WINTHROP FOCUS FUNDS, 485APOS, 1996-12-31

WINTHROP FOCUS FUNDS
485APOS, 1996-12-31

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<PAGE>

File No. 33-3706
812-9390

As filed with the Securities and Exchange Commission on December 30, 1996

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

FORM N-1A

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

Post-Effective Amendment No. 15
----

[ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X]

Amendment No. 16
----

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

Winthrop Focus Funds
- ----------------------------------------------------------------------
(Exact name of registrant as specified in charter)

277 Park Avenue, NEW YORK, NEW YORK 10272
- ----------------------------------------------------------------------
(Address of principal executive offices)

Registrant's Telephone Number: 212-892-4006

Charles Hughes
277 Park Avenue
New York, New York 10272

- ----------------------------------------------------------------------
(Name and address of agent for service)

Copies To: Stephen K. West
125 Broad Street
New York, New York 10004

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

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

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

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

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

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

December 27, 1996.

<PAGE>

Cross Reference Sheet (Pursuant to Rule 495)

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

Part A
------

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

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

Item 5. Management of the Fund Management; General
Information

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

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

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

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

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

Item 14. Management of the Management
Registrant

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

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

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

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

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

Part C
------

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

<PAGE>
WINTHROP FOCUS FUNDS
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.

Small Company Value 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 25.

There can, of course, be no assurance that the Funds will achieve their
respective investment objectives. See "Investment Objectives and Policies", page
18, 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; and (iv) simplified
employee pension (SEP) plans. Further information can be obtained from Winthrop
at the address and telephone number shown above. See "Purchases, Redemptions and
Shareholder Services", page 35.

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 35.

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 , 1997,
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 , 1997

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>
SMALL COMPANY VALUE FIXED
GROWTH FUND FUND INCOME FUND
-------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS
SHAREHOLDER TRANSACTION EXPENSES CLASS A B(4) CLASS A CLASS B(4) CLASS A CLASS B(4)
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, 1996)
Management Fees..................... .751/2%* .75%*+ .80%* .80%*+ .63%* .63%*+
12b-1 Fees**(2)..................... .36 1.00 + .36 1.00 + .36 1.00+
Other Expenses, after expense
reimbursement (Fixed Income Fund
only)............................. .37 .42 .31 .35 + .01 .07+
Total Fund Operating Expenses....... 1.48% 2.17%+ 1.47% 2.15% 1.00% 1.70%(3)
</TABLE>

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

+ Annualized.

* 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
Small Company Value 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 33.

(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 39. 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) For the period November 1, 1995 through February 27, 1996, Class A 12b-1
fees were charged at the annual rate of .50 of 1% of average daily net
assets and were reduced to .30 of 1% of average daily net assets effective
February 28, 1996.

(3) Management Fees for the Fixed Income Fund are based on actual expenses for
the year ended October 31, 1996. 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 .34% 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 1.34% and 2.04%, for Class A shares and Class B shares,
respectively.

(4) Winthrop began offering Class B shares on February 28, 1996. 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 40.

3
<PAGE>

<TABLE>
<CAPTION>
GROWTH AND MUNICIPAL
INCOME FUND TRUST FUND
------------------- -------------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B(4) CLASS A CLASS B(4)
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, 1996)
Management Fees..................... .68%* .68%*+ .63%* .63%*+
12b-1 Fees**(2)..................... .36 1.00 + .37 1.00+
Other Expenses, after expense
reimbursement (Municipal Trust Fund
only).............................. .32 .31 + (.50 ) (.43)+
Total Fund Operating Expenses....... 1.36% 1.99 + .50 (3) 1.20(3)+
</TABLE>

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

+ Annualized.

* 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 33.

(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 39. 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.

(3) Management Fees for the Municipal Trust Fund are based on actual expenses
for the year ended October 31, 1996. 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 .94% for Class A shares and
.67% for 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 1.44% and 1.87%, for Class A shares and
Class B shares, respectively.

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 including the
maximum 4.75% sales charge and assuming (1) 5% annual return and (2) redemption
at the end of each time period.................................................. $ 62 $ 92 $ 124 $ 216
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 62 $ 92 $ 124 $ 216
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 $ 88 $ 116 $ 232
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 22 $ 68 $ 116 $ 232
SMALL COMPANY VALUE FUND
CLASS A
You would pay the following expenses on a $1,000 investment including the
maximum 4.75% sales charge and assuming (1) 5% annual return and (2) redemption
at the end of each time period.................................................. $ 62 $ 92 $ 124 $ 215
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 62 $ 92 $ 124 $ 215
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 $ 230
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 22 $ 67 $ 115 $ 230
FIXED INCOME FUND
CLASS A
You would pay the following expenses on a $1,000 investment including the
maximum 4.75% sales charge and 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 including the
maximum 4.75% sales charge and assuming (1) 5% annual return and (2) redemption
at the end of each time period.................................................. $ 61 $ 89 $ 118 $ 203
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 61 $ 89 $ 118 $ 203
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................. $ 60 $ 82 $ 107 $ 213
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 20 $ 62 $ 107 $ 213
</TABLE>

5
<PAGE>
<TABLE>
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
MUNICIPAL TRUST FUND
CLASS A
You would pay the following expenses on a $1,000 investment including the
maximum 4.75% sales charge and assuming (1) 5% annual return and (2) redemption
at the end of each time period.................................................. $ 52 $ 63 $ 74 $ 107
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 52 $ 63 $ 74 $ 107
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................. $ 52 $ 58 $ 66 $ 126
You would pay the following expenses on the same investment, assuming no
redemptions..................................................................... $ 12 $ 38 $ 66 $ 126
</TABLE>

The purpose of the Examples 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 33, and "Purchases,
Redemptions and Shareholder Services", page 35. The Examples 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 30, and the
Statement of Additional Information, page 30. Commencing July 1, 1994, the
Adviser reimbursed through October 31, 1995 1996 Total Fund Operating Expenses
in excess of 1.00% of the average daily net assets of the Fixed Income Fund. For
the period November 1, 1996 through April 30, 1997 the Adviser has agreed to
reduce its management fees and reimburse operating expenses by the amount that
Total Fund Operating Expenses exceed 1.00% of the average daily net assets of
the Class A shares and 1.70% of the average daily net assets of the Class B
shares of the Fixed Income Fund. For the Municipal Trust Fund, commencing July
1, 1994, the Adviser reimbursed through October 31, 1995 Total Fund Operating
Expenses in excess of 1.00% of the average daily net assets. During the period
November 1, 1995 through May 31, 1996, the Adviser reduced, with respect to the
Municipal Trust Fund, its management fees and reimbursed operating expenses by
the amount that Total Fund Operating Expenses exceeded 1.00% of the average
daily net assets of its Class A shares and 1.70% of the average daily net assets
of its Class B shares. For the period June 1, 1996 through December 31, 1996,
the Adviser has agreed to reduce, with respect to the Municipal Trust Fund, its
management fees reimburse operating expenses by the amount that Total Fund
Operating Expenses exceed .50% of the average daily net assets of its Class A
shares and 1.20% of the average daily net assets of its Class B shares. After
December 31, 1997, with respect to the Fixed Income Fund, and December 31, 1996,
with respect to the Municipal Trust Fund, the Adviser may, in its sole
discretion, determine to continue to pay certain expenses of the Fixed Income
Fund or the Municipal Trust Fund or it may discontinue this practice with
respect to both or either of such Funds. As a result of the voluntary assumption
of expenses, the Adviser reimbursed the Fixed Income Fund and Municipal Trust
Fund $198,923 and $249,651, respectively, during the year ended October 31,
1996.

"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.

6
<PAGE>
FINANCIAL HIGHLIGHTS

The following financial highlights for the five fiscal years ended October
31, 1996 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
and a Class B share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. Prior to February 28, 1996, Class A shares and Class B shares were
not offered. Accordingly, the data presented below with respect to Class A
shares for periods prior to such date has been obtained from the financial
statements for the Fund's prior fiscal years.

<TABLE>
<CAPTION>
GROWTH FUND
--------------------------------------------------------------------------------------
CLASS A SHARES
--------------------------------------------------------------------------------------
FISCAL YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.............. $ 11.350 $ 10.820 $ 10.970 $ 11.100 $ 11.450 $ 9.200 $ 11.690 $ 10.490
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income (Loss)....... .053 .037 .014 .061 .123 .148 .270 .276
Net Gains or Losses on Securities
(both realized and unrealized)... 2.107 1.190 .435 1.386 .418 2.512 (1.355) 1.832
--------- --------- --------- --------- --------- --------- --------- ---------
Total From Investment Operations... 2.163 1.227 .449 1.447 .541 2.660 (1.085) 2.108
LESS DISTRIBUTIONS:
Dividends (from net
investment income)............... (.038) (.012) -- (.077) (.163) (.198) (.244) (.437)
Distributions (from capital
gains)........................... (.782) (.685) (.599) (1.500) (.728) (.212) (1.161) (.471)
--------- --------- --------- --------- --------- --------- --------- ---------
Total Distributions................ (.820) (.697) (.599) (1.577) (.891) (.410) (1.405) (.908)
--------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Period.................... $ 12.690 $ 11.350 $ 10.820 $ 10.970 $ 11.100 $ 11.450 $ 9.200 $ 11.690
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN(3).................... 20.32% 12.21% 4.15% 14.36% 4.66% 29.71% (11.05)% 21.72%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).................. $ 68,096 $ 55,946 $ 52,455 $ 49,446 $ 48,678 $ 50,426 $ 42,937 $ 53,142
Ratio of expenses to average net
assets........................... 1.48% 1.63% 1.65% 1.36% 1.26% 1.34% 1.33% 1.37%
Ratio of net investment income to
average net assets............... 0.47% .35% .06% .56% 1.11% 1.40% 2.53% 2.53%
Portfolio turnover rate............ 60.6% 101.7% 28.2% 61.7% 65.7% 31.7% 68.2% 64.3%
Average commission rate paid....... $ 0.0560

**CLASS B
SHARES
----------

1988 1987* 1996
--------- --------- ----------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period.............. $ 9.650 $ 10.000 $ 11.88
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income (Loss)....... .210 .044 (.013)
Net Gains or Losses on Securities
(both realized and unrealized)... .888 (.394) .763
--------- --------- ----------
Total From Investment Operations... 1.098 (.350) .750
LESS DISTRIBUTIONS:
Dividends (from net
investment income)............... (.051) -- --
Distributions (from capital
gains)........................... (.207) -- --
--------- --------- ----------
Total Distributions................ (.258) -- (.000)
--------- --------- ----------
Net Asset Value,
End of Period.................... $ 10.490 $ 9.650 $ 12.63
--------- --------- ----------
--------- --------- ----------
TOTAL RETURN(3).................... 11.72% (3.99)%(1) 6.40%(2)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).................. $ 52,626 $ 54,809 $ 3,177
Ratio of expenses to average net
assets........................... 1.37% 1.69%(1) 2.17%
Ratio of net investment income to
average net assets............... 2.15% .60%(1) (0.34)%
Portfolio turnover rate............ 42.3% 90.6% 60.6%
Average commission rate paid....... $ 0.06
</TABLE>

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

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

** From February 28, 1996 (commencement of offering of Class B shares) to
October 31, 1996.

(1) Annualized.

(2) Not annualized.

(3) A sales load of up to 4.75% on Class A purchases and a Contingent Deferred
Sales Charge on certain redemptions of Class A and Class B shares may be
imposed, which would reduce total return shown above.

7
<PAGE>
FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data for a Class A share
and a Class B share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. Prior to the February 28, 1996, Class A shares and Class B shares
were not offered. Accordingly, the data presented below with respect to Class A
shares for periods prior to such date has been obtained from the financial
statements for the Fund's prior fiscal years.

<TABLE>
<CAPTION>
FIXED INCOME FUND
-------------------------------------------------------------------------------------------------
CLASS A SHARES
-------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 10.22 $ 9.66 $ 10.93 $ 10.40 $ 10.08 $ 9.57 $ 9.72 $ 9.52 $ 9.26
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income...... .577 .588 .567 .622 .695 .773 .809 .830 .749
Net Gains or Losses on
Securities (both realized
and unrealized).......... (.150) .560 (1.027) .567 .320 .510 (.150) .200 .260
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total From Investment
Operations............... .427 1.148 (.460) 1.189 1.015 1.283 .659 1.030 1.009
LESS DISTRIBUTIONS:
Dividends (from net
investment income)....... (.577) (.588) (.567) (.622) (.695) (.773) (.809) (.830) (.749)
Distributions (from capital
gains)................... -- -- (.243) (.037) -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Distributions........ (.577) (.588) (.810) (.659) (.695) (.773) (.809) (.830) (.749)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Period............ $ 10.07 $ 10.22 $ 9.66 $ 10.93 $ 10.40 $ 10.08 $ 9.57 $ 9.72 $ 9.52
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN(3)............ 4.34% 12.23% (4.37)% 11.79% 10.37% 13.92% 7.14% 11.42% 11.27%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).......... $ 56,388 $ 53,885 $ 39,150 $ 40,881 $ 32,358 $ 23,783 $ 10,300 $ 5,861 $ 5,335
Ratio of expenses to
average net assets(4).... 1.00% 1.00% .93% .83% .51% -- -- -- .32%
Ratio of net investment
income to average net
assets(4)................ 5.72% 5.90% 5.58% 5.79% 6.71% 7.75% 8.34% 8.74% 7.96%
Portfolio turnover rate.... 90.2% 66.1% 55.9% 95.6% 62.8% 35.9% 37.9% 30.3% 48.2%

**CLASS B
SHARES
---------

1987* 1996
--------- ---------
<S> <C> <C>
Net Asset Value,
Beginning of Period...... $ 10.00 $ 10.22
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income...... .554 .339
Net Gains or Losses on
Securities (both realized
and unrealized).......... (.740) (.150)
--------- ---------
Total From Investment
Operations............... (.186) 0.189
LESS DISTRIBUTIONS:
Dividends (from net
investment income)....... (.554) (.339)
Distributions (from capital
gains)................... -- --
--------- ---------
Total Distributions........ (.554) (.339)
--------- ---------
Net Asset Value,
End of Period............ $ 9.26 $ 10.07
--------- ---------
--------- ---------
TOTAL RETURN(3)............ (2.15)%(1) 2.23%(2)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).......... $ 4,697 $ 1,629
Ratio of expenses to
average net assets(4).... 1.00%(1) 1.70%
Ratio of net investment
income to average net
assets(4)................ 6.60%(1) 5.01%
Portfolio turnover rate.... 51.1% 90.2%
</TABLE>

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

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

** From February 28, 1996 (commencement of offering of Class B shares) to
October 31, 1996.

(1) Annualized.

