WINTHROP FOCUS FUNDS, 497, 1996-02-29

WINTHROP FOCUS FUNDS
497, 1996-02-29

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WINTHROP FOCUS FUNDS
277 Park Avenue, New York, NY 10172
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 20.

There can, of course, be no assurance that the Funds will achieve their
respective investment objectives. See "Investment Objectives and Policies", page
12, 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: (i) 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; (v) salary reduction simplified employee pension
(SARSEP) plans; and (vi) for the minimum initial investment only, Class B
accounts established as of February 28, 1996 under Winthrop's automatic monthly
investment plan. Further information can be obtained from Winthrop at the
address and telephone number shown above. See "Purchases, Redemptions and
Shareholder Services", page 30.

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 30.

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 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.
<PAGE>
This Page Intentionally Left Blank

2
<PAGE>
SUMMARY OF FUND
EXPENSES
<TABLE>
<CAPTION>
AGGRESSIVE FIXED
GROWTH FUND GROWTH FUND INCOME FUND
-------------------- -------------------- --------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B(3) CLASS A CLASS B(3) CLASS A CLASS 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 reimbursement
(Fixed Income Fund only).................... .38 .38 .32 .32 .07 .07
Total Fund Operating Expenses................. 1.43 2.13 1.44 2.14 1.00(2) 1.70(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.

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

<TABLE>
<C> <S>
* 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", page 29.

(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 Converted Shares", page 35. 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 policy of the Adviser in effect. Total
Fund Operating Expenses, as so adjusted, reflect a voluntary assumption by the Adviser of
expenses or a voluntary reduction of the management fee amounting to .31% for Class A shares
and Class B shares 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, Redemption and Shareholder Services--Automatic Conversion of Class
B Shares", page 36.
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
GROWTH AND MUNICIPAL
INCOME FUND TRUST FUND
-------------------- --------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B(3) CLASS A CLASS B(3)
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 reimbursement (Municipal Trust
Fund only)...................................................... 34 .34 .07 .07
Total Fund Operating Expenses................................ 1.38 2.08 1.00(2) 1.70(2)
</TABLE>

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

<TABLE>
<C> <S>
* 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% 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", page 29.
(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 Converted Shares", page 35. 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 policy of the Adviser in effect.
Total Fund Operating Expenses, as so adjusted, reflect a voluntary assumption by the Adviser
of expenses or a voluntary reduction of the management fee amounting to .38% for Class A
shares and Class B shares 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, Redemption and Shareholder Services--Automatic Conversion of Class
B Shares", page 36.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>

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 $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................................................. $ 57 $74 $ 92 $182
You would pay the following expenses on the same investment,
assuming no redemptions.......................................... $ 17 $54 $ 92 $182
GROWTH AND 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................................................. $ 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
</TABLE>

5
<PAGE>
<TABLE>
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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................................................. $ 57 $74 $ 92 $182
You would pay the following expenses on the same investment,
assuming no redemptions.......................................... $ 17 $54 $ 92 $182
</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 of Winthrop", page 29, and "Purchases,
Redemptions and Shareholder Services", page 30. 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 to Class A 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 waive its advisory fee or reimburse Winthrop for
certain of its expenses. See "Management" in the Prospectus, page 27, and the
Statement of Additional Information, page 25. 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 and reimburse operating expenses by the amount that Total Fund Operating
Expenses exceed 1.000% of the average daily net assets of the Class A shares and
1.700% of the average daily net assets of the Class B shares 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 fiscal
ended October 31, 1995 and (ii) the Municipal Trust Fund $208,045 during the
fiscal year ended October 31, 1995.

"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 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.

6
<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.

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.
<TABLE>
<CAPTION>
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 (LOSS) 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.

7
<PAGE>
FINANCIAL HIGHLIGHTS

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.
<TABLE>
<CAPTION>
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 (LOSS) 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)
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.

8
<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.
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED
OCTOBER 31, FISCAL YEARS ENDED JUNE 30,
---------------------------------------- --------------------------------------------------------------
1995 1994 1993 1992* 1992 1991 1990 1989 1988 1987
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <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
INCOME (LOSS) FROM
INVESTMENT
OPERATIONS:
Net Investment
Income............. .254 .244 .270 .083 .320 .380 .565 .464 .423 .456
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
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total From
Investment
Operations......... 2.023 .602 1.990 .655 1.236 .390 1.268 2.013 (1.593) 1.665
LESS DISTRIBUTIONS:
Dividends (from net
investment
income)............ (.266) (.223) (.271) (.165) (.234) (.386) (.562) (.577) (.415) (.365)
Distributions (from
capital gains)..... (.567) (.419) (.649) (.170) (.672) (.784) (.906) (.396) (.932) (1.100)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
Distributions...... (.833) (.642) (.920) (.335) (.906) (1.170) (1.468) (.973) (1.347) (1.465)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
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
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL RETURN(2).... 16.10% 4.58% 16.93% 16.39%(1) 10.45% 3.86% 10.13% 18.36% (10.20)% 13.04%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period
(000's omitted)... $87,975 $67,020 $52,166 $46,457 $45,342 $47,340 $50,687 $52,337 $55,404 $70,753
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%
Ratio of net
investment
income to average
net assets(3)..... 1.94% 1.88% 2.12% 1.99%(1) 2.62% 3.25% 4.35% 3.92% 3.35% 3.23%
Portfolio turnover
rate............... 31.8% 25.9% 36.4% 14.4% 29.0% 48.0% 41.0% 46.0% 38.0% 48.0%

1986
-------
<S> <C>
Net Asset Value,
Beginning of
Period............. $ 13.10
INCOME (LOSS) FROM
INVESTMENT
OPERATIONS:
Net Investment
Income............. .560
Net Gains or Losses
on Securities
(both realized
and unrealized)... 3.230
-------
Total From
Investment
Operations......... 3.790
LESS DISTRIBUTIONS:
Dividends (from net
investment
income)............ (.548)
Distributions (from
capital gains)..... (1.962)
-------
Total
Distributions...... (2.510)
-------
Net Asset Value,
End of Period..... $ 14.38
-------
-------
TOTAL RETURN(2).... 29.67%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period
(000's omitted)... $65,908
Ratio of expenses
to average
net assets(3)..... 1.17%
Ratio of net
investment
income to average
net assets(3)..... 3.93%
Portfolio turnover
rate............... 90.0%
</TABLE>

- ------------
* For the period July 1, 1992 to October 31, 1992.
(1) Annualized.
(2) A Contingent Deferred Sales Charge 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.

9
<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.

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.
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
-------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED
OCTOBER 31, FISCAL YEARS ENDED DECEMBER 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.... $ 15.65 $ 16.11 $ 14.00 $ 14.16 $ 10.16 $ 11.90 $ 12.64 $ 11.52 $13.351
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income
(Loss).................. 035 .105 .123 .011 .023 .157 .062 .018 (.066)
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)
-------- -------- ------- ------- ------- ------- ------- ------- -------
Total From Investment
Operations.............. 1.656 .708 3.318 1.493 5.113 (1.563) 2.024 3.409 (1.291)
LESS DISTRIBUTIONS:
Dividends (from net
investment income)..... -- (.026) (.011) (.027) (.024) (.177) (.062) (.009) --
Distributions (from
capital gains)......... (.696) (1.142) (1.197) (1.626) (1.089) -- (2.702) (2.280) (.540)
-------- -------- ------- ------- ------- ------- ------- ------- -------
Total Distributions..... (.696) (1.168) (1.208) (1.653) (1.113) (.177) (2.764) (2.289) (.540)
-------- -------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period.......... $ 16.61 $ 15.65 $ 16.11 $ 14.00 $ 14.16 $ 10.16 $ 11.90 $ 12.64 $11.520
-------- -------- ------- ------- ------- ------- ------- ------- -------
-------- -------- ------- ------- ------- ------- ------- ------- -------
TOTAL RETURN(2)......... 11.10% 4.67% 25.34% 13.95%(1) 50.55% (13.12)% 16.25% 29.59% (10.61)%
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
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%
Ratio of net investment
income (loss) to
average net assets(3)... .23% (.04%) .32% .10%(1) .18% 1.45% .43% .13% (.49)%
Portfolio turnover
rate.................... 25.1% 31.6% 134.3% 164.1% 91.3% 87.6% 107.4% 107.9% 117.4%

1986
-------
<S> <C>
Net Asset Value,
Beginning of Period.... $15.211
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income
(Loss).................. (.071)
Net Gains or Losses on
Securities (both
realized
and unrealized)........ 1.467
-------
Total From Investment
Operations.............. 1.396
LESS DISTRIBUTIONS:
Dividends (from net
investment income)..... (.044)
Distributions (from
capital gains)......... (3.212)
-------
Total Distributions..... (3.256)
-------
Net Asset Value,
End of Period.......... $13.351
-------
-------
TOTAL RETURN(2)......... 8.53%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period
(000's omitted)........ $23,338
Ratio of expenses to
average net
assets(3)............... 1.78%
Ratio of net investment
income (loss) to
average net assets(3)... (.45)%
Portfolio turnover
rate.................... 73.7%
</TABLE>

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

(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 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.

10
<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.
<TABLE>
<CAPTION>
MUNICIPAL TRUST FUND
---------------------------------------
FISCAL YEARS ENDED
PERIOD ENDED
OCTOBER 31, OCTOBER 31, 1993*
------------------ -----------------
1995 1994
------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............................ $ 9.51 $ 10.10 $ 10.00
INCOME (LOSS) 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%
</TABLE>

- ------------
* 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 Adviser of expenses, expressed as a
percentage of average net assets as follows: .58%, .77% and 1.15%
(annualized) for the fiscal years ended October 31, 1995 and 1994 and the
period July 28, 1993 through October 31, 1993, respectively.

11
<PAGE>
INTRODUCTION

Winthrop is a diversified, open-end management investment company commonly
known as a "mutual fund" whose shares are offered in five separate portfolios,
collectively referred to as "Funds". Because Winthrop offers multiple funds, it
is known as a "series fund". Winthrop is empowered to establish additional Funds
with different investment objectives and policies and offer additional classes
of shares.

Each of Winthrop's Funds is a separate pool of assets constituting, in
effect, a separate Fund with its own investment objective and policies. (See
"Investment Objectives and Policies" below.) A shareholder may utilize
Winthrop's exchange privilege to transfer such shareholder's assets to the same
class in another Fund of Winthrop and among certain other affiliated mutual
funds in accordance with such shareholder's changing perceptions of the relative
investment potential of each investment alternative. (See "Purchases,
Redemptions and Shareholder Services--Additional Shareholder Services", page
36.) Shareholders of all classes of a Fund are entitled to their pro rata share
of any dividends and distributions arising from that Fund's assets except that
with respect to each Fund, each class bears different distribution expenses.
(See "Dividends, Distributions and Taxes", page 39.) Upon redeeming shares of a
Fund, the shareholder will receive the next-determined net asset value of that
Fund represented by the redeemed shares less the applicable contingent deferred
sales charge, if any. (See "Purchases, Redemptions and Shareholder Services",
page 30.)

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives of each Fund are fundamental policies of that Fund
and may not be changed without the approval of that Fund's shareholders. Except
as set forth in "Investment Restrictions", page 25, or as otherwise indicated
below, the investment policies of each Fund are not fundamental policies and may
be changed by the Board of Trustees without a shareholder vote.

The investment objectives and policies of each Fund are set forth below.
There can be, of course, no assurance that any of the Funds will achieve its
respective investment objective.

THE FUNDS

Growth Fund The investment objective of the Growth Fund is long-term capital
appreciation. Investments will be made based upon their potential for long-term
capital appreciation. However, the Growth Fund may make an investment to earn
income when, in the opinion of the Adviser, such an investment will not
compromise the Growth Fund's investment objective.

It is the policy of the Growth Fund to invest principally in common stock,
securities convertible into common stock and other equity securities (i.e.,
preferred stock, interests in master limited partnerships) of well-known and
established companies (generally, companies in operation for more than three
years) as well as new and unseasoned companies which, in the opinion of the
Adviser, have the potential for long-term capital appreciation. Investments in
new and unseasoned companies which have limited operating histories may involve
risks not present in investments in established and well-known companies.

Under normal circumstances, the Growth Fund will have at least 65% of the
value of its total assets invested in equity securities of companies

12
<PAGE>
which in the opinion of the Adviser have long-term capital appreciation
potential. However, the Growth Fund reserves the right when the Adviser
determines it is appropriate to invest in investment grade short-term fixed
income securities and other investment grade debt securities, enter into
repurchase agreements and hold cash for temporary defensive purposes without
regard for the above limitation. In addition, under normal circumstances the
Growth Fund may invest up to 35% of the value of its total assets in equity
securities selected on a basis other than long-term capital appreciation
potential, investment grade fixed income securities, including bonds,
debentures, notes, asset and mortgage-backed securities and money market
instruments such as commercial paper and bankers acceptances and other financial
instruments. (See "Additional General Investment Policies--Mortgage and
Asset-Backed Securities", page 22, for a description of asset and
mortgage-backed securities.)

The Growth Fund may invest only in debt securities of investment grade
quality. Investment grade quality debt securities are debt securities rated in
one of the four highest rating categories by a nationally recognized statistical
rating organization and unrated debt securities believed by the Adviser (on the
basis of criteria believed by the Adviser to be comparable to that applied by
such rating agencies) to be of comparable quality to debt securities so rated.
(See "Additional General Investment Policies--Investment Grade Debt Securities",
page 23, for a description of investment grade debt securities.) The foregoing
investment grade limitation applies only at the time of initial investment and
the Growth Fund may determine to retain in its portfolio securities the issuers
of which have had their credit characteristics downgraded.

Critical factors considered in the selection of securities include the
economic and political outlook, the value of a particular security relative to
another security, trends in the determinants of corporate profits, and
management capability and practices. Within this basic framework, the policy of
the Growth Fund is to invest in any company or industry believed to offer the
opportunity for long-term capital appreciation. The selection of securities on
the basis of their appreciation possibilities provides an opportunity for
greater capital gain which may involve a corresponding greater risk of capital
loss than would the selection of a more conservative equity portfolio.

