbursement would be charged to income or to capital; to treat any
dividend or other distribution on any investment as income or capital, or
to apportion the same between income and capital; to provide or fail to
provide reserves, including reserves for depreciation, amortization or
obsolescence in respect of any Trust Property in such amounts and by such
methods as they shall determine; to allocate less than all consideration
paid for Shares of any Series to the shares of beneficial interest account
of the Portfolio to which such Shares relate and to allocate the balance
thereof to paid-in capital of that Portfolio, and to reallocate such
amounts from time to time; all as the Trustees may reasonably deem proper.

SECTION 3.5. Further Powers; Limitations. The Trustees shall
---------------------------
have power to do all such other matters and things, and execute all such
instruments, as they deem necessary, proper or desirable in order to carry
out, promote or advance the interests of the Trust, although such matters
or things are not herein specifically mentioned. Any determination as to
what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this Declaration of
Trust, the presumption shall be in favor of a grant of power to the
Trustees. The Trustees shall not be required to obtain any court order to
deal with the Trust Property. The Trustees may limit their right to
exercise any of their powers through express restrictive provisions

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<PAGE>

in the instruments evidencing or providing the terms for any Securities of
the Trust or in other contractual instruments adopted on behalf of the
Trust.

ARTICLE IV
----------

TRUSTEES AND OFFICERS
---------------------

SECTION 4.1. Number, Designation, Election, Term, etc.
-----------------------------------------

(a) Number. The Trustees serving as such may increase (to not
------
more than twenty (20)) or decrease the number of Trustees to a number
other than the number theretofore determined by a written instrument
signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees). No decrease in
the number of Trustees shall have the effect of removing any Trustee
from office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a Trustee
pursuant to subsection (e) of this Section 4.1.

(b) Election and Term. The Trustees shall be elected by the
-----------------
Shareholders of the Trust at the first meeting of Shareholders
immediately prior to the initial public offering of Shares of the
Trust, and the term of office of any Trustees in office before such
election shall terminate at the time of such election. Subject to
Section 16(a) of the 1940 Act and to the preceding sentence of this
subsection (c), the Trustees shall have the power to set and alter the
terms of office of the Trustees, and at any time to lengthen or
shorten their own terms or make their terms of unlimited duration, to
elect their own successors and, pursuant to subsection (f) of this
Section 4.1, to appoint Trustees to fill vacancies; provided, that
--------
Trustees shall be elected by a Majority Shareholder Vote at any such
time or times as the Trustees shall determine that such action is
required under Section 16(a) of the 1940 Act or, if not so required,
that such action is advisable; and further provided, that, after the
------- --------
initial election of Trustees by the Shareholders, the term of office
of any incumbent Trustee shall continue until the termination of this
Trust or his earlier death, resignation, retirement, bankruptcy,
adjudicated incompetency or other incapacity or removal, or if not so
terminated, until the election of

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<PAGE>

such Trustee's successor in office has become effective in accordance
with this subsection (c).

(c) Resignation and Retirement. Any Trustee may resign his
--------------------------
trust or retire as a Trustee, by a written instrument signed by him
and delivered to the other Trustees or to any officer of the Trust,
and such resignation or retirement shall take effect upon such
delivery or upon such later date as is specified in such instrument.

(d) Removal. Any Trustee may be removed with or without cause
-------
at any time: (i) by written instrument, signed by at least two-thirds
(2/3) of the number of Trustees prior to such removal, specifying the
date upon which such removal shall become effective; or (ii) by vote
of Shareholders holding not less than two-thirds (2/3) of the Shares
of each Series then outstanding, cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration
signed by Shareholders holding not less than two-thirds (2/3) of the
Shares of each Series then outstanding and filed with the Trust's
Custodian.

(e) Vacancies. Any vacancy or anticipated vacancy resulting
---------
from any reason, including an increase in the number of Trustees, may
(but need not unless required by the 1940 Act) be filled by a Majority
of the Trustees, subject to the provisions of Section 16(a) of the
1940 Act, through the appointment in writing of such other individual
as such remaining Trustees in their discretion shall determine;
provided, that if there shall be no Trustees in office, such vacancy
--------
or vacancies shall be filled by vote of the Shareholders. Any such
appointment or election shall be effective upon such individual's
written acceptance of his appointment as a Trustee and his agreement
to be bound by the provisions of this Declaration of Trust, except
that any such appointment in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in the number of
Trustees to be effective at a later date shall become effective only
at or after the effective date of said retirement, resignation or
increase in the number of Trustees.

(f) Acceptance of Trusts. Any individual appointed as a Trustee
--------------------
under subsection (f), and any individual elected as a Trustee under
subsection (c), of this Section 4.1 who was not, immediately prior to
such election, acting as a Trustee, shall accept such appointment or
election in writing and agree in such

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<PAGE>

writing to be bound by the provisions hereof, and whenever such
individual shall have executed such writing and any conditions to such
appointment or election shall have been satisfied, such individual
shall become a Trustee and the Trust Property shall vest in the new
Trustee, together with the continuing Trustees, without any further
act or conveyance.

(g) Effect of Death, Resignation, etc. No vacancy, whether
----------------------------------
resulting from the death, resignation, retirement, removal or
incapacity of any Trustee, an increase in the number of Trustees or
otherwise, shall operate to annul or terminate the Trust hereunder or
to revoke or terminate any existing agency or contract created or
entered into pursuant to the terms of this Declaration of Trust.
Until such vacancy is filled as provided in this Section 4.1, the
Trustees in office (if any), regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by this Declaration. A written
instrument certifying the existence of such vacancy signed by a
Majority of the Trustees shall be conclusive evidence of the existence
of such vacancy.

(h) Conveyance. In the event of the resignation or removal of a
----------
Trustee or his otherwise ceasing to be a Trustee, such former Trustee
or his legal representative shall, upon request of the continuing
Trustees, execute and deliver such documents as may be required for
the purpose of consummating or evidencing the conveyance to the Trust
or the remaining Trustees of any Trust Property held in such former
Trustee's name, but the execution and delivery of such documents shall
not be requisite to the vesting of title to the Trust Property in the
remaining Trustees, as provided in subsection (g) of this Section 4.1
and in Section 4.13 hereof.

(i) No Accounting. Except to the extent required by the 1940
-------------
Act or under circumstances which would justify his removal for cause,
no Person ceasing to be a Trustee (nor the estate of any such Person)
shall be required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.

(j) Filings. Whenever there shall be a change in the
-------
composition of the Trustees, the Trust shall cause to be filed in the
office of the Secretary of The Commonwealth of Massachusetts and in
each other place where the Trust is required to file amendments to
this

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<PAGE>

Declaration a copy of (i) the instrument by which (in the case of the
appointment of a new Trustee, or the election of an individual who was
not theretofore a Trustee) the new Trustee accepted his appointment or
election and agreed to be bound by the terms of this Declaration, or
(in the case of a resignation) by which the former Trustee resigned as
such, together in either case with a certificate of one of the other
Trustees as to the circumstances of such election, appointment or
resignation, or (ii) in the case of the removal or death of a Trustee,
a certificate of one of the Trustees as to the circumstances of such
removal or resignation.

SECTION 4.2. Trustees' Meetings; Participation by Telephone,
-----------------------------------------------
etc. An annual meeting of Trustees shall be held not later than the last
- ----
day of the fourth month after the end of each fiscal year of the Trust and
special meetings may be held from time to time, in each case, upon the call
of such officers as may be thereunto authorized by the By-Laws or vote of
the Trustees, or by any two (2) Trustees, or pursuant to a vote of the
Trustees adopted at a duly constituted meeting of the Trustees, and upon
such notice as shall be provided in the By-Laws. The Trustees may act with
or without a meeting, and a written consent to any matter, signed by a
Majority of the Trustees, shall be equivalent to action duly taken at a
meeting of the Trustees, duly called and held. Except as otherwise
provided by the 1940 Act or other applicable law, or by this Declaration of
Trust or the By-Laws, any action to be taken by the Trustees may be taken
by a majority of the Trustees present at a meeting of Trustees (a quorum,
consisting of at least a Majority of the Trustees, being present), within
or without Massachusetts. If authorized by the By-Laws, all or any one or
more Trustees may participate in a meeting of the Trustees or any Committee
thereof by means of conference telephone or similar means of communication
by means of which all Persons participating in the meeting can hear each
other, and participation in a meeting pursuant to such means of
communication shall constitute presence in person at such meeting. The
minutes of any meeting thus held shall be prepared in the same manner as a
meeting at which all participants were present in person.

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<PAGE>

SECTION 4.3. Committees; Delegation. The Trustees shall have
----------------------
power, consistent with their ultimate responsibility to supervise the
affairs of the Trust, to delegate from time to time to an Executive
Committee, and to one or more other Committees, or to any single Trustee,
the doing of such things and the execution of such deeds or other
instruments, either in the name of the Trust or the names of the Trustees
or as their attorney or attorneys in fact, or otherwise as the Trustees may
from time to time deem expedient, and any agreement, deed, mortgage, lease
or other instrument or writing executed by the Trustee or Trustees or other
Person to whom such delegation was made shall be valid and binding upon the
Trustees and upon the Trust.

SECTION 4.4. Officers. The Trustees shall annually elect such
--------
officers or agents, who shall have such powers, duties and responsibilities
as the Trustees may deem to be advisable, and as they shall specify by
resolution or in the By-Laws. Except as may be provided in the By-Laws,
any officer elected by the Trustees may be removed at any time with or
without cause. Any two (2) or more offices may be held by the same
individual.

SECTION 4.5. Compensation of Trustees and Officers. The
-------------------------------------
Trustees shall fix the compensation of all officers and Trustees. Without
limiting the generality of any of the provisions hereof, the Trustees shall
be entitled to receive reasonable compensation for their general services
as such, and to fix the amount of such compensation, and to pay themselves
or any one or more of themselves such compensation for special services,
including legal, accounting, or other professional services, as they in
good faith may deem reasonable. No Trustee or officer resigning and
(except where a right to receive compensation for a definite future period
shall be expressly provided in a written agreement with the Trust, duly
approved by the Trustees) no Trustee or officer removed shall have any
right to any compensation as such Trustee or officer for any period
following his resignation or removal, or any right to damages on account of
his removal, whether his compensation be by the month, by the year or
otherwise.

SECTION 4.6. Ownership of Shares and Securities of the Trust.
-----------------------------------------------
Any Trustee, and any officer, employee or agent of the Trust, and any
organization in which any such Person is interested, may acquire, own, hold
and dispose of Shares of any Series and other Securities of the Trust for
his or its individual account, and may exercise all rights of a holder of
such Shares or Securities to the same extent and in the same manner as if
such Person were not such a

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<PAGE>

Trustee, officer, employee or agent of the Trust; subject, in the case of
Trustees and officers, to the same limitations as directors or officers (as
the case may be) of a Massachusetts business corporation; and the Trust may
issue and sell or cause to be issued and sold and may purchase any such
Shares or other Securities from any such Person or any such organization,
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares of such Series or other
Securities of the Trust generally.

SECTION 4.7. Right of Trustees and Officers to Own Property or
-------------------------------------------------
to Engage in Business; Authority of Trustee to Permit Others to Do
- ------------------------------------------------------------------
Likewise. The Trustees, in their capacity as Trustees, and (unless
- --------
otherwise specifically directed by vote of the Trustees) the officers of
the Trust in their capacity as such, shall not be required to devote their
entire time to the business and affairs of the Trust. Except as otherwise
specifically provided by vote of the Trustees, or by agreement in any
particular case, any Trustee or officer of the Trust may acquire, own, hold
and dispose of, for his own individual account, any property, and acquire,
own, hold, carry on and dispose of, for his own individual account, any
business entity or business activity, whether similar or dissimilar to any
property or business entity or business activity invested in or carried on
by the Trust, and without first offering the same as an investment
opportunity to the Trust, and may exercise all rights in respect thereof as
if he were not a Trustee or officer of the Trust. The Trustees shall also
have power, generally or in specific cases, to permit employees or agents
of the Trust to have the same rights (or lesser rights) to acquire, hold,
own and dispose of property and businesses, to carry on businesses, and to
accept investment opportunities without offering them to the Trust, as the
Trustees have by virtue of this Section 4.7.