(2) Not annualized.

(4) Net of voluntary assumption by Advisor of expenses, expressed as a
percentage of average net assets as follows: Class A, .34%, .51%, .67%,
.58%, .98%, 2.19%, 2.92%, 2.91%, 1.68% and 1.00%, for the years ended
October 31, 1996, 1995, 1994, 1993, 1992, 1991, 1990, 1989, 1988 and 1987,
respectively; Class B shares, .34% (annualized) for the period 2/28/96
through 10/31/96.

8
<PAGE>
FINANCIAL HIGHLIGHTS

The following financial highlights for the fiscal years ended October 31,
1996, 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.

<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------------------------------------------------------------------------------------
CLASS A SHARES
----------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED OCTOBER 31, FISCAL YEARS ENDED JUNE 30,
----------------------------------------------------- -------------------------------------------
1996 1995 1994 1993 1992* 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 14.57 $ 13.38 $ 13.42 $ 12.35 $ 12.03 $ 11.70 $ 12.48 $ 12.68 $ 11.64
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income...... .266 .254 .244 .270 .083 .320 .380 .565 .464
Net Gains or Losses on
Securities (both realized
and unrealized).......... 2.935 1.769 .358 1.720 .572 .916 .010 .703 1.549
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total From Investment
Operations............... 3.201 2.023 .602 1.990 .655 1.236 .390 1.268 2.013
LESS DISTRIBUTIONS:
Dividends (from net
investment income)....... (.241) (.266) (.223) (.271) (.165) (.234) (.386) (.562) (.577)
Distributions (from capital
gains)................... (.350) (.567) (.419) (.649) (.170) (.672) (.784) (.906) (.396)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Distributions........ (.591) (.833) (.642) (.920) (.335) (.906) (1.170) (1.468) (.973)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Period............ $ 17.18 $ 14.57 $ 13.38 $ 13.42 $ 12.35 $ 12.03 $ 11.70 $ 12.48 $ 12.68
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Return(3)............ 22.60% 16.10% 4.58% 16.93% 16.39%(1) 10.45% 3.86% 10.13% 18.36%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).......... $ 113,803 $ 87,975 $ 67,020 $ 52,166 $ 46,457 $ 45,342 $ 47,340 $ 50,687 $ 52,337
Ratio of expenses to
average net assets(4).... 1.36% 1.58% 1.64% 1.33% 1.32%(1) 1.35% 1.23% 1.21% 1.19%
Ratio of net investment
income to average net
assets(4)................ 1.68% 1.94% 1.88% 2.12% 1.99%(1) 2.62% 3.25% 4.35% 3.92%
Portfolio turnover rate.... 44.0% 31.8% 25.9% 36.4% 14.4% 29.0% 48.0% 41.0% 46.0%
Average commission rate
paid..................... $ 0.06

**CLASS B
SHARES
-------------

1988 1987 1996
--------- --------- -------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 14.58 $ 14.38 $ 16.05
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net Investment Income...... .423 .456 .136
Net Gains or Losses on
Securities (both realized
and unrealized).......... (2.016) 1.209 1.109
--------- --------- ------
Total From Investment
Operations............... (1.593) 1.665 1.245
LESS DISTRIBUTIONS:
Dividends (from net
investment income)....... (.415) (.365) (.145)
Distributions (from capital
gains)................... (.932) (1.100) --
--------- --------- ------
Total Distributions........ (1.347) (1.465) (.145)
--------- --------- ------
Net Asset Value,
End of Period............ $ 11.64 $ 14.58 $ 17.15
--------- --------- ------
--------- --------- ------
Total Return(3)............ (10.20)% 13.04% 7.67%(2)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000's omitted).......... $ 55,404 $ 70,753 $ 6,545
Ratio of expenses to
average net assets(4).... 1.17% 1.14% 1.99%
Ratio of net investment
income to average net
assets(4)................ 3.35% 3.23% 1.06%
Portfolio turnover rate.... 38.0% 48.0% 44.0%
Average commission rate
paid..................... $ 0.06
</TABLE>

- -----------------
* For the period July 1, 1992 to October 31, 1992.
** From February 28, 1996 (commencement of offering of Class B shares) to
October 31, 1996.
(1) Annualized.
(2) Not annualized.

(4) 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,
1996, 1995, 1994 and 1993 and the period ended October 31, 1992 have been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report thereon appears in the Statement of Additional Information. Financial
highlights for the year ended December 31, 1991 were previously audited by other
auditors whose report thereon was unqualified. Financial statements and related
notes are included in the Statement of Additional Information, which is
available upon request. Additional information about the Fund's performance is
contained in the Fund's annual report to shareholders, which may be obtained
without charge.

<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND*
---------------------------------------------------------------------------------------------------
CLASS A SHARES
---------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED OCTOBER 31, FISCAL YEARS ENDED DECEMBER 31,
-------------------------------------------------------- --------------------------------------
1996 1995 1994 1993 1992** 1991 1990 1989
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.............. $ 16.61 $ 15.65 $ 16.11 $ 14.00 $ 14.16 $ 10.16 $ 11.90 $ 12.64
INCOME (LOSS) FROM
INVESTMENT
OPERATIONS:
Net Investment Income
(Loss).............. .084 .035 .105 .123 .011 .023 .157 .062
Net Gains or Losses on
Securities (both
realized and
unrealized)......... 2.162 1.621 .603 3.195 1.482 5.090 (1.720) 1.962
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
Total From Investment
Operations.......... 2.246 1.656 .708 3.318 1.493 5.113 (1.563) 2.024
LESS DISTRIBUTIONS:
Dividends (from net
investment
income)............. (.037) -- (.026) (.011) (.027) (.024) (.177) (.062)
Distributions (from
capital gains)...... (.409) (.696) (1.142) (1.197) (1.626) (1.089) -- (2.702)
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
Total Distributions... (.446) (.696) (1.168) (1.208) (1.653) (1.113) (.177) (2.764)
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
Net Asset Value,
End of Period....... $ 18.41 $ 16.61 $ 15.65 $ 16.11 $ 14.00 $ 14.16 $ 10.16 $ 11.90
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
--------- --------- --------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN(3)....... 13.80% 11.10% 4.67% 25.34% 13.95%(1) 50.55% (13.12)% 16.25%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period
(000's omitted)..... $ 227,716 $ 202,730 $ 144,624 $ 77,903 $ 39,683 $ 32,340 $ 22,041 $ 24,999
Ratio of expenses to
average net
assets(4)........... 1.47% 1.64% 1.70% 1.44% 1.74%(1) 1.89% 1.98% 1.84%
Ratio of net
investment income
(loss) to average
net assets(4)....... 0.48% .23% (.04%) .32% .10%(1) .18% 1.45% .43%
Portfolio turnover
rate................ 35.1% 25.1% 31.6% 134.3% 164.1% 91.3% 87.6% 107.4%
Average commission
rate paid........... $ 0.06

CLASS B
SHARES+
----------

1988 1987 1986 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.............. $ 11.52 $ 13.351 $ 15.211 $ 17.41
INCOME (LOSS) FROM
INVESTMENT
OPERATIONS:
Net Investment Income
(Loss).............. .018 (.066) (.071) (.023)
Net Gains or Losses on
Securities (both
realized and
unrealized)......... 3.391 (1.225) 1.467 .953
---------- ---------- ---------- ----------
Total From Investment
Operations.......... 3.409 (1.291) 1.396 0.934
LESS DISTRIBUTIONS:
Dividends (from net
investment
income)............. (.009) -- (.044) --
Distributions (from
capital gains)...... (2.280) (.540) (3.212) --
---------- ---------- ---------- ----------
Total Distributions... (2.289) (.540) (3.256) --
---------- ---------- ---------- ----------
Net Asset Value,
End of Period....... $ 12.64 $ 11.520 $ 13.351 $ 18.34
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
TOTAL RETURN(3)....... 29.59% (10.61)% 8.53% 5.28%(2)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period
(000's omitted)..... $ 21,821 $ 21,081 $ 23,338 $ 6,305
Ratio of expenses to
average net
assets(4)........... 1.93% 1.69% 1.78% 2.15%
Ratio of net
investment income
(loss) to average
net assets(4)....... .13% (.49)% (.45)% (.34)%
Portfolio turnover
rate................ 107.9% 117.4% 73.7% 35.1%
Average commission
rate paid........... $ 0.06
</TABLE>

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

* Name changed from Aggressive Growth Fund on February , 1997.

** For the period January 1, 1992 to October 31, 1992.
+ From February 28, 1996 (commencement of offering of Class B shares) to
October 31, 1996.
(1) Annualized.
(2) Not annualized.

(4) 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,
1996, 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
and a Class B share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. Prior to February 28, 1996, Class A shares and Class B shares were
not offered. Accordingly, the data presented below with respect to Class A
shares has been obtained from the financial statements for the Fund's prior
fiscal years.

<TABLE>
<CAPTION>
MUNICIPAL TRUST FUND
--------------------------------------------------------
**CLASS
CLASS A SHARES B SHARES
-------------------------------------------- --------
PERIOD
ENDED
FISCAL YEARS ENDED OCTOBER 31, OCTOBER 31,
1993*
------------------------------- -----------
1996 1995 1994 1996
--------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 10.06 $ 9.51 $ 10.10 $ 10.00 $ 10.12
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income................................... .425 .389 .365 .085 .248
Net Gains or Losses on Securities (both realized and
unrealized)........................................... .050 .550 (.590) .100 (.110)
--------- --------- --------- ----------- --------
Total From Investment Operations........................ .375 .939 (.225) .185 .137
LESS DISTRIBUTIONS:
Dividends (from net investment income).................. (.425) (.389) (.365) (.085) (.248)
--------- --------- --------- ----------- --------
Total Distributions..................................... (.425) (.389) (.365) (.085) (.248)
--------- --------- --------- ----------- --------
Net Asset Value, End of Period.......................... $ 10.01 $ 10.06 $ 9.51 $ 10.10 $ 10.01
--------- --------- --------- ----------- --------
--------- --------- --------- ----------- --------
TOTAL RETURN(3)......................................... 3.83% 10.06% (2.27)% 7.15%(1) 1.42%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's omitted)............... $ 38,794 $ 39,059 $ 34,470 $ 33,794 $ 489
Ratio of expenses to average net assets(4).............. 0.80% 1.00% .83% .75%(1) 1.23%
Ratio of net investment income to average net
assets(4)............................................. 4.26% 3.97% 3.71% 3.28%(1) 3.81%
Portfolio turnover rate................................. 79.3% 49.3% 42.5% 0.0% 79.3%
</TABLE>

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

* Commencement of operations was July 28, 1993.

** From February 28, 1996 (commencement of offering of Class B shares) to
October 31, 1996.

(1) Annualized.

(2) Not annualized.

(3) A sales load of up to 4.75% on Class A purchases and a Contingent Deferred
Sales Charge on certain redemptions of Class A shares and Class B shares may
be imposed, which would reduce total return shown above.

(4) Net of voluntary assumption by Adviser of expenses, expressed as a
percentage of average net assets as follows: Class A shares, .64%, .58%,
.77% and 1.15% (annualized) for the fiscal years ended October 31, 1996,
1995 and 1994 and the period July 28, 1993 through October 31, 1993,
respectively; Class B shares, .64% (annualized) for the period February 28,
1996 through October 31, 1996.

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
41.) 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 44.) 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 35.)

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 30, 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 which in
the opinion of the Adviser have long-term capital appreciation potential.
However, the Growth Fund reserves

12
<PAGE>

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 27, 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 27, 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 30.)

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
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

13
<PAGE>
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.

SMALL COMPANY VALUE FUND The investment objective of the Small Company
Value Fund is a high level of growth of capital. The Small Company Value Fund is
not intended for investors whose principal objective is assured income or
preservation of capital.

This investment objective has not been changed as a result of the change in
name from Aggressive Growth Fund to Small Company Value Fund.

Although the investment objective of the Fund has not been changed, the
change in name reflects the investment policy that has been and continues in
effect to implement the investment objective and is described below.

It is the policy of the Small Company Value Fund to invest principally in
common stock and securities convertible into common stock, but it may when
deemed appropriate by the Adviser invest part of its assets in preferred stock,
other equity securities, bonds or other debt securities as described below.
Under normal market conditions, at least 65% of the Fund's total assets will be
invested in equity securities of small market capitalization companies, which
for the purposes of this Fund, are those companies with a market capitalization
of $2 billion or less at the time of the Fund's investment. While smaller
companies generally have potential for rapid growth, investments in smaller
companies often involve greater risks than investments in larger, more
established companies because smaller companies may lack the management
experience, financial resources, product diversification, and competitive
strengths of larger companies. In addition, in many instances the securities of
smaller companies are traded only over-the-counter or on a regional securities
exchange and the frequency and volume of their trading is substantially less
than is typical of larger companies. As a result, the securities of smaller
companies may be subject to greater and more abrupt price fluctuations. When
making larger sales, the Fund may have to sell portfolio holdings at discounts
from quoted prices or may have to make a series of small sales over an extended
period of time due to the trading volume of smaller company securities.
Investors should be aware that, based on the foregoing factors, an investment in
the Fund may be subject to greater price fluctuations than an investment in a
fund that invests primarily in larger, more established companies. The Adviser's
research efforts may also play a greater role in selecting securities for the
Fund than in a fund that invests in larger, more established companies.