The Growth Fund may invest in both listed and unlisted securities and in
foreign as well as domestic securities. While the Growth Fund has no present
intention of investing any significant portion of its assets in foreign
securities, it may invest up to 10% of the value of its total assets in foreign
securities. Investments in foreign securities may be subject to special risks,
including changes in restrictions on foreign currency transactions and in rates
of exchange, variations in accounting and auditing standards, limited public
information about the issuer, future political and economic developments and
possible imposition of exchange controls or other foreign governmental laws and
restrictions which generally are not present in investments in domestic
securities. The Growth Fund may invest in restricted securities and in
instruments having no ready market if such purchases at the time thereof would
cause no more than 10% of the value of its net assets to be invested in not
readily marketable assets. (See "Investment Restrictions", page 25.)

The Growth Fund may invest up to 5% of its total assets in warrants which
entitle the holder to buy equity securities at a specific price for a specific
period of time.

To minimize the effect of a market decline in the value of its securities,
the Growth Fund may write covered call options on securities or stock indices. A
call option on a security gives the purchaser of the option, upon payment of a
premium to the writer of the option, the right to purchase from the writer of
the option a specified number of shares of a specified security on or before a
fixed date, at a predetermined price. A call option on a securities index
represents the holder's right to obtain from the writer in cash a fixed multiple
of the amount by which the exercise price is less than the value of the

13
<PAGE>
underlying securities index on the exercise date. So long as the Growth Fund
remained obligated as a writer of covered call options, it would forego the
opportunity to profit from increases in the market price of the underlying
security or index above the exercise price of the option. The Growth Fund may
not write a call option on a security unless at all times during the option
period it owns either (i) the optioned securities, or securities convertible
into or carrying rights to acquire the optioned securities at no additional
cost, or (ii) an offsetting call option on the same securities at the same or a
lower price. When the Fund writes a call option on a securities index, it will
establish a segregated account with its custodian in which it will deposit cash
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. In addition, the Growth Fund may not write a
call option if as a result thereof, the aggregate of the Growth Fund's portfolio
securities subject to outstanding call options (valued at the lower of the
option price or market value of such securities) or the amount deposited in a
segregated account would exceed 5% of the Growth Fund's total assets.

If the Growth 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. The
Fund may also enter into a closing purchase transaction in order to terminate
its obligations under an option it has written. 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 on the same security and same
terms as the option previously written. There can be no assurances that a
closing purchase transaction can be effected. The Fund realizes a profit or loss
from a closing purchase transaction if the cost of the transaction is less or
more than the premium received from the writing of the option. The Fund will not
purchase call options except in closing purchase transactions.

See the Statement of Additional Information for a more complete discussion
of the Growth Fund's investment practices and the risks associated therewith.

Aggressive Growth Fund The investment objective of the Aggressive Growth
Fund is a high level of growth of capital. The Aggressive Growth Fund is not
intended for investors whose principal objective is assured income or
preservation of capital.

It is the policy of the Aggressive Growth Fund to invest principally in
common stock and securities convertible into common stock, but it may when
deemed appropriate by the Adviser invest all or part of its assets in preferred
stock, other equity securities and in bonds and other debt securities as
described below. The Aggressive Growth Fund may invest in established companies
(generally, companies in operation for more than three years) as well as in new
and unseasoned companies that, in the opinion of the Adviser, have the potential
for a high level of capital appreciation. Because of the Aggressive Growth
Fund's policy of selecting investments on the basis of their potential for a
high level of growth of capital, a greater proportion of the Aggressive Growth
Fund's assets may from time to time be invested in new and unseasoned companies
with speculative risk characteristics as compared to an investment company that
does not select securities on the basis of their potential for a high level of
growth of capital. The Aggressive Growth Fund will not, however, invest more
than 10% of its assets (at the time of purchase) in equity securities of
companies (including predecessors) that have less than three years of
operations. The securities of such companies may be less marketable and more
volatile than the securities of more established companies. Although the
Aggressive Growth Fund has adopted the investment policies stated above, it has
in addition made undertakings to certain States which prohibit the purchase of
securities of companies which have been in operation for less than three years.

14
<PAGE>
The Aggressive Growth Fund may also invest in special situations, that is,
in securities the values of which may be affected by particular developments
unrelated to business conditions generally, and which may fluctuate without
relation to general market trends. In general, a special situation company is a
company whose securities could reasonably be expected to be accorded market
recognition within a foreseeable period of time at an appreciated value solely
by reason of a development particularly or uniquely applicable to that company.
The principal risk associated with investment in special situation companies is
that if the anticipated development does not occur, the investment is likely not
to appreciate or may decline. Examples of special situations are companies being
reorganized or merged, having unusual new products, enjoying particular tax
advantages, or acquiring new management. In addition, the Aggressive Growth Fund
may invest in the securities of companies that appear relatively under priced in
relation to future prospects as assessed by the Adviser. This would include
investments in companies in industries where an important, positive change in
outlook appears probable or in companies where significant and identifiable
internal changes have occurred but, in the view of the Adviser, have yet to be
broadly identified by investors.

In addition to common stock and securities convertible into common stock,
the Aggressive Growth Fund may invest in preferred stock, investment grade debt
securities (including bonds, debentures, notes, asset and mortgage-backed
securities and convertible securities), U.S. Government securities (including
securities issued or guaranteed by agencies or instrumentalities of the U.S.
Government), municipal securities (including general and special obligation
securities and industrial revenue bonds) and money market instruments (such as
commercial paper and bankers' acceptances) and other financial instruments. (See
"Additional General Investment Policies--Mortgage and Asset-Backed Securities",
page 22, for a description of asset and mortgage-backed securities.)

The Aggressive Growth Fund may invest only in debt securities of investment
grade quality. Investment grade quality debt securities are debt securities
rated in one of the four highest rating categories by a nationally recognized
statistical rating organization and unrated debt securities believed by the
Adviser (on the basis of criteria believed by the Adviser to be comparable to
that applied by such rating agencies) to be of comparable quality to debt
securities so rated. (See "Additional General Investment Policies--Investment
Grade Debt Securities", page 23, for a description of investment grade debt
securities.) The foregoing investment grade limitation applies only at the time
of initial investment and the Aggressive Growth Fund may determine to retain in
its portfolio securities the issuers of which have had their credit
characteristics downgraded.

In selecting portfolio investments for the Aggressive Growth Fund, the
Adviser considers factors such as the general economic and political outlook,
the value of a particular security relative to the value for other securities,
trends in determinants of corporate profits and management capability and
practices. Within this basic framework, the Adviser attempts to find relatively
established companies in growth industries that have product, management or
similar advantages over other companies in such industries and that are believed
by the Adviser to offer the potential for a high level of capital appreciation.
The Aggressive Growth Fund presently intends to emphasize investment in equity
securities of small- to medium-size companies that are believed by the Adviser
to have the potential for a high level of capital appreciation. This emphasis
may be altered when, in the view of the Adviser, some other emphasis is more
appropriate to the Aggressive Growth Fund's investment objective. Securities of
small- and medium-size companies may be less marketable and more volatile than
securities of larger companies. Smaller and medium-size companies generally tend
to reinvest earnings rather than pay cash dividends. Dividend income generally
is not considered by the Adviser in the choice of portfolio securities for the
Aggressive

15
<PAGE>
Growth Fund. The selection of securities on the basis of the potential for a
high level of capital appreciation provides an opportunity for a high level of
capital gain and involves a corresponding greater risk of capital loss than
would the selection of a more conservative portfolio. There can be no assurance
that the Aggressive Growth Fund will achieve its investment objective.

The Aggressive Growth Fund may invest in securities listed on a securities
exchange and securities traded in the over-the-counter markets. It may also
invest in foreign as well as domestic securities. A greater proportion of the
securities in which the Fund invests may not be listed on any national
securities exchange as compared with an investment company that invests
primarily in securities of larger companies. Securities not listed on a national
securities exchange may be less liquid and more volatile than listed securities.
The Aggressive Growth Fund may invest up to 20% of the value of its total assets
in foreign securities. Investments in foreign securities may be subject to
special risks, including changes in restrictions on foreign currency
transactions and fluctuations in rates of exchange, variations in accounting and
auditing standards, limited public information about the issuer, future
political and economic developments and possible imposition of exchange controls
or other foreign governmental laws or restrictions which generally are not
present in investments in domestic securities. The Aggressive Growth Fund may
invest in instruments having no ready market if such purchases at the time
thereof would cause no more than 10% of the value of its net assets to be
invested in not readily marketable assets. Although the Aggressive Growth Fund
has adopted this investment policy, it has in addition made undertakings to
certain States which limit to no more than 5% of its total assets its
investments in not readily marketable securities. The Aggressive Growth Fund
also may invest up to 5% of its total assets in warrants or rights which entitle
the holder to buy equity securities at a specific price during or at the end of
a specific period of time.

The Aggressive Growth Fund may engage in short-term portfolio transactions
in an attempt to generate capital gains when deemed appropriate by the Adviser
under the circumstances, taking into consideration the market analysis factors
of any particular security and the technical conditions of the securities
markets. In accordance with the investment policy of engaging in short-term
portfolio transactions, the Aggressive Growth Fund has no restrictions with
respect to portfolio turnover and the rate of portfolio turnover is not
considered a prohibitive factor by the Adviser when considering short-term
portfolio transactions. As a result of this policy, it is possible that the
Aggressive Growth Fund's annual portfolio turnover rate may exceed 100%,
although the Adviser anticipates that such rate will not exceed 200%. Because it
is difficult to predict accurately portfolio turnover rates, actual turnover may
be higher or lower. The portfolio turnover rate is computed by dividing the
lesser of the amount of the securities purchased or the securities sold by the
average monthly value of securities owned during the year, excluding securities
whose maturities at the time of acquisition were one year or less. A high degree
of portfolio turnover results in increased transaction costs. In addition, a
high degree of portfolio turnover will make it more difficult for the Aggressive
Growth Fund to qualify as a pass-through entity for federal tax purposes due to
a requirement under federal tax law that a registered investment company, such
as the Aggressive Growth Fund, obtain less than 30% of its gross income in any
tax year from gains on the sale of securities held less than three months. The
Aggressive Growth Fund intends to so qualify as a pass-through entity. Failure
to so qualify would result in federal taxation of the Aggressive Growth Fund at
the standard effective corporate rate of up to 35%.

The Aggressive Growth Fund may purchase or sell options on individual
securities as well as on indices of securities as a means of achieving
additional return or of hedging the value of its portfolio. The Aggressive
Growth Fund's successful purchase and sale of options depends on the ability of
the Adviser to predict the direction of the market and is

16
<PAGE>
subject to certain additional risks, including generally greater volatility of
options as compared to common stocks and the risk that an option will expire
without value. A call option is a contract that gives the holder of the option
the right, in return for a premium paid, to buy from the seller the security
underlying the option at a specified exercise price at any time during the term
of the option or, in some cases, only at the end of the term of the option. The
seller of the call option has the obligation upon exercise of the option to
deliver the underlying security upon payment of the exercise price. A put option
is a contract that gives the holder of the option the right, in return for a
premium, to sell to the seller of the option the underlying security at a
specified price. The seller of the put, on the other hand, has the obligation to
buy the underlying security upon exercise at the exercise price.

If the Aggressive Growth Fund has sold an option, it may terminate its
obligation by effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously sold. There can
be no assurance that a closing purchase transaction can be effected when the
Aggressive Growth Fund so desires. The purchaser of an option risks a total loss
of the premium paid for the option if the price of the underlying security does
not increase or decrease sufficiently to justify exercise. The seller of an
option, on the other hand, will recognize the premium as income if the option
expires unexercised but forgoes any capital appreciation in excess of the
exercise price in the case of a call option and may be required to pay a price
in excess of current market value in the case of a put option. Options purchased
and sold in private transactions (other than on an exchange) also impose on the
Aggressive Growth Fund the credit risk that the counterparty will fail to honor
its obligations. The Aggressive Growth Fund will not purchase options if, as a
result, the aggregate cost of all outstanding options exceeds 10% of its assets.
The Aggressive Growth Fund may also purchase and sell financial futures
contracts and options thereon for hedging and risk management purposes. To the
extent that puts, calls, straddles and similar investment strategies involve
instruments regulated by the Commodity Futures Trading Commission, the
Aggressive Growth Fund is limited to an investment not in excess of 5% of its
total assets. Although the Aggressive Growth Fund has adopted the investment
policies stated above, it has in addition made undertakings to certain States
which (a) prohibit investment in commodities and commodity futures contracts,
(b) limit investment in options, financial futures and stock index futures to 5%
of the value of its net assets and (c) prohibit investment in interests in oil,
gas or other mineral exploration or development programs.

See the Statement of Additional Information for a more complete description
of the Aggressive Growth Fund's investment practices and the risks associated
therewith.

Fixed Income Fund The investment objective of the Fixed Income Fund is to
provide as high a level of total return as is consistent with capital
preservation by investing principally in debt securities, including, without
limitation, convertible and nonconvertible debt securities of foreign and
domestic companies, including both well-known and established and new and
lesser-known companies. Total return means the sum of interest income, dividend
income (if any) and capital gains less capital losses. Capital preservation
means minimizing the risk of capital loss in a period of falling prices (rising
interest rates) for debt securities.

Specifically, the investment policies of the Fixed Income Fund permit it to
invest, without restriction, in the following types of securities:

(1) Bonds, including municipal bonds (taxable and tax-exempt, including,
among others, special and general obligation bonds and industrial
development bonds) and other debt securities, which are rated Aaa, Aa, A or
MIG-1 by Moody's Investors Service, Inc. ("Moody's"), or AAA, AA, A or SP-1
by Standard & Poor's Ratings Group ("S&P");

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<PAGE>
(2) Marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities ("U.S. Government
Securities");

(3) Obligations issued or guaranteed by national or state bank holding
companies, which obligations are not rated as a matter of policy by either
Moody's or S&P, but which, in the opinion of the Adviser (on the basis of
criteria believed by the Adviser to be comparable to that used by nationally
recognized statistical rating organizations for assigning ratings), meet the
Fixed Income Fund's investment objective; and

(4) Commercial paper rated Prime-1 by Moody's or A-1 + or A-1 by S&P.

The Fixed Income Fund may also invest not more than 25% of its total assets
at the time of investment in debt securities rated Baa or MIG-2 by Moody's or
BBB or SP-2 by S&P and in commercial paper rated Prime-2 by Moody's or A-2 by
S&P, to the extent that such investments would, in the opinion of the Adviser,
be consistent with the Fixed Income Fund's investment objective. (See
"Additional General Investment Policies", page 22, for a description of
securities rated BBB by S&P and Baa by Moody's and of asset and mortgage-backed
securities.)