SECTION 4.8. Reliance on Experts. The Trustees and officers may
-------------------
consult with counsel, engineers, brokers, appraisers, auctioneers,
accountants, investment bankers, securities analysts or other Persons (any
of which may be a firm in which one or more of the Trustees or officers is
or are members or otherwise interested) whose profession gives authority to
a statement made by them on the subject in question, and who are reasonably
deemed by the Trustees or officers in question to be competent, and the
advice or opinion of such Persons shall be full and complete personal
protection to all of the Trustees and officers in respect of any action
taken or suffered by them in good faith and in reliance on or in accordance
with such advice or opinion. In discharging their duties, Trustees and
officers, when

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<PAGE>

acting in good faith, may rely upon financial statements of the Trust
represented to them to be correct by any officer of the Trust having charge
of its books of account, or stated in a written report by an independent
certified public accountant fairly to present the financial position of the
Trust. The Trustees and officers may rely, and shall be personally
protected in acting, upon any instrument or other document believed by them
to be genuine.

SECTION 4.9. Surety Bonds. No Trustee, officer, employee or
------------
agent of the Trust shall, as such, be obligated to give any bond or surety
or other security for the performance of any of his duties, unless required
by applicable law or regulation, or unless the Trustees shall otherwise
determine in any particular case.

SECTION 4.10. Apparent Authority of Trustees and Officers. No
-------------------------------------------
purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer of the Trust shall be bound to make any inquiry concerning
the validity of any transaction purporting to be made by the Trustees or by
such officer, or to make inquiry concerning or be liable for the
application of money or property paid, loaned or delivered to or on the
order of the Trustees or of such officer.

SECTION 4.11. Other Relationships Not Prohibited. The fact
----------------------------------
that:

(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party (as defined in Section 5.2 hereof), or of or
for any parent or affiliate of any Contracting Party, or that the
Contracting Party or any parent or affiliate thereof is a Shareholder
or has an interest in the Trust or any Portfolio, or that

(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests, shall not affect
the validity of any contract for the performance and assumption of
services, duties and responsibilities to, for or of the Trust and/or
the Trustees or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability
or accountability to the Trust or to the holders of Shares of any
Series;

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<PAGE>

provided, that, in the case of any relationship or interest referred
--------
to in the preceding clause (i) on the part of any Trustee or officer
of the Trust, either (x) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not
having any such relationship or interest and the contract involved is
approved in good faith by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or
disinterested Trustees are less than a quorum of all of the Trustees),
(y) the material facts as to such relationship or interest and as to
the contract have been disclosed to or are known by the Shareholders
entitled to vote thereon and the contract involved is specifically
approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is
authorized, approved or ratified by the Trustees or by the
Shareholders.

SECTION 4.12. Payment of Trust Expenses. The Trustees are
-------------------------
authorized to pay or to cause to be paid out of the principal or income of
the Trust, or partly out of principal and partly out of income, and
according to any allocation to particular Portfolios made by them pursuant
to Section 6.2(b) hereof, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the business and affairs
of the Trust or in connection with the management thereof, including, but
not limited to, the Trustees' compensation and such expenses and charges
for the services of the Trust's officers, employees, Investment Advisor,
Administrator, Distributor, Principal Underwriter, auditor, counsel,
Custodian, Transfer Agent, Dividend Disbursing Agent, Accounting Agent,
Shareholder Servicing Agent, and such other agents, consultants, and
independent contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur.

SECTION 4.13. Ownership of the Trust Property. Legal title to
-------------------------------
all the Trust Property shall be vested in the Trustees as joint tenants,
except that the Trustees shall have power to cause legal title to any Trust
Property to be held by or in the name of one or more of the Trustees, or in
the name of the Trust, or of any particular Portfolio, or in the name of
any other Person as nominee, on such terms as the Trustees may determine;
provided, that the interest of the Trust and of the respective Portfolio
- --------
therein is appropriately protected. The right, title and interest of the
Trustees in the Trust Property shall vest automatically in each Person who
may hereafter become a Trustee. Upon the termination of the term of office
of a Trustee as provided

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<PAGE>

in Section 4.1(c), (d) or (e) hereof, such Trustee shall automatically
cease to have any right, title or interest in any of the Trust Property,
and the right, title and interest of such Trustee in the Trust Property
shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to Section 4.1(i) hereof.

ARTICLE V
---------

DELEGATION OF MANAGERIAL RESPONSIBILITIES
-----------------------------------------

SECTION 5.1. Appointment; Action by Less than All Trustees. The
---------------------------------------------
Trustees shall be responsible for the general operating policy of the Trust
and for the general supervision of the business of the Trust conducted by
officers, agents, employees or advisers of the Trust or by independent
contractors, but the Trustees shall not be required personally to conduct
all the business of the Trust and, consistent with their ultimate
responsibility as stated herein, the Trustees may appoint, employ or
contract with one or more officers, employees and agents to conduct, manage
and/or supervise the operations of the Trust, and may grant or delegate
such authority to such officers, employees and/or agents as the Trustees
may, in their sole discretion, deem to be necessary or desirable, without
regard to whether such authority is normally granted or delegated by
trustees. With respect to those matters of the operation and business of
the Trust which they shall elect to conduct themselves, except as otherwise
provided by this Declaration or the By-Laws, if any, the Trustees may
authorize any single Trustee or defined group of Trustees, or any committee
consisting of a number of Trustees less than the whole number of Trustees
then in office without specification of the particular Trustees required to
be included therein, to act for and to bind the Trust, to the same extent
as the whole number of Trustees could do, either with respect to one or
more particular matters or classes of matters, or generally.

SECTION 5.2. Certain Contracts. Subject to compliance with the
-----------------
provisions of the 1940 Act, but notwithstanding any limitations of present
and future law or custom in regard to delegation of powers by trustees
generally, the Trustees may, at any time and from time to time in their
discretion and without limiting the generality of their powers and
authority otherwise set forth herein, enter into one or more contracts with
any one or more corporations, trusts, associations, partnerships, limited
partnerships or other types of organizations, or individuals

-24-

<PAGE>

("Contracting Party"), to provide for the performance and assumption of
-----------------
some or all of the following services, duties and responsibilities to, for
or on behalf of the Trust and/or any Portfolio, and/or the Trustees, and to
provide for the performance and assumption of such other services, duties
and responsibilities in addition to those set forth below, as the Trustees
may deem appropriate:

(a) Advisory. An investment advisory or management agreement
--------
whereby an advisor (any such advisor being referred herein as an
"Investment Advisor") shall undertake to furnish the Trust such
------------------
management, investment advisory or supervisory, administrative,
accounting, legal, statistical and research facilities and services,
and such other facilities and services, if any, as the Trustees shall
from time to time consider desirable, all upon such terms and
conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the
1940 Act or any applicable provisions of the By-Laws. Any such
advisory or management agreement and any amendment thereto shall be
subject to approval by a Majority Shareholder Vote at a meeting of the
Shareholders of the Trust. Notwithstanding any provisions of this
Declaration, the Trustees may authorize the Investment Advisor
(subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or
exchanges of portfolio securities of the Trust on behalf of the
Trustees or may authorize any officer or employee of the Trust or any
Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of the Investment Advisor (and all without further
action by the Trustees). Any such purchases, sales, loans and
exchanges shall be deemed to have been authorized by all of the
Trustees. The Trustees may, in their sole discretion, call a meeting
of Shareholders in order to submit to a vote of Shareholders at such
meeting the approval of continuance of any such investment advisory or
management agreement. If the Shareholders of any Portfolio should
fail to approve any such investment advisory or management agreement,
the Investment Advisor may nonetheless serve as Investment Advisor
with respect to any other Portfolio whose Shareholders shall have
approved such contract.

-25-

<PAGE>

(b) Administration. An agreement whereby the agent, subject to
--------------
the general supervision of the Trustees and in conformity with any
policies of the Trustees with respect to the operations of the Trust
and each Portfolio, will supervise all or any part of the operations
of the Trust and each Portfolio, and will provide all or any part of
the administrative and clerical personnel, office space and office
equipment and services appropriate for the efficient administration
and operations of the Trust and each Portfolio (any such agent being
herein referred to as an "Administrator").
-------------

(c) Distribution. An agreement providing for the sale of Shares
------------
of any one or more Series to net the Trust not less than the net asset
value per Share (as described in Section 6.2(h) hereof) and pursuant
to which the Trust may appoint the other party to such agreement as
its principal underwriter or sales agent for the distribution of such
Shares. The agreement shall contain such terms and conditions as the
Trustees may in their discretion determine to be not inconsistent with
this Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws (any such agent being herein
referred to as a "Distributor" or a "Principal Underwriter", as the
----------- ---------------------
case may be).

(d) Custodian. The appointment of a bank or trust company
---------
having an aggregate capital, surplus and undivided profits (as shown
in its last published report) of at least two million dollars
($2,000,000) as custodian of the Securities and cash of the Trust and
of each Portfolio and of the accounting records in connection
therewith (any such agent being herein referred to as a "Custodian").
---------

(e) Transfer and Dividend Disbursing Agency. An agreement with
---------------------------------------
an agent to maintain records of the ownership of outstanding Shares,
the issuance and redemption and the transfer thereof (any such agent
being herein referred to as a "Transfer Agent"), and to disburse any
--------------
dividends declared by the Trustees and in accordance with the policies
of the Trustees and/or the instructions of any particular Shareholder
to reinvest any such dividends (any such agent being herein referred
to as a "Dividend Disbursing Agent").
-------------------------

-26-

<PAGE>

(f) Shareholder Servicing. An agreement with an agent to
---------------------
provide service with respect to the relationship of the Trust and its
Shareholders, records with respect to Shareholders and their Shares,
and similar matters (any such agent being herein referred to as a
"Shareholder Servicing Agent").
---------------------------

(g) Accounting. An agreement with an agent to handle all or any
----------
part of the accounting responsibilities, whether with respect to the
Trust's properties, Shareholders or otherwise (any such agent being
herein referred to as an "Accounting Agent").
----------------

The same Person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust and/or the
Trustees, and the contracts with respect thereto may contain such terms
interpretive of or in addition to the delineation of the services, duties
and responsibilities provided for, including provisions that are not
inconsistent with the 1940 Act relating to the standard of duty of and the
rights to indemnification of the Contracting Party and others, as the
Trustees may determine. Nothing herein shall preclude, prevent or limit
the Trust or a Contracting Party from entering into sub-contractual
arrangements relative to any of the matters referred to in subsections (a)
through (g) of this Section 5.2.

ARTICLE VI
----------

PORTFOLIOS AND SHARES
---------------------

SECTION 6.1. Description of Portfolios and Shares.
------------------------------------

(a) Shares; Portfolios; Series of Shares. The beneficial
------------------------------------
interest in the Trust shall be divided into Shares having a nominal or
par value of one cent ($.01) per Share, of which an unlimited number
may be issued. The Trustees shall have the authority from time to
time to establish and designate one or more separate, distinct and
independent Portfolios into which the assets of the Trust shall be
divided, and to authorize a separate Series of Shares for each such
Portfolio (each of which Series, including without limitation each
Series authorized in Section 6.2 hereof, shall represent interests
only in the Portfolio with respect to which such Series was
authorized), as they deem necessary or desirable. Except as otherwise
provided as to a particular Portfolio herein, or in the Certificate of
Designation therefor, the Trustees shall

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<PAGE>

have all the rights and powers, and be subject to all the duties and
obligations, with respect to each such Portfolio and the assets and
affairs thereof as they have under this Declaration with respect to
the Trust and the Trust Property in general.