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The Small Company Value Fund will pursue its investment objective by
employing the value-oriented investment approach. The Fund seeks securities that
appear to be underpriced and are issued by companies with proven management,
sound finances and strong potential for market growth. By investing in such
companies, the Fund tries to enhance the potential for appreciation and limit
the risk of decline in the value of its portfolio. The Fund focuses on the
fundamentals of each small-cap company, instead of trying to anticipate what
changes might occur in the stock market, the economy, or the political
environment. This approach differs from that used by many other funds investing
in small-cap company stocks. Those funds often buy stocks of companies they
believe will have above-average earnings growth, based on anticipated future
developments. In contrast, the Fund's securities are generally selected with the
belief that they are currently undervalued, based on existing conditions and
that their earning power or franchise value does not appear to be reflected in
their current stock price. In addition, to further reduce risk, the Fund
diversifies its holdings among many companies and industries.

The Small Company Value 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. The Small Company Value 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.

In addition to common stock and securities convertible into common stock,
the Small Company Value 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 27, for a description of asset and mortgage-backed securities.)

The Small Company Value Fund may invest up to 35% 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 27, for a description of
investment grade debt securities.) The foregoing investment grade limitation
applies only at the time of initial investment and the Small Company Value Fund
may determine to retain in its portfolio securities the issuers of which have
had their credit characteristics downgraded.

The Small Company Value 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 Small Company Value 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

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<PAGE>
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 Small
Company Value 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 Small
Company Value 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 Small Company
Value 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 Small Company Value 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 Small Company Value 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
Small Company Value 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 Small
Company Value 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 Small Company Value 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 Small Company Value Fund intends to so qualify as a pass-through
entity. Failure to so qualify would result in federal taxation of the Small
Company Value Fund at the standard effective corporate rate of up to 35%.

The Small Company Value 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 Small Company
Value Fund's successful purchase and sale of options depends on the ability of
the Adviser to predict the direction of the market and is 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 Small Company Value 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
Small Company Value 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

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<PAGE>
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 Small
Company Value Fund the credit risk that the counterparty will fail to honor its
obligations. The Small Company Value Fund will not purchase options if, as a
result, the aggregate cost of all outstanding options exceeds 10% of its assets.
The Small Company Value 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 Small
Company Value Fund is limited to an investment not in excess of 5% of its total
assets. Although the Small Company Value 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 Small Company Value 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");

(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 27, 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

17
<PAGE>
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 30).

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-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 27, 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

18
<PAGE>

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 27, 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 30.)

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 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

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<PAGE>
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 44.

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 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 27, 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 obtained
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

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<PAGE>
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 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 30.)

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 44.)

See the Statement of Additional Information for a more complete description
of the Municipal Trust

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<PAGE>
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 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 Small Company Value 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 Small Company Value 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

22
<PAGE>
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 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, Small Company Value 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, Small Company Value 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

23
<PAGE>
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.
PORTFOLIO TURNOVER The portfolio turnover rate for the Growth Fund, the
Fixed Income Fund, the Small Company Value Fund, the Growth and Income Fund and
the Municipal Trust Fund for the year ended October 31, 1996 was 60.6%, 90.2%,
35.1%, 44.0% and 77.6%, 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 a majority of the shareholders of that Fund. See
"Investment Policies and Restrictions" in the Statement of Additional
Information.

24
<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 Small Company Value Fund (since 1989, which was previously named
the Aggressive Growth Fund and includes its predecessor, the Neuwirth Fund,
Inc.) Mr. Engle is a Vice President of Winthrop and 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 Small Company Value 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 Winthrop 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 Small Company Value 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

25
<PAGE>
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; Small Company Value 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 Small Company Value 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 $476,341, equivalent to .75% of the average daily net assets for
the year ended October 31, 1996. The Growth Fund's total operating expenses of
$943,669 for such period amounted to 1.48% of the average daily net assets of
its Class A shares and for the period February 28, 1996 (commencement of
offering Class B shares) through October 31, 1996, 2.18% of the average daily
net assets of its Class B shares.

Pursuant to the Advisory Agreement, the Small Company Value Fund has paid
the Adviser an advisory fee of $1,774,607, equivalent to .80% of the average
daily net assets for the year ended October 31, 1996. The Small Company Value
Fund's total operating expenses of $3,300,408 for such period amounted to 1.47%
of the average daily net assets of its Class A shares and for the period
February 28, 1996 (commencement of offering Class B shares) through October 31,
1996, 2.15% of the average daily net assets of its Class B shares.

Pursuant to the Advisory Agreement, the Fixed Income Fund has paid the
Adviser an advisory fee of $360,520, equivalent to .625% of the average daily
net assets for the year ended October 31, 1996. The Fixed Income Fund's total
operating expenses for such period were $780,350. Commencing July 1, 1994, the
Adviser reimbursed through February 27, 1996 such operating expenses in excess
of 1.00% of the average daily net assets of the Fixed Income Fund. For the
period February 28, 1996 through April 30, 1997 the Adviser has agreed to reduce
its management fees and reimburse expenses by the amount that total fund
operating expenses exceed 1.00% of the average daily net assets of Class A
shares and 1.70% of the average daily net assets of Class B shares of the Fixed
Income Fund. After April 30, 1997, the Adviser may continue or it may determine
to discontinue this practice. As a result of the voluntary assumption of
expenses, the Adviser reimbursed the Fund $198,923 during the year ended October
31, 1996. Absent such reimbursement, the Fixed Income Fund's total operating
expenses for the year ended October 31, 1996 would have amounted to 1.34% of its
average daily net assets of its Class A shares and 2.04% of the average daily
net assets of its Class B shares.

Pursuant to the Advisory Agreement, the Growth and Income Fund has paid the
Adviser an advisory fee of $714,397, equivalent to .68% of the average daily net
assets for the year ended October 31, 1996. The Growth and Income Fund's total
operating expenses of $1,441,692 for such period amounted to 1.36% of the
average daily net assets of its Class A shares and for the period February 28,
1996 (commencement of offering Class B shares) through October 31, 1996, 2.00%
of the average daily net assets of its Class B shares.

Pursuant to the Advisory Agreement, the Municipal Trust Fund has paid the
Adviser an advisory fee of $242,321, equivalent to .625% of the average daily
net assets for the year ended October 31, 1996. Commencing July 1, 1994 the
Adviser reimbursed through February 27, 1996 all operating expenses in excess of
1.00% of the average daily net assets of the Fund. For the period February 28,
1996 through May 31, 1996 the Adviser reduced its management fees and reimbursed
expenses by the amount that Total Fund Operating Expenses exceeded 1.00% of the
average daily net assets of Class A shares and 1.70% of the average daily net
assets of Class B shares of the Municipal Trust Fund. For the period June 1,
1996 through December 31, 1996, the Adviser has agreed, with

26
<PAGE>
respect to the Municipal Trust Fund, to reduce its management fees and reimburse
operating expenses by the amount that Total Fund Operating Expenses exceed .50%
of the average daily net assets of its Class A shares and 1.20% of the average
daily net assets of its Class B shares. After December 31, 1996, with respect to
the Municipal Trust Fund, the Adviser may, in its sole discretion, determine to
continue to pay certain expenses of the Fund or it may discontinue this
practice. As a result of the voluntary assumption of expenses, the Adviser
reimbursed the Fund $249,651 during the year ended October 31, 1996. Absent such
reimbursement, the Municipal Trust Fund's total operating expenses for such
period would have amounted to 1.44% of its average daily net assets of its Class
A shares and 1.88% of the average daily net assets of its Class B shares.

27
<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 1/2% 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.

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<PAGE>
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 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.

29
<PAGE>
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 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, FPS
Services, Inc., P.O. Box 61503, (3200 Horizon Drive), King of Prussia, PA
19406-0903, Attn: Winthrop Focus Funds. Checks made payable to the shareholder
or another third party (third party checks) will not be accepted for investment
in Winthrop.

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 Winthrop's automatic monthly investment plan.]
With respect to Class B Shares of a Fund, 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, FPS 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 44, 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,
FPS 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 42.)

30
<PAGE>
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
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:

<TABLE>
<CAPTION>
INITIAL SALES CHARGE
-------------------------------------------------
COMMISSION TO
AS A % OF AS A % OF DEALER/AGENT
AMOUNT NET AMOUNT OFFERING AS A % OF
PURCHASED INVESTED PRICE OFFERING PRICE
- ---------------------- --------------- ------------- -----------------
<S> <C> <C> <C>
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
</TABLE>

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.

From time to time, the Distributor may re-allow the full amount of the sales
charge to brokers as a commission for sales of such shares.

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<PAGE>
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 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;

(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;
and

(7) shares purchased for 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.

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.

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<PAGE>
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 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.

<TABLE>
<CAPTION>
YEAR SINCE PERCENTAGE
PURCHASE CONTINGENT
PAYMENT DEFERRED
WAS MADE SALES CHARGE
- ----------------------------------- -----------------
<S> <C>
First.............................. 4%
Second............................. 3%
Third.............................. 2%
Fourth............................. 1%
Fifth and thereafter............... 0%
</TABLE>

33
<PAGE>
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

(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
38, and "Sales at Net Asset Value", page 36.

34
<PAGE>
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 obtained 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.

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; and (iii) 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.

35
<PAGE>
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 42), for
shares of the same class of another Fund or for shares of the Winthrop
Opportunity Funds, another investment company managed by the Adviser and an
affiliate, which is currently comprised of four portfolios, the Winthrop
Developing Markets Fund and the Winthrop International Equity Fund (the
"Opportunity Equity Funds") and the Winthrop Municipal Money Fund and Winthrop
U.S. Government Money Fund (the "Opportunity Money Funds"). Shares exchanged
from a Fund must be exchanged to the same Class of shares of the Opportunity
Equity Funds. Each Opportunity Equity 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. Each
Opportunity Money Fund Portfolio currently offers only one class of shares.

Class A shares subject to a contingent deferred sales charge as described in
"Contingent Deferred Sales Charge on Class A Shares", page 39, and "Contingent
Deferred Sales Charge on Converted Shares", page 39, and Class B shares which
are exchanged for 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.

Prior to the commencement of operations on , 1997 of the
Opportunity Money Funds shares of Winthrop were eligible for exchange into
shares of the Alliance Government Reserves or Alliance Municipal Trust
(collectively, 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. Exchanges to the Alliance Money Market
Funds are no longer eligible for exchange pursuant to Winthrop's exchange
privilege. Alliance Money Market Fund shares, however, maintained within an
account previously established under Winthrop's exchange privilege may be
exchanged into a Winthrop Opportunity Money Fund or back into a Fund, provided
that the exchange is directed to the same class of shares previously held when
invested in Winthrop.

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. Any applicable
contingent deferred sales charge will be assessed when the shareholder redeems
shares of the Funds, the Winthrop Opportunity Funds or from an account
established pursuant to Winthrop's exchange privilege in 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

36
<PAGE>
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.

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 Fund 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 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 another fund in Winthrop or Winthrop Opportunity Funds. 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.

37
<PAGE>
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.

38
<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

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 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.

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 declares 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 Small Company Value 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.

39
<PAGE>

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 distributions as may be
necessary to avoid this excise tax.

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 taken in the form of cash or reinvested in additional
shares and irrespective 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 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 Small
Company Value 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.

For federal income tax purposes, dividends that are declared by a Fund in
October, November or December as of a record date in such month and actually
paid in January of the following year will be treated as if they were paid on
December 31 of the year in which they were declared. Therefore such dividends
will generally be taxable to a shareholder in the year declared rather than the
year paid.

A dividend or capital gains distribution with respect to shares of any Fund
held by a tax-deferred or qualified retirement plan, such as an IRA, Keogh Plan
or corporate pension or profit sharing plan, will not be taxable to the plan.
Distributions from such plans will be taxable to individual participants under
applicable tax rules without regard to the character of the income earned by the
qualified plan.

Dividends paid by the Growth Fund, the Aggressive Growth Fund and the Growth
and Income Fund (other than capital gain distributions) will generally be
eligible, subject to certain limitations and regardless of whether received in
the form of cash or reinvested in additional shares, for the dividends-received
deduction available to corporate shareholders. This deduction is only available
to the extent that the aggregate dividends received by each Fund would be
eligible for the dividends-received deduction if received directly by the
corporate shareholders. A corporate shareholder may also be subject to the
extraordinary dividend provisions of the Code under which a shareholder's basis
in stock can be reduced if certain extraordinary dividends are received.
Dividends paid by the Fixed Income Fund and the Municipal Trust Fund will
generally not be eligible for the dividends-received deduction.

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,

40
<PAGE>

page 18) 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 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 shares, assuming the shares constitute
capital assets in his hands, generally will result in long-term or short-term
capital gains (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.

Some of the investment practices of the Growth Fund, the Aggressive Growth
Fund and the Growth and Income Fund are subject to special provisions that,
among other things, may defer the use of certain losses of such Funds and affect
the holding period of the securities held by the Funds and the character of the
gains or losses realized. These provisions may also require the Growth Fund, the
Aggressive Growth Fund and the Growth and Income Fund to mark to market some of
the positions in their respective portfolios (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

41
<PAGE>

mitigate the effect of these rules and prevent disqualification of the Fund as a
regulated investment company.

Each Fund's ability to dispose of portfolio securities may be limited by the
requirement of 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 the 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 underreported dividend or interest income or who fails to certify to
Winthrop that he or she is not subject to such withholding. An individual's tax
identification number is his or her social security number.

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 and current 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.

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.

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.

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

42
<PAGE>
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.

[SIMPLE IRA AND SIMPLE 401K]

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 deciding on the purchase or sale of portfolio securities.
FPS 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

43
<PAGE>
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 FPS 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.