The Fixed Income Fund may enter into repurchase agreements, terminable
within seven days or less, with respect to issues of the United States Treasury,
with member banks of the Federal Reserve System or primary dealers in U.S.
Government Securities, as long as such investments do not in the aggregate
exceed 15% of the total assets of the Fixed Income Fund (except where such
investments are made for temporary defensive purposes, in which case no limit is
applicable).

As a matter of fundamental policy, which cannot be changed without approval
by the vote of a majority of the Fixed Income Fund's outstanding voting
securities (as defined in the Statement of Additional Information), the Fixed
Income Fund will invest at least 80% of the value of its total assets at the
time of investment in debt securities. In normal circumstances, the Fixed Income
Fund will invest at least 65% of the value of its total assets in fixed income
securities. However, the Fixed Income Fund reserves the right to hold cash and
short-term fixed income securities and to enter into repurchase agreements as
necessary for temporary defensive or emergency purposes as determined by the
Adviser without regard for the above limitations.

The Fixed Income Fund may also invest in restricted securities and in
instruments having no ready market if such purchases at the time thereof would
not cause more than 10% of the value of its net assets to be invested in not
readily marketable assets. (See "Investment Restrictions", page 25).

The Adviser intends to adjust the average maturity of the Fund's portfolio
depending upon its assessment of the relative yields on debt securities of
different maturities and its expectations of future interest rate patterns.
Because the change in market value of a debt security generally is inversely
related to market interest rates, the market value of the Fixed Income Fund's
investments will tend to decrease during periods of rising interest rates and to
increase during periods of falling rates. The magnitude of the fluctuations in
market value of the Fund's portfolio as a result of fluctuations in interest
rates will generally be greater at times when the average maturity of the Fund's
portfolio is longer. The Fixed Income Fund will invest and hold debt securities
which, in the opinion of the Adviser, will maximize the total return of the
portfolio.

See the Statement of Additional Information for a more complete description
of the Fixed Income Fund's investment practices and the risks associated
therewith.

Growth and Income Fund The investment objective of the Growth and Income
Fund is long-term capital appreciation and continuity of income. The Growth and
Income Fund pursues its investment objective by investing principally in
dividend-

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<PAGE>
paying common stock and diversifying its investments among different industries
and different companies. The Growth and Income Fund's investment portfolio is
structured with a view to combining an opportunity for long-term capital
appreciation with continuity of income. Accordingly, the Growth and Income Fund
invests in securities on the basis of the Adviser's evaluation of their
investment merit and their potential for appreciation in value and/or income.
The selection of securities on the basis of their capital appreciation or income
potential cannot ensure against possible loss in value and there can be no
assurance that the Growth and Income Fund will achieve its investment objective.

The Growth and Income Fund may invest in common stock, securities
convertible into common stock, preferred stock, debt securities (including
bonds, debentures, notes and asset and mortgage-backed securities), U.S.
Government securities (including securities issued or guaranteed by agencies or
instrumentalities of the U.S. Government), municipal securities (including
general and special obligation securities and industrial revenue bonds) and
money market instruments, such as commercial paper, bankers acceptances and
other financial instruments. (See "Additional General Investment
Policies--Mortgage and Asset-Backed Securities", page 22, for a description of
asset and mortgage-backed securities.) Although the Growth and Income Fund
emphasizes investment in common stock, there is no fixed proportion of the
Growth and Income Fund's assets that must be invested in particular types of
securities. The proportion of assets to be invested in various types of
securities will be determined from time to time by the Adviser.

The Growth and Income Fund may invest only in debt securities of investment
grade quality. Investment grade debt securities are debt securities rated in one
of the four highest rating categories by a nationally recognized statistical
rating organization and unrated debt securities believed by the Adviser (on the
basis of criteria believed by the Adviser to be comparable to that applied by
such rating agencies) to be of comparable quality to debt securities so rated.
(See "Additional General Investment Policies--Investment Grade Debt Securities",
page 23, for a description of investment grade debt securities.) The foregoing
investment grade limitation applies only at the time of initial investment and
the Growth and Income Fund may determine to retain in its portfolio securities
the issuers of which have had their credit characteristics downgraded.

The Growth and Income Fund may invest in both listed and unlisted securities
and in foreign as well as domestic securities. Investments in foreign securities
may be subject to special risks, including changes in restrictions on foreign
currency transactions and in rates of exchange, variations in accounting and
auditing standards, limited public information about the issuer, future
political and economic developments and possible imposition of exchange controls
or other governmental laws or restrictions which generally are not present in
investments in domestic securities. The Growth and Income Fund may invest in
restricted securities and in other investments having no ready market if such
purchases at the time thereof would cause no more than 10% of the value of its
net assets to be invested in not readily marketable assets. (See "Investment
Restrictions", page 25.)

Within the foregoing limits, the investments of the Growth and Income Fund
are diversified among as many different companies and industries as seem
appropriate to the Adviser in light of conditions prevailing at any given time.
Concentration or diversification of assets does not eliminate the risk inherent
in securities investments.

To minimize the effect of a market decline in the value of its securities,
the Growth and Income Fund may write covered call options on securities or stock
indices. A call option on a security gives the purchaser of the option, upon
payment of a premium to the writer of the option, the right to purchase from the
writer of the option a specified number of shares of a specified security on or
before a fixed date, at a predetermined price. A call option on a securities
index represents the holder's right to

19
<PAGE>
obtain from the writer in cash a fixed multiple of the amount by which the
exercise price is less than the value of the underlying securities index on the
exercise date. So long as the Growth and Income Fund remained obligated as a
writer of covered call options, it would forego the opportunity to profit from
increases in the market price of the underlying security or index above the
exercise price of the option. The Growth and Income Fund may not write a call
option on a security unless at all times during the option period it owns either
(i) the optioned securities, or securities convertible into or carrying rights
to acquire the optioned securities at no additional cost, or (ii) an offsetting
call option on the same securities at the same or a lower price. When the Fund
writes a call option on a securities index, it will establish a segregated
account with its custodian in which it will deposit cash 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. In addition, the Growth and Income Fund may not write a call
option if, as a result thereof, the amount deposited in a segregated account
would exceed 5% of the Growth and Income Fund's total assets.

If the Growth and Income 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. The Fund may also enter into a closing purchase transaction in order
to terminate its obligations under an option it has written. A closing purchase
transaction is a transaction in which an investor who is obligated as a writer
of an option terminates such investor's obligation by purchasing an option on
the same security and same terms as the option previously written. There can be
no assurances a closing purchase transaction can be entered into. The Fund
realizes a profit or loss from a closing purchase transaction if the cost of the
transaction is less or more than the premium received from the writing of the
option. The Fund will not purchase call options except in closing purchase
transactions.

Although the Growth and Income Fund has adopted the investment policies
described above, it has in addition made undertakings to certain States which
(a) prohibit the purchase of securities of companies which have been in
operation for less than three years, (b) limit to no more than 5% of its total
assets its investment in not readily marketable securities, and (c) limit to no
more than 5% of its total assets its aggregate investment in puts, calls,
straddles, spreads and any combination thereof.

See the Statement of Additional Information for a more complete discussion
of the Growth and Income Fund's investment practices and the risks associated
therewith.

Municipal Trust Fund The investment objective of the Municipal Trust Fund is
to provide as high a level of total return as is consistent with capital
preservation by investing principally in high grade tax-exempt municipal
securities. This investment objective, unlike most other municipal bond funds,
is not to provide current income which is exempt from federal and/or state
income tax. Total return means the sum of interest income and capital gains less
capital losses. The Municipal Trust Fund intends to distribute annually its net
capital gains. Any such distributions will be taxable to a shareholder as
capital gain. See "Dividends, Distributions and Taxes", page 39.

The Municipal Trust Fund attempts to provide high total return by actively
managing the maturities of the bonds in the portfolio in response to the
Adviser's anticipation of the movement of interest rates. The Fund will shorten
the portfolio's maturities when the Adviser believes that interest rates will
rise and lengthen maturities when the Adviser believes that rates will fall. To
a lesser extent, the Municipal Trust Fund will also attempt to enhance total
return by selecting municipal securities which the Adviser believes are
undervalued. The success of these strategies depends upon the Adviser's ability
to accurately forecast changes in interest rates and to properly assess the
value of municipal securities. The investor should be aware that there can be

20
<PAGE>
no assurances that the Fund's investment strategies will be successful.

Under normal circumstances, it is the Municipal Trust Fund's policy to
invest at least 80% of the value of its net assets at the time of investment in
tax-exempt municipal securities. However, the Municipal Trust Fund reserves the
right to hold cash and short-term fixed income securities and to enter into
repurchase agreements as necessary for temporary defensive or emergency purposes
as determined by the Adviser without regard for the above limitation.

The Municipal Trust Fund seeks to achieve its objective by investing
primarily in a diversified portfolio of high grade, intermediate term municipal
securities. The investment policies of the Municipal Trust Fund permit it to
invest, without restriction, in tax-exempt municipal bonds and notes which are
rated Aaa, Aa, A or MIG-1 by Moody's or AAA, AA, A or SP-1 by S&P.

The Municipal Trust Fund may also invest not more than 25% of its total
assets at the time of investment in municipal securities rated Baa or MIG-2 by
Moody's or BBB or SP-2 by S&P and in commercial paper rated Prime-2 by Moody's
or A-2 by S&P, to the extent that such investments would, in the opinion of the
Adviser, be consistent with the Municipal Trust Fund's investment objective.
(See "Additional General Investment Policies--Investment Grade Debt Securities",
page 23, for a description of securities rated BBB by S&P and Baa by Moody's.)
Non-rated municipal securities will also be considered for investment by the
Municipal Trust Fund when the Adviser believes that the financial condition of
the issuers of such obligations and the protection afforded by the terms of the
obligations themselves limit the risk to the Fund to a degree comparable to that
of rated securities which are consistent with the Fund's objective and policies.

Municipal securities fall into two principal classes: bonds and notes.
Municipal bonds, which are longer-term debt obligations meeting long-term
capital needs, fall into two general classifications: "general obligation" bonds
or "revenue" bonds. Payment of principal and interest on general obligation
bonds is secured by the issuing municipality's pledge of its full faith, credit,
and taxing power. Payment on revenue bonds is met from the revenues derived from
a certain facility, class of facilities, special excise or other tax, but not
from general tax revenues. Variations on these two classifications exist, such
as revenue bonds backed by a municipality's general taxing power, or general
obligation bonds backed by limited taxing power. Municipal notes are short-term
debt obligations generally maturing in a year or less, meeting short-term
capital needs and are also either "general obligation" or "revenue" debt
securities. They include tax anticipation notes, revenue anticipation notes,
bond anticipation notes, construction loan notes and tax-exempt commercial
paper.

Municipal securities may have fixed, variable or floating rates of interest.
Variable and floating rate securities pay interest at rates that are adjusted
periodically, according to a specified formula, in order to minimize fluctuation
in the principal value of the securities. A "variable" interest rate adjusts at
predetermined intervals (e.g., daily, weekly, or monthly), while a "floating"
interest rate adjusts whenever a specified benchmark rate (such as the bank
prime lending rate) changes.

The Adviser intends to adjust the average maturity of the Fund's portfolio
depending upon its assessment of the relative yields on municipal securities of
different maturities and its expectations of future interest rate patterns.
Because the change in market value of a debt security generally is inversely
related to market interest rates, the market value of the Municipal Trust Fund's
investments will tend to decrease during periods of rising interest rates and to
increase during periods of falling rates. The magnitude of the fluctuations in
market value of the Fund's portfolio as a result of fluctuations in interest
rates will generally be greater at times when the average maturity of the Fund's
portfolio is longer. The Municipal Trust Fund will invest and hold debt
securities which, in

21
<PAGE>
the opinion of the Adviser, will maximize the total return of the portfolio.

The Municipal Trust Fund may enter into repurchase agreements, terminable
within seven days or less, with respect to issues of the United States Treasury,
with member banks of the Federal Reserve System or primary dealers in U.S.
Government Securities, as long as such investments do not in the aggregate
exceed 15% of the total assets of the Municipal Trust Fund (except where such
investments are made for temporary defensive purposes in which case no limit is
applicable).

The Municipal Trust Fund may also invest in restricted securities and in
instruments having no ready market if such purchases at the time thereof would
not cause more than 15% of the value of its net assets to be invested in not
readily marketable assets. (See "Investment Restrictions", page 25.)

Although the Municipal Trust Fund has adopted the investment policies
described above, it has in addition made undertakings to certain States which
(a) prohibit the purchase of securities of companies which have been in
operation for less than three years, (b) 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
marketable and (c) limit to no more than 5% of its total assets its aggregate
investment in puts, calls, straddles, spreads, and any combinations thereof.

The Municipal Trust Fund may invest in municipal bonds that are subject to
the alternative minimum tax ("AMT-Subject Bonds"). Currently, existing tax law
draws a distinction between municipal securities issued to finance certain
"private activities" and other municipal securities. Such private activity bonds
include bonds issued to finance such projects as airports, housing projects,
resource recovery programs, solid waste disposal facilities, student loan
programs, and water and sewage projects. Interest income from such private
activity bonds (AMT-Subject Bonds) becomes an item of "tax preference" which is
subject to the alternative minimum tax ("AMT") when received by a person in a
tax year during which he is subject to that tax. Because interest income on
AMT-Subject Bonds is taxable to certain investors, it is expected, although
there can be no guarantee, that such municipal securities generally will provide
somewhat higher yields than other municipal securities ("AMT-Exempt Bonds") of
comparable quality and maturity.

The dividends of the Municipal Trust Fund will consist of income exempt from
federal income tax, income subject to the federal AMT, and taxable ordinary
income and capital gains. (See "Dividends, Distributions and Taxes", page 39.)

See the Statement of Additional Information for a more complete description
of the Municipal Trust Fund's investment practices and the risks associated
therewith.

Additional General Investment Policies The following general investment
policies supplement those set forth above for each Fund.