(b) Establishment, etc. of Portfolios; Authorization of Shares.
----------------------------------------------------------
The establishment and designation of any Portfolio in addition to the
Portfolios established and designated in Section 6.2 hereof and the
authorization of the Shares thereof shall be effective upon the
execution by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees) of an instrument
setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Portfolio and the manner
in which the same may be amended (a "Certificate of Designation"), and
--------------------------
may provide that the number of Shares or Classes of Shares of such
Series which may be issued is unlimited, or may limit the number
issuable. At any time that there are no Shares outstanding of any
particular Portfolio previously established and designated, including
any Portfolio established and designated in Section 6.2 hereof, the
Trustees may by an instrument executed by a Majority of the Trustees
(or by an officer of the Trust pursuant to the vote of a Majority of
the Trustees) terminate such Portfolio and the establishment and
designation thereof and the authorization of its Shares (a
"Certificate of Termination"). Each Certificate of Designation,
--------------------------
Certificate of Termination and any instrument amending a Certificate
of Designation shall have the status of an amendment to this
Declaration of Trust, and shall be filed and become effective as pro-
vided in Section 9.4 hereof.

(c) Character of Separate Portfolios and Shares Thereof. Each
---------------------------------------------------
Portfolio established hereunder shall be a separate component of the
assets of the Trust, and the holders of Shares of the Series
representing the beneficial interest in the assets of that Portfolio
shall be considered Shareholders of such Portfolio, but such
Shareholders shall also be considered Shareholders of the Trust for
purposes of receiving reports and notices and, except as otherwise
provided herein or in the Certificate of Designation of a particular
Portfolio as to such Portfolio, or as required by the 1940 Act or
other applicable law, the right to vote, all without distinction by
Series. The Trustees shall have exclusive power without the
requirement of Shareholder approval to establish and designate such

-28-

<PAGE>

separate and distinct Portfolios, and to fix and determine the
relative rights and preferences as between the shares of the
respective Portfolios as to rights of redemption and the price, terms
and manner of redemption, special and relative rights as to dividends
and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the
Shareholders of the several Portfolios shall have separate voting
rights or no voting rights.

(d) Establishment of Classes. The Trustees, in their discretion
------------------------
without a vote of the Shareholders, may divide the Shares of any
Series into Classes. In such event, each Class of a Series shall
represent interests in the assets of that Portfolio and, as described
in Section 6.2, have identical voting, dividend, liquidation and other
rights and the same terms and conditions except that expenses related
directly or indirectly to the distribution, transfer agency,
shareholder servicing or other appropriate expenses of the Shares of a
Class of a Series may be borne solely by such Class (as shall be
determined by the Trustees) and, as provided in Section 6.1(f), a
Class of a Series may have exclusive voting rights with respect to
matters relating to the expenses being borne solely by such Class.
The bearing of such expenses solely by a Class of Shares shall be
appropriately reflected (in the manner determined by the Trustees) in
the net asset value, dividend and liquidation rights of the Shares of
such Class.

(e) Consideration for Shares. The Trustees may issue Shares of
------------------------
any Series or Classes of Shares of any Series for such consideration
(which may include property subject to, or acquired in connection with
the assumption of, liabilities) and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or
split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be
fully paid and non-assessable (but may be subject to mandatory
contribution back to the Trust as provided in Section 6.2(h) hereof).
The Trustees may classify or reclassify any unissued Shares, or any
Shares of any Series or any Class of any Series previously issued and
reacquired by the Trust, into Shares of one or more other Portfolios
that may be established and designated from time to time.

-29-

<PAGE>

(f) The terms of each Series existing as of the date of this
Amended and Restated Declaration of Trust as further set by the
Trustees are as follows:

(1) As of the date hereof, the shares of beneficial interest
of the Shares of each Series shall have three Classes of shares,
which shall be designated Class A, Class B and Class O.

(2) Each Class of each Series shall represent the same
beneficial interest in the assets of that Portfolio and have
identical voting, dividend, liquidation, and other rights;
provided, however, that notwithstanding anything in this
Declaration to the contrary:

(a) Class A Shares may be subject to (i) such front-end
sales loads as may be established by the Trustees from time
to time and (ii) a Plan of Distribution under Rule 12b-1 of
the 1940 Act, in each case in accordance with the 1940 Act
and applicable rules and regulations of the National
Association of Securities Dealers, Inc. (the "NASD").
----

(b) Class B Shares may be subject to (i) such
contingent deferred sales charge as may be established from
time to time by the Trustees and (ii) a plan of distribution
under Rule 12b-1 of the 1940 Act, each in accordance with
the 1940 Act and applicable rules and regulations of the
NASD.

(c) Class O Shares shall consist of all outstanding
shares of a Series outstanding on the date of this Amended
and Restated Agreement and Declaration of Trust.

(3) Expenses related solely to a particular class (including
without limitation, distribution expenses under a Rule 12b-1 plan
and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which
may differ between the Classes) shall be borne by the Class and
shall be appropriately reflected (in the manner determined by the
Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that Class.

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<PAGE>

(4) At such time as shall be permitted under the 1940 Act,
any applicable rules and regulations thereunder and the
provisions of any exemptive order applicable to the Trust, and as
may be determined by the Trustees and disclosed in the then
current prospectus for a Series, shares of a particular Class of
a Series may be automatically converted into shares of another
Class of a Series; provided, however, that such conversion shall
be subject to the continuing availability of an opinion of
counsel to the effect that such conversion does not constitute a
taxable event under federal income tax law. The Trustees, in
their sole discretion, may suspend any conversion rights if such
opinion is no longer available.

(5) As to any matter with respect to which a separate vote
of any Class of a Series is required by the 1940 Act or by
Massachusetts law (including, without limitation, approval of any
plan, agreement or other arrangement referred to in subsection
(3) above), such requirement as to a separate vote by that Class
of a Series shall apply, and, if permitted by the 1940 Act or any
rules, regulations or orders thereunder and Massachusetts law,
the Classes shall vote together as a single Class on any such
matter that shall have the same effect on each such Class. As to
any matter that does not affect the interest of a particular
Class, only the holders of shares of the affected Class shall be
entitled to vote.

SECTION 6.2. Establishment and Designation of Certain
----------------------------------------
Portfolios; General Provisions for All Portfolios. Without limiting the
- -------------------------------------------------
authority of the Trustees set forth in Section 6.1(a) hereof to establish
and designate further Portfolios, there are hereby established and
designated the following Portfolios: the Growth Fund, the Money Market
Portfolio, Aggressive Growth Fund, Growth and Income Fund, Fixed Income
Fund, and the Municipal Trust Fund. The Shares of such Portfolios, and the
Shares of any further Portfolios that may from time to time be established
and designated by the Trustees shall (unless the Trustees otherwise
determine with respect to some further Portfolio at the time of
establishing and designating the same) have the following relative rights
and preferences:

(a) Assets Belonging to Portfolios. Any portion of the Trust
------------------------------
Property allocated to a particular Portfolio, and all consideration
received by the Trust for the issue or sale of Shares of such
Portfolio,

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<PAGE>

together with all assets in which such consideration is invested or
reinvested, all interest, dividends, income, earnings, profits and
gains therefrom, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Portfolio and shall
irrevocably belong to that Portfolio for all purposes, and shall be so
recorded upon the books of account of the Trust, and the Shareholders
of such Portfolio shall not have, and shall be conclusively deemed to
have waived, any claims to the assets of any Portfolio of which they
are not Shareholders. Such consideration, assets, interest,
dividends, income, earnings, profits, gains and proceeds, together
with any General Items allocated to that Portfolio as provided in the
following sentence, are herein referred to collectively as "Portfolio
---------
Assets" of such Portfolio, and as assets "belonging to" that
------ ------------
Portfolio. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Portfolio
(collectively "General Items"), the Trustees shall allocate such
-------------
General Items to and among any one or more of the Portfolios
established and designated from time to time in such manner and on
such basis as they, in their sole discretion, deem fair and equitable;
and any General Items so allocated to a particular Portfolio shall
belong to and be part of the Portfolio Assets of that Portfolio. Each
such allocation by the Trustees shall be conclusive and binding upon
the Shareholders of all Portfolios for all purposes.

(b) Liabilities of Portfolios. The assets belonging to each
-------------------------
particular Portfolio shall be charged with the liabilities in respect
of that Portfolio and all expenses, costs, charges and reserves
attributable to that Portfolio, and any general liabilities, expenses,
costs, charges or reserves of the Trust which are not readily
identifiable as pertaining to any particular Portfolio shall be
allocated and charged by the Trustees to and among any one or more of
the Portfolios established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The indebtedness, expenses, costs, charges and
reserves allocated and so charged to a particular Portfolio are herein
referred to as "liabilities of" that Portfolio. Each allocation of
--------------
liabilities, expenses, costs,

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<PAGE>

charges and reserves by the Trustees shall be conclusive and binding
upon the Shareholders of all Portfolios for all purposes. Any
creditor of any Portfolio may look only to the assets of that
Portfolio to satisfy such creditor's debt.

(c) Dividends. Dividends and distributions on Shares of a
---------
particular Portfolio may be paid with such frequency as the Trustees
may determine, which may be daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, to the Shareholders of that Portfolio,
from such of the income, accrued or realized, and capital gains,
realized or unrealized, and out of the assets belonging to that
Portfolio, as the Trustees may determine, after providing for actual
and accrued liabilities of that Portfolio. All dividends and
distributions on Shares of a particular Portfolio shall be distributed
pro rata to the Shareholders of that Portfolio in proportion to the
number of such Shares held by such holders at the date and time of
record established for the payment of such dividends or distributions,
except that such dividends and distributions shall appropriately
reflect expenses related directly or indirectly to the distribution of
shares of a Class or other expenses attributable to a Class of such
portfolio and except in connection with any dividend or distribution
program or procedure the Trustees may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's
purchase order and/or payment have not been received by the time or
times established by the Trustees under such program or procedure, or
that dividends or distributions shall be payable on Shares which have
been tendered by the holder thereof for redemption or repurchase, but
the redemption or repurchase proceeds of which have not yet been paid
to such Shareholder. Such dividends and distributions may be made in
cash or Shares of that Portfolio or a combination thereof as
determined by the Trustees, or pursuant to any program that the
Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or distribution
to that Shareholder. Any such dividend or distribution paid in Shares
will be paid at the net asset value thereof as determined in
accordance with subsection (h) of this Section 6.2.

(d) Liquidation. In the event of the liquidation or dissolution
-----------
of the Trust, the Shareholders of each Portfolio of which Shares are
outstanding shall be

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<PAGE>

entitled to receive, when and as declared by the Trustees, the excess
of the Portfolio Assets over the liabilities of such Portfolio. The
assets so distributable to the Shareholders of any particular
Portfolio shall be distributed among such Shareholders and each Class
of such Portfolio, according to their respective rights taking into
account their respective net asset values and the proper allocation of
expenses being borne solely by any Portfolio or and Class of Shares of
a Portfolio. The liquidation of any particular Portfolio may be
authorized by vote of a Majority of the Trustees, subject to the
affirmative vote of "a majority of the outstanding voting securities"
of that Portfolio, as the quoted phrase is defined in the 1940 Act,
determined in accordance with clause (iii) of the definition of
"Majority Shareholder Vote" in Section 1.4 hereof.
-------------------------

(e) Voting. The Shareholders shall have the voting rights set
------
forth in or determined under Article VII hereof.