44
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK

45
<PAGE>
WINTHROP FOCUS FUNDS
SHARE PURCHASE APPLICATION

<TABLE>
<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
</TABLE>

<TABLE>
<C> <S> <C> <C>
(1) TYPE OF ACCOUNT DATE ----------------- , 199 ------
</TABLE>

/ / New Account / / Existing Account #

INVESTMENT SELECTION--Please indicate the dollar amount you wish
(2) 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>
<CAPTION>
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)
-------------------
Small Company Value 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>

<TABLE>
<C> <S>
(3) SHARE REGISTRATION
</TABLE>

<TABLE>
<S> <C> <C> <C>
/ /
Individual ---------------------------------------------- ----------------------------------------------
Name *Joint Owner, if any
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
Gift to as custodian
/ / Minor ---------------------------------- for ----------------------------------
Name of Custodian Name of minor
</TABLE>

<TABLE>
<S> <C> <C>
under the --------------------- Uniform Gift to Minors Act. (Reference social security # of minor in
space provided below)
State
</TABLE>

<TABLE>
<S> <C> <C>
/ / Other --------------------------------------------------------------------------------------
Name of corporation, organization, trust, etc.

Address -----------------------------------------------------------------------------------------------
Street

-----------------------------------------------------------------------------------------------
City State Zip Code
</TABLE>

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

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

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

<TABLE>
<S> <C>
Dealer Name _____________ Dealer No. _____________
Branch Office Name _____________ Branch Office No. _____________
Branch Office Address _____________
Representative's Name _____________ Representative's No. _____________
</TABLE>

Representative's Phone No. _____________ Authorized Signature _____________

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

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

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

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
/ / Reinvest dividends / / Pay dividends in cash / / Use Dividend Direction Option
CAPITAL GAINS DISTRIBUTION: (select one)
/ / Reinvest capital gains / / Pay capital gains in cash / / Use Dividend Direction Option
/ / 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>
<C> <S>
(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:
</TABLE>

<TABLE>
<S> <C> <C> <C>
- -------------------------------------- ------------- -------------------------------------- -------------
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>

(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>

<TABLE>
<CAPTION>
FUND NAME AMOUNT
----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
/ / monthly / / quarterly / / semi-annually / / annually
---------------------------- ----------------------------
/ / monthly / / quarterly / / semi-annually / / annually
---------------------------- ----------------------------
/ / monthly / / quarterly / / semi-annually / / annually
---------------------------- ----------------------------
/ / monthly / / quarterly / / semi-annually / / annually
---------------------------- ----------------------------
</TABLE>

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

Name of Payee -------------------------------------- Account of Policy #----------------------------------
(if applicable)
Address ---------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<C> <S>
(10) BANK ACCOUNT INFORMATION* (To be completed if applicable under Section 4 or 9).
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------- ----------------------------------------------------
<C> <S> <C>
Name of Bank Branch if applicable

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

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

<TABLE>
<S> <C> <C> <C>
- ------------------------- ------------------------- ------------------------- -------------------------
Fund Name Account Number Fund Name Account Number

- ------------------------- ------------------------- ------------------------- -------------------------
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:
</TABLE>

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

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

<TABLE>
<S> <C>
- ---------------------------------------------------- ----------------------------------------------------
Fund Name/Account Number Fund Name/Account Number
- ---------------------------------------------------- ----------------------------------------------------
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

DISTRIBUTOR
Donaldson, Lufkin & Jenrette Securities Corporation
277 PARK AVENUE, NEW YORK, NY 10172

AUDITORS
Ernst & Young LLP
787 SEVENTH AVENUE, NEW YORK, NY 10019

CUSTODIAN
Citibank, N.A.
111 WALL STREET, NEW YORK, NY 10043

TRANSFER AGENT
FPS Services, Inc.
P.O. BOX 61503 (3200 HORIZON DRIVE),
KING OF PRUSSIA, PA 19406-0903

COUNSEL
Sullivan & Cromwell
125 BROAD STREET, NEW YORK, NY 10004

TABLE OF CONTENTS

<TABLE>
<S> <C>
Summary of Fund Expenses 3
Financial Highlights 6
Introduction 12
Investment Objectives and Policies 12
Investment Restrictions 24
Management 25
Expenses of Winthrop 28
Purchases, Redemptions and Shareholder Services 30
Net Asset Value 39
Dividends, Distributions and Taxes 39
Retirement Plans 42
General Information 43
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

WOOD, STRUTHERS & WINTHROP
ESTABLISHED 1871

[LOGO]

INVESTMENT MANAGEMENT SUBSIDIARY OF
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

WFF-MB-6 11818A 2/97

WINTHROP

FOCUS
FUNDS

[ART]
PROSPECTUS
FEBRUARY , 1997

[LOGO]
<PAGE>

WINTHROP FOCUS FUNDS

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

277 PARK AVENUE, NEW YORK, NEW YORK 10172

TOLL FREE (800) 225-8011

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

STATEMENT OF ADDITIONAL INFORMATION

DATED FEBRUARY __, 1997

This Statement of Additional Information is not a prospectus and should be read
in conjunction with Winthrop's current Prospectus dated February __, 1997, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Expenses of Winthrop . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Purchases, Redemptions, Exchanges and
Systematic Withdrawal Plan. . . . . . . . . . . . . . . . . . . . . . . .44
Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . .55
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . . . .__
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
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 23.

GROWTH FUND, SMALL COMPANY VALUE 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 Small Company Value 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 Small Company Value 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

<PAGE>

company. Also, the value of a warrant does not necessarily change with the
value of the underlying securities and a warrant ceases to have value if it is
not exercised prior to the expiration date.

The Growth Fund may invest up to 10% of the value of its total assets
in foreign securities and the Small Company Value 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

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<PAGE>

generally less government supervision and regulation of exchanges, brokers and
issuers than there is in the U.S. The Funds might have greater difficulty
taking appropriate legal action in non-U.S. courts. Non-U.S. markets also have
different clearance and settlement procedures which in some markets have at
times failed to keep pace with the volume of transactions, thereby creating
substantial delays and settlement failures that could adversely affect the
Funds' performance. Dividend and interest income from non-U.S. securities will
generally be subject to withholding taxes by the country in which the issuer is
located and may not be recoverable by the Funds or investors.

The Growth Fund and Small Company Value 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 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

- 3 -
<PAGE>

weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories. Securities rated Baa by Moody's are considered
by Moody's to be medium grade obligations; they are neither highly protected nor
poorly secured; interest payments and principal security appear to be adequate
for the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; in the opinion of
Moody's, they lack outstanding investment characteristics and in fact have
speculative characteristics as well. Fixed income securities in which the Funds
may invest include asset and mortgage backed securities. Prepayments of
principal may be made at any time on the obligations underlying asset and
mortgage backed securities and are passed on to the holders of the assets and
mortgage backed securities. As a result, if a Fund purchases such a security at
a premium, faster than expected prepayments will reduce and slower than expected
prepayments will increase yield to maturity. Conversely, if the Fund purchases
these securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce, yield to maturity.

The Growth Fund, the Growth and Income Fund and the Small Company
Value 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,

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<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.

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<PAGE>

The Small Company Value 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 Small Company Value 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
Small Company Value 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 Small Company Value 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 Small Company Value 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 Small Company Value 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 Small Company
Value Fund at a profit. By

- 6 -
<PAGE>

writing a call option, the Small Company Value 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 Small Company Value Fund will be
obligated to purchase the underlying security at a price that may be higher
than the market value of that security at the time of exercise for as long as
the option is outstanding. Thus, in some periods, the Small Company Value
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 Small Company Value 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

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<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 Small
Company Value 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 Small Company Value 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 Small Company Value Fund will only invest in futures contracts and
related options to the extent that the Fund would not be required to register
with the CFTC. The Small Company Value Fund will not engage in financial
futures or related options transactions for speculative purposes but only in an
effort to hedge portfolio risks as described above. In accordance with the
foregoing, under current regulations the Small Company Value Fund may not
purchase or sell futures contracts if, immediately thereafter, the sum of the
amount of initial margin deposits on the

- 8 -
<PAGE>

Fund's open futures positions and premiums on open positions thereon would
exceed 5% of the market value of the Small Company Value Fund's total assets.
Certain provisions of the federal tax laws may limit the extent to which the
Small Company Value 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 Small Company Value 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 Small Company Value Fund may
invest, and various

- 9 -
<PAGE>

combinations thereof, continue to be developed and the Small Company Value 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 Small Company
Value 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.

At least 65% of the Small Company Value Fund's total assets will
normally be invested in equity securities of small market capitalization
companies, which for the purposes of this Fund, are those companies with a
market capitalization of $2 billion or less at the time of the Fund's
investment. Small-cap company stocks generally are considered to offer greater
potential for appreciation than securities of companies with larger market
capitalizations. Most small-cap company stocks pay low or no dividends, and the
Fund seeks long-term appreciation, rather than income. Small-cap company stocks
also have higher risk and volatility, because most are not as broadly traded as
stocks of companies with larger capitalizations and their prices thus may
fluctuate more widely and abruptly. Small-cap company securities are also less
researched and often overlooked and undervalued in the market.

- 10 -
<PAGE>

In addition, the 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:

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.

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<PAGE>

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 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.

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<PAGE>

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 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

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<PAGE>

relatively long, (iii) selling a security whose market price has risen above its
call price and purchasing another security of comparable quality whose market
price is below its call price and (iv) substituting for a security with a
refunding date a comparable security with a more distant refunding date.
Depending on market conditions, debt securities may be purchased at a discount
or premium from face value, producing a yield of more or less than the coupon
rate. The market value of the Fixed Income Fund's assets will reflect yields
generally available on debt securities of similar quality. When such yields
decline, the market value of the Fixed Income Fund's assets already invested can
be expected to rise. Similarly, when such yields increase, the market value of
the Fund's assets already invested can be expected to decline.

MUNICIPAL TRUST FUND

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.

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<PAGE>

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 obtained 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 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.

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<PAGE>

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.

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 typi-

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<PAGE>

cally 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 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

- 17 -
<PAGE>

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 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

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<PAGE>

levy taxes. There is also the possibility that, as a result of litigation or
other conditions, the ability of any issuer to pay, when due, the principal
or the interest on its municipal bonds may be materially affected.

From time to time, proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities. It can be expected that similar proposals may
be introduced in the future. If such a proposal were enacted, the availability
of municipal securities for investment by the Fund and the value of the Fund's
portfolio would be affected. Additionally, the Fund would reevaluate its
investment objectives and policies.

ADDITIONAL GENERAL INVESTMENT POLICIES

The following general investment policies supplement those set forth
above for each Fund.

SUBCHAPTER M QUALIFICATION

In accordance with the requirements for qualification as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), it is the policy of each Fund to limit its short-term trading so that
less than 30% of its annual gross income (including all dividends and interest
income and gross realized capital gains, both short- and long-term, without
offset for realized capital losses) will be derived from gross gains realized on
the sale or other disposition of securities held for less than three months.

SHORT SALES ("AGAINST THE BOX")

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<PAGE>

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 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 obtained 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

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<PAGE>

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, Small Company Value 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 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 Small
Company Value 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

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<PAGE>

registration statement is in effect under the Securities Act of 1933 or pursuant
to Rule 144 promulgated under such Act. Where registration is required,
Winthrop may be obligated to pay all or part of the registration expense, and a
considerable period may elapse between the time of the decision to sell and the
time Winthrop may be permitted to sell a security under an effective
registration statement. If during such a period adverse market conditions were
to develop, Winthrop might obtain a less favorable price than that which
prevailed when it decided to sell. Securities salable without restriction among
qualified institutional investors pursuant to rules (E.G., Rule 144A)
promulgated under the Securities Act of 1933 are not considered to be subject to
legal restrictions on transfer and may be considered liquid if they satisfy
liquidity standards established by the Board of Trustees. The continued
liquidity of such securities is not as well assured as that of publicly traded
securities, and accordingly the Board of Trustees will monitor their liquidity.
Restricted securities will be valued in such manner as the Trustees of Winthrop
in good faith deem appropriate to reflect their fair value.

STATE UNDERTAKINGS

The Funds have also made undertakings to certain States which (a)
limit investment in warrants to not more than 5% of the value of each Fund's net
assets (only 2% of the value of each Fund's net assets may be invested in
warrants not listed on the New York or American Stock Exchange), (b) generally
prohibit any investment in oil, gas and other mineral leases, and (c) prohibit

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<PAGE>

purchases or sales of real property (including limited partnership interests,
but excluding readily marketable interests in real estate investment trusts or
readily marketable securities of companies which invest in real estate).

ADDITIONAL FUNDAMENTAL INVESTMENT RESTRICTIONS

The following fundamental investment restrictions are applicable to
each of the Funds as indicated and may not be changed with respect to a Fund
without the approval of a majority of the shareholders of that Fund, which means
the affirmative vote of the holders of (a) 67% or more of the shares of that
Fund represented at a meeting at which more than 50% of the outstanding shares
of the Fund are represented or (b) more than 50% of the outstanding shares of
that Fund, whichever is less. The following fundamental investment restrictions
are in addition to those set forth in the Prospectus.

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;

- 23 -
<PAGE>

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 Small Company Value
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 Small Company Value 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;
- 24 -

<PAGE>

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 Small Company Value Fund
and the Growth and Income Fund, in connection with hedging
transactions, short sales (against the 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

- 25 -
<PAGE>
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 Small Company Value 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 Small Company Value 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,

- 26 -
<PAGE>
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;
12. With respect to the Growth Fund, the Fixed Income Fund, the Municipal
Trust Fund and the Growth and Income Fund, participate on a joint or
joint and several basis in any securities trading account;

- 27 -
<PAGE>

13. Issue any senior security within the meaning of the Investment Company
Act of 1940 (except to the extent that when-issued securities
transactions, forward commitments, stand-by commitments or reverse
repurchase agreements may be considered senior securities and except,
with respect to the Small Company Value 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);
14. 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 Small Company Value 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
Small Company Value Fund, for hedging purposes;
15. 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,

- 28 -
<PAGE>
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;
16. Invest in companies for the purpose of exercising control or
management; or
17. With respect to the Municipal Trust Fund, make short sales of
securities.

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.

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.

- 29 -
<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, 46, 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, 66, Trustee of Winthrop, is Vice Chairman of
Donaldson, Lufkin & Jenrette, Inc. with which he has been associated since prior
to 1990.

*JAMES A. ENGLE, 38, 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, 39, 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.

- 30 -
<PAGE>

CATHY A. JAMESON, 42, 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, 71, 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, 50, 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, 33, Vice President of Winthrop, is also a Vice
President of the Adviser, with which she has been associated since 1990.