Mortgage and Asset-Backed Securities Except for the Municipal Trust Fund,
the Funds may invest in mortgage and asset-backed securities. "Mortgage-backed
securities" are securities that directly or indirectly represent a participation
in, or are secured by and payable from, mortgage loans on real property,
including pass-through securities such as Ginnie Mae, Fannie Mae and Freddie Mac
Certificates. The yield and credit characteristics of mortgage-backed securities
differ in a number of respects from traditional fixed income securities. The
major differences typically include more frequent interest and principal
payments, usually monthly, and the possibility that prepayment of principal may
be made at any time. Prepayment rates are influenced by changes in current
interest rates and a variety of other factors. In general, changes in the rate
of prepayment on a security will change the yield to maturity of the security.
Under certain interest rate or prepayment rate scenarios, a Fund may fail to
recoup fully its investment in such securities notwithstanding the credit
quality of the issuers of such securities. As a

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<PAGE>
result of usual prepayment patterns, amounts available for reinvestment are
likely to be greater during a period of declining interest rates and, thus, are
likely to be invested at lower interest rates, than during a period of rising
interest rates. Mortgage-backed securities may decrease in value as a result of
increases in interest rates and may benefit less than other fixed income
securities from declining interest rates because of the risk of prepayment.
Except for the Municipal Trust Fund, the Funds may also invest in private
mortgage pass-through securities. Such securities are not guaranteed by the U.S.
Government or its agencies or instrumentalities. In addition, the Aggressive
Growth Fund may invest in securities representing interests in a pool of
mortgages or other assets the cash flow of which has been separated into its
interest and principal components, commonly known as "IOs" (interest only) and
"POs" (principal only), although the Aggressive Growth Fund has no present
intention to so invest. IOs and POs issued by parties other than agencies or
instrumentalities of the U.S. Government are considered, under current
guidelines of the staff of the Securities and Exchange Commission, to be
illiquid securities.

"Asset-backed securities" have similar structural characteristics to
mortgage-backed securities, but the underlying assets include assets such as
motor vehicle installment sales or installment loan contracts, leases of various
types of real and personal property, and receivables from revolving credit
agreements, rather than mortgage loans or interests in mortgage loans.
Asset-backed securities present certain risks that are not present in
mortgage-backed securities; primarily, these securities do not have the benefit
of the same security interest in the related collateral. There is the
possibility that recoveries of repossessed collateral may not, in some cases, be
available to support payments on these securities.

Investment Grade Debt Securities The Funds may invest in debt securities of
investment grade quality. Investment grade debt securities are debt securities
rated in one of the four highest rating categories by a nationally recognized
statistical rating organization and unrated debt securities believed by the
Adviser (on the basis of criteria believed by the Adviser to be comparable to
that applied by such rating agencies) to be of comparable quality to debt
securities so rated. Debt securities rated Baa or higher by Moody's or BBB or
higher by S&P are investment grade securities. Securities rated BBB 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 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. For a more
complete description of Moody's and S&P's ratings, see the Appendix to the
Statement of Additional Information incorporated by reference into this
Prospectus.

Repurchase Agreements The Funds may enter into "repurchase agreements" with
respect to U.S. Government Securities. The Funds may enter into repurchase
agreements with member banks of the Federal Reserve System or "primary dealers"
(as designated by the Federal Reserve Bank of New York) in such securities.
Repurchase agreements permit a Fund to keep all of its assets at work while
retaining "overnight" flexibility in pursuit of investments of a longer-term
nature. Winthrop requires continual maintenance of collateral with the Custodian
in an amount equal to, or in excess of, the market value of the securities which
are the subject of a repurchase agreement. In the event a vendor defaults on its
repurchase obligation, the Fund might suffer a loss to the extent that the
proceeds

23
<PAGE>
from the sale of the collateral were less than the repurchase price. If the
vendor becomes the subject of bankruptcy proceedings, the Fund might be delayed
in selling the collateral.

Reverse Repurchase Agreements The Growth Fund, Aggressive Growth Fund, Fixed
Income Fund and Municipal Trust Fund each may also enter into reverse repurchase
agreements. Under a reverse repurchase agreement a Fund would sell securities
and agree to repurchase them at a mutually agreed upon date and price. At the
time a Fund enters into a reverse repurchase agreement, it would establish and
maintain with an approved custodian a segregated account containing liquid
high-grade debt securities having a value not less than the repurchase price.
Reverse repurchase agreements involve the risk that the market value of the
securities subject to such agreement could decline below the repurchase price to
be paid by a Fund for such securities. In the event the buyer of securities
under a reverse repurchase agreement filed for bankruptcy or became insolvent,
such buyer or receiver would receive an extension of time to determine whether
to enforce the Fund's obligations to repurchase the securities and the Fund's
use of the proceeds of the reverse repurchase could effectively be restricted
pending such decision. Reverse repurchase agreements create leverage, a
speculative factor, but are not considered senior securities by the Funds or the
Securities and Exchange Commission to the extent liquid high-grade assets are
segregated in an amount at least equal to the amount of the liability.

Securities Lending The Growth Fund, Aggressive Growth Fund, Fixed Income
Fund and Municipal Trust Fund each may seek to receive or increase income by
lending their respective portfolio securities. Under present regulatory
policies, such loans may be made to member firms of the New York Stock Exchange
and are required to be secured continuously by collateral held by the Custodian
consisting of cash, cash equivalents or U.S. Government Securities maintained in
an amount at least equal to the market value of the securities loaned.
Accordingly, the Funds will continuously secure the lending of portfolio
securities by collateral held by the Custodian consisting of cash, cash
equivalents or U.S. Government Securities maintained in an amount at least equal
to the market value of the securities loaned. The Funds have the right to call
such a loan and obtain the securities loaned at any time on five days' notice.
As is the case with any extension of credit, loans of portfolio securities
involve special risks in the event that the borrower should be unable to repay
the loan, including delays or inability to recover the loaned securities or
foreclose against the collateral. The aggregate value of securities loaned by a
Fund may not exceed 25% of the value of its total assets.

When Issued, Delayed Delivery Securities and Forward Commitments The Funds
may, to the extent consistent with their other investment policies and
restrictions, enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in excess
of customary settlement periods for the type of security involved. In some
cases, a forward commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a merger, corporate
reorganization or debt restructuring, i.e., a when, as and if issued security.
When such transactions are negotiated, the price is fixed at the time of the
commitment, with payment and delivery taking place in the future, generally a
month or more after the date of the commitment. While the Funds will only enter
into a forward commitment with the intention of actually acquiring the security,
the Funds may sell the security before the settlement date if it is deemed
advisable.

Securities purchased under a forward commitment are subject to market
fluctuations, and no interest (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.

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<PAGE>
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.

INVESTMENT RESTRICTIONS

Winthrop has adopted certain investment restrictions applicable to each Fund
which are fundamental policies and may not be changed with respect to a Fund
without the approval of the shareholders of that Fund. Briefly, these
restrictions provide that a Fund may not:

(1) Purchase the securities of any one issuer other than the United
States Government or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of the Fund's
assets would be invested in such issuer or the Fund would own more than 10%
of the outstanding voting securities of such issuer, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such 5% and 10% limitations.

(2) Invest more than 25% of its total assets in the securities of
issuers conducting their principal business activities in any one industry,
provided that, for purposes of this policy, consumer finance companies,
industrial finance companies and gas, electric, water and telephone utility
companies are each considered to be separate industries, and provided
further, that there is no limitation for the Fixed Income Fund, the
Municipal Trust Fund, the Aggressive Growth Fund or the Growth and Income
Fund in respect of investments in U.S. Government Securities or, for the
Fixed Income Fund, the Municipal 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.

(4) Make loans of its assets to any person, except for (i) the purchase
of publicly distributed debt securities, (ii) the purchase of non-publicly
distributed securities subject to paragraph 7, (iii) the lending of
portfolio securities, and (iv) the entering of repurchase agreements.

(5) Borrow money except for (i) the short-term credits from banks
referred to in paragraph 3 above and (ii) borrowings from banks for
temporary or emergency purposes, including the meeting of redemption
requests which might require the disposition of securities. Borrowing in the
aggregate may not exceed 15%, and borrowing for purposes other than meeting
redemptions may not exceed 5% of the value of the Fund's total assets
(including all amounts borrowed) less liabilities (not including all amounts
borrowed) at the time the borrowing is made. Outstanding borrowings in
excess of 5% of the value of the Fund's total assets will be repaid before
any subsequent investments are made. This restriction and asset limitation
on borrowing shall not prohibit the Funds from entering into reverse
repurchase agreements.

(6) Mortgage, pledge or hypothecate any of its assets, except as may be
necessary in connection with permissible borrowings mentioned in paragraph 5
and except, with respect to the Aggressive Growth Fund and the Growth and
Income Fund, in connection with hedging transactions, short sales (against
the

25
<PAGE>
box), when issued and forward commitment transactions and similar investment
strategies.

(7) Act as an underwriter of securities of other issuers, except that a
Fund may acquire restricted or not readily marketable securities under
circumstances where, if such securities were sold, the Funds or Winthrop
might be deemed to be an underwriter for purposes of the Securities Act of
1933 and except, with respect to the Aggressive Growth Fund, to the extent
that in connection with the disposition of portfolio securities such Fund
may be deemed to be an underwriter.

(8) Invest more than 10%, or 15% in the case of the Municipal Trust
Fund, of the value of its net assets in the aggregate in restricted
securities or other instruments not having a ready market, including
repurchase agreements not terminable within seven days; provided that the
Aggressive Growth Fund will not invest in restricted securities. Securities
freely saleable among qualified institutional investors 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 such
purchase at the time thereof would cause more than 10% of the value of the
total assets of the Fund to be invested in the securities of such issuer or
issuers.

(10) With respect to the Growth Fund, the Fixed Income Fund, the
Municipal Trust Fund and the Growth and Income Fund, purchase or retain the
securities of any issuer if, to the knowledge of Winthrop's management,
those officers and Trustees of Winthrop and its Adviser who each own
beneficially more than one-half of 1% of the outstanding securities of such
issuer together own more than 5% of the securities of such issuer.

(11) With respect to the Growth Fund, the Fixed Income Fund, the
Municipal Trust Fund and the Growth and Income Fund, invest more than 5% of
the value of its total assets at the time an investment is made in the non-
convertible preferred stock of issuers whose non-convertible preferred stock
is not readily marketable, subject to the limitation in paragraph 8.

The Funds do not consider the segregation of assets in connection with any
of their investment practices to be a mortgage, pledge or hypothecation of such
assets.

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<PAGE>
MANAGEMENT

Wood, Struthers & Winthrop Management Corp., a Delaware corporation with
principal offices at 277 Park Avenue, New York, New York 10172 (the "Adviser"),
has been retained under an investment advisory agreement to provide investment
advice and to supervise the management and investment programs of the Funds
described above, subject to the general supervision and control of the Trustees
of Winthrop.

The Adviser is a subsidiary of Donaldson, Lufkin & Jenrette Securities
Corporation, which is a member of the New York Stock Exchange and a wholly-owned
subsidiary of Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), a major international
supplier of financial services. DLJ is an independently operated, indirect
subsidiary of The Equitable Companies Incorporated, a holding company controlled
by AXA, a member of a large French insurance group. AXA is indirectly controlled
by a group of five French mutual insurance companies.

Various individuals are responsible for management of the Fund's portfolio.

James A. Engle is the co-portfolio manager of the Growth Fund (since March,
1993) and the Aggressive Growth Fund (since 1989, which includes its
predecessor, the Neuwirth Fund, Inc.) and is a Vice President of Winthrop. Mr.
Engle is also co-portfolio manager of the Growth and Income Fund (since July,
1993) prior to which he was its sole portfolio manager (since 1986, which
includes its predecessor, the Pine Street Fund, Inc.). Mr. Engle is also Chief
Investment Officer and Managing Director of the Adviser, and heads the
Investment Committee which focuses its attention on identifying undervalued
securities. He has been an employee of the Adviser since 1983.

Cathy A. Jameson is the portfolio manager of the Fixed Income Fund, a
position she has held since the commencement of operations of the Fixed Income
Fund and is a Vice President of Winthrop. Ms. Jameson is also a Senior Vice
President of Winthrop and has been an employee of the Adviser since 1979.

Roger W. Vogel is the portfolio co-manager of the Growth Fund, the Growth
and Income Fund, and the Aggressive Growth Fund,a position he has held since
July, 1993, and a Vice President of Winthrop, and a Senior Vice President and
Director of Equity Research of the Adviser. He also chairs the Stock Selection
Committee which is charged with the mandate of identifying undervalued stocks.
Prior to becoming associated with Winthrop, Mr. Vogel was a Vice President and
portfolio manager with Chemical Banking Corp.

Marybeth B. Leithead is the portfolio manager of the Municipal Trust Fund, a
position she has held since the commencement of its operations on July 28, 1993.
Ms. Leithead is also a Vice President of Winthop and of the Adviser and has been
an employee of the Adviser since 1989. Prior to joining the Adviser, Ms.
Leithead was an employee of Citicorp Securities Markets Inc.

Effective August, 1995, Hugh M. Neuburger joined James A. Engle and Roger W.
Vogel as co-portfolio manager of the Growth Fund, the Growth and Income Fund and
the Aggressive Growth Fund. Mr. Neuburger is also a Senior Vice President of the
Adviser and has been an employee of the Adviser since March, 1995. Prior to
March, 1995, Mr. Neuburger was the president of Hugh M. Neuburger, Inc., a
consulting firm providing domestic and global tactical asset allocation advice
and other consulting services to large corporate and state pension plans. From
1986 through 1991, Mr. Neuburger was Managing director of Matrix Capital
Management, an investment management firm. Prior thereto, Mr. Neuburger was with
the Prudential Insurance Company of America managing asset allocation
portfolios.

Under its Advisory Agreement with Winthrop, the Adviser provides investment
advisory services and order placement facilities for each of the Funds and pays
all compensation of Trustees of Winthrop who are affiliated persons of the
Adviser. The Adviser or its affiliates also furnish Winthrop, without separate
charge, management supervision and assistance and office facilities. Winthrop
pays a fee to the Adviser 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; Aggressive Growth

27
<PAGE>
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; Municipal Trust
Fund, .625 of 1% of the first $100,000,000, .500 of 1% of the balance; and
Growth and Income Fund, .750 of 1% of the first $75,000,000, .500 of 1% of the
balance. The advisory fees to be paid by the Growth Fund, the Aggressive Growth
Fund and the Growth and Income Fund are higher than those paid by many other
mutual funds with similar investment objectives.