(f) Redemption by Shareholder. Each holder of Shares of a
-------------------------
particular Portfolio shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each week, to
require the Trust to redeem all or any part of his Shares of that
Portfolio at a redemption price equal to the net asset value per Share
of that Portfolio next determined in accordance with subsection (h) of
this Section 6.2 after the Shares are properly tendered for
redemption; provided, that the Trustees may from time to time, in
--------
their discretion, determine and impose a fee for such redemption.
Payment of the redemption price shall be in cash; provided, however,
-------- -------
that if the Trustees determine, which determination shall be
conclusive, that conditions exist which make payment wholly in cash
unwise or undesirable, the Trust may make payment wholly or partly in
Securities or other assets belonging to such Portfolio at the value of
such Securities or assets used in such determination of net asset
value. Notwithstanding the foregoing, the Trust may postpone payment
of the redemption price and may suspend the right of the holders of
Shares of any Portfolio to require the Trust to redeem Shares of that
Portfolio during any period or at any time when and to the extent
permissible under the 1940 Act.

(g) Redemption at the Option of the Trust. Each Share of any
-------------------------------------
Portfolio shall be subject to redemption at the option of the Trust at
the redemption price

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<PAGE>

which would be applicable if such Share were then being redeemed by
the Shareholder pursuant to subsection (f) of this Section 6.2: (i) at
any time, if the Trustees determine in their sole discretion that
failure to so redeem may have materially adverse consequences to the
holders of the Shares of the Trust or of any Portfolio, or (ii) upon
such other conditions with respect to maintenance of Shareholder
accounts of a minimum amount as may from time to time be determined by
the Trustees and set forth in the then current Prospectus of such
Portfolio. Upon such redemption the holders of the Shares so redeemed
shall have no further right with respect thereto other than to receive
payment of such redemption price.

(h) Net Asset Value. The net asset value per Share of any
---------------
Portfolio at any time shall be the quotient obtained by dividing the
value of the net assets of such Portfolio at such time (being the
current value of the assets belonging to such Portfolio, less its then
existing liabilities) by the total number of Shares of that Portfolio
then outstanding, subject, in the case of any Class, to deduction of
expenses related solely to that Class as contemplated in Section (d)
of Section 6.1, all determined in accordance with the methods and
procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time. The Trustees
may determine to maintain the net asset value per Share of any
Portfolio at a designated constant dollar amount and in connection
therewith may adopt procedures not inconsistent with the 1940 Act for
the continuing declaration of income attributable to that Portfolio as
dividends payable in additional Shares of that Portfolio at the
designated constant dollar amount and for the handling of any losses
attributable to that Portfolio. Such procedures may provide that in
the event of any loss each Shareholder shall be deemed to have
contributed to the shares of beneficial interest account of that
Portfolio his pro rata portion of the total number of Shares required
to be cancelled in order to permit the net asset value per Share of
that Portfolio to be maintained, after reflecting such loss, at the
designated constant dollar amount. Each Shareholder of the Trust
shall be deemed to have expressly agreed, by his investment in any
Portfolio with respect to which the Trustees shall have adopted any
such procedure, to make the contribution referred to in the preceding
sentence in the event of any such loss.

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<PAGE>

(i) Transfer. All Shares of each particular Portfolio shall be
--------
transferable, but transfers of Shares of a particular Portfolio will
be recorded on the Share transfer records of the Trust applicable to
that Portfolio only at such times as Shareholders shall have the right
to require the Trust to redeem Shares of that Portfolio and at such
other times as may be permitted by the Trustees.

(j) Equality. All Shares of each particular Portfolio shall
--------
represent an equal proportionate interest in the assets belonging to
that Portfolio (subject to the liabilities of that Portfolio), and
each Share of any particular Portfolio shall be equal to each other
Share thereof; but the provisions of this sentence shall not restrict
any distinctions permissible under this Declaration of Trust including
any distinctions contemplated by (i) subsection (f) of Section 6.1 or
(ii) subsection (c) of this Section 6.2 that may exist with respect to
dividends and distributions on Shares of the same Portfolio. The
Trustees may from time to time divide or combine the Shares of any
particular Portfolio into a greater or lesser number of Shares or
Classes of Shares of that Portfolio without thereby changing the
proportionate beneficial interest in the assets belonging to that
Portfolio or in any way affecting the rights of the holders of Shares
of any other Portfolio.

(k) Rights of Fractional Shares. Any fractional Share of any
---------------------------
Series shall carry proportionately all the rights and obligations of a
whole Share of that Series, including rights and obligations with
respect to voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust or of the Portfolio to which
they pertain.

(l) Conversion Rights. Subject to compliance with the
-----------------
requirements of the 1940 Act, the Trustees shall have the authority to
provide that holders of Shares of any Portfolio or Class shall have
the right to convert said Shares into Shares of one or more other
Portfolios or Classes in accordance with such requirements and
procedures as the Trustees may establish.

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<PAGE>

SECTION 6.3. Ownership of Shares. The ownership of Shares shall
-------------------
be recorded on the books of the Trust or of a Transfer Agent or similar
agent for the Trust, which books shall be maintained separately for the
Shares of each Series that has been authorized. Certificates evidencing
the ownership of Shares need not be issued except as the Trustees may
otherwise determine from time to time, and the Trustees shall have power to
call outstanding Share certificates and to replace them with book entries.
The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the use of facsimile signatures, the
transfer of Shares and similar matters. The record books of the Trust as
kept by the Trust or any Transfer Agent or similar agent, as the case may
be, shall be conclusive as to who are the Shareholders and as to the number
of Shares of each Portfolio held from time to time by each such
Shareholder.

The holders of Shares of each Portfolio shall upon demand
disclose to the Trustees in writing such information with respect to their
direct and indirect ownership of Shares of such Portfolio as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code,
or to comply with the requirements of any other authority.

SECTION 6.4. Investments in the Trust. The Trustees may accept
------------------------
investments in any Portfolio of the Trust from such Persons and on such
terms and for such consideration, not inconsistent with the provisions of
the 1940 Act, as they from time to time authorize. The Trustees may
authorize any Distributor, Principal Underwriter, Custodian, Transfer Agent
or other Person to accept orders for the purchase of Shares that conform to
such authorized terms and to reject any purchase orders for Shares, whether
or not conforming to such authorized terms.

SECTION 6.5. No Pre-emptive Rights. No Shareholder, by virtue
---------------------
of holding Shares of any Portfolio, shall have any pre-emptive or other
right to subscribe to any additional Shares of that Portfolio, or to any
shares of any other Portfolio, or any other Securities issued by the Trust.

SECTION 6.6. Status of Shares. Every Shareholder, by virtue of
----------------
having become a Shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto. Shares shall
be deemed to be personal property, giving only the rights provided herein.
Ownership of Shares shall not entitle the Shareholder to any title in or to
the whole or any part of the Trust Property or right to call for a
partition or

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<PAGE>

division of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders partners. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the
Trust or any Portfolio, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said decedent
under this Declaration of Trust.

ARTICLE VII
-----------

SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------

SECTION 7.1. Voting Powers. The Shareholders shall have power
-------------
to vote only (i) for the election or removal of Trustees as provided in
Sections 4.1(c) and (e) hereof, (ii) with respect to the approval or
termination in accordance with the 1940 Act of any contract with a
Contracting Party as provided in Section 5.2 hereof as to which Shareholder
approval is as required by the 1940 Act, (iii) with respect to any
termination or reorganization of the Trust or any Portfolio to the extent
and as provided in Sections 9.1 and 9.2 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in
Section 9.3 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or any Portfolio,
or the Shareholders of any of them (provided, however, that a Shareholder
-------- -------
of a particular Portfolio or Class shall not in any event be entitled to
maintain a derivative or class action on behalf of any other Portfolio or
Class or the Shareholders thereof), and (vi) with respect to such
additional matters relating to the Trust as may be required by the 1940
Act, this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any State, or as the
Trustees may consider necessary or desirable. If and to the extent that
the Trustees shall determine that such action is required by law, they
shall cause each matter required or permitted to be voted upon at a meeting
or by written consent of Shareholders to be submitted to a separate vote of
the outstanding Shares of each Portfolio or Class entitled to vote thereon;
provided, that (i) when expressly required by this Declaration or by the
- --------
1940 Act, actions of Shareholders shall be taken by Single Class Voting of
all outstanding Shares of each Series whose holders are entitled to vote
thereon; and (ii) when the Trustees determine that any matter to be
submitted to a vote of Shareholders affects

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<PAGE>

only the rights or interests of Shareholders of one or more but not all
Portfolios or Classes, then only the Shareholders of the Portfolios or
Classes so affected shall be entitled to vote thereon.

SECTION 7.2. Number of Votes and Manner of Voting; Proxies. On
---------------------------------------------
each matter submitted to a vote of the Shareholders, each holder of Shares
of any Series or Class, as relevant, shall be entitled to a number of votes
equal to the number of Shares of such Series or Class standing in his name
on the books of the Trust. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two (2) or more Persons shall be
valid if executed by any one of them unless at or prior to exercise of the
proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of
Trust or the By-Laws to be taken by Shareholders.

SECTION 7.3. Meetings. Meetings of Shareholders may be called
--------
by the Trustees from time to time for the purpose of taking action upon any
matter requiring the vote or authority of the Shareholders as herein
provided, or upon any other matter deemed by the Trustees to be necessary
or desirable. Written notice of any meeting of Shareholders shall be given
or caused to be given by the Trustees by mailing such notice at least seven
(7) days before such meeting, postage prepaid, stating the time, place and
purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. The Trustees shall promptly call
and give notice of a meeting of Shareholders for the purpose of voting upon
removal of any Trustee of the Trust when requested to do so in writing by
Shareholders holding not less than ten percent (10%) of the Shares then
outstanding. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of thirty (30) days after written
application by Shareholders holding at least ten percent (10%) of the
Shares then outstanding requesting that a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least ten percent (10%) of the Shares
then outstanding may call and give notice of such meeting, and thereupon
the meeting shall be held in the manner provided for herein in case of call
thereof by the Trustees.

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<PAGE>

SECTION 7.4. Record Dates. For the purpose of determining the
------------
Shareholders who are entitled to vote or act at any meeting or any
adjournment thereof, or who are entitled to participate in any dividend or
distribution, or for the purpose of any other action, the Trustees may from
time to time close the transfer books for such period, not exceeding thirty
(30) days (except at or in connection with the termination of the Trust),
as the Trustees may determine; or without closing the transfer books the
Trustees may fix a date and time not more than sixty (60) days prior to the
date of any meeting of Shareholders or other action as the date and time of
record for the determination of Shareholders entitled to vote at such
meeting or any adjournment thereof or to be treated as Shareholders of
record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of
record for purposes of such other action, even though he has since that
date and time disposed of his Shares, and no Shareholder becoming such
after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for
purposes of such other action.

SECTION 7.5. Quorum and Required Vote. A majority of the Shares
------------------------
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a
reasonable time after the date set for the original meeting without the
necessity of further notice. A Majority Shareholder Vote at a meeting of
which a quorum is present shall decide any question, except when a
different vote is required or permitted by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or the By-Laws, or
when the Trustees shall in their discretion require a larger vote or the
vote of a majority or larger fraction of the Shares of one or more
particular Series.

SECTION 7.6. Action by Written Consent. Subject to the
-------------------------
provisions of the 1940 Act and other applicable law, any action taken by
Shareholders may be taken without a meeting if a majority of Shareholders
entitled to vote on the matter (or such larger proportion thereof or of the
Shares of any particular Series as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws or as
shall be permitted by the Trustees) consent to the action in writing and if
the writings in which such consent is given are filed with the records of
the meetings of Shareholders, to the same extent

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<PAGE>

and for the same period as proxies given in connection with a Shareholders'
meeting. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.

SECTION 7.7. Inspection of Records. The records of the Trust
---------------------
shall be open to inspection by Shareholders to the same extent as is
permitted stockholders of a Massachusetts business corporation under the
Massachusetts Business Corporation Law.

SECTION 7.8. Additional Provisions. The By-Laws may include
---------------------
further provisions for Shareholders' votes and meetings and related matters
not inconsistent with the provisions hereof.