HUGH M. NEUBURGER, 53, 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, 71, 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, 77, Trustee of Winthrop, is a private investor and
retired Director of Management Sciences, General Foods

- 31 -
<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, 70, 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, 59, 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, 61, 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, 82, 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.

- 32 -
<PAGE>

JAMES L. MCCABE, 53, 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, 66, 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, 77, 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, 68, 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.

- 33 -
<PAGE>

COMPENSATION TABLE

<TABLE>
<CAPTION>
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 $3,600 None None $3,600
(Trustee)

John J. Halsey $3,400 None None $3,400
(Trustee)

Stig Host $5,800 None None $5,800
(Trustee)

Peter F. Krogh $4,600 None None $4,600
(Trustee)

Dennis G. Little $3,600 None None $3,600
(Trustee)

William H. Mathers $5,800 None None $5,800
(Trustee)

James L. McCabe $3,600 None None $3,600
(Trustee)

John J. Sheehan $4,800 None None $4,800
(Trustee)

William C. Simpson $3,600 None None $3,600
(Trustee)

Stephen K. West $3,600 None None $3,600
(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, 1996, such remuneration totalled $42,400.
Messrs. Halsey, Host, Krogh, and Mathers are members of the Audit Committee.
Messrs. Bast, Mathers and Cochran are members of the Dividend Committee whose
function is to declare dividends on behalf

- 34 -

<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 Cochran 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 Small Company
Value Fund and the Growth and Income Fund, respectively, two portfolios of
the Winthrop Focus Funds on July 10, 1992.

As of December 24, 1996 the Trustees and officers of Winthrop as a
group owned beneficially 1.0% of the shares of the Small Company Value Fund,
1.9% of the shares of the Fixed Income Fund, 1.2% 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 11, 1996, no
shareholder owned 5% or more of the outstanding Class A or Class B shares of the
Growth Fund, the Small Company Value 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 __, 1996, [1,301,114] shares (____%) of the Small

- 35 -
<PAGE>

Company Value Fund. Set forth below is certain information as to persons who
owned 5% or more of a Fund's outstanding shares as of December 11, 1996:

<TABLE>
<CAPTION>
NATURE OF
NAME AND ADDRESS % OF CLASS OWNERSHIP

Fixed Income Class B Virginia Abrasives 8.09% Beneficial
Tools Inc
5022 N Lakes OR NW
Roanoke VA 24019

Municipal Robert Winthrop 5.92% Beneficial
Trust Class A BC 238-707848
c/o Wood Struthers &
Winthrop
277 Park Ave, 24th Floor
New York, NY 10172

Municipal Trust Company of Louisiana 41.94% Beneficial
Trust Class B and Jon Babb
Trust Jasper L. Custer Trust
UA DTD 10/20/95
PO Drawer 1410
Ruston, LA 71273-1410

Municipal Donaldson Lufkin Jenrette 27.75% Record*
Trust Class B Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303

Municipal Donaldson Lufkin Jenrette 20.58% Record*
Trust Class B Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303

</TABLE>
- ------------------
* Such Recordholder disclaims beneficial ownership.

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

- 36 -

<PAGE>

Prospectus). The Adviser was established in 1871, as a private concern to
manage money for the Winthrop family of Boston.

The Adviser is a wholly-owned subsidiary of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ Securities" or the "Distributor"), the
distributor of the Funds' 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
along with its affiliates are an integral part of the DLJ Securities family, and
as one of the oldest money management firms in the country, they maintain a
tradition of personalized service and performance.

As of September 10, 1996, AXA owned [ ] of the outstanding
shares of the common stock of ECI. AXA is the holding company for an
international group of insurance and related financial services companies.
AXA's insurance operations are comprised of activities in life insurance,
property and casualty insurance and reinsurance. The insurance operations are
diverse geographically with activities in France, the United States, the United
Kingdom, Canada and other countries, principally in Europe. AXA is also engaged
in asset management, investment banking and brokerage, real estate and other
financial services activities in the United States and Europe. Based on
information provided by AXA, on September 10, 1996, 35.6% of the issued ordinary
shares (representing 48.6% of the voting power) of AXA were directly or

- 37 -
<PAGE>

indirectly owned by Finaxa, a French holding company ("Finaxa"). Such percentage
of interest includes the interest of Colisee Vendome, a wholly-owned subsidiary
of Finaxa, which owned 5.3% of the issued ordinary shares (representing 4.3% of
the voting power) of AXA and the interest of les Ateliers de construction du
Nord de la France- ANF ("ANF"), a 95.4% owned subsidiary of Finaxa, which owned
0.3% of the issued ordinary shares (representing 0.4% of the voting power) of
AXA. As of September 10, 1996, 61.3% of the issued ordinary shares
(representing 73.5% of the voting power) of Finaxa were owned by five French
mutual insurance companies (the "Mutuelles AXA") (one of which, AXA Assurances
I.A.R.D. Mutuelle, owned 34.8% of the issued ordinary shares (representing 40.6%
of the voting power) and 23.7% of the issued ordinary shares (representing 15.0%
of the voting power) of Finaxa were owned by Banque Paribas, a French bank
("Paribas"). Including the ordinary shares owned by Finaxa and its subsidiaries
on September 10, 1996, the Mutuelles AXA directly and indirectly owned 41.3% of
the issued ordinary shares of AXA (representing 56.3% of the voting power).
Acting as a group, the Mutuelles AXA will continue to control AXA and Finaxa.
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 Agreement") that terminated because of its
technical assignment as

- 38 -
<PAGE>

a result of AXA's acquisition of control over ECI. In anticipation of the
assignment of the First Advisory Agreement, on February 12, 1992, the
Trustees approved the Investment Advisory Agreement and on June 15, 1992, a
majority of the outstanding voting securities of Winthrop approved the
Investment Advisory Agreement. The Investment Advisory Agreement was
approved with respect to the Municipal Trust Fund by the Trustees on June 16,
1993 and by the then sole shareholder, the Adviser, on July 26, 1993 and
became effective with respect to the Municipal Trust Fund on the same date.
The Investment Advisory Agreement continues in force for successive twelve
month periods computed from the first day of each fiscal year of Winthrop
provided that such continuation is specifically approved at least annually by
a majority vote of the Trustees who neither are interested persons of
Winthrop nor have any direct or indirect financial interest in the Investment
Advisory Agreement, cast in person at a meeting called for the purpose of
voting on such approval. The Investment Advisory Agreement was continued
until October 31, 1997 at a meeting of the Trustees on October 24, 1996.

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

- 39 -
<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, 1996, 1995 and 1994 the Growth
Fund paid the Adviser fees of $476,341, $395,327 and $387,752, respectively; the
Small Company Value Fund paid the Adviser fees of $1,774,607, $1,432,939 and
$965,285, respectively; the Fixed Income Fund paid the Adviser fees of $360,520,
$281,997 and $240,985, respectively; the Growth and Income Fund paid the Adviser
fees of $714,397, $556,556 and $434,475, and $364,762 respectively; and the
Municipal Trust Fund paid the Adviser fees of $242,321 $224,300, and $219,851,
respectively.

- 40 -
<PAGE>

- -------------------------------------------------------------------------------
EXPENSES OF WINTHROP
- -------------------------------------------------------------------------------

DISTRIBUTION PLANS

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

- 41 -
<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. The 12b-1 Plans were last approved by the
Board of Trustees on October 24, 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. As
approved, the Class A Plans provide that: (i) an asset based sales charge of
.05 of 1% per year and (ii) a service fee of .25 of 1% per year, in each
case, of the average daily net assets of the Class A shares of the Fund may
be paid as compensation to the Distributor for its services. The Class B
Plans provide that: (i) an asset based sales charge of .75 of 1% per year and
(ii) a service fee of .25 of 1% per year, in each case, of the average daily
net assets of the Class B shares of the Fund may be paid as compensation to
the Distributor for its services.

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 each class of shares of each Fund, voting
separately. The 12b-1

- 42 -
<PAGE>

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 each
class of shares of each Fund, voting separately 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 each class of shares of each Fund,
voting separately and will terminate automatically in the event of assignment.

The 12b-1 Plans require that the Board of Trustees shall review at
least quarterly a written report of the payments made pursuant to each Plan and
the purpose for which such payments were made. For the year ended October 31,
1996, distribution fees paid or payable with respect to Class A shares and Class
B shares for each fund were as follows:

Fund Class A Shares Class B Shares
- --------------------------------------------------------------------------------
Growth Fund $225,915 $ 9,651
Fixed Income Fund 208,372 6,565
Small Company Value Fund 802,958 22,502
Growth and Income Fund 372,389 21,572
Municipal Trust Fund 141,896 1,775

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, 1996, the Adviser reimbursed the Fixed Income Fund
$198,923 and the Municipal Trust Fund $249,651, for operating expenses.

- 43 -
<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

- 44 -
<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

- 45 -
<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

- 46 -
<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 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
redeeming his shares and obtaining the redemption proceeds.

EXCHANGES

Shares of one class of a Fund may be exchanged by mail for shares of
the same class of another Fund or for shares of the Winthrop Opportunity Funds,
another investment company managed by

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<PAGE>

the Adviser and an affiliate of the Advisor which is currently comprised of four
portfolios, the Winthrop Developing Markets Fund and the Winthrop
International Equity Fund (the "Opportunity Equity Funds") and the Winthrop
Municipal Money Fund and Winthrop U.S. Government Money Fund (the
"Opportunity Money Funds"). Shares exchanged from a Fund must be exchanged for
the same Class of shares of the Opportunity Equity Funds. Each Opportunity
Equity 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. Each Opportunity Money Fund
Portfolio currently offers only one class of shares.

Class A shares subject to a contingent deferred sales charge as
described in the Prospectus and Class B shares which are exchanged for 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. 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, FPS Services, Inc., P.O. Box 61503 (3200 Horizon Drive), King of
Prussia, PA 19406-0903, Attn.: Winthrop Focus Funds.

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<PAGE>

In the case of each of the Winthrop Opportunity Funds, the exchange
privilege is available only in those jurisdictions where shares of the relevant
Fund may be legally sold. Prospectuses for the Winthrop Opportunity 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 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 the Winthrop Opportunity Funds are subject to the
minimum investment requirements and any other applicable terms set forth in the
Prospectus for the relevant Winthrop Opportunity 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 or the
Winthrop Opportunity Funds. Shareholders who engage in such frequent
transactions may be prohibited from or restricted in placing future exchange
orders.

SYSTEMATIC WITHDRAWAL PLANS

Shares of Winthrop owned by a participant in Winthrop's systematic
withdrawal plan will be redeemed as necessary to meet withdrawal payments. A
contingent deferred sales charge which would otherwise be imposed will be waived
in connection with redemptions made pursuant to Winthrop's systematic withdrawal
plan up to 1% monthly or 3% quarterly of an account's total purchase payments
(excluding dividend reinvestments) not to exceed 10% of total purchase payments
over any 12 month rolling period; however, the contingent deferred sales charge
will not be waived for systematic withdrawals elected on a semi-annual or annual
basis. See the Prospectus for a description of the contingent deferred sales
charge.

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<PAGE>

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.

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<PAGE>

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 the last sale price at the close of the
New York Stock Exchange on the

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<PAGE>

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 Market System (the "System") 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-the-counter (excluding those admitted to
trading on the System) 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, Inc. 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 securities) may be valued on
the basis of prices provided by a pricing service when such prices are believed
by the Adviser to

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<PAGE>

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>

- -------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
- -------------------------------------------------------------------------------

Each of the Funds has qualified and intends to qualify in the
future as a 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

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<PAGE>

or distributions. Furthermore, such dividends and distributions, although in
effect a return of capital, are subject to income taxes.

In the event that total distributions (including distributed or
designated net capital gain) of a Fund for a taxable year exceed its investment
company taxable income and net capital gain, a portion of each distribution
generally will be treated as a return of capital. 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 obtained 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, because the holder has acquired
a put option

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<PAGE>

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. Another proposal would reduce the dividends-received
deduction to 50%. Although not yet enacted, it is possible these, or similar
proposals may be resubmitted as proposed legislation in the future.

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 dividend. To the
extent such untaxed amount exceeds the shareholder's basis, such excess will be
taxed as gain upon sale or disposition of

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<PAGE>

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 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

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<PAGE>

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, Small Company
Value Fund and the Growth and Income Fund are subject to special provisions
that, among other things, may defer the use of certain losses of such Funds and
affect the holding period of the securities held by the Funds and the character
of the gains or losses realized. These provisions may also require the Growth
Fund, the Small Company Value 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

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<PAGE>

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-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")

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<PAGE>

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 and relates solely to the
application of that law to (i) citizens or residents of the United States,
(ii) domestic corporations or partnerships, or (iii) entities otherwise
subject to U.S. taxation on a net income basis. 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 and current 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.

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<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 Small Company Value 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 although the transaction

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<PAGE>

costs of another broker or dealer are lower. The supplemental information
received from a broker or dealer is in addition to the services required to be
performed by the Adviser under the Investment Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a result of the
receipt of such information.

Neither Winthrop nor the Adviser has entered into agreements or
understandings with any broker or dealer regarding the placement of securities
transactions. Because of research or information to the Adviser for use in
rendering investment advice to Winthrop, such information may be supplied at no
cost to the Adviser and, therefore, may have the effect of reducing the expenses
of the Adviser in rendering advice to Winthrop. While it is impossible to place
an actual dollar value on such investment information, its receipt by the
Adviser probably does not reduce the overall expenses of the Adviser to any
material extent.

The investment information provided to the Adviser is of the types
described in Section 28(e)(3) of the Securities Exchange Act of 1934 and is
designed to augment the Adviser's own internal research and investment strategy
capabilities. Research and statistical services 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.

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<PAGE>

The Growth Fund, the Small Company Value 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.