Pursuant to the Advisory Agreement, the Growth Fund has paid the Adviser an
advisory fee of $395,327, equivalent to .750% of the average daily net assets
for the year ended October 31, 1995. The Growth Fund's total operating expenses
for such period were $859,087, which amounted to 1.63% of its average daily net
assets.

Pursuant to the Advisory Agreement, the Aggressive Growth Fund has paid the
Adviser an advisory fee of $1,432,939, equivalent to .82% of the average daily
net assets for the year ended October 31, 1995. The Aggressive Growth Fund's
total operating expenses for such period were $2,861,129, which amounted to
1.64% of its average daily net assets.

Pursuant to the Advisory Agreement, the Fixed Income Fund has paid the
Adviser an advisory fee of $281,997, equivalent to .625% of the average 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 October 31, 1996 the Adviser may, in its sole
discretion, determine to reduce its management fees and reimburse expenses by
the amount that total fund operating expenses exceed 1.000% of the average daily
net assets of Class A shares and 1.700% of the average daily net assets of Class
B shares of the Fixed Income Fund or it may determine to discontinue this
practice. As a result of the voluntary assumption of expenses, the Adviser
reimbursed the Fund $230,399 during the year ended October 31, 1995. Absent such
reimbursement, the Fixed Income Fund's total operating expenses for the year
ended October 31, 1995 would have amounted to 1.51% of its average daily net
assets.

Pursuant to the Advisory Agreement, the Growth and Income Fund has paid the
Adviser an advisory fee of $556,556, equivalent to .74% of the average daily net
assets for the year ended October 31, 1995. The Growth and Income Fund's total
operating expenses for such period were $1,188,201, which amounted to 1.58% of
its average daily net assets.

Pursuant to the Advisory Agreement, the Municipal Trust Fund has paid the
Adviser an advisory fee of $224,300, equivalent to .625% of the average daily
net assets for the year ended October 31, 1995. 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 Fund. For the period
November 1, 1995 through October 31, 1996 the Adviser may, in its sole
discretion, determine to reduce its management fees and reimburse expenses by
the amount that Total Fund Operating Expenses exceed 1.000% of the average daily
net assets of Class A shares and 1.700% of the average daily net assets of Class
B shares of the Municipal Trust Fund or it may determine to discontinue this
practice. As a result of the voluntary assumption of expenses, the Adviser
reimbursed the Fund $208,045 during the year ended October 31, 1995. Absent such
reimbursement, the Municipal Trust Fund's total operating expenses for such
period would have amounted to 1.58% of its average daily net assets.

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<PAGE>
EXPENSES OF WINTHROP

GENERAL

In addition to the payments to the Adviser under the investment advisory
agreement described above, Winthrop pays the other expenses incurred in its
organization and operations, including the costs of printing prospectuses and
other reports to existing shareholders; all expenses and fees related to
registration and filing with the Securities and Exchange Commission ("SEC") and
with state regulatory authorities; custody, transfer and dividend disbursing
expenses; legal and auditing costs; clerical, accounting, and other office
costs; fees and expenses of Trustees who are not affiliated with the Adviser;
costs of maintenance of existence; and interest charges, taxes, brokerage fees,
and commissions. As to the obtaining of clerical and accounting services not
required to be provided to Winthrop by the Adviser under the investment advisory
agreement, Winthrop may employ its own personnel. For such services, it also may
utilize personnel employed by the Adviser or by its affiliates. In such event,
the services shall be provided to Winthrop at cost and the payments therefor
must be specifically approved in advance by Winthrop's Trustees, including a
majority of its disinterested Trustees.

The investment advisory agreement provides that the Adviser will reimburse
Winthrop for the expenses of any Fund (exclusive of interest, taxes, brokerage,
expenditures pursuant to the distribution services agreement described below,
and extraordinary expenses, all to the extent permitted by applicable state law
and regulations) which in any year exceed the limits prescribed by any state in
which shares of such Fund are qualified for sale. Winthrop believes that
presently the most restrictive applicable expense ratio limitation is 2 of the
first $30 million of average net assets and 2% of the next $70 million of
average net assets and 1 1/2% of average net assets in excess of $100 million.

DISTRIBUTION AGREEMENT

Rule 12b-1 adopted by the SEC under the Investment Company Act of 1940
permits an investment company directly or indirectly to pay expenses associated
with the distribution of its shares. Under SEC regulations, some of the payments
described below to be made by Winthrop could be deemed to be distribution
expenses within the meaning of such rule. Thus, pursuant to Rule 12b-1,
Winthrop's Trustees, including a majority of its disinterested Trustees, have
adopted separate 12b-1 Plans to compensate the distributor for the expenses to
be incurred in distributing each Fund's Class A shares (the "12b-1 Class A
Plans") and Class B shares (the "12b-1 Class B Plans" and collectively, the
"12b-1 Plans"), and Winthrop, on behalf of each Fund, has entered into a
Distribution Agreement (the "Agreement") with Donaldson, Lufkin & Jenrette
Securities Corporation, Winthrop's distributor (the "Distributor").

With respect to each Fund, the amount payable by a Fund under the 12b-1
Class A Plans for distributing Class A shares is .30 of 1% of the average daily
net assets of the Class A shares during the year consisting of (i) an
asset-based sales charge of .05 of 1% of the average daily net assets of the
Class A shares and (ii) a service fee of up to .25 of 1% of the average daily
net assets of the Class A shares. Under the 12b-1 Class B Plans, the amount
payable by a Fund for distributing Class B shares is 1% of the average daily net
assets of the Class B shares during the year 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 and (ii) a service fee of up to .25 of 1% of the average daily net assets
of the Class B shares. The Agreement, but not the Rule 12b-1 Plans, terminate in
the event of assignment of the Agreement.

Under the 12b-1 Plans, each Fund is obligated to pay distribution and/or
service fees to the Distributor as compensation for its distribution and service
activities, not as reimbursement for specific expenses incurred. If the
Distributor's expenses exceed its distribution and service fees, the Fund will
not be obligated to pay any additional expenses. If the Distributor's expenses
are less than such distribution and service fees, it will retain its full fees
and realize a profit.

With respect to sales of a Fund's Class B shares through a broker-dealer,
the Distributor pays the broker-dealer a concession at the time of

29
<PAGE>
sale. In addition, an ongoing maintenance fee may be paid to broker-dealers on
sales of both Class A shares and Class B shares. Pursuant to the 12b-1 Plans,
the Distributor is then compensated for such payments with amounts paid from the
assets of such Fund. The payments to the broker-dealer, although a Fund expense
which is paid by all shareholders, will only directly benefit investors who
purchase their shares through a broker-dealer rather than from the Funds.
Broker-dealers who sell shares of the Funds may provide services to their
customers that are not available to investors who purchase their shares directly
from the Funds. Investors who purchase their shares directly from the Funds will
pay a pro rata share of the Funds' expenses of encouraging broker-dealers to
provide such services but not receive any of the direct benefits of such
services. The 12b-1 Fees will continue to be paid to these broker-dealers for as
long as the related assets remain in the Funds.

In adopting the 12b-1 Plans, the Trustees determined that there is a
reasonable likelihood that the 12b-1 Plans may benefit Winthrop and its
shareholders.

Under the Agreement, the Adviser may make payments to the Distributor from
the Adviser's own resources, which may include the management fees paid by
Winthrop. Amounts paid under the 12b-1 Plans and the Agreement are used in their
entirety to compensate the Distributor for expenses incurred 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 shareholders. In
addition to the concession paid to dealers or agents, the Distributor will from
time to time pay additional compensation to dealers or agents in connection with
the sale of shares. Such additional amounts may be utilized, in whole or in
part, in some cases together with other revenues of such dealers or agents, to
provide additional compensation to registered representatives of such dealers or
agents who sell shares of the Fund. On some occasions, such compensation will be
conditioned on the sale of a specified minimum dollar amount of the shares of
the Funds during a specific period of time. Such incentives may take the form of
payment for meals, entertainment, or attendance at educational seminars and
associated expenses such as travel and lodging. Such dealer or agent may elect
to receive cash incentives of equivalent amounts in lieu of such payments.

The Trustees, including a majority of the disinterested trustees, approved
the 12b-1 Plans at a meeting on October 19, 1995, effective as of February 28,
1996. Payments under the prior 12b-1 plans and then existing distribution
agreement for the year ended October 31, 1995 were made in an amount equal to
.50% of each Fund's average daily net assets, the maximum allowable under
provisions of the prior 12b-1 plans and the prior distribution agreement. Prior
to February 28, 1996, the 12b-1 plans operated as "reimbursement type" plans,
that is, the Distributor received payments under the 12b-1 plans only to the
extent it had properly expended amounts on behalf of the Funds pursuant to the
12b-1 plans. Winthrop will not reimburse expenses incurred by the Distributor in
excess of allowable amounts accrued under the previous 12b-1 plan prior to
February 28, 1996.

PURCHASES, REDEMPTIONS AND SHAREHOLDER SERVICES

PURCHASES

Shares of each of the Funds will be offered on a continuous basis directly
by the Funds and by the Distributor, acting as agent for the Funds, at the
respective net asset value per share determined as of the close of the regular
trading session of the New York Stock Exchange (the "NYSE"), currently 4:00
p.m., New York City time, following receipt of a purchase order in proper form
plus, in the case of Class A shares of each Fund, an initial sales charge

30
<PAGE>
imposed at the time of purchase or, subject to a contingent deferred sales
charge upon redemption in the case of Class B shares and certain redemptions of
Class A shares of each Fund. The investor should send a completed Share Purchase
Application (found in this Prospectus) and enclose a check in the amount of the
initial investment to the Transfer Agent, Fund/Plan Services, Inc., P.O. Box
874, Conshohocken, PA 19428, Attn: Winthrop Focus Funds.

The initial minimum investment in each Fund is $250 and $25 for subsequent
investments in a Fund. (For example, an investor wishing to make an initial
investment in shares of two Funds would be required to invest at least $250 in
each Fund.) Full and fractional shares will be credited to an investor's account
in the amount of the investment. Each Fund reserves the right to reject any
Share Purchase Application in its sole discretion. 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: (i) retirement plans qualified under section 401(k) of 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; (v) salary reduction simplified employee pension (SARSEP) plans;
and (vi) for the minimum initial investment only, Class B accounts established
as of February 28, 1996 under Win-throp's automatic investment plan. With
respect to Class B Shares, an investor's maximum purchase of such shares is
$250,000.

Existing shareholders wishing to purchase additional shares of a Fund may
use the investment stub found at the bottom of the Funds' Shareholder Statement
form or, if one is not available, they may send a check payable to such Fund
directly to Winthrop's Transfer Agent, Fund/Plan Services, Inc. at the address
indicated on the back cover of this Prospectus. Any check for additional shares
sent directly to Winthrop should reference the account number to which it should
be credited.

Further information and assistance is available by contacting Winthrop at
the address or telephone number listed on the cover page of this Prospectus.

REDEMPTIONS

Shares of Winthrop may be redeemed at a redemption price equal to the net
asset value per share, as next computed following the receipt in proper form by
Winthrop of shares tendered for redemption, less any applicable contingent
deferred sales charge in the case of Class B shares and certain redemptions of
Class A shares.

The value of a shareholder's shares on redemption may be more or less than
the cost of such shares to the shareholder, depending upon the value of the
Fund's portfolio securities at the time of such redemption or repurchase. (See
"Dividends, Distributions and Taxes", page 39, for a discussion of the tax
consequences of a redemption.)

To redeem shares for which no share certificates have been issued, the
registered owner or owners should forward a letter to Winthrop's Transfer Agent,
Fund/Plan Services, Inc. containing a request for redemption of such shares at
the next determined net asset value per share. Alternatively, the shareholder
may elect the right to redeem shares by telephone. (See "Additional Shareholder
Services--Telephone Redemption and Exchange Privilege", page 37.)

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 endorsement 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

31
<PAGE>
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 fails to do so, Winthrop reserves the
right to close such account and send the proceeds to the shareholder. IRAs and
other qualified retirement accounts are not subject to mandatory redemption. A
Fund will not redeem involuntarily any shareholder account with an aggregate
balance of less than $250 based solely on the market movement of such Fund's
shares.

The right of redemption may not be suspended or the date of payment upon
redemption postponed for more than seven days after shares are tendered in
proper form for redemption, except for any period during which the New York
Stock Exchange is closed (other than customary weekend and holiday closings) or
during which trading on the exchange is deemed to be restricted under rules of
the SEC, or for any period during which an emergency (as determined by the SEC)
exists as a result of which disposal by Winthrop of its portfolio securities is
not reasonably practicable, or as a result of which it is not reasonably
practicable for Winthrop to determine the value of its net assets, or for such
other period as the SEC may by order permit for the protection of shareholders.
Generally, redemptions will be made by payment in cash or by check. (See the
Statement of Additional Information.)

For information concerning circumstances in which redemptions may be
effected through the delivery of in kind portfolio securities, see the Statement
of Additional Information.

INITIAL SALES CHARGE

Class A shares of each Fund are offered at net asset value next determined
plus a sales charge, as follows:

INITIAL SALES CHARGE
----------------------------------------
COMMISSION TO
DEALER/AGENT
AS A % OF AS A % OF AS A % OF
AMOUNT NET AMOUNT OFFERING OFFERING
PURCHASED INVESTED PRICE PRICE
- -------------------- ---------- --------- -------------
Less than $50,000... 4.99% 4.75% 4.25%
$50,000 to less than
$100,000............ 4.71 4.50 4.00
$100,000 to less
than $250,000...... 3.90 3.75 3.25
$250,000 to less
than $500,000...... 2.56 2.50 2.25
$500,000 to less
than $1,000,000.... 1.78 1.75 1.60
$1,000,000 or
more................ 0 0 0

On purchases of $1,000,000 or more, there is no initial sales charge; the
Distributor may pay the dealer a fee of up to 1% as follows: 1% on purchases up
to $2 million, plus .80% on the next $1 million up to $3 million, .50% on the
next $47 million up to $50 million, .25% on purchases over $50 million. In
addition, Class A shares issued upon conversion of other shares of the Fund are
not subject to an initial sales charge.