ARTICLE VIII
------------

LIMITATION OF LIABILITY; INDEMNIFICATION
----------------------------------------

SECTION 8.1. Trustees, Shareholders, etc. Not Personally Liable;
---------------------------------------------------
Notice. The Trustees and officers of the Trust, in incurring any debts,
- ------
liabilities or obligations, or in limiting or omitting any other actions
for or in connection with the Trust, are or shall be deemed to be acting as
Trustees or officers of the Trust and not in their own capacities. No
Shareholder shall be subject to any personal liability whatsoever in tort,
contract or otherwise to any other Person or Persons in connection with the
assets or the affairs of the Trust or of any Portfolio, and subject to
Section 8.4 hereof, no Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever in tort, contract, or
otherwise, to any other Person or Persons in connection with the assets or
affairs of the Trust or of any Portfolio, save only that arising from his
own willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or the discharge of his
functions. The Trust (or if the matter relates only to a particular
Portfolio, that Portfolio) shall be solely liable for any and all debts,
claims, demands, judgments, decrees, liabilities or obligations of any and
every kind, against or with respect to the Trust or such Portfolio in tort,
contract or otherwise in connection with the assets or the affairs of the
Trust or such Portfolio, and all Persons dealing with the Trust or any
Portfolio shall be deemed to have agreed that resort shall be had solely to
the Trust Property of the Trust or the Portfolio Assets of such Portfolio,
as the case may be, for the payment or performance thereof.

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<PAGE>

The Trustees shall use their best efforts to ensure that every
note, bond, contract, instrument, certificate or undertaking made or issued
by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or
made by or on behalf of the Trust or by them as Trustees or Trustee or as
officers or officer, and not individually, and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of the
Trust, or the particular Portfolio in question, as the case may be, but the
omission thereof shall not operate to bind any Trustees or Trustee or
officers or officer or Shareholders or Shareholder individually, or to
subject the Portfolio Assets of any Portfolio to the obligations of any
other Portfolio.

SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No Bond
---------------------------------------------------
or Surety. The exercise by the Trustees of their powers and discretions
- ---------
hereunder shall be binding upon everyone interested. Subject to Section
8.4 hereof, a Trustee shall be liable for his own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be
liable for errors of judgment or mistakes of fact or law. Subject to the
foregoing, (i) the Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, consultant,
Investment Advisor, Administrator, Distributor or Principal Underwriter,
Custodian or Transfer Agent, Dividend Disbursing Agent, Shareholder
Servicing Agent or Accounting Agent of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee; (ii) the Trustees
may take advice of counsel or other experts with respect to the meaning and
operation of this Declaration of Trust and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice; and (iii) in discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely
upon the books of account of the Trust and upon written reports made to the
Trustees by any officer appointed by them, any independent public
accountant, and (with respect to the subject matter of the contract
involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 5.2 hereof. The
Trustees as such shall not be required to give any bond or surety or any
other security for the performance of their duties.

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<PAGE>

SECTION 8.3. Indemnification of Shareholders. If any
-------------------------------
Shareholder (or former Shareholder) of the Trust shall be charged or held
to be personally liable for any obligation or liability of the Trust solely
by reason of being or having been a Shareholder and not because of such
Shareholder's acts or omissions or for some other reason, the Trust (upon
proper and timely request by the Shareholder) shall assume the defense
against such charge and satisfy any judgment thereon, and the Shareholder
or former Shareholder (or the heirs, executors, administrators or other
legal representatives thereof, or in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled (but
solely out of the assets of the Portfolio of which such Shareholder or
former Shareholder is or was the holder of Shares) to be held harmless from
and indemnified against all loss and expense arising from such liability.

SECTION 8.4. Indemnification of Trustees, Officers, etc.
------------------------------------------
Subject to the limitations set forth hereinafter in this Section 8.4, the
Trust shall indemnify (from the assets of the Portfolio or Portfolios to
which the conduct in question relates) each of its Trustees and officers
(including Persons who serve at the Trust's request as directors, officers
or trustees of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise [hereinafter, together with such
Person's heirs, executors, administrators or personal representative,
referred to as a "Covered Person"]) against all liabilities, including but
--------------
not limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by any Covered Person in connection with the defense
or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or
otherwise or with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Trustee or officer, director or trustee, except with respect to
any matter as to which it has been determined that such Covered Person (i)
did not act in good faith in the reasonable belief that such Covered
Person's action was in or not opposed to the best interests of the Trust or
(ii) had acted with willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office (either and both of the conduct described in (i) and (ii)
being referred to hereafter as "Disabling Conduct"). A determination that
-----------------
the Covered Person is entitled to indemnification may be made by (i) a

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<PAGE>

final decision on the merits by a court or other body before whom the
proceeding was brought that the Covered Person to be indemnified was not
liable by reason of Disabling Conduct, (ii) dismissal of a court action or
an administrative proceeding against a Covered Person for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based
upon a review of the facts, that the indemnitee was not liable by reason of
Disabling Conduct by (a) a vote of a majority of a quorum of Trustees who
are neither "interested persons" of the Trust as defined in Section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by any such Covered Person (but
excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Portfolio or
Portfolios to which the conduct in question related in advance of the final
disposition of any such action, suit or proceeding; provided, that the
--------
Covered Person shall have undertaken to repay the amounts so paid to such
Portfolio or Portfolios if it is ultimately determined that indemnification
of such expenses is not authorized under this Article VIII and (i) the
Covered Person shall have provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested Trustees, or
an independent legal counsel in a written opinion, shall have determined,
based on a review of readily available facts (as opposed to a full trial-
type inquiry), that there is reason to believe that the Covered Person
ultimately will be found entitled to indemnification.

SECTION 8.5. Compromise Payment. As to any matter disposed of
------------------
by a compromise payment by any such Covered Person referred to in Section
8.4 hereof, pursuant to a consent decree or otherwise, no such
indemnification either for said payment or for any other expenses shall be
provided unless such indemnification shall be approved (i) by a majority of
a quorum of the disinterested Trustees or (ii) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause
(i) or by independent legal counsel pursuant to clause (ii) shall not
prevent the recovery from any Covered Person of any amount paid to such
Covered Person in accordance with either of such clauses as indemnification
if such Covered Person is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that
such Covered Person's action was in or not opposed to the best interests of
the Trust or to have been liable to the Trust or its Shareholders by reason
of willful misfeasance, bad faith, gross negligence or reckless

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<PAGE>

disregard of the duties involved in the conduct of such Covered Person's
office.

SECTION 8.6. Indemnification Not Exclusive, etc. The right of
----------------------------------
indemnification provided by this Article VIII shall not be exclusive of or
affect any other rights to which any such Covered Person may be entitled.
As used in this Article VIII, a "disinterested" Person is one against whom
-------------
none of the actions, suits or other proceedings in question, and no other
action, suit or other proceeding on the same or similar grounds is then or
has been pending or threatened. Nothing contained in this Article VIII
shall affect any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other Persons may be entitled by
contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such Person.

SECTION 8.7. Liability of Third Persons Dealing with Trustees.
------------------------------------------------
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

ARTICLE IX
----------

DURATION; REORGANIZATION; AMENDMENTS
------------------------------------

SECTION 9.1. Duration and Termination of Trust. Unless
---------------------------------
terminated as provided herein, the Trust shall continue without limitation
of time and, without limiting the generality of the foregoing, no change,
alteration or modification with respect to any Portfolio or Series of
Shares shall operate to terminate the Trust. The Trust may be terminated
at any time by a Majority of the Trustees, subject to the favorable vote of
the holders of not less than a majority of the Shares outstanding and
entitled to vote of each Portfolio of the Trust, or by an instrument or
instruments in writing without a meeting, consented to by the holders of
not less than a majority of such Shares, or by such greater or different
vote of Shareholders of any Series as may be established by the Certificate
of Designation by which such Series was authorized. Upon termination,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated as may be determined by
the Trustees, the Trust shall in accordance with such procedures as the
Trustees consider appropriate reduce the remaining assets to distributable
form in cash, Securities or other property, or

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<PAGE>

any combination thereof, and distribute the proceeds to the Shareholders,
in conformity with the provisions of Section 6.2(d) hereof.

SECTION 9.2. Reorganization. The Trustees may sell, convey and
--------------
transfer all or substantially all of the assets of the Trust, or the assets
belonging to any one or more Portfolios, to another trust, partnership,
association or corporation organized under the laws of any state of the
United States, or may transfer such assets to another Portfolio of the
Trust, in exchange for cash, Shares or other Securities (including, in the
case of a transfer to another Portfolio of the Trust, Shares of such other
Portfolio), or to the extent permitted by law then in effect may merge or
consolidate the Trust or any Portfolio with any other Trust or any
corporation, partnership, or association organized under the laws of any
state of the United States, all upon such terms and conditions and for such
consideration when and as authorized by vote or written consent of a
Majority of the Trustees and approved by the affirmative vote of the
holders of not less than a majority of the Shares outstanding and entitled
to vote of each Portfolio whose assets are affected by such transaction, or
by an instrument or instruments in writing without a meeting, consented to
by the holders of not less than a majority of such Shares, and/or by such
other vote of any Series as may be established by the Certificate of
Designation with respect to such Series. Following such transfer, the
Trustees shall distribute the cash, Shares or other Securities or other
consideration received in such transaction (giving due effect to the assets
belonging to and indebtedness of, and any other differences among, the
various Portfolios of which the assets have so been transferred) among the
Shareholders of the Portfolio of which the assets have been so transferred;
and if all of the assets of the Trust have been so transferred, the Trust
shall be terminated. Nothing in this Section 9.2 shall be construed as
requiring approval of Shareholders for the Trustees (i) to organize or
assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations, and to sell, convey or transfer less
than substantially all of the Trust Property or the assets belonging to any
Portfolio to such organizations or entities, or (ii) to issue Shares of one
or more Portfolios, or to create one or more new Portfolios and issue the
Shares thereof, in order to purchase or otherwise acquire all or part of
the assets of any corporation, trust, partnership, association or other
organization and to hold such assets as part of the Trust Property, so long
as the assets so acquired are assets in which the Trust may invest and
which it may hold in accordance herewith.

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<PAGE>

SECTION 9.3. Amendments; etc. All rights granted to the
---------------
Shareholders under this Declaration of Trust are granted subject to the
reservation of the right to amend this Declaration of Trust as herein
provided, except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or the prohibition of assessment
upon the Shareholders (otherwise than as permitted under Section 6.2(h))
without the express consent of each Shareholder or Trustee involved.
Subject to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be amended at
any time, so long as such amendment does not adversely affect the rights of
any Shareholder with respect to which such amendment is or purports to be
applicable and so long as such amendment is not in contravention of
applicable law, including the 1940 Act, by an instrument in writing signed
by a Majority of the Trustees (or by an officer of the Trust pursuant to
the vote of a Majority of the Trustees). Any amendment to this Declaration
of Trust that adversely affects the rights of all Shareholders may be
adopted at any time by an instrument in writing signed by a Majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a Majority of
the Trustees) when authorized to do so by the vote in accordance with
Section 7.1 hereof of Shareholders holding a majority of all the Shares
outstanding and entitled to vote, without regard to Series, or if said
amendment adversely affects the rights of the Shareholders of less than all
of the Portfolios, by the vote of the holders of a majority of all the
Shares entitled to vote of each Portfolio so affected. Subject to the
foregoing, any such amendment shall be effective when the instrument
containing the terms thereof and a certificate (which may be a part of such
instrument) to the effect that such amendment has been duly adopted, and
setting forth the circumstances thereof, shall have been executed and
acknowledged by a Trustee or officer of the Trust and filed as provided in
Section 9.4 hereof.