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<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 $53,166, $124,640
and $87,799 during its fiscal years ended October 31, 1994, 1995 and 1996 of
which $12,491, $20,641, and $427, respectively, or approximately 23.5%, $16.6%
and .5%, respectively, was paid to Autranet, Inc. In the fiscal year ended
October 31, 1996, the Growth Fund effected .8% of the aggregate dollar amount of
transactions

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<PAGE>

involving the payment of commissions through Autranet, Inc. In addition, of
the brokerage commissions incurred in 1995 and 1996, $63,217 and $49,673,
respectively, or approximately 50.7% and 56.6%, respectively, was paid to
Donaldson, Lufkin & Jenrette Securities Corporation which accounted for 59.1%
and 64.4%, respectively, of the aggregate dollar amount of transaction
involving the payment of commissions.

For the fiscal years ended October 31, 1996, 1995 and 1994, the Small
Company Value Fund incurred brokerage commissions of $323,577, $248,826, and
$216,506 respectively, of which $45,893, $31,035, and $28,518 or approximately
14.2%, 12.5% and 13.2%, respectively, was paid to Autranet, Inc. In the fiscal
year ended October 31, 1996, the Small Company Value Fund effected 13.3% of the
aggregate dollar amount of transactions involving the payment of commissions
through Autranet, Inc.

For the fiscal years ended October 31, 1996, 1995 and 1994, the Growth
and Income Fund incurred brokerage commissions of $110,073, $85,577, and
$47,707, respectively, of which $26,317, $33,120, and $13,152, or approximately
23.9%, 38.7% and 27.6%, respectively, was paid to Autranet, Inc. In the fiscal
year ended October 31, 1996, the Growth and Income Fund effected 22.8% of the
aggregate dollar amount of transactions involving the payment of commissions
through Autranet, Inc.

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<PAGE>

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PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

Presented below is certain performance information with respect to an
investment in Class A shares and Class B shares of beneficial interest of the
Funds. Prior to February 28, 1996, Class A shares were not offered.
Accordingly, the information presented below with respect to Class A shares has
been obtained from the financial statements for the Funds' prior fiscal years.

COMPUTATION OF WINTHROP'S AVERAGE ANNUAL TOTAL RETURN

The average annual total return of Class A shares for the one and five
year periods ended October 31, 1996 was 14.60% and 9.90% for the Growth Fund and
(.62)% and 5.64% the Fixed Income Fund, respectively. The average annual total
return for the period December 15, 1986 (commencement of operations) through
October 31, 1996 was 9.39% and 7.01% for the Growth Fund and Fixed Income Fund,
respectively. The average annual total return of Class A shares for the one,
five and ten year periods ended October 31, 1996 for the Small Company Value
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
8.40%, 13.77% and 11.66% for the Small Company Value Fund and 16.77%, 12.18% and
10.53% for the Growth and Income Fund. The average annual total return of
Class A shares for the one year period ended October 31, 1996 for the Municipal
Trust Fund was (1.10)% and 2.49% for the period July 28, 1993 (commencement of
operations) through October 31, 1996. The

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<PAGE>

average annual total return for Class B shares for the period February 28,
1996 (commencement of offering of Class B shares) to October 31, 1996 was
2.40%, (1.77)%, 1.28%, 3.67% and (2.58)% for the Growth Fund, the Fixed
Income Fund, the Small Company Value Fund, the Growth and Income Fund and the
Municipal Trust Fund, respectively. 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 with respect to Class A
shares, the maximum initial sales charge of 4.75% was deducted at the time of
investment and, with respect to Class B shares, 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, 1996, the
applicable deferred sales load charged was 4% for each of the Growth Fund,
Fixed Income Fund, Small Company Value Fund, the Growth and Income Fund and
the Municipal Trust Fund and 1% for the Municipal Trust Fund for the period
July 28, 1993 (commencement of operations) through October 31, 1996. No
deferred sales load applied to the return of the Small Company Value Fund and
the Growth and Income Fund for the five and ten year period ended October 31,
1996, or to the return of the Growth Fund and Fixed Income Fund for the five
year period ended October 31, 1996 or for the period December 15, 1986
(commencement of operations) through October 31, 1996. 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

- 69 -
<PAGE>

(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, 1996 was with respect to Class A
shares, 5.43% and 4.46%, respectively and, with respect to Class B shares, 4.99%
and 3.97%, 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:
6
YIELD = 2[(a-b/cd+1) -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.

- 70 -
<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 Amended and Restated Agreement and Declaration of
Trust, however, provides that shareholders of Winthrop shall not be subject to
any personal liability for the acts or obligations of Winthrop and that every
written obligation, contract, instrument or undertaking made by Winthrop shall
contain a provision to that effect. Upon payment of any liability, the
shareholder will be entitled to reimbursement from the general assets of the
appropriate Fund. The Trustees intend to conduct the operation of Winthrop,
with the advice of counsel, in such a way as to avoid, to the extent possible,
ultimate liability of the shareholders for liabilities of Winthrop.

The Amended and Restated 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

- 71 -
<PAGE>

negligence or reckless disregard of his or its duties. It also provides
that all 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 Amended and Restated 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.

- 72 -

<PAGE>

ADDITIONAL INFORMATION

This Statement of Additional Information does not contain all the
information set forth in the Registration Statement filed by Winthrop with the
Securities and Exchange Commission under the 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.

- 73 -
<PAGE>

PART C
Other Information

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements
--------------------

Included in the Prospectus:
Financial Highlights

Included in the Statement of Additional Information:

For Year Ended October 31, 1996

Statement of Investments, October 31, 1996
Statement of Operations for Year Ended October 31, 1996
Statement of Changes in Net Assets for Each of the Years
Ended October 31, 1995 and 1996
Statement of Assets and Liabilities, October 31, 1996
Notes to Financial Statements
Financial Highlights
Report of Ernst & Young LLP, Independent Auditors

Included In Part C of the Registration Statement:

None
(b) Exhibits
--------

(1) Amended and Restated Declaration of Trust10
(2) Bylaws1
(3) Not Applicable
(4) Specimen Stock Certificates
a. Growth Fund and Fixed Income Fund2
b. Aggressive Growth Fund3
c. Growth and Income Fund4
d. Municipal Trust Fund8
(5) Investment Advisory Contract
a. Growth Fund, Fixed Income Fund, Aggressive Growth Fund
and Growth and Income Fund3
b. Municipal Trust Fund9
(6) Distribution Agreement dated as of February 25, 1996*
(7) Not Applicable
(8) Custodial Services Agreement5
(9) Shareholder Services Agreement5
(10) Legal Opinion2
(11) Consent of Independent Auditors**
(12) Not Applicable
(13) Investment Representation Letter6
(14) Prototype Retirement Plans7
(15) Rule 12b-1 Plan
a. Aggressive Growth Fund - Class A Plan*
b. Aggressive Growth Fund - Class B Plan*
c. Growth and Income Fund - Class A Plan*
d. Growth and Income Fund - Class B Plan*
e. Growth Fund - Class A Plan*
f. Growth Fund - Class B Plan*
g. Fixed Income Fund - Class A Plan*
h. Fixed Income Fund - Class B Plan*
i. Municipal Trust Fund - Class A Plan*
j. Municipal Trust Fund - Class B Plan*
(16) Schedules for Computation of Performance Quotation**
(17) Financial Data Schedule**
(18) Rule 18F-3 Plan 10

Other Exhibit: Power of Attorney (attached to signature page)
__________________
1 Incorporated herein by reference to Registration Statement of Winthrop
Focus Funds on Form N-1A (File No. 3706) filed March 4, 1986.

<PAGE>

2 Incorporated herein by reference to Pre-Effective Amendment No. 2 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on November 3, 1986.
3 Incorporated herein by reference to Post-Effective Amendment No. 8 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 24, 1992.
4 Incorporated herein by reference to Post-Effective Amendment No. 7 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 3, 1992.
5 Incorporated herein by reference to Post-Effective Amendment No. 9 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on December 31, 1992.
6 Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on October 21, 1986.
7 Incorporated herein by reference to Post-Effective Amendment No. 2 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
3706) filed on February 26, 1988.
8 Incorporated herein by reference to Post-Effective Amendment No. 10 to
Registration Statement of Winthrop Focus Funds on Form N-1A (File
No. 3706) filed on April 22, 1993.
9 Incorporated herein by reference to Post-Effective Amendment No. 12
to Registration Statement of Winthrop Focus Funds on Form N-1A (File
No. 3706) filed on January 28, 1994.

10 Incorporated herein by reference to Post-Effective Amendment No. 14
to Registration Statement of Winthrop Focus Funds on Form N-1A (File No.
33-3706) filed via EDGAR on December 29, 1995.

__________________
* Filed herewith.

** To be filed by amendment.

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not Applicable

Item 26. NUMBER OF HOLDERS OF SECURITIES

Number of Record Holders
Title of Class as of November 30, 1996
-------------- ---------------------------

Growth Fund Shares
par value $.01 per share Class A: 2,920
Class B: 301

Aggressive Growth Fund Shares
par value $.01 per share Class A: 9,586
Class B: 964

Fixed Income Fund Shares
par value $.01 per share Class A: 1,334
Class B: 135

Growth and Income Fund Shares
par value $.01 per share Class A: 4,264
Class B: 558

Municipal Trust Fund Shares
par value $.01 per share Class A: 445
Class B: 12

Item 27. INDEMNIFICATION

Registrant's Amended and Restated Agreement and Declaration of Trust
provides that the Trust (or the appropriate Fund) shall indemnify each person
who is or has been

C-2

<PAGE>

a trustee or officer of the Trust (including persons who serve, or have
served, at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise) against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel
fees, incurred in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such person may be or may have
been threatened, while in office or thereafter, by reason of being or
having been such a person, except with respect to any matter as to which it
has been determined that such person (i) did not act in good faith in the
reasonable belief that his action was in or not opposed to the best
interests of the Trust or (ii) had acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.

The Advisory Agreement between Registrant and Wood, Struthers &
Winthrop Management Corp. provides that Wood, Struthers & Winthrop
Management Corp. will not be liable thereunder for any mistake of judgment
or in any event whatsoever except for lack of good faith and that nothing
therein shall be deemed to protect Wood, Struthers & Winthrop Management
Corp. against any liability to Registrant or its security holders to which
it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties thereunder, or by
reason of reckless disregard of its duties and obligations thereunder.

The Distribution Services Agreement between the Registrant and
Donaldson, Lufkin & Jenrette Securities Corporation provides that
Registrant will indemnify, defend and hold Donaldson, Lufkin & Jenrette
Securities Corporation, and any other person who controls it within the
meaning of Section 15 of the Investment Company Act of 1940, free and
harmless from and against any and all claims, demands, liabilities and
expenses which Donaldson, Lufkin & Jenrette Securities Corporation or any
controlling person may incur arising out of or based upon any alleged
untrue statement of a material fact contained in Registrant's Registration
Statement, Prospectus or Statement of Additional Information or arising out
of, or based upon any alleged omission to state a material fact required to
be stated in any one of the foregoing or necessary to make the statements
in any one of the foregoing not misleading.

The foregoing summaries are qualified by the entire text of
Registrant's Agreement and Declaration of Trust, the Advisory Agreement
between Registrant and Wood, Struthers & Winthrop Management Corp. and the
Distribution Services Agreement between Registrant and Donaldson, Lufkin &
Jenrette Securities Corporation. The Registrant's Amended and Restated
Agreement and Declaration of Trust is filed herewith. The Advisory
Agreement and Distribution Services Agreement are incorporated by reference
herein as Exhibits 5 and 6, in response to Item 24.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is

C-3

<PAGE>

against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

The Equitable Life Assurance Society of the United States (the
parent of Adviser's parent) carries for itself and its subsidiaries
Directors and Officers Liability Insurance. Coverage under this policy has
been extended to directors and officers of the investment companies managed
by Wood, Struthers & Winthrop Management Corp. Under this policy, outside
directors would be covered up to the limits specified for any claim against
them for acts committed in their capacities as members of the Board.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The description of Wood, Struthers & Winthrop Management Corp.
under the caption "Management" in the Prospectus and in the Statement of
Additional Information constituting Parts A and B, respectively, of this
Registration Statement are incorporated by reference herein.

The following are Directors and Officers of the Adviser including
their other business connections which are of a substantial nature.

POSITION WITH OTHER BUSINESS
NAME THE ADVISER CONNECTIONS
---- ------------- --------------

G. Moffett Chairman of the Board Director of Palmer National
Cochran and President Bank; President and Chairman
of Winthrop Focus Funds.

Martin Jaffe Managing Director, Chief President, International
Operating Officer and Association for Financial
Treasurer Planning, New York Chapter;
Vice President, Secretary
and Treasurer of Winthrop
Focus Funds; Vice President
of Donaldson Lufkin &
Jenrette Securities
Corporation.

Guy S. Waltman Vice Chairman Chairman, Winthrop Trust
Company

Thomas E. Siegler Secretary ----

Item 29. PRINCIPAL UNDERWRITERS

(a) Donaldson, Lufkin & Jenrette Securities Corporation, the
Registrant's Distributor (Underwriter) also acts as Distributor
for the following investment companies:

None

C-4

<PAGE>

(b) The following are the Directors and Officers of Donaldson,
Lufkin & Jenrette Securities Corporation, none of whom hold any
post or office with the Registrant. Donaldson, Lufkin and
Jenrette Securities Corporation's principal place of business is
277 Park Avenue, New York, New York 10272.