During the first year that Class A shares are offered to the public, the
Distributor may re-allow the full amount of the sales charge to brokers as a
commission for sales of such shares.

SALES AT NET ASSET VALUE

The initial sales charge will be waived for the following shareholders or
transactions:

(1) investment advisory clients of the Adviser;

(2) officers and Trustees of the Funds, directors or trustees of other
investment companies managed by the Adviser, officers, directors and
full-time employees of the Adviser and of its wholly-owned subsidiaries or
parent entities ("Related Entities"); or the spouse, siblings, children,
parents or grandparents (collectively, "relatives") of any such person, or
any trust or individual retirement account or self-employed retirement plan
for the benefit of any such person or relative; or the estate of any such
person or relative, if such sales are made

32
<PAGE>
for investment purposes (such shares may not be resold except to the Funds);

(3) certain employee benefit plans for employees of the Adviser and
Related Entities;

(4) an agent or broker of a dealer that has a sales agreement with the
Distributor, for their own account or an account of a relative of any such
person, or any trust or individual retirement account or self-employed
retirement plan for the benefit of any such person or relative; or the
estate of any such person or relative, if such sales are made for investment
purposes (such shares may not be resold except to the Funds). To qualify,
the Distributor or Transfer Agent must be notified at the time of purchase;

(5) shares purchased by registered investment advisors on behalf of
fee-based accounts or by broker-dealers that have sales agreements with the
Funds and which shares have been purchased on behalf of wrap fee client
accounts and for which such registered investment advisors or broker-dealers
perform advisory, custodial, record keeping or other services; and

(6) shareholders who received shares in Winthrop as a result of the
merger of Neuwirth Fund, Inc., Pine Street Fund, Inc. or deVegh Mutual Fund,
Inc., and who have maintained their investment in such shares of Winthrop.

REDUCED SALES CHARGES

A reduction of sales charge rates in the tables above may be obtained for
participants in any of the following discount programs. These programs allow an
investor to receive a reduced offering price based upon the assets held or
pledged by the investor. The term "investor" refers to (i) an individual, (ii)
an individual and spouse purchasing shares of the Fund for their own account or
for the trust or custodial accounts of their minor children, or (iii) a
fiduciary purchasing for any one trust, estate or fiduciary account, including
employee benefit plans of a single employer.

LETTER OF INTENT

By initially investing $250 and submitting a Letter of Intent to the Funds'
Distributor or Transfer Agent, an investor may purchase shares of the Fund over
a 13-month period at the reduced sales charge applying to the aggregate amount
of the intended purchases stated in the Letter. The Letter may apply to
purchases made up to 90 days before the date of the Letter. It is the investor's
responsibility to notify the Transfer Agent at the time the Letter is submitted
that there are prior purchases that may apply.

5% of the amount invested pursuant to the Letter will be held in escrow by
the Transfer Agent until the investment contemplated by the Letter is completed
within the 13-month period. The 13-month period begins on the date of the
earliest purchase. If the intended investment is not completed, the Transfer
Agent will redeem an appropriate number of the escrowed shares in order to
realize the difference between the sales charge on the shares purchased at the
reduced rate and the sales charge applicable to the total shares purchased.

RIGHT OF ACCUMULATION

For investors who already have an account with the Funds, reduced sales
charges based upon the Funds' sales charge schedule are applicable to subsequent
purchases. The sales charge on each additional purchase is determined by adding
the current market value of the shares the investor currently owns to the amount
being invested. The Right of Accumulation is illustrated by the following
example: if a previous purchase currently valued in the amount of $50,000 had
been made subject to a sales charge and the shares are still held, a current
purchase of $50,000 will qualify for a 3.75% sales charge (i.e., the sales
charge on a $100,000 purchase). The reduced sales charge is applicable only to
current purchases. It is the investor's responsibility to notify the Transfer
Agent at the time of subsequent purchases that the account is eligible for the
Right of Accumulation.

To be entitled to a reduced sales charge based upon shares already owned,
the investor must notify the Distributor or the Transfer Agent at the time of
the purchase that he wishes to take advantage of such entitlement, and give the
numbers of his accounts, and those accounts held in the name of his spouse or
for minor children, the age of any such

33
<PAGE>
child and the specific relationship of each such person to the investor.

CONCURRENT PURCHASES

To qualify for a reduced sales charge, the investor may combine concurrent
purchases of shares purchased within the Winthrop Focus Funds or shares of the
Winthrop Opportunity Funds. For example, if the investor concurrently invests
$25,000 in one Fund and $25,000 in another, the sales charge would be reduced to
reflect a $50,000 purchase. In order to exercise the Concurrent Purchases
privilege, the investor must notify the Distributor or Transfer Agent.

COMBINED PURCHASE PRIVILEGE

By combining the investor's holdings of shares within the Winthrop Focus
Funds or with shares held in the Winthrop Opportunity Funds, the investor can
reduce the initial sales charges on any additional purchases of Class A shares.
The investor may also use these combinations under a Letter of Intent. This
allows the investor to make purchases over a 13-month period and qualify the
entire purchase for a reduction in initial sales charges on Class A shares. A
combined purchase of $1,000,000 or more may trigger the payment of a dealer's
commission and the applicability of a Limited CDSC, as defined below.

REINSTATEMENT PRIVILEGE

The Reinstatement Privilege permits shareholders to reinvest the proceeds of
each Fund's Class A shares redeemed, within 120 days from the redemption,
without an initial sales charge. It is the investor's responsibility to notify
the Transfer Agent in order to exercise the Reinstatement Privilege.

CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES

A shareholder can purchase Class B shares at net asset value without an
initial sales charge. However a shareholder may pay a Contingent Deferred Sales
Charge ("CDSC") if such shareholder redeems within four years after purchase.
The CDSC will be assessed on an amount equal to the lesser of the then current
net asset value or the original purchase price of the Class B shares being
redeemed. Accordingly, no Class B CDSC will be imposed on amounts representing
increases in net asset value above the initial purchase price of the shares
identified for redemption. In determining the Class B CDSC, Class B shares are
redeemed in the following order: (i) those acquired pursuant to reinvestment of
dividends or distributions, (ii) those held for over four years, and (iii) those
held longest during the four-year period.

Where the charge is imposed, the amount of the charge will depend on the
number of years since the shareholder made the purchase according to the table
below.

YEAR SINCE PERCENTAGE
PURCHASE CONTINGENT
PAYMENT DEFERRED
WAS MADE SALES CHARGE
- -------------------------- ------------
First..................... 4%
Second.................... 3%
Third..................... 2%
Fourth.................... 1%
Fifth and thereafter...... 0%

The amount of any contingent deferred sales charge will be paid by the
shareholder to and retained by the Distributor and will not offset the amounts
which may be paid to the Distributor under the Agreement. For federal income tax
purposes, the amount of the CDSC will reduce the gain or increase the loss, as
the case may be, recognized by a shareholder on the redemption of shares.

The contingent deferred sales charge will be waived for the following
shareholders or transactions:

(1) shares received pursuant to the exchange privilege which are
currently exempt from a contingent deferred sales charge;

(2) redemptions as a result of shareholder death or disability (as
defined in the Internal Revenue Code of 1986, as amended) (the "Code");

(3) redemptions made pursuant to Winthrop's systematic withdrawal plan
pursuant to which up to 1% monthly or 3% quarterly of an account (excluding
dividend reinvestments) may be withdrawn, provided that no more than 10% of
the total market value of an account may be withdrawn over any 12 month
period (shareholders who elect systematic withdrawals on a semi-annual or
annual basis are not eligible for the waiver); and

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<PAGE>
(4) liquidations, distributions or loans from the following types of
retirement plan accounts: (i) retirement plans qualified under section
401(k) of the Code; (ii) plans described in section 403(b) of the Code and
(iii) deferred compensation plans described in section 457 of the Code.

Redemptions effected by the Funds pursuant to their right to liquidate a
shareholder's account with a current net asset value of less than $250 will not
be subject to the CDSC.

CONTINGENT DEFERRED SALES CHARGE ON
CLASS A SHARES

A Limited Contingent Deferred Sales Charge ("Limited CDSC") will be imposed
by the Funds upon certain redemptions of Class A shares (or shares into which
such Class A shares are exchanged) made within 12 months of purchase, if such
purchases were made at net asset value and triggered the payment by the
Distributor of the dealer's commission described above (i.e., purchases of
$1,000,000 or more).

The Limited CDSC will be paid to the Distributor and will be equal to the
lesser of 1% of (i) the net asset value at the time of purchase of the Class A
shares being redeemed or (ii) the net asset value of such Class A shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at the time of purchase of such
Class A shares even if those shares are later exchanged and, in the event of an
exchange of such Class A shares, the "net asset value of such shares at the time
of redemption" will be the net asset value of the shares into which the Class A
shares have been exchanged.

Redemptions of such Class A shares held for more than 12 months will not be
subjected to the Limited CDSC and an exchange of such Class A shares will not
trigger the imposition of the Limited CDSC at the time of such exchange. The
period a shareholder owns shares into which Class A shares are exchanged will
count towards satisfying the 12-month holding period. The Funds will assess the
Limited CDSC if such 12-month period is not satisfied irrespective of whether
the redemption triggering its payment is of the Class A shares of the Funds or
shares into which the Class A shares have been exchanged.

In determining whether a Limited CDSC is payable, it will be assumed that
shares not subject to the Limited CDSC are the first redeemed followed by other
shares held for the longest period of time. The Limited CDSC will not be imposed
upon shares representing reinvested dividends or upon amounts representing share
appreciation. All investments made during a calendar month, regardless of when
during the month the investment occurred, will age one month on the last day of
that month and each subsequent month.

The Limited CDSC will be waived for the shareholders and transactions
described above in "Contingent Deferred Sales Charge on Class B Shares", page
34, and "Sales at Net Asset Value", page 32.

CONTINGENT DEFERRED SALES CHARGE ON CONVERTED SHARES

Class A shares issued upon conversion of shares of a Fund purchased prior to
February 28, 1996, ("Converted Shares") will be subject to the same contingent
deferred sales charge with the same terms as the Converted Shares were subject
to at the time of purchase. This CDSC is similar in all respects to the CDSC
charged on Class B shares except that the CDSC will not be imposed if the amount
redeemed is derived from increases in the value of the account in a Fund
(whether from appreciation or reinvestment of dividends and capital gains
distributions) above the amounts of purchase payments during the past four
years.

For purposes of the CDSC on Class A shares issued upon conversion of
Converted Shares, it is assumed that the redemption is made from the earliest
purchase payment from which a redemption (or exchange) has not already been
effected. Therefore, redemptions will first be made from increases in the value
of the account without imposition of a CDSC and then, if necessary, from the
shares which have been held the longest.

Because the CDSC on Class A shares issued upon conversion of Converted
Shares is based on dollar value rather than number of shares, it may be imposed
even if the number of shares in the investor's account has increased through
reinvestment of dividends and capital gains distributions.

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<PAGE>
The CDSC on Class A shares issued upon conversion of Converted Shares will
be waived for the following shareholders or transactions:

(1) shareholders of Neuwirth Fund, Inc., Pine Street Fund, Inc. and
deVegh Mutual Fund, Inc., which were diversified, no-load open-end
management investment companies to which the Adviser provided investment
advisory services;

(2) investment advisory clients of the Adviser;

(3) officers, directors and full-time employees and Trustees of Winthrop
and Related Entities; or the relatives of any such person, or any trust or
individual retirement account or self-employed retirement plan for the
benefit of any such person or relative; or the estate of any such person or
relative, if such sales are made for investment purposes (such shares may
not be resold except to Winthrop);

(4) certain employee benefit plans for employees of the Adviser and
Related Entities;

(5) an agent or broker of a dealer that has a sales agreement with the
Distributor, for their own account or an account of a relative of any such
person, or any trust or individual retirement account or self-employed
retirement plan for the benefit of any such person or relative; or the
estate of any such person or relative, if such sales are made for investment
purposes (such shares may not be resold except to the Funds). To qualify,
the Distributor or Transfer Agent must be notified at the time of purchase;

(6) redemptions as a result of shareholder death or disability (as
defined in the Code);

(7) redemptions made pursuant to Winthrop's systematic withdrawal plan
up to 1% monthly or 3% quarterly of the account's total purchase payments
(excluding dividend reinvestment) not to exceed 10% of total purchase
payments over any 12 month rolling period (systematic withdrawals elected on
a semi-annual or annual basis are not eligible for the waiver); and

(8) liquidations, distributions or loans from the following types of
retirement plans established on or after February 1, 1995: (i) retirement
plans qualified under section 401(k) of the Code; (ii) plans described in
section 403(b) of the Code (iii) and deferred compensation plans described
in section 457 of the Code.

(9) shares purchased by registered investment advisers or by
broker-dealers that have sales agreements with the Funds and which shares
have been purchased on behalf of wrap fee client accounts and for which such
registered investment advisers or broker-dealers charge a fixed fee and
perform advisory, custodial, record keeping or other services.

Redemptions effected by Winthrop pursuant to its right to liquidate a
shareholder's account with a current net asset value of less than $250 will not
be subject to the contingent deferred sales charge.

AUTOMATIC CONVERSION OF CLASS B SHARES

Class B shares held for eight years after purchase will be automatically
converted into Class A shares. The Fund will effect conversions of Class B
shares into Class A shares only four times in any calendar year, on the last
business day of the second full week of March, June, September and December
(each, a "Conversion Date"). If the eighth anniversary after a purchase of Class
B shares falls on a Conversion Date, an investor's Class B shares will be
converted on that date. If the eighth anniversary occurs between Conversion
Dates, an investor's Class B shares will be converted on the next Conversion
Date after such anniversary. Consequently, if a shareholder's eighth anniversary
falls on the day after a Conversion Date, that shareholder will have to hold
Class B shares for as long as an additional three months after the eighth
anniversary after purchase before the shares will automatically convert into
Class A shares.

All such automatic conversions of Class B shares will constitute a tax-free
exchange for federal income tax purposes.

ADDITIONAL SHAREHOLDER SERVICES

Exchange Privilege Shares of one class of a Fund may be exchanged by mail or
telephone (see "Telephone Redemption and Exchange Privilege", page 37), for
shares of the same class of another Fund or for shares of Alliance Government
Reserves or Alliance Municipal Trust (collectively,

36
<PAGE>
the "Alliance Money Market Funds"). The Alliance Money Market Funds are no-load
money market funds which retain Alliance Capital Management Company, Inc. as
investment adviser.