SECTION 9.4. Filing of Copies of Declaration and Amendments.
----------------------------------------------
The original or a copy of this Declaration and of each amendment hereto
(including each Certificate of Designation and Certificate of Termination),
as well as the certificates called for by Section 4.1(k) hereof as to
changes in the Trustees, shall be kept at the office of the Trust where it
may be inspected by any Shareholder, and one copy of each such instrument
shall be filed with the Secretary of The Commonwealth of Massachusetts, as
well as with any other governmental office where such filing may from time
to time be required by the laws of Massachusetts. A restated Declaration,
integrating into a single instrument all of the provisions of this
Declaration which are then in

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<PAGE>

effect and operative, may be executed from time to time by a Majority of
the Trustees and shall, upon filing with the Secretary of The Commonwealth
of Massachusetts, be conclusive evidence of all amendments contained
therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.

ARTICLE X
---------

MISCELLANEOUSS
--------------

SECTION 10.1. Governing Law. This Declaration of Trust is
-------------
executed and delivered in The Commonwealth of Massachusetts and with
reference to the laws thereof, and the rights of all parties and the
construction and effect of every provision hereof shall be subject to and
construed according to the laws of said Commonwealth.

SECTION 10.2. Counterparts. This Declaration of Trust and any
------------
amendment thereto may be simultaneously executed in several counterparts,
each of which so executed shall be deemed to be an original, and such
counterparts, together, shall constitute but one and the same instrument,
which shall be sufficiently evidenced by any such original counterpart.

SECTION 10.3. Reliance by Third Parties. Any certificate
-------------------------
executed by an individual who, according to the records in the office of
the Secretary of The Commonwealth of Massachusetts appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument
or writing, (c) the form of any vote passed as a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration of Trust, (e) the form of any By-Law
adopted, or the identity of any officers elected, by the Trustees, or (f)
the existence or non-existence of any fact or facts which in any manner
relate to the affairs of the Trust, shall be conclusive evidence as to the
matters so certified in favor of any Person dealing with the Trustees, or
any of them, and the successors of such Person.

SECTION 10.4. References; Headings. The masculine gender shall
--------------------
include the feminine and neuter genders. Headings are placed herein for
convenience of reference only and shall not be taken as a part of this
Declaration or control or affect the meaning, construction or effect
hereof.

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<PAGE>

SECTION 10.5. Use of the Name "Winthrop". Wood, Struthers &
--------------------------
Winthrop Management Corp. ("Wood, Struthers & Winthrop") has consented to
--------------------------
the use by the Trust of the identifying name ("Winthrop"), which is a
--------
property right of Wood, Struthers & Winthrop. The Trust will only use the
name "Winthrop" as a component of its name and for no other purpose, and
will not purport to grant to any third party the right to use the name
"Winthrop" for any purpose. Winthrop or any corporate affiliate of Wood,
Struthers & Winthrop may use or grant to others the right to use the name
"Winthrop", as all or a portion of a corporate or business name or for any
commercial purpose, including a grant of such right to any other investment
company. At the request of Wood, Struthers & Winthrop, the Trust will take
such action as may be required to provide its consent to the use of such
name by Wood, Struthers & Winthrop, or any corporate affiliate of Wood,
Struthers & Winthrop, or by any Person to whom Wood, Struthers & Winthrop
or an affiliate of Wood, Struthers & Winthrop shall have granted the right
to the use of the name "Winthrop". Upon the termination of any investment
advisory or management agreement into which Wood, Struthers & Winthrop and
the Trust may enter, the Trust shall, upon request by Wood, Struthers &
Winthrop, cease to use the name "Winthrop" as a component of its name, and
shall not use such name or initials as a part of its name or for any other
commercial purpose, and shall cause its officers and Trustees to take any
and all actions which Wood, Struthers & Winthrop may request to effect the
foregoing and to reconvey to Wood, Struthers & Winthrop or such corporate
affiliate any and all rights to such name.

-49-<PAGE>

IN WITNESS WHEREOF, the undersigned being at least a Majority of
the Trustees of the Trust have executed this instrument as of the date
first above written.

ROBERT L. BAST, as Trustee
and not individually
-------------------------

G. MOFFETT COCHRAN, as Trustee
and not individually
-------------------------

JAMES A. ENGLE, as Trustee
and not individually
-------------------------

JOHN J. HALSEY, as Trustee
and not individually
-------------------------

STIG HOST, as Trustee
and not individually
-------------------------

PETER F. KROGH, as Trustee
and not individually
-------------------------

DENNIS G. LITTLE, as Trustee
and not individually
-------------------------

WILLIAM H. MATHERS, as Trustee
and not individually
-------------------------

JOHN L. McCABE, as Trustee
and not individually
-------------------------

CARL B. MENGES, as Trustee
and not individually
-------------------------

JOHN J. SHEEHAN, as Trustee
and not individually
-------------------------

WILLIAM C. SIMPSON, as Trustee
and not individually
-------------------------

STEPHEN K. WEST, as Trustee
and not individually
-------------------------

The address of each of the above is:

140 Broadway
New York, New York 10005

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EXHIBIT (6)

FORM OF DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT, dated , 1995, between Winthrop
--------- --
Focus Funds, a Massachusetts business trust (the "Company"), and Donaldson
Lufkin & Jenrette Securities Corporation (the "Distributor"). The Company
is registered as a series investment company under the Investment Company
Act of 1940 (the "1940 Act"), and an indefinite number of shares of
beneficial interest in one or more series, without par value (the
"Shares"), have been registered under the Securities Act of 1933 (the "1933
Act") to be offered for sale to the public in a continuous public offering
in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Company
included in the Company's Registration Statement on Form N-1A as such
documents may be amended from time to time.

In this connection, the Company desires that the Distributor act as
its exclusive sales agent and distributor for the sale and distribution of
Shares. The Distributor has advised the Company that it is willing to act
in such capacities, and it is accordingly agreed between them as follows:

1. The Company hereby appoints the Distributor as exclusive sales
agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering
that it will not, without the Distributor's consent, sell or agree to sell
any Shares otherwise than through the Distributor, except the Company may
issue Shares in connection with a merger, consolidation or acquisition of
assets on such basis as may be authorized or permitted under the 1940 Act.

2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares, provided, however, that when
requested by the Company at any time for any reason the Distributor will
suspend such efforts. The Company may also withdraw the offering of Shares
at any time when determined to be in the best interests of the shareholders
of the Company by the Board, or when required by the provisions of any
statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that the Distributor does not undertake to
sell all or any specific portion of the Shares.

3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will use all
reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association
of Securities Dealers, Inc., and all other rules and regulations that are
now or may become applicable to its performance

<PAGE>

hereunder. The Distributor will undertake and discharge its obligations
hereunder as an independent contractor and it shall have no authority or
power to obligate or bind the Company by its actions, conduct or contracts
except that it is authorized to accept orders for the purchase or
repurchase of Shares as the Company's agent and subject to its approval.
The Company reserves the right to reject any order in whole or in part. The
Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements
approved by the Company, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale or
repurchase of Shares on behalf of the Company or otherwise act as the
Company's agent for any purpose. The Distributor shall not utilize any
materials in connection with the sale or offering of Shares except the then
current Prospectus and such other materials as the Company shall provide or
approve in writing.

4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be
sold either through persons with whom it has selling agreements or directly
to prospective purchasers. To facilitate sales, the Company will furnish
the Distributor with the net asset value of its Shares promptly after each
calculation thereof.

5. The Company has delivered to the Distributor a copy of its current
Prospectus. It agrees that it will use its best efforts to continue the
effectiveness of its Registration Statement filed under the 1933 Act and
the 1940 Act. The Company further agrees to prepare and file any amendments
to its Registration Statement as may be necessary and any supplemental data
in order to comply with such Acts.

6. The Company will take such steps at its own expense as may be
necessary and feasible to qualify Shares for sale in states, territories or
dependencies of the United States of America and in the District of
Columbia in accordance with the laws thereof, and to renew or extend any
such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in
any state, territory, dependency or district where it shall deem such
qualification disadvantageous to the Company. The Distributor will pay all
expenses relating to its broker-dealer qualifications.

7. The Distributor agrees that:

(a) It will furnish to the Company any pertinent information
required to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and state
securities laws in any reports or registrations required to be filed
with any government authority;

<PAGE>

(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus
filed under the Securities Act of 1933, as in effect from time to
time;

(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in the
Company's then current Prospectus or in such supplemental literature
or advertising as may be authorized in writing by the Company; and

(d) Subject to paragraph 9 below, the Distributor will bear those
costs of printing and distributing copies of any prospectuses and
annual or interim reports of the Company which are used in connection
with the offering of Shares which are incremental to the costs of
setting in type such prospectuses and reports and the costs of
printing the copies of such documents that the Company prepares for
distribution to its shareholders, and the costs of preparing, printing
and distributing any other literature used by the Distributor or
furnished by the Distributor for use in connection with the offering
of the Shares and the costs and expenses incurred by the Distributor
in advertising, promoting and selling Shares to the public. Subject to
the approval of the Board of Trustees, such costs may be reimbursed
pursuant to Section 9.

8. The Company will pay its legal and auditing expenses and the cost
of composition, setting in type, printing and distribution of the
prospectuses or annual or interim reports prepared for distribution to its
shareholders.

9. The Company will compensate the Distributor for its services in
connection with distribution of Shares by the Distributor in accordance
with the terms of the Plans of Distribution (the "Plans") adopted by the
Fund pursuant to Rule 12b-1 under the 1940 Act as such Plans may be in
effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall
have been approved by Trustee Approval and Disinterested Trustee Approval
(as such terms are defined in such Plans). The Company reserves the right
to modify or terminate such Plans at any time as specified in the Plans and
Rule 12b-1, and this Section 9 shall thereupon be modified or terminated to
the same extent without further action of the parties. In addition, this
Section 9 may be modified or terminated by the Trustees as set forth in
Section 13 hereof. The persons authorized to direct the payment of funds
pursuant to this Agreement and the Plans shall provide to the Company's
Board of Trustees, and the Trustees shall review, at least quarterly a
written report of the amounts so paid and the purposes for which such
expenditures were made. The amounts paid under this Agreement are in
addition to the amount of any initial sales charge or contingent deferred
sales charge, if any, paid to the Distributor pursuant to the terms of the
Company's Registration Statement as in effect from time to time.

<PAGE>

10. The Company agrees to indemnity, defend and hold the Distributor,
its officers, directors, employees and agents and any person who controls
the Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all claims,
demands, liabilities and expenses, including costs of investigation or
defense (including reasonable counsel fees) incurred by such indemnitee in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which such indemnitee may be or
may have been involved as a party or otherwise or with which he may be or
may have been threatened, while the Distributor was active in such capacity
or by reason of the Distributor having acted in any such capacity or
arising out of or based upon any untrue statement of a material fact
contained in the then-current Prospectus relating to the Shares or arising
out of or based upon any alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by the Distributor to the
Company expressly for use in any such Prospectus; provided, however, that
(1) no indemnitee shall be indemnified hereunder against any liability to
the Company or the shareholders of the Company or any expense of such
indemnitee with respect to any matter as to which such indemnitee shall
have been adjudicated not to have acted in good faith in the reasonable
belief that its action was in the best interest of the Company or arising
by reason of such indemnitee's willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations under this Agreement ("disabling conduct"), or
(2) as to any matter disposed of by settlement or a compromise payment by
such indemnitee, no indemnification shall be provided unless there has been
a determination that such settlement or compromise is in the best interests
of the Company and that such indemnitee appears to have acted in good faith
in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide
any such indemnification to the extent such provision would waive any right
which the Company cannot lawfully waive.

The Distributor agrees to indemnify, defend and hold the Company, its
Trustees, officers, employees and agents and any person who controls the
Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities
and expenses, including costs of investigation or defense (including
reasonable counsel fees) incurred by such indemnitee, but only to the
extent that such liability or expense shall arise out of or be based upon
any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor of the Company
expressly for use in a Prospectus or any alleged omission to state a
material fact in connection with such information required to be stated
therein or necessary to make such information

<PAGE>

not misleading or arising by reason of disabling conduct by such indemnitee
or any person selling Shares pursuant to an agreement with the Distributor.