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

OFFICE
------

John S. Chalsty Director, Chairman of the Board and Chief Executive
Officer

Joe L. Ruby Director, President and Chief Operating Officer

Anthony F. Daddino Director, Executive Vice President and Chief
Financial Officer

Hamilton E. James Director, Managing Director (Chairman - DLJ Banking
Group)

Richard S. Pechter Director, Managing Director (Chairman - DLJ
Financial Services Group)

Theodore P. Shen Director, Managing Director (Chairman - DLJ
Capital Markets Group)

James L. Alexandre Senior Vice President (Managing Director -
Institutional Equities Division)

Richard Browne Senior Vice President (Managing Director - Pershing
Division)

Richard F. Brueckner Senior Vice President (Managing Director - Pershing
Division)

Van Vechten Burger, Jr. Senior Vice President (Chairman - Pershing Division)

Joseph P. Bzezinski Senior Vice President (Managing Director - Fixed
Income Division)

Michael J. Campbell Senior Vice President (Managing Director -
Investment Services Group

Anthony R. Chidoni Senior Vice President (Managing Director -
Investment Services Group

Peter C. Cohen Senior Vice President (Managing Director - Pershing
Division)

Robert W. Diemer Senior Vice President (Chief Finacial Officer -
and Managing Director - Pershing Division)

Vincent C. DeGiaimo Senior Vice President (Managing Director - Investment
Banking)

Joseph D. Dreitlein Senior Vice President and Associate General
Counsel (Managing Director/General Counsel -
Pershing Division)

Michael A. Dreisdein Senior Vice President (Managing Director - Pershing
Division)

John A. Friel Senior Vice President (Managing Director - Fixed
Income Division)

Frank L. Hohmann, III Senior Vice President (Managing Director - Equity
Derivatives Division)

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
OFFICERS AND DIRECTORS
----------------------------------------------------

Alan C. Jones Senior Vice President (Managing Director - Pershing
Division)

Todd N. Kanter Senior Vice President (Managing Director - Investment
Services Group)

George J. Minnig Senior Vice President (Managing Director - Pershing
Division)

David S. Moore Senior Vice President (Managing Director -
Institutional Equities Division)

Garrett M. Moran Senior Vice President (Vice Chairman - Investment
Banking Division)

Leon M. Pollack Senior Vice President (Managing Director - Fixed
Income Division)

Richard W. Reinemann Senior Vice President (Managing Director - Pershing
Division)

Stuart M. Robbins Senior Vice President (Managing Director -
Instututional Equities Division)

C-5

<PAGE>

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
OFFICERS AND DIRECTORS
----------------------------------------------------

Item 30. LOCATION OF ACCOUNTS AND RECORDS

The majority of accounts, books and other documents required to
be maintained by Section 31(a) of the Investment Company Act of 1940 and
the rules thereunder are maintained at the offices of Wood, Struthers &
Winthrop Management Corp., 277 Park Avenue, New York, New York 10272 (see
"Investment Adviser" in the Prospectus). Additional records are maintained
at the offices of Citibank, N.A., the Registrant's Custodian, 111 Wall
Street, New York, New York 10043.

Item 31. MANAGEMENT SERVICES

Not Applicable

Item 32. UNDERTAKINGS

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered, a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

C-6

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and the State of
New York on the 30th day of December 1996.

Winthrop Focus Funds

By: G. Moffett Cochran*
-------------------
G. Moffett Cochran
President

Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:

Signature Title Date
--------- ----- ----

G. Moffet Cochran* President December 30, 1996
------------------
G. Moffet Cochran Chairman of the Board

/s/ Martin Jaffe Treasurer December 30, 1996
------------------
Martin Jaffe

Robert L. Bast* Trustee December 30, 1996
------------------
Robert L. Bast

James Engle* Trustee December 30, 1996
------------------
James Engle

John J. Halsey* Trustee December 30, 1996
------------------
John J. Halsey

Stig Host* Trustee December 30, 1996
------------------
Stig Host

Peter F. Krogh* Trustee December 30, 1996
------------------
Peter F. Krogh

Trustee
------------------
Dennis Little

William H. Mathers* Trustee December 30, 1996
------------------
William H. Mathers

James L. McCabe* Trustee December 30, 1996
------------------
James L. McCabe

Carl B. Menges* Trustee December 30, 1996
------------------
Carl B. Menges

John J. Sheehan* Trustee December 30, 1996
------------------
John J. Sheehan

William C. Simpson* Trustee December 30, 1996
------------------
William C. Simpson

Stephen K. West* Trustee December 30, 1996
------------------
Stephen K. West

*By:
/s/ Martin Jaffe
----------------------------
Martin Jaffe
(Attorney-in-fact)
Pursuant to Power of Attorney attached hereto

C-7

<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned has
constituted and appointed, and by these presents does constitute and appoint,
G. Moffet Cochran and Martin Jaffe, or either of them, the true and lawful
agents and attorneys-in-fact of each of the undersigned with respect to all
matters arising in connection with the filing with the Securities and
Exchange Commission of this Post-Effective Amendment No. 15 to the
Registration Statement under the Securities Act of 1933 and under the
Investment Company Act of 1940 on Form N-1A and any subsequent amendments to
the Registration Statement with full power and authority to execute and
deliver for and on behalf of each of the undersigned all such consents and
documents in connection therewith as said agents and attorneys-in-fact may
deem advisable. Each of the undersigned hereby gives to said agents and
attorneys-in-fact full power and authority to act in the premises, including,
but not limited to, the power and authority to execute and file with the
Securities and Exchange Commission this Post-Effective Amendment No. 15 to
the Registration Statement on Form N-1A and any amendments thereto, and/or
other documents in connection therewith, and to appoint a substitute or
substitutes to act hereunder with the same power and authority as said agents
and attorneys-in-fact would have if personally acting. Each of the
undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.

This Power of Attorney may be signed in more than one counterpart, each
of which shall be deemed an original, but all of which together shall
constitute one and the same document.

/s/ Carl B. Menges /s/ Robert L. Bast
- ---------------------------------- -----------------------------------
Carl B. Menges Robert L. Bast

/s/ G. Moffett Cochran /s/ James A. Engle
- ---------------------------------- -----------------------------------
G. Moffett Cochran James A. Engle

/s/ John J. Halsey /s/ Stig Host
- ---------------------------------- -----------------------------------
John J. Halsey Stig Host

/s/ Peter F. Krogh
- ---------------------------------- -----------------------------------
/s/ Peter F. Krogh Dennis G. Little

/s/ William H. Mathers /s/ James L. McCabe
- ---------------------------------- -----------------------------------
William H. Mathers James L. McCabe

/s/ John J. Sheehan /s/ William C. Simpson
- ---------------------------------- -----------------------------------
John J. Sheehan William C. Simpson

/s/ Stephen K. West
-----------------------------
Stephen K. West

Dated as of December 30, 1996

<PAGE>

Exhibit Index
-------------

A complete list of exhibits is included in Part C, Item 24(b) of
the registration Statement. The following exhibits are filed herewith:

Page
----

(6) Distribution Agreement dated as of
February 28, 1996
(15) a. Aggressive Growth Fund - Class A Plan
b. Aggressive Growth Fund - Class B Plan
c. Growth and Income Fund - Class A Plan
d. Growth and Income Fund - Class B Plan
e. Growth Fund - Class A Plan
f. Growth Fund - Class B Plan
g. Fixed Income Fund - Class A Plan
h. Fixed Income Fund - Class B Plan
i. Municipal Trust Fund - Class A Plan
j. Municipal Trust Fund - Class B Plan

<PAGE>

Exhibit 6
DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT, dated as of February 27, 1996, between Winthrop
Focus Funds, a Massachusetts business trust (the "Company"), and Donaldson
Lufkin & Jenrette Securities Corporation (the "Distributor"). The Company is
registered as a series investment company under the Investment Company Act of
1940 (the "1940 Act"), and an indefinite number of shares of beneficial interest
in one or more series, without par value (the "Shares"), have been registered
under the Securities Act of 1933 (the "1933 Act") to be offered for sale to the
public in a continuous public offering in accordance with terms and conditions
set forth in the Prospectus and Statement of Additional Information (the
"Prospectus") of the Company included in the Company's Registration Statement on
Form N-1A as such documents may be amended from time to time.

In this connection, the Company desires that the Distributor act as its
exclusive sales agent and distributor for the sale and distribution of Shares.
The Distributor has advised the Company that it is willing to act in such
capacities, and it is accordingly agreed between them as follows:

1. The Company hereby appoints the Distributor as exclusive sales agent
and distributor for the sale and distribution of Shares pursuant to the
aforesaid continuous public offering of Shares, and the Company further agrees
from and after the commencement of such continuous public offering that it will
not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 1940 Act.

2. The Distributor hereby accepts such appointment and agrees to use its
best efforts to sell such Shares, provided, however, that when requested by the
Company at any time for any reason the Distributor will suspend such efforts.
The Company may also withdraw the offering of Shares at any time when determined
to be in the best interests of the shareholders of the Company by the Board, or
when required by the provisions of any statute, order, rule or regulation of any
governmental body having jurisdiction. It is understood that the Distributor
does not undertake to sell all or any specific portion of the Shares.

3. The Distributor represents that it is a member in good standing of the
National Association of Dealers, Inc. and agrees that it will use all reasonable
efforts to maintain such status and to abide by the Rules of Fair Practice, the
Constitution and the Bylaws of the National Association of Securities Dealers,
Inc., and all other rules

<PAGE>

and regulations that are now or may become applicable to its performance
hereunder. The Distributor will undertake and discharge its obligations
hereunder as an independent contractor and it shall have no authority or power
to obligate or bind the Company by its actions, conduct or contracts except that
it is authorized to accept orders for the purchase or repurchase of Shares as
the Company's agent and subject to its approval. The Company reserves the right
to reject any order in whole or in part. The Distributor may appoint sub-agents
or distribute through dealers or otherwise as it may determine from time to time
pursuant to agreements approved by the Company, but this Agreement shall not be
construed as authorizing any dealer or other person to accept orders for sale or
repurchase of Shares on behalf of the Company or otherwise act as the Company's
agent for any purpose. The Distributor shall not utilize any materials in
connection with the sale or offering of Shares except the then current
Prospectus and such other materials as the Company shall provide or approve in
writing.

4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be sold
either through persons with whom it has selling agreements or directly to
prospective purchasers. To facilitate sales, the Company will furnish the
Distributor with the net asset value of its Shares promptly after each
calculation thereof.

5. The Company has delivered to the Distributor a copy of its current
Prospectus. It agrees that it will use its best efforts to continue the
effectiveness of its Registration Statement filed under the 1933 Act and the
1940 Act. The Company further agrees to prepare and file any amendments to its
Registration Statement as may be necessary and any supplemental data in order to
comply with such Acts.

6. The Company will take such steps at its own expense as may be
necessary and feasible to qualify Shares for sale in states, territories or
dependencies of the United States of America and in the District of Columbia in
accordance with the laws thereof, and to renew or extend any such qualification;
provided, however, that the Company shall not be required to qualify Shares or
to maintain the qualification of Shares in any state, territory, dependency or
district where it shall deem such qualification disadvantageous to the Company.
The Distributor will pay all expenses relating to its broker-dealer
qualifications.

7. The Distributor agrees that:

(a) It will furnish to the Company any pertinent information required
to be inserted with respect to the Distributor as exclusive sales agent and
distributor within the purview of Federal and state securities laws in any
reports or registrations required to be filed with any government
authority;

<PAGE>

(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus filed
under the Securities Act of 1933, as in effect from time to time;

(c) It will not use or distribute or authorize the use or distribution
of any statements other than those contained in the Company's then current
Prospectus or in such supplemental literature or advertising as may be
authorized in writing by the Company; and

(d) Subject to paragraph 9 below, the Distributor will bear those
costs of printing and distributing copies of any prospectuses and annual or
interim reports of the Company which are used in connection with the
offering of Shares which are incremental to the costs of setting in type
such prospectuses and reports and the costs of printing the copies of such
documents that the Company prepares for distribution to its shareholders,
and the costs of preparing, printing and distributing any other literature
used by the Distributor or furnished by the Distributor for use in
connection with the offering of the Shares and the costs and expenses
incurred by the Distributor in advertising, promoting and selling Shares to
the public. Subject to the approval of the Board of Trustees, such costs
may be [reimbursed] pursuant to Section 9.

8. The Company will pay its legal and auditing expenses and the cost of
composition, setting in type, printing and distribution of the prospectuses or
annual or interim reports prepared for distribution to its shareholders.

9. The Company will compensate the Distributor for its services in
connection with distribution of Shares by the Distributor in accordance with the
terms of the Plans of Distribution (the "Plans") adopted by the Fund pursuant to
Rule 12b-1 under the 1940 Act as such Plans may be in effect from time to time;
provided, however, that no payments shall be due or paid to the Distributor
hereunder unless and until this Agreement shall have been approved by Trustee
Approval and Disinterested Trustee Approval (as such terms are defined in such
Plans). The Company reserves the right to modify or terminate such Plans at any
time as specified in the Plans and Rule 12b-1, and this Section 9 shall
thereupon be modified or terminated to the same extent without further action of
the parties. In addition, this Section 9 may be modified or terminated by the
Trustees as set forth in Section 13 hereof. The persons authorized to direct
the payment of funds pursuant to this Agreement and the Plans shall provide to
the Company's Board of Trustees, and the Trustees shall review, at least
quarterly a written report of the amounts so paid and the purposes for which
such expenditures were made. The amounts paid under this Agreement are in
addition to the amount of any initial sales charge or contingent deferred sales
charge, if any, paid to the Distributor pursuant to the terms of the Company's
Registration Statement as in effect from time to time.

<PAGE>

10. The Company agrees to indemnity, defend and hold the Distributor, its
officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all claims, demands,
liabilities and expenses, including costs of investigation or defense (including
reasonable counsel fees) incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Company or any expense of such indemnitee with respect to any matter as
to which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.

The Distributor agrees to indemnify, defend and hold the Company, its
Trustees, officers, employees and agents and any person who controls the Company
within the meaning of Section 15 of the 1933 Act (each, an "indemnitee"), free
and harmless from and against any and all liabilities and expenses, including
costs of investigation or defense (including reasonable counsel fees) incurred
by such indemnitee, but only to the extent that such liability or expense shall
arise out of or be based upon any untrue or alleged untrue statement of a
material fact contained in information furnished in writing by the Distributor
of the Company expressly for use in a Prospectus or any alleged omission to
state a material fact in connection with such information required to be stated
therein or necessary to make such information not

<PAGE>

misleading or arising by reason of disabling conduct by such indemnitee or any
person selling Shares pursuant to an agreement with the Distributor.