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 "Contingent Deferred Sales
Charge on Class A Shares", page 35, and "Contingent Deferred Sales Charge on
Converted Shares", page 35, 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 exchange.

Winthrop imposes no separate charge for exchanges. A shareholder will not be
assessed any sales charge at the time of an exchange between the Funds or
between any of the Funds and a Winthrop Opportunity Fund or an Alliance Money
Market Fund. Any applicable contingent deferred sales charge will be assessed
when the shareholder redeems shares of the Funds, the Winthrop Opportunity Funds
or of the Alliance Money Market Funds. The period of time during which a
shareholder owns shares in any of the Funds or the Winthrop Opportunity Funds
will be credited to such shareholders holding period in determining the
applicable contingent deferred sales charge, if any. However, the period of time
during which a shareholder's funds are held in the Alliance Money Market Funds
will not be included in the holding period used to determine the applicable
contingent deferred sales charge.

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. Winthrop reserves the right to reject any exchange
request or otherwise modify, restrict or terminate the exchange privilege at any
time upon at least 60 days prior written notice.

Exchanges of shares are subject to the other requirements of the fund into
which exchanges are made. Annual fund operating expenses for such fund may be
higher and a sales charge differential may apply. The Funds retain the right to
revoke the exchange privilege for retirement plan accounts that exchange their
shares for shares of the Alliance Money Market Funds.

Shareholders should be aware that an exchange is treated for federal income
tax purposes as a sale and purchase of shares which may result in recognition of
gain or loss.

Automatic Monthly Investment Plan A shareholder may elect on the Share
Purchase Application to make additional investments in a Fund automatically, by
authorizing Winthrop to draw on the shareholder's bank account.

A shareholder may change the date (either the 10th, 15th or 20th of each
month) or amount (subject to a minimum of $25) of the shareholder's monthly
investment at any time by letter or telephone call to Winthrop at least three
business days before the change becomes effective. The plan may be terminated at
any time without penalty by the shareholder or Winthrop.

Dividend Direction Option A shareholder may elect on the Share Purchase
Application to have his or her dividends paid to another individual or directed
for reinvestment within the same class of another series of Winthrop or the
Winthrop Opportunity Funds provided that an existing account in such other Fund
or Winthrop Opportunity Funds is maintained by the shareholder.

Systematic Withdrawal Plan Any shareholder who owns or purchases shares of a
Fund having a current net asset value of at least $10,000 may establish a
systematic withdrawal plan under which the shareholder or a third party will
receive payment by check in a stated amount of not less than $50 on a monthly or
quarterly basis. A CDSC which would otherwise be imposed on a
withdrawal/redemption will be waived in connection

37
<PAGE>
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 reinvestment) not to exceed 10% of total purchase payments over any
12-month rolling period. See "Purchases, Redemptions and Shareholder Services",
page 30.

Telephone Redemption and Exchange Privilege A shareholder may elect on the
Share Purchase Application to be eligible to make withdrawals from such
shareholder's account, via telephone orders (toll free (800) 225-8011) given to
the Funds by the shareholder or the shareholder's investment dealer of record.
The maximum amount of such withdrawals is $50,000 per day. A shareholder may
also transfer assets via telephone from such shareholder's account to purchase
shares of the same class of another fund in Winthrop or Winthrop Opportunity
Funds or for shares of an Alliance Money Market Fund. Each Fund will employ
reasonable procedures to confirm that 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 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.

Additional information concerning these Additional Shareholder Services may
be obtained by contacting Winthrop at the address or telephone number listed on
the cover page of this Prospectus.

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<PAGE>
NET ASSET VALUE

The net asset value per share for purchases and redemptions of shares 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 Amended and Restated 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.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends on shares of the Fixed Income Fund and the Municipal Trust Fund
are declared from its net investment income on each Fund Business Day. The Fixed
Income Fund and the Municipal Trust Fund each declare dividends for Saturdays,
Sundays and holidays on the previous business day. Dividends on shares of the
Fixed Income Fund and the Municipal Trust Fund are paid after the close of
business on the last Fund Business Day of each month. Winthrop intends to
distribute to shareholders of the Growth Fund and the Aggressive Growth Fund on
an annual basis and to shareholders of the Growth and Income Fund on a quarterly
basis, substantially all of such respective periods' net investment income, if
any, for the respective Funds.

Capital gains (short-term and long-term), if any, realized by each of the
Funds during a fiscal year of Winthrop will be distributed to the respective
shareholders shortly after the end of such fiscal year.

Distributions of net investment income (which generally includes dividends,
interest, net short-term capital gains and other income, other than
Exempt-Interest Dividends, as defined below, and net-long term capital gains),
if any, declared by Winthrop on the outstanding shares of any Fund will, at the
election of each shareholder, be paid in cash or reinvested in additional full
and fractional shares of that Fund. Such distributions will be taxable to a
shareholder as ordinary income, regardless of whether received in the form of
cash or reinvested in additional shares. Distributions of net long-term capital
gains in excess of any net short-term capital losses ("capital gains
distributions") are taxable to shareholders as long-term capital gains
regardless of whether received in the form of cash or reinvested in additional
shares and irregardless of the length of time the shareholder has held shares of
the Fund. Shareholders will be advised annually as to the federal tax status of
dividends

39
<PAGE>
and capital gains distributions made by each Fund for the preceding year.

An election to receive dividends and distributions in cash or shares is made
at the time of the initial investment and may be changed by notice received by
Winthrop from a shareholder at least 30 days prior to (i) the record date for a
particular dividend or distribution on shares of the Growth Fund, the Aggressive
Growth Fund or the Growth and Income Fund, or (ii) the payable date for a
particular dividend or distribution on shares of the Fixed Income Fund and the
Municipal Trust Fund. There is no charge in connection with the reinvestment of
dividends and capital gains distributions.

Distributions to shareholders out of tax-exempt interest income earned by
the Municipal Trust Fund ("Exempt-Interest Dividends") 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 for federal income tax purposes to
the AMT on distributions to shareholders out of income from the AMT-Subject
Bonds (as defined in "Investment Objectives and Policies--Municipal Trust Fund",
page 20) in which the Municipal Trust Fund may invest. Further, under current
tax law, certain corporate taxpayers may be subject to the AMT based on their
"adjusted current earnings". Distributions from the Municipal Trust Fund that
are excluded from gross income and from alternative minimum taxable income will
be included in such corporation's "adjusted current earnings" for purposes of
computation of the AMT.

Interest on indebtedness incurred by shareholders to purchase or carry
shares of the Municipal Trust Fund is not deductible for federal income tax
purposes to the extent that the Municipal Trust Fund distributes Exempt-Interest
Dividends. The amount of the interest on indebtedness that is not deductible is
proportional to the amount of non-capital gains dividends received that are
Exempt-Interest Dividends. Under rules of the Internal Revenue Service for
determining when borrowed funds are used for purchasing or carrying particular
assets, shares may be considered to have been purchased or carried with borrowed
funds even though those funds are not directly linked to the shares. Further,
persons who are "substantial users" (or related persons) of facilities financed
by AMT-Subject Bonds should consult their tax advisers before purchasing shares
of the Municipal Trust Fund.

Because the Municipal Trust Fund can invest in taxable municipal bonds and
other taxable securities as well as tax-exempt municipal bonds, the portion of
its dividends that will be exempt from or subject to regular federal income
taxes cannot be predicted. Shareholders may be subject to state and local taxes
on dividends from the Municipal Trust Fund, including dividends which are exempt
from federal income taxes. In addition, for federal income tax purposes,
distributions of net short-term capital gains are taxable to shareholders of the
Municipal Trust Fund as ordinary income and distributions of net long-term
capital gains are taxable to such shareholders as long-term capital gains,
regardless of the nature of the investments made by the Fund.

There is no fixed dividend rate and there can be no assurance that any Fund
will pay any dividends or realize any gains. The amount of any dividend or
distribution paid by each Fund depends upon the realization by the Fund of
income and capital gains from that Fund's investments. All dividends and
distributions will be made to shareholders of a Fund solely from assets of that
Fund. Since the Funds are not treated as a single entity for federal income tax
purposes, the performance of one Fund will have no effect on the income tax
liability of shareholders of another Fund.

Payment (either in cash or in portfolio securities) received by a
shareholder upon redemption of his or her shares, assuming the shares constitute
capital assets in such shareholder's hands, generally will result in long-term
or short-term capital gains

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<PAGE>
(or losses) depending upon the shareholder's holding period and basis in respect
of shares redeemed. Any loss realized by a shareholder on the sale of Fund
shares held for six months or less will be treated for federal income tax
purposes as a long-term capital loss to the extent of any distributions of
long-term capital gains received by the shareholder with respect to such shares.
In addition, no loss will be allowed on the sale or other disposition of shares
of a Fund if, within a period beginning 30 days before the date of such sale or
disposition and ending 30 days after such date, the holder acquires (such as
through dividend reinvestment) securities that are substantially identical to
the shares of such Fund. In that event, the basis of the shares acquired will be
adjusted to reflect the disallowed loss.

RETIREMENT PLANS

Each of Winthrop's Funds may be a suitable investment vehicle for part or
all of the assets held in various tax-sheltered retirement plans, such as those
listed below. Semper Trust Company serves as custodian under these prototype
retirement plans and charges an annual account maintenance of $15 per
participant, regardless of the number of Funds selected. Persons desiring
information concerning these plans should write or telephone Winthrop's Transfer
Agent. While Winthrop reserves the right to suspend sales of its shares in
response to conditions in the securities markets or for other reasons, it is
anticipated that any such suspension of sales would not apply to sales to the
types of plans listed below.

INDIVIDUAL RETIREMENT ACCOUNTS ("IRA")

The Adviser has available a prototype form of IRA for investment in shares
of any one or more Funds. Under the Code, individuals may make IRA contributions
of up to $2,000 annually. An individual with a non-working spouse may establish
a separate IRA for the spouse and contribute a combined maximum of $2,250
annually to one or both IRAs, provided that no more than $2,000 may be
contributed to the IRA of either spouse. Contributions to an IRA may be wholly
or partly tax-deductible, 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")

A SAR/SEP offers employers with 25 or fewer eligible employees the ability
to establish a SEP/IRA that permits salary deferral contributions. An employer
may also elect to make additional contributions to this Plan. This form of
retirement plan is also available for investment in the Funds.

EMPLOYER-SPONSORED RETIREMENT PLANS

The Adviser has a prototype retirement plan available which provides for
investment of plan assets in shares of any one or more Funds. The prototype
retirement plan may be used by sole proprietors and partnerships as well as
corporations to establish a tax qualified profit sharing plan or money purchase
pension plan (or both) of their own.

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<PAGE>
Under the prototype retirement plan, an employer may make annual
tax-deductible contributions for allocation to the accounts of the plan
participants to the maximum extent permitted by the federal tax law for the type
of plan implemented.The Adviser has received favorable opinion letters from the
IRS that the prototype retirement plan is acceptable by qualified employers.

SELF-DIRECTED RETIREMENT PLANS

Shares of Winthrop may be suitable for self-directed IRA accounts and
prototype retirement plans such as those developed by Donaldson, Lufkin &
Jenrette Securities Corporation, an affiliate of the Adviser and Winthrop's
Distributor.

GENERAL INFORMATION

CAPITALIZATION

Winthrop was organized as a Massachusetts business trust under the laws of
Massachusetts on November 26, 1985. Winthrop has an unlimited number of
authorized shares of beneficial interest, par value $.01 per share, which may,
without shareholder approval, be divided into an unlimited number of series and
an unlimited number of classes. Such shares are currently divided into several
series, one series of shares for each Fund. Shares of each Fund are divided into
Class A shares and Class B shares of each Fund and are normally entitled to one
vote (with proportional voting for fractional shares) for all purposes.
Generally, shares of all Funds vote as a single series on matters that affect
all Funds in substantially the same manner. As to matters affecting each Fund
separately, such as approval of the investment advisory agreement, shares of
each Fund would vote as separate series. With respect to each Fund, each Class
is identical in all respects except that (i) each Class bears different
distribution service fees, (ii) each Class has exclusive voting rights with
respect to its 12b-1 Plan, (iii) each Class has different exchange privileges,
and (iv) only Class B shares have a conversion feature. Winthrop will not have
annual meetings of shareholders so long as at least two-thirds of the Trustees
then in office have been elected by the shareholders. Section 16(c) of the
Investment Company Act of 1940 provides certain rights to shareholders which
Winthrop will honor regarding the calling of meetings of shareholders and other
communications with shareholders. Trustees also will call meetings of
shareholders from time to time as the Trustees deem necessary or desirable.

Shares of a Fund are freely transferable, are entitled to dividends as
determined by the Trustees and, in liquidation of Winthrop, are entitled to
receive the net assets of that Fund. Since Class B shares of each Fund are
subject to greater distribution services fees than Class A shares of the Fund,
the liquidation proceeds to shareholders of Class B shares are likely to be less
than proceeds to Class A shareholders. Shareholders have no preemptive rights.

PORTFOLIO TRANSACTIONS

Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking best execution, Winthrop may
consider sales of its shares as a factor in the selection of brokers and dealers
to execute portfolio transactions for Winthrop.

DISTRIBUTOR

Donaldson, Lufkin & Jenrette Securities Corporation, an affiliate of the
Adviser, serves as Winthrop's Distributor.

CUSTODIAN, DIVIDEND DISBURSING AGENT AND
TRANSFER AGENT

Citibank, N.A. acts as Custodian for the securities and cash of Winthrop,
but plays no part in

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<PAGE>
deciding on the purchase or sale of portfolio securities. Fund/Plan Services,
Inc. acts as dividend disbursing agent, registrar and transfer agent.

HOW WINTHROP CALCULATES PERFORMANCE

From time to time Winthrop may advertise its total return (including
"average annual" total return and "aggregate" total return) and yield in
advertisements or sales literature. Total return and yield are calculated
separately for Class A and Class B shares. These figures are based on historical
earnings and are not intended to indicate future performance. The "total return"
shows how much an investment in a Fund would have increased (decreased) over a
specified period of time (i.e., one, five or ten years or since inception of
that Fund) assuming that all distributions and dividends by the Fund were
reinvested on the reinvestment dates during the period and less all recurring
fees. The "aggregate" total return 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. Winthrop's advertisements of total
return and average total return may not reflect any applicable initial or
contingent deferred sales charge, but such charges will be disclosed. 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 back 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.