The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification
might be sought hereunder if the Company receives a written affirmation of
the indemnitee's good faith belief that the standard of conduct necessary
for indemnification has been met and a written undertaking to reimburse the
Company unless it is subsequently determined that the indemnity is entitled
to such indemnification and if the Trustees of the Company determine that
the facts then known to them would not preclude indemnification. In
addition, at least one of the following conditions must be met: (A) the
indemnitee shall provide a security for his undertaking, (B) the Company
shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of Trustees of the Company who are neither
"interested persons" of the Company (as defined in Section 2(a)(19) of the
Act) nor parties to the proceeding ("Disinterested Non-Party Trustees") or
an independent legal counsel in a written opinion, shall determine, based
on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee ultimately
will be found entitled to indemnification.

All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before
whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by
(i) a majority vote of a quorum of the Disinterested Non-party Trustees of
the Company, or (ii) if such a quorum is not obtainable or even, if
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.

11. This Agreement shall become effective with respect to any class
and any series of the Company when approved by the Board of Trustees and
shall remain in effect for up to two years from its effective date (one
year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Trustee Approval or by vote at a meeting of
shareholders of such class or series of the lesser of (i) 67 percent of the
Shares of such class or series present or represented by proxy and (ii) 50
percent of the outstanding Shares of such class or series and (b) by
Disinterested Trustee Approval.

12. This Agreement may be terminated (a) by the Distributor at any
time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at
any time without penalty upon sixty (60) days' written notice to the
Distributor (which notice may be waived by the Distributor); provided,
however, that any such termination by the Company

<PAGE>

shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of
termination of Section 9, by Section 11(b)).

13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the
case of amendment of Section 9, by Section 11(b)). Any such amendment or
change shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, but this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment
(as such term is defined in the 1940 Act and the rules thereunder).

14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.

15. If any provision of this Agreement shall be held or made invalid
or unenforceable by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected or impaired thereby.

16. Notice is hereby given that this Agreement is entered into on the
Company's behalf by an officer of the Company in such officer's capacity as
an officer and not individually. It is understood and expressly stipulated
that none of the Trustees, officers or shareholders of the Company are
personally liable hereunder. Neither the Trustees, officers or shareholders
assume any personal liability for obligations entered into on behalf of the
Company. All persons dealing with the Company shall look solely to the
property of the Company for the enforcement of any claims against the
Company.

<PAGE>

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by the Company's authorized officers as of September , 1995.
--

Winthrop Focus Funds

By:
-----------------------------
Name:
Title:

Donaldson Lufkin & Jenrette
Securities Corporation

By:
-----------------------------
Name:
Title:

EXHIBIT (11)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Financial
Highlights" and "General Information - Counsel and Auditors" and to the use
of our report dated November 28, 1995 in this Registration Statement (Form
N-1A No. 33-3706) of Winthrop Focus Funds.

/s/ ERNST & YOUNG LLP

ERNST & YOUNG LLP

New York, New York
December 26, 1995

EXHIBIT (15)(a)

FORM OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP FUND
----------------
CLASS A SHARES

The Winthrop Fund (the "Fund") intends to engage in
-----------------
business as a separate series of Winthrop Focus Funds (the "Company"),
which is an open-end management investment company registered as such under
the Investment Company Act of 1940 (the "Act"). The Company intends to
employ Donaldson, Lufkin & Jenrette Securities Corporation and/or others as
the principal underwriter and distributor (the "Distributor") of the
Class A shares of the Fund pursuant to a written distribution agreement and
desires to adopt a plan of distribution pursuant to Rule 12b-1 under the
Act to assist in the distribution of Class A shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined
that a plan of distribution containing the terms set forth herein is
reasonably likely to benefit the Fund and its shareholders, the Company
hereby adopts a compensation-type plan of distribution for the Fund's
Class A shares (the "Plan") pursuant to Rule 12b-1 under the Act on the
following terms and conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class A shares of the Fund an aggregate
of .30 of 1% per year of the average daily net assets of Class A shares of
the Fund consisting of (i) an asset based sales charge of .05 of 1% per
year of the average daily net assets of the Class A shares of the Fund and
(ii) a service fee of .25 of 1% per year of the average daily net assets of
the Class A shares of the Fund. Such Payments as shall be approved by the
Board shall be accrued daily and paid monthly in arrears or shall be
accrued and paid at such other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose
of financing or assisting in the financing of any activity which is
primarily intended to result in the sale of Class A shares of the Fund. The
scope of the foregoing shall be interpreted by the Board from time to time
including the selection of those activities for which payment can be made
whose decision shall be conclusive. Without in any way limiting the
discretion of the Board, the following activities are hereby declared to be
primarily intended to result in the sale of Class A shares of the Fund:
advertising the Fund either alone or together with other funds;
compensating underwriters, dealers, brokers, banks and other selling
entities and sales and marketing personnel of any of them for sales of
Class A shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing
personnel (including

<PAGE>

the Fund's investment adviser and its personnel) of any of them for
providing services to shareholders of the Fund relating to their investment
in the Fund, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and
shareholder servicing materials; third party consultancy or similar
expenses relating to any activity for which Payment is authorized by the
Board; and the financing of any activity for which Payment is authorized by
the Board.

3. Amounts paid to the Distributor by the Fund under the Plan will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of the Fund except that distribution expenses attributable
to the Fund as a whole will be allocated to the Class A shares according to
the ratio of the net assets of Class A shares to the total net assets of
the Fund shares over the Fund's fiscal year or such other allocation method
approved by the Trustees.

4. The Company is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person
to whom the Company intends to make any Payment, and the Distributor is
hereby authorized and directed to enter into appropriate written agreements
with each person to whom the Distributor intends to make any payments in
the nature of a Payment. The foregoing requirement is not intended to apply
to any agreement or arrangement with respect to which the party to whom
Payment is to be made does not have the purpose set forth in Section 2
above (such as the printer in the case of the printing of a prospectus or a
newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement
for purposes of Rule 12b-1 under the Act.

5. Each agreement required to be in writing by Section 4 must contain
the provisions required by Rule 12b-1 under the Act and must be approved by
a majority of the Board ("Board Approval") and by a majority of the
trustees ("Disinterested Trustee Approval") who are not "interested
persons" of the Company and have no direct or indirect financial interest
in the operation of the Plan or any such agreement, by vote cast in person
at a meeting called for the purposes of voting on such agreement.

6. The officers, investment adviser or Distributor of the Fund, as
appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard
to the

<PAGE>

existence or terms and conditions of a plan of distribution under
Rule 12b-1 of the Act (such as the printing of prospectuses for existing
Fund shareholders), this Plan shall not be construed to prevent or restrict
the Company from paying such amounts outside of this Plan and without
limitation hereby and without such payments being included in calculation
of Payments subject to the limitation set forth in Section 1.

8. This Plan shall not take effect until it has been approved by a
vote of at least a majority of the outstanding voting securities of the
Class A shares of the Fund. This Plan may not be amended in any material
respect without Board Approval and Disinterested Trustee Approval and may
not be amended to increase the maximum level of Payments permitted
hereunder without such approvals and further approval by a vote of at least
a majority of the outstanding voting securities of the Class A shares of
the Fund. This Plan may continue in effect for longer than one year after
its approval by the shareholders of the Fund only as long as such
continuance is specifically approved at least annually by Board Approval
and by Disinterested Trustee Approval.

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed
to the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees
who are not interested persons of the Company and have no director or
indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of ____ such
termination, or by a vote of at least a majority of the outstanding voting
securities of Class A shares of the Fund.

11. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the outstanding voting securities" of the
Class A shares of the Fund shall mean the vote, at the annual or a special
meeting of the holders of Class A shares of the Fund duly called, of the
lesser of (a) 67% or more of the securities of Class A shares of the Fund
present at such meeting, if the holders of more than 50% of the outstanding
voting securities of the Class A shares of the Fund are present or
represented by proxy or (b) more than 50% of the outstanding voting
securities of the Class B shares of the Fund.

EXHIBIT (15)(b)

FORM OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
FUND
----------------------------------------------
CLASS B SHARES

The Fund (the "Fund") intends to
--------------------------------
engage in business as a separate series of Winthrop Opportunity Funds (the
"Company"), which is an open-end management investment company registered
as such under the Investment Company Act of 1940 (the "Act"). The Company
intends to employ Donaldson, Lufkin & Jenrette Securities Corporation
and/or others as the principal underwriter and distributor (the
"Distributor") of the Class B shares of the Fund pursuant to a written
distribution agreement and desires to adopt a plan of distribution pursuant
to Rule 12b-1 under the Act to assist in the distribution of Class B shares
of the Fund.

The Board of Trustees (the "Board") of the Company having determined
that a plan of distribution containing the terms set forth herein is
reasonably likely to benefit the Fund and its shareholders, the Company
hereby adopts a compensation type plan of distribution for the Fund's
Class B shares (the "Plan") pursuant to Rule 12b-1 under the Act on the
following terms and conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of
Class B shares of the Fund consisting of (i) an asset-based sales charge of
up to .75 of 1% of the average daily net assets of the Class B shares of
the Fund and (ii) a service fee of up to .25 of 1% of the average daily net
assets of the Class B shares of the Fund. Such Payments as shall be
approved by the Board shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall
determine.

2. Payments may be made by the Company under this Plan for the purpose
of financing or assisting in the financing of any activity which is
primarily intended to result in the sale of Class B shares of the Fund. The
scope of the foregoing shall be interpreted by the Board from time to time
including the selection of those activities for which payment can be made
whose decision shall be conclusive. Without in any way limiting the
discretion of the Board, the following activities are hereby declared to be
primarily intended to result in the sale of Class B shares of the Fund:
advertising the Fund either alone or together with other funds;
compensating underwriters, dealers, brokers, banks and other selling
entities and sales and marketing personnel of any of them for sales of
Class B shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing
personnel (including

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not
be used to pay the distribution expenses incurred with respect to any other
class of shares of the Fund except that distribution expenses attributable
to the Fund as a whole will be allocated to the Class B shares according to
the ratio of the sales of Class B shares to the total sales of the Fund's
shares over the Fund's fiscal year or such other allocation method approved
by the Trustees.

<PAGE>

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard
to the existence or terms and conditions of a plan of distribution under
Rule 12b-1 of the Act (such as the printing of prospectuses for existing
Fund shareholders), this Plan shall not be construed to prevent or restrict
the Company from paying such amounts outside of this Plan and without
limitation hereby and without such payments being included in calculation
of Payments subject to the limitation set forth in Section 1.

8. This Plan shall not take effect until it has been approved by a
vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund. This Plan may not be amended in any material
respect without Board Approval and Disinterested Trustee Approval and may
not be amended to increase the maximum level of Payments permitted
hereunder without such approvals and further approval by a vote of at least
a majority of the outstanding voting securities of the Fund. This Plan may
continue in effect for longer than one year after its approval by the
shareholders of the Fund only as long as such continuance is specifically
approved at least annually by Board Approval and by Disinterested Trustee
Approval.

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed
to the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees
who are not interested persons of the Company and have no direct or
indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of voting on
such termination, or by a vote of at least a majority of the outstanding
voting securities of the Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the outstanding voting securities" of the
Class B shares of the Fund shall mean the vote, at the annual or a special
meeting of the holders of Class A shares of the Fund duly called the lesser
of (a) 67% or more of the voting securities of the Class B shares of the
Fund present at such meeting, if the holders of more than 50% of the
outstanding voting securities of the Class B shares of the Fund are present
or represented by proxy or (b) more than 50% of the outstanding voting
securities of the Class B shares of the Fund.