43
<PAGE>
WINTHROP FOCUS FUNDS
SHARE PURCHASE APPLICATION
<TABLE><CAPTION>
<S> <C>
WINTHROP FOCUS FUNDS FOR ASSISTANCE IN FILLING OUT THIS
C/O FUND/PLAN SERVICES, INC. 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.
</TABLE>

WINTHROP FUND NAME AMOUNT CLASS (FUND NUMBER)
- ------------------ ------ -------------------------------------------
<S> <C> <C> <C>
Growth Fund $ / / Class A (530) / / Class B (630)
-----------------
Fixed Income Fund / / Class A (531) / / Class B (631)
-----------------
Aggressive Growth Fund / / Class A (534) / / Class B (634)
-----------------
Growth and Income Fund / / Class A (535) / / Class B (635)
-----------------
Municipal Trust Fund / / Class A (536) / / Class B (636)
-----------------
Total
-----------------
Initial Investment Minimum per Fund $250; Subsequent Investment Minimum $25. Minimums are waived for SEP,
SAR/SEP, 401K, 403B and 457 plans. Class B shares are not available for purchases of $250,000 or more.
</TABLE>

(3) SHARE REGISTRATION

<TABLE><CAPTION>
<S> <C> <C>
/ / 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 space State
provided below)

/ / Other_____________________________________________________________________________________________________________________
Name of corporation, organization, trust, 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.
</TABLE>

<PAGE>

<TABLE>
<S> <C>
(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.)

(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 that 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.
</TABLE>

<TABLE>
<S> <C>
___________________________________________________ ____________________________________________________
Signature Date

___________________________________________________ ____________________________________________________
Signature Date

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

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

</TABLE>

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

FOR DIVIDEND INSTRUCTIONS AND OTHER ACCOUNT OPTIONS, PLEASE COMPLETE THE REVERSE
SIDE OF THIS PURCHASE APPLICATION.
<PAGE>
WINTHROP FOCUS FUNDS
SHARE PURCHASE APPLICATION

<TABLE>
<S> <C>
(7) DIVIDEND OPTIONS
DIVIDEND INSTRUCTIONS--If no instructions are given, all distributions will be reinvested.
INCOME DIVIDENDS: (select one)

/ / 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
/ / 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:
</TABLE>

<TABLE>
<S> <C>
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.)
</TABLE>

<TABLE>
<S> <C>
(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.
</TABLE>

<TABLE>
<S> <C>
_________________________________________________ _______________________________________________________
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.)
</TABLE>

<PAGE>

<TABLE>
<S> <C>
(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>

FUND NAME AMOUNT
--------- ------

<S> <C> <C> <C> <C> <C>
__________________________ _________________________ / / monthly / / quarterly / / semi-annually / / annually

__________________________ _________________________ / / monthly / / quarterly / / semi-annually / / annually

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_________________________________________________________________________________________________________

(10) BANK ACCOUNT INFORMATION* (To be completed if applicable under Section 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) REDUCED SALES CHARGES (Class A only)--If you, your spouse or minor children own shares in other Winthrop
Funds, you may be eligible for a reduced sales charge. If applicable, please complete the sections below
and indicate the accounts to be considered.
RIGHT OF ACCUMULATION OR CONCURRENT PURCHASES
/ / I qualify for Right of Accumulation or Concurrent Purchase privileges with the account(s) listed
below.

_________________________ _______________________ _____________________________ _____________________________
Fund Name Account Number Fund Name Account Number

(NOTE: When qualifying for the Concurrent Purchase privilege, Account Number reference is not required for
new accounts.)

LETTER OF INTENT

/ / I agree to the terms of the Letter of Intent set forth in the Prospectus (including the escrowing of
shares). Although I am not obligated to do so, it is my intention to invest over a thirteen-month
period in shares of one or more Winthrop Funds in an aggregate amount at least equal to:

/ / $50,000 / / $100,000 / / $250,000 / / $500,000 / / $1,000,000

If the full amount indicated is not purchased within 13 months, I understand
an additional sales charge must be paid from my accounts.

(12) 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

______________________________________________________ __________________________________________________________
Fund Name/Account Number Fund Name/Account Number
</TABLE>
<PAGE>
ADVISOR
Wood, Struthers & Winthrop Management Corp.
277 Park Avenue, New York, NY 10172
[ART]

DISTRIBUTOR
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue, New York, NY 10172

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

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

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

COUNSEL
Sullivan & Cromwell
125 Broad Street, New York, NY 10004
TABLE OF CONTENTS [ART]

Summary of Fund Expenses 3
Financial Highlights 7
Introduction 12
Investment Objectives and Policies 12
Investment Restrictions 25
Management 27
Expenses of Winthrop 29
Purchases, Redemptions and
Shareholder Services 30
Net Asset Value 39
Dividends, Distributions and Taxes 39
Retirement Plans 41
General Information 42

This Prospectus does not constitute an offering in any state in which such
offering may not lawfully be made.

WOOD, STRUTHERS & WINTHROP
ESTABLISHED 1871
Prospectus
[LOGO]
February 28, 1996
INVESTMENT MANAGEMENT SUBSIDIARY OF
SECURITIES CORPORATION

[Logo]

WFF-MB-6 11818A 2/96

<PAGE>

WINTHROP FOCUS FUNDS

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

277 PARK AVENUE, NEW YORK, NEW YORK 10172

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 . . . . . . . . . . . . . . . . . . . . . . . . . . __
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . __
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 22.

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 issuing com-

<PAGE>

pany. 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. securities markets are

generally higher than in the U.S. There is gener-

-2-

<PAGE>

ally 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. Investment

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 more likely, in the opinion of S&P,

to lead to a weakened capacity

-3-

<PAGE>

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 securities at higher prices. In exchange for the premium

received,

-4-

<PAGE>

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 writing of the option. The Growth Fund and the Growth and

Income Fund may not purchase call options except in closing purchase

transactions.

-5-

<PAGE>

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 the underlying

security in the event the option expires unexercised or is closed out by the

Aggressive Growth Fund at a profit. By

-6-

<PAGE>

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 obli-

gated 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 or high quality short-term debt obligations or a

combination of

-7-

<PAGE>

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 agreement 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

financial futures or related options transactions for speculative purposes

but only in an effort to hedge portfolio risks as described above. In accor-

dance with the foregoing, under current regulations the Aggressive Growth

Fund may not purchase or sell futures contracts if, immediately thereafter,

the sum of the amount of initial margin deposits on the Fund's open

-8-

<PAGE>

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 a 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. A Fund's losses on futures transactions could be

unlimited.

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 consummated, 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.

-13-

<PAGE>

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

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.

-18-

<PAGE>

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

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 divi-

dends 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

-19-

<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 marketable. 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. Securi-

ties 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

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 ac-

count;

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 securi-

ties 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;

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

management; or

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.

-24-

<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 277 Park

Avenue, New York, New York 10172. Those Trustees whose names are preceded by

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

Company Act of 1940.

*G. MOFFETT COCHRAN, 45, Chairman of the Board of Trustees and

President 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.

*CARL B. MENGES, 65, Trustee of Winthrop, is Vice Chairman of

Donaldson, Lufkin & Jenrette, Inc. with which he has been associated since

prior to 1990.

*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.

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.

-25-

<PAGE>

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 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

-26-

<PAGE>

Corp. with which he had been associated since prior to 1990. His address is

9900 S. Oceanna Drive, Jensen Beach, FL 34957.

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. (conglomerate).

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

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.

-27-

<PAGE>

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>

<TABLE><CAPTION>
Compensation Table

Total
Pension or Compensation
Retirement From Winthrop
Aggregate Benefits Accrued Estimated Annual and Fund
Compensation As Part of Benefits Upon Complex Paid
Name and Position From Winthrop Winthrop 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

Dividend Committee whose function is to declare dividends on behalf

-29-

<PAGE>

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., 277 Park Avenue, New York, New York 10172, 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 277 Park Avenue, New York, New York 10172, 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 in property and casualty insurance and

life insurance in Europe and

-31-

<PAGE>

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 277 Park Avenue, New York,

New York 10172. 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 earlier, substantially

identical agreement (the "First Advisory

-32-

<PAGE>

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 Agree-

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

services

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<PAGE>

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.

For the fiscal years ending October 31, 1995, 1994 and 1993 the

Growth Fund paid the Adviser fees of $395,327, $387,752 and $365,862,

respectively; the Aggressive Growth Fund paid the Adviser fees of $1,432,939,

$965,285 and $506,013, respectively; the Fixed Income Fund paid the Adviser

fees of $281,997, $240,985 and $238,766, respectively,; the Growth and Income

Fund paid the Adviser fees of $556,556, $434,475 and $364,762 respectively;

and the Municipal Trust Fund paid the Adviser fees of $224,300, $219,851 and

$49,236, respectively.

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<PAGE>

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EXPENSES OF WINTHROP

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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 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 expenditures

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 approved 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

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<PAGE>

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 February 27, 1996. 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 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, $872,716 for the Aggressive Growth Fund,

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<PAGE>

$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.

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<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

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<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

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<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 contingent 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 alternative, 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

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<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 and

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<PAGE>

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 Funds, the exchange privilege is available only in those

jurisdictions where shares of the relevant Fund may

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<PAGE>

be legally sold. Prospectuses for each of the Winthrop Opportunity Funds and

Alliance Money Market Funds may be obtained from Winthrop at the address or

telephone number listed on the cover page of the Prospectus. An exchange is

effected on the basis of each Fund's relative net asset value per share next

computed following receipt of an order for such exchange from the

shareholder. 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

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<PAGE>

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 shareholders with a systematic withdrawal plan (see below).

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

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<PAGE>

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 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 Funds have one transaction time each Fund Business Day, which

is as of the close of the regular session of the New York Stock Exchange,

generally 4:00 p.m. New York City time. If monies are received prior to such

time for any of the Funds, shares purchased are entitled to the dividends, if

any, for the next Fund Business Day. If monies are received after such time

for any of the Funds, they are invested at the next transaction time on the

following Fund Business Day and, accordingly, are entitled to the

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<PAGE>

dividends for the next Fund Business Day after such investment. Shares earn

dividends through the day a redemption is effected. Dividends and

distributions payable in additional Fund shares will be paid based on the net

asset value of each class of shares on the record date for such dividend or

distribution, or such other date as the Board of Trustees may determine. 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.

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 approximately the amount of any accrued distribution

services fee.

For purposes of the computation of net asset value, each of the

Funds value securities held in their respective portfolios as follows:

readily marketable portfolio securities listed on the New York Stock Exchange

are valued, except as indicated below, at

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<PAGE>

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 value. However, fixed-income securities (except short-term securi-

ties) may be valued on the basis of prices provided by a pricing

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<PAGE>

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

developments 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.

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<PAGE>

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DIVIDENDS, DISTRIBUTIONS AND TAXES

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

Each of the Funds has qualified and intends to qualify in the

future as regulated investment company under Subchapter M of the Internal

Revenue Code of 1986, as amended (the "Code"). As a regulated investment

company, a Fund will not be subject to federal income taxes if at least 90%

of its net investment income and net short-term capital gains less any

available capital loss carryforwards are distributed to shareholders within

allowable time limits. However, a Fund will be subject to tax on its income

and gains to the extent that it does not distribute to its shareholders an

amount equal to such income and gains. In addition, a Fund will be subject

to a nondeductible 4% excise tax to the extent that it does not make

distributions to its shareholders on a basis such that they are taxed to

shareholders in the same year in which the related income or gain was

realized by such Fund. To the extent possible, each Fund intends to make

such distribution as may be necessary to avoid this excise tax.

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 dis-

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<PAGE>

tributions, 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. Distributions

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.

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.

Each Fund's ability to dispose of portfolio securities may be

limited by the requirement for qualification as a regulated investment

company that less than 30% of a Fund's gross income be derived from the

disposition of securities held for less than three months. Each fund is

required to withhold and remit to the U.S. Treasury 31% of the dividends or

proceeds of any redemptions or exchanges of shares with respect to any

shareholder who fails to furnish Winthrop with a correct taxpayer

identification number, who has been notified by the U.S. Treasury that he or

she has under reported dividend or interest income or who fails to certify to

Winthrop that he or she is not subject to such withholding. An

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<PAGE>

individual's tax identification number is his or her social security number.

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 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,

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<PAGE>

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 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 divi-

dend. To the extent such untaxed amount

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<PAGE>

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 excise tax. To do

so, each Fund expects to distribute during the calendar year an amount at

least equal to the sum of (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

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<PAGE>

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 distribution 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 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

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<PAGE>

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 qualification 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 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-

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<PAGE>

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.

The foregoing discussion is a general summary of certain current

federal income tax laws regarding the Funds. The discussion does not purport

to deal with all of the Federal income tax consequences applicable to the

Funds, or to all categories of investors, some of whom may be subject to

special rules. Each prospective shareholder should consult with his or her

own professional tax adviser regarding federal, state and local tax

consequences of ownership of shares of the Funds.

-56-

<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

-57-

<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 infor-

mation, 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 furnished 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.

-58-

<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.

-59-

<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 the fiscal

year ended October 31, 1995, the Growth Fund effected 13.7% of the aggregate

-60-

<PAGE>

dollar amount of transactions involving the payment of commissions through

Autranet, Inc. In addition, of the brokerage commissions incurred in 1995,

$63,217 or approximately 50.7% was paid to Donaldson, Lufkin & Jenrette

Securities Corporation which accounted for 59.1% of the aggregate dollar

amount of transaction involving the payment of commissions..

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.

In the fiscal year ended October 31, 1995, the Aggressive Growth Fund

effected 13.5% of the aggregate dollar amount of transactions involving the

payment of commissions through 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. In the

fiscal year ended October 31, 1995, the Growth and Income Fund effected 40.1%

of the aggregate dollar amount of transactions involving the payment of

commissions through Autranet, Inc.

-61-

<PAGE>

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 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

-62-

<PAGE>

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

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:

-63-

<PAGE>

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.

-64-

<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 possi-

ble, 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 provides that

all

-65-

<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

-66-

<PAGE>

by Winthrop with the Securities and Exchange Commission under the 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.

-67-

<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