EXHIBIT (16)

<PAGE>

Exhibit 16

SCHEDULE OF COMPUTATION OF PERFORMANCE QUOTATION

Average annual total return quotations for the Growth Fund and Fixed Income
Fund for the one and five year periods ended October 31, 1995 and for the
period from the Funds' inception on December 15, 1986 through October 31,
1995 are set forth in the Statement of Additional Information. In
addition, also set forth in the Statement of Additional Information are
average annual total return quotations for the Aggressive Growth Fund
(which, for periods prior to July 10, 1992 includes its predecessor, the
Neuwirth Fund, Inc.) and the Growth and Income Fund (which, for periods
prior to July 10, 1992 includes its predecessor, the Pine Street Fund,
Inc.) for the one, five and ten year periods ended October 31, 1995 and for
the Municipal Trust Fund for the one year period ended October 31, 1995 and
for the period from the Fund's inception on July 28, 1993 through October
31, 1995. The average annual return is computed by finding the average
annual compounded rates of return over these periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

P(1 + T)n = ERV

P = a hypothetical initial payment of $1,000
N = average annual total return
n = number of years
ERV = Ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the stated periods at the end of
the stated periods.

Average Annual Total Returns for the periods ended 10/31/94
-----------------------------------------------------------

Growth Fund Fixed Income Fund
------------------- ------------------
Ending Average Ending Average
Redeemable Annual Redeemable Annual
Value Total Value Total
Return* Return*
--------- ------ ---------- -------
1 Year Ended
10/31/95 $1082 8.21% $1082 8.23%

5 Year Ended
10/31/95 $1814 12.65% $1509 8.57%

From Inception:
(12/15/86 through
10/31/95) $2118 8.82% $1966 7.91%

- --------------------
* The Fund's average annual total return figures assume all dividends
and distributions by the Fund over the relevant time periods were
reinvested. It was then assumed that at the end of these periods, the
entire amount was redeemed and the appropriate deferred sales load was
deducted. The average annual return was then calculated by calculating the
annual rate required for the initial payment to grow to the amount which
would have been received upon redemption (i.e., the average annual
compounded rate of return).

<PAGE>

Aggressive Growth Fund Growth and Fixed Income
Fund
------------------------- ------------------------
Ending Average Ending Average
Redeemable Annual Total Redeemable Annual Total
Value Return* Value Return*

1 Year Ended
10/31/95 $1071 7.10% $1121 12.10%

5 Year Ended
10/31/95 $2665 21.66% $1930 14.05%

10 Year Ended
10/31/95 $3514 13.39% $2975 11.52%

Municipal Trust Fund
--------------------------
Ending Average
Redeemable Annual Total
Value Return*
----------- -------------
1 Year Ended
10/31/95 $1061 6.06%

From Inception:
(7/28/93 through
10/31/95) $1049 2.12%

--------------------
* The Fund's average annual total return figures assume all
dividends and distributions by the Fund over the relevant time
periods were reinvested. It was then assumed that at the end of
these periods, the entire amount was redeemed and the appropriate
deferred sales load was deducted. The average annual return was
then calculated by calculating the annual rate required for the
initial payment to grow to the amount which would have been
received upon redemption (i.e., the average annual compounded
rate of return).

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<PAGE>

SCHEDULE FOR COMPUTATION OF FIXED INCOME FUND
AND MUNICIPAL TRUST FUND 30-DAY YIELD QUOTATION

A 30-day yield quotation for each of the Fixed Income Fund and

the Municipal Trust Fund, for the year ended October 31, 1995, was set

forth in the Statement of Additional Information. The Fund's yield is

based on a 30-day period and is computed by dividing the net investment

income per share earned during the period by the maximum offering price per

share on the last day of the period, according to the following formula:

YIELD = 2[ (a-b/cd+1)6 - 1]

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

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

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

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

The 30-day yield quotation for the Fixed Income Fund and the Municipal

Trust Fund for the period ended October 31, 1995 was 5.34% and 3.71%,

respectively.

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EXHIBIT (18)

WINTHROP FOCUS FUNDS

Plan for Multiple Classes of Shares
-----------------------------------

THIS PLAN, as it may be amended from time to time, sets forth the
separate arrangement and expense allocation of each class of shares of each
series of Winthrop Focus Funds, a Massachusetts Business Trust (the
"Trust"). The Plan has been adopted pursuant to Rule 18f-3(d) under the
Investment Company Act of 1940, as amended (the "Act"), by a majority of
the Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Trust within the meaning of Section 2(a)(19) of
the Act ("Independent Trustees"). Any material amendment to this plan is
subject to the prior approval of the Trustees, including a majority of the
Independent Trustees.

1. General
-------

A. Any series of the Trust (a "Series") may issue more than one
class of shares of beneficial interest (each, a "Class"),
provided that each Class --

i. Shall have a different arrangement for shareholder services
or the distribution of securities or both, and shall pay all
of the expenses of that arrangement;

ii. May pay a different share of other expenses, not including
advisory or custodial fees or other expenses related to the
management of the Series' assets, if these expenses are
actually incurred in a different amount by that Class, or if
the Class receives services of a different kind or to a
different degree than other Classes of the same Series ("
Other Class Expenses");

iii. May pay a different advisory fee to the extent that any
difference in amount paid is the result of the application
of the same performance fee provisions in the advisory
contract of the Fund or Series to the different investment
performance of each Class;

iv. Shall have exclusive voting rights on any matter submitted
to shareholders that relates solely to its arrangement;

<PAGE>

v. Shall have separate voting rights on any matter submitted to
shareholders in which the interests of one Class differ from
the interests of any other Class; and

vi. Shall have in all other respects the same rights and
obligations as each other Class of the Series.

B. Other Class Expenses may include only (i) transfer agency fees
attributable to a specific Class; (ii) printing and postage
expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxies to current
shareholders of a specific Class; (iii) blue sky registration
fees incurred by a Class; (iv) registration fees of the
Securities and Exchange Commission (the "Commission") incurred by
a Class; (v) the expenses of administrative personnel and
services as required to support the shareholders of a specific
Class; (vi) litigation or other legal expenses relating solely to
one Class; and (vii) Trustees' fees incurred as a result of
issues relating to one Class.

C. Income, realized and unrealized capital gains and losses, and
expenses of a Series not allocated to a particular Class shall be
allocated to each Class of that Series on the basis of the net
asset value of the Class in relation to the net asset value of
the Series.

D. On an ongoing basis, the Trustees, pursuant to their fiduciary
responsibilities under the Act and otherwise, will monitor each
Series for the existence of any material conflicts among the
interests of its several Classes. The Trustees, including a
majority of the Independent Trustees, shall take such action as
is reasonably necessary to eliminate any such conflicts that may
develop. Wood, Struthers & Winthrop Management Corp. (the
"Adviser") and Donaldson, Lufkin & Jenrette Securities
Corporation (the "Distributor") will be responsible for reporting
any potential or existing conflicts to the Trustees. If a
conflict arises, the Adviser and the Distributor will be
responsible at their own costs for remedying such conflict by
appropriate steps up to and including the establishment of a new
registered management investment company.

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<PAGE>

E. The Trust's plans adopted under Rule 12b-1 under the Act (the
"Rule 12b-1 Plan") provide that the Trustees will receive
quarterly and annual statements complying with
paragraph (b)(3)(ii) of Rule 12b-1, as it may be amended from
time to time. In the statements, only distribution expenditures
properly attributable to the sale of a Class will be used to
support the Rule 12b-1 fee charged to shareholders of such Class.
Expenditures not related to the sale of a specific Class will not
be presented to the Trustees to support Rule 12b-1 fees charged
to shareholders of such Class. The statements, including the
allocations upon which they are based, will be subject to the
review and approval of the Independent Trustees in the exercise
of their fiduciary duties.

F. Dividends paid by a Series with respect to each Class, to the
extent any dividends are paid, will be calculated in the same
manner, at the same time and on the same day and will be in the
same amount, except that fee payments made under the Rule 12b-1
Plan relating to the Classes will be borne exclusively by each
Class and except that any Class Expenses may be borne by the
applicable Class.

G. For purposes of expressing an opinion on the financial statements
of the Fund, the methodology and procedures for calculating the
net asset value and dividends/distributions of the Fund's several
classes and the proper allocation of income and expenses among
such classes will be examined annually by the Fund's independent
auditors who, in performing such examination, shall consider the
factors set forth in the relevant auditing standards adopted from
time to time by the American Institute of Certified Public
Accountants.

H. Each Series may be offered with an exchange privilege providing
that the securities of a class may be exchanged for certain
securities of another Series or another fund advised by the
trust's investment adviser or whose securities are distributed by
the Trust's distributor or otherwise.

I. Each Series may be offered with a conversion feature providing
that the shares of one class (the "Purchase Class") will be
exchanged automatically for shares of another class (the

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<PAGE>

"Target Class") after a specified period of time, provided that,
-------------
such conversion will be effected on the basis of relative net
asset values of the two classes without the imposition of any
sales load, fee or other charge and that the expenses of the
Target Class, including payments authorized under a Rule 12b-1
plan, are not higher than the expenses of the Purchase Class,
including payments authorized under a Rule 12b-1 plan; and, if
the amount of expenses of the Target Class, including payments
under a Rule 12b-1 plan, are increased materially without
approval of the shareholders of the Purchase Class, the Trust
will establish a new Target Class for the Purchase Class on the
same terms as applied to the Target Class before the increase.

J. Each Series may offer a conversion feature providing that shares
of a class in which an investor is no longer eligible to
participate may be converted to shares of a class in which such
investor is eligible to participate provided that such investor
-------------
is given notice of the proposed conversion either at the time of
purchase or subsequently and the conversion is effected on the
basis of the relative net asset values of the two classes without
the imposition of a sales load, fees or other charge.

2. Terms of the Classes
--------------------

A. Each Series currently intends to offer three classes of shares
(each, a "Class") but reserves the right to issue additional
classes. Each Series' Class A shares are offered subject to a
front-end sales load of up to 4.75% of the offering price, a
management fee as described in the Prospectus, and a Rule 12b-1
fee of .30 of 1% per year of the average daily net assets of the
Class A shares of such Series consisting of (i) an asset-based
sales charge of .05 of 1% per year of the average daily net
assets of the Class A shares of such Series and (ii) a service
fee of .25 of 1% per year of the average daily net assets of the
Class A shares of such Series. In addition, Class A shares
issued as a result of the conversion of Class O shares of such
Series shall be subject to a contingent deferred sales charge at
the same rate and for the same periods of time as if such Class O
shares had not converted to Class A shares. Each Series' Class B
shares are offered subject to a contingent deferred sales charge
of

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<PAGE>

4% if redeemed within 1 year after purchase, 3% if redeemed more
than 1 year but less than 2 years of purchase, 2% if redeemed
more than 2 years but less than 3 years after purchase, and 1% if
redeemed more than 3 years but less than 4 years after purchase
and 0% if redeemed more than 4 years after purchase. Each
Series' Class B shares are subject to a management fee as
described in the Prospectus and a Rule 12b-1 fee at an annual
rate of 1.00% per year of the average daily net assets of the
Class B shares of such Series consisting of (i) an asset-based
sales charge of .75 of 1% per year of the average daily net
assets of the Class B shares of such Series and (ii) a service
fee of .25 of 1% per year of the average daily net assets of the
Class B shares of such Series.

B. Except for shares acquired through reinvestment of dividends,
each Series' Class B shares held for 8 years after purchase will
be automatically converted into Class A shares of such Series.

C. Class O shares of each Series outstanding on the date of the
commencement of the offering of Class A shares shall be
automatically convertible into Class A shares of such Series upon
the commencement of offering of Class A shares, as described in
the Prospectus.

D. Shares of one Class of a Series can be converted to another Class
of the same Series or exchanged for shares of the same class of
Alliance Government Reserves of Alliance Municipal Trust or for
shares of the same class of Winthrop Opportunity Funds, where
legally permissible and as described in the Prospectus.

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