The Company shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Company receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Company unless it is subsequently
determined that the indemnity is entitled to such indemnification and if the
Trustees of the Company determine that the facts then known to them would not
preclude indemnification. In addition, at least one of the following conditions
must be met: (A) the indemnitee shall provide a security for his undertaking,
(B) the Company shall be insured against losses arising by reason of any lawful
advances, or (C) a majority of a quorum of Trustees of the Company who are
neither "interested persons" of the Company (as defined in Section 2(a)(19) of
the Act) nor parties to the proceeding ("Disinterested Non-Party Trustees") or
an independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.

All determinations with respect to indemnification hereunder shall be made
(1) by a final decision on the merits by a court or other body before whom the
proceeding was brought that such indemnitee is not liable by reason of disabling
conduct or, (2) in the absence of such a decision, by (i) a majority vote of a
quorum of the Disinterested Non-party Trustees of the Company, or (ii) if such a
quorum is not obtainable or even, if obtainable, if a majority vote of such
quorum so directs, independent legal counsel in a written opinion.

11. This Agreement shall become effective with respect to any class and
any series of the Company when approved by the Board of Trustees and shall
remain in effect for up to two years from its effective date (one year in the
case of Section 9) and thereafter from year to year provided such continuance is
specifically approved at least annually prior to each anniversary of such date
by (a) Trustee Approval or by vote at a meeting of shareholders of such class or
series of the lesser of (i) 67 percent of the Shares of such class or series
present or represented by proxy and (ii) 50 percent of the outstanding Shares of
such class or series and (b) by Disinterested Trustee Approval.

12. This Agreement may be terminated (a) by the Distributor at any time
without penalty by giving sixty (60) days' written notice to the Company which
notice may be waived by the Company; or (b) by the Company at any time without
penalty upon sixty (60) days' written notice to the Distributor (which notice
may be waived by the Distributor); provided, however, that any such termination
by the Company shall

<PAGE>

be directed or approved in the same manner as required for continuance of this
Agreement by Section 11(a) (or, in the case of termination of Section 9, by Sec-
tion 11(b)).

13. This Agreement may not be amended or changed except in writing signed
by each of the parties hereto and approved in the same manner as provided for
continuance of this Agreement in Section 11(a) (or, in the case of amendment of
Section 9, by Section 11(b)). Any such amendment or change shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, but this Agreement shall not be assigned by either party and shall
automatically terminate upon assignment (as such term is defined in the 1940 Act
and the rules thereunder).

14. This Agreement shall be construed in accordance with the laws of the
State of New York applicable to agreements to be performed entirely therein and
in accordance with applicable provisions of the 1940 Act.

15. If any provision of this Agreement shall be held or made invalid or
unenforceable by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected or impaired thereby.

16. Notice is hereby given that this Agreement is entered into on the
Company's behalf by an officer of the Company in such officer's capacity as an
officer and not individually. It is understood and expressly stipulated that
none of the Trustees, officers or shareholders of the Company are personally
liable hereunder. Neither the Trustees, officers or shareholders assume any
personal liability for obligations entered into on behalf of the Company. All
persons dealing with the Company shall look solely to the property of the
Company for the enforcement of any claims against the Company.

<PAGE>

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by the Company's authorized officers as of February 27, 1996.

Winthrop Focus Funds

By: /s/ G. Moffett Cochran
-----------------------
Name: G. Moffett Cochran
Title: President

Donaldson Lufkin & Jenrette
Securities Corporation

By: /s/ Martin Jaffe
----------------
Name: Martin Jaffe
Title: Vice President

<PAGE>

Exhibit 15 a

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP AGGRESSIVE GROWTH FUND
CLASS A SHARES

The Winthrop Aggressive Growth Fund (the "Fund") intends to engage in
business as a separate series of Winthrop Focus Funds (the "Company"), which is
an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Company intends to employ
Donaldson, Lufkin & Jenrette Securities Corporation and/or others as the
principal underwriter and distributor (the "Distributor") of the Class A shares
of the Fund pursuant to a written distribution agreement and desires to adopt a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of Class A shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation-type plan of distribution for the Fund's Class A shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class A shares of the Fund an aggregate of
.30 of 1% per year of the average daily net assets of Class A shares of the Fund
consisting of (i) an asset based sales charge of .05 of 1% per year of the
average daily net assets of the Class A shares of the Fund and (ii) a service
fee of .25 of 1% per year of the average daily net assets of the Class A shares
of the Fund. Such Payments as shall be approved by the Board shall be accrued
daily and paid monthly in arrears or shall be accrued and paid at such other
intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class A shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class A shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class A shares of the Fund, whether in a lump sum or on a

<PAGE>

continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Fund's investment adviser and its personnel) of any of
them for providing services to shareholders of the Fund relating to their
investment in the Fund, including assistance in connection with inquiries
relating to shareholder accounts; the production and dissemination of
prospectuses (including statements of additional information) of the Fund and
the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; third party consultancy or similar expenses
relating to any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board.

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class A shares according to the ratio of the
net assets of Class A shares to the total net assets of the Fund shares over the
Fund's fiscal year or such other allocation method approved by the Trustees.

4. The Company is hereby authorized and directed to enter into appropriate
written agreements with the Distributor and each other person to whom the
Company intends to make any Payment, and the Distributor is hereby authorized
and directed to enter into appropriate written agreements with each person to
whom the Distributor intends to make any payments in the nature of a Payment.
The foregoing requirement is not intended to apply to any agreement or
arrangement with respect to which the party to whom Payment is to be made does
not have the purpose set forth in Section 2 above (such as the printer in the
case of the printing of a prospectus or a newspaper in the case of an
advertisement) unless the Board determines that such an agreement or arrangement
should be treated as a "related" agreement for purposes of Rule 12b-1 under the
Act.

5. Each agreement required to be in writing by Section 4 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the trustees
("Disinterested Trustee Approval") who are not "interested persons" of the
Company and have no direct or indirect financial interest in the operation of
the Plan or any such agreement, by vote cast in person at a meeting called for
the purposes of voting on such agreement.

6. The officers, investment adviser or Distributor of the Fund, as
appropriate, shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such Payments were made.

<PAGE>

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard to
the existence or terms and conditions of a plan of distribution under Rule 12b-1
of the Act (such as the printing of prospectuses for existing Fund
shareholders), this Plan shall not be construed to prevent or restrict the
Company from paying such amounts outside of this Plan and without limitation
hereby and without such payments being included in calculation of Payments
subject to the limitation set forth in Section 1.

8. This Plan shall not take effect until it has been approved by a vote of
at least a majority of the outstanding voting securities of the Class A shares
of the Fund. This Plan may not be amended in any material respect without Board
Approval and Disinterested Trustee Approval and may not be amended to increase
the maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the outstanding voting
securities of the Class A shares of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund only
as long as such continuance is specifically approved at least annually by Board
Approval and by Disinterested Trustee Approval.

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of such termination, or by a vote
of at least a majority of the outstanding voting securities of Class A shares of
the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class A shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called, of the lesser of (a) 67% or more of the
securities of Class A shares of the Fund present at such meeting, if the holders
of more than 50% of the outstanding voting securities of the Class A shares of
the Fund are present or represented by proxy or (b) more than 50% of the
outstanding voting securities of the Class B shares of the Fund.

<PAGE>

Exhibit 15 b

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE WINTHROP AGGRESSIVE GROWTH FUND
CLASS B SHARES

The Winthrop Aggressive Growth Fund (the "Fund") intends to engage in
business as a separate series of Winthrop Opportunity Funds (the "Company"),
which is an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Company intends to employ
Donaldson, Lufkin & Jenrette Securities Corporation and/or others as the
principal underwriter and distributor (the "Distributor") of the Class B shares
of the Fund pursuant to a written distribution agreement and desires to adopt a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of Class B shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of Class B
shares of the Fund consisting of (i) an asset-based sales charge of up to .75 of
1% of the average daily net assets of the Class B shares of the Fund and (ii) a
service fee of up to .25 of 1% of the average daily net assets of the Class B
shares of the Fund. Such Payments as shall be approved by the Board shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class B shares of the Fund, whether in a lump sum or on a

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class B shares according to the ratio of the
sales of Class B shares to the total sales of the Fund's shares over the Fund's
fiscal year or such other allocation method approved by the Trustees.

<PAGE>

8. This Plan shall not take effect until it has been approved by a vote of
at least a majority of the outstanding voting securities of the Class B shares
of the Fund. This Plan may not be amended in any material respect without Board
Approval and Disinterested Trustee Approval and may not be amended to increase
the maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the outstanding voting
securities of the Fund. This Plan may continue in effect for longer than one
year after its approval by the shareholders of the Fund only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of voting on such termination, or
by a vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.

<PAGE>

Exhibit 15 c

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP GROWTH AND INCOME FUND
CLASS A SHARES

The Winthrop Growth and Income Fund (the "Fund") intends to engage in
business as a separate series of Winthrop Focus Funds (the "Company"), which is
an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Company intends to employ
Donaldson, Lufkin & Jenrette Securities Corporation and/or others as the
principal underwriter and distributor (the "Distributor") of the Class A shares
of the Fund pursuant to a written distribution agreement and desires to adopt a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of Class A shares of the Fund.

1. The Company is hereby authorized to pay to the Distributor as compensa-
tion for its services, distribution payments (the "Payments") in connection with
the distribution of Class A shares of the Fund an aggregate of .30 of 1% per
year of the average daily net assets of Class A shares of the Fund consisting of
(i) an asset based sales charge of .05 of 1% per year of the average daily net
assets of the Class A shares of the Fund and (ii) a service fee of .25 of 1% per
year of the average daily net assets of the Class A shares of the Fund. Such
Payments as shall be approved by the Board shall be accrued daily and paid
monthly in arrears or shall be accrued and paid at such other intervals as the
Board shall determine.

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

<PAGE>

Exhibit 15 d

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE WINTHROP GROWTH AND INCOME FUND
CLASS B SHARES

The Winthrop Growth and Income Fund (the "Fund") intends to engage in
business as a separate series of Winthrop Opportunity Funds (the "Company"),
which is an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Company intends to employ
Donaldson, Lufkin & Jenrette Securities Corporation and/or others as the
principal underwriter and distributor (the "Distributor") of the Class B shares
of the Fund pursuant to a written distribution agreement and desires to adopt a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of Class B shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of Class B
shares of the Fund consisting of (i) an asset-based sales charge of up to .75 of
1% of the average daily net assets of the Class B shares of the Fund and (ii) a
service fee of up to .25 of 1% of the average daily net assets of the Class B
shares of the Fund. Such Payments as shall be approved by the Board shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class B shares of the Fund, whether in a lump sum or on a

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class B shares according to the ratio of the
sales of Class B shares to the total sales of the Fund's shares over the Fund's
fiscal year or such other allocation method approved by the Trustees.

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of voting on such termination, or
by a vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.

<PAGE>

EXHIBIT 15e

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP GROWTH FUND
CLASS A SHARES

The Winthrop Growth Fund (the "Fund") intends to engage in business as a
separate series of Winthrop Focus Funds (the "Company"), which is an open-end
management investment company registered as such under the Investment Company
Act of 1940 (the "Act"). The Company intends to employ Donaldson, Lufkin &
Jenrette Securities Corporation and/or others as the principal underwriter and
distributor (the "Distributor") of the Class A shares of the Fund pursuant to a
written distribution agreement and desires to adopt a plan of distribution
pursuant to Rule 12b-1 under the Act to assist in the distribution of Class A
shares of the Fund.

<PAGE>

the Fund's investment adviser and its personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Fund,
including assistance in connection with inquiries relating to shareholder
accounts; the production and dissemination of prospectuses (including statements
of additional information) of the Fund and the preparation, production and
dissemination of sales, marketing and shareholder servicing materials; third
party consultancy or similar expenses relating to any activity for which Payment
is authorized by the Board; and the financing of any activity for which Payment
is authorized by the Board.

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard to
the existence

<PAGE>

or terms and conditions of a plan of distribution under Rule 12b-1 of the Act
(such as the printing of prospectuses for existing Fund shareholders), this Plan
shall not be construed to prevent or restrict the Company from paying such
amounts outside of this Plan and without limitation hereby and without such
payments being included in calculation of Payments subject to the limitation set
forth in Section 1.

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

<PAGE>

EXHIBIT 15f

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE WINTHROP GROWTH FUND
CLASS B SHARES

The Winthrop Growth Fund (the "Fund") intends to engage in business as a
separate series of Winthrop Opportunity Funds (the "Company"), which is an
open-end management investment company registered as such under the Investment
Company Act of 1940 (the "Act"). The Company intends to employ Donaldson, Lufkin
& Jenrette Securities Corporation and/or others as the principal underwriter and
distributor (the "Distributor") of the Class B shares of the Fund pursuant to a
written distribution agreement and desires to adopt a plan of distribution
pursuant to Rule 12b-1 under the Act to assist in the distribution of Class B
shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of Class B
shares of the Fund consisting of (i) an asset-based sales charge of up to .75 of
1% of the average daily net assets of the Class B shares of the Fund and (ii) a
service fee of up to .25 of 1% of the average daily net assets of the Class B
shares of the Fund. Such Payments as shall be approved by the Board shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class B shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing personnel
(including

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class B shares according to the ratio of the
sales of Class B shares to the total sales of the Fund's shares over the Fund's
fiscal year or such other allocation method approved by the Trustees.

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of voting on such termination, or
by a vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.

<PAGE>

EXHIBIT 15g

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP FIXED INCOME FUND
CLASS A SHARES

The Winthrop Fixed Income Fund (the "Fund") intends to engage in business
as a separate series of Winthrop Focus Funds (the "Company"), which is an
open-end management investment company registered as such under the Investment
Company Act of 1940 (the "Act"). The Company intends to employ Donaldson, Lufkin
& Jenrette Securities Corporation and/or others as the principal underwriter and
distributor (the "Distributor") of the Class A shares of the Fund pursuant to a
written distribution agreement and desires to adopt a plan of distribution
pursuant to Rule 12b-1 under the Act to assist in the distribution of Class A
shares of the Fund.

<PAGE>

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard to
the existence

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

<PAGE>

EXHIBIT 15h

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE WINTHROP FIXED INCOME FUND
CLASS B SHARES

The Winthrop Fixed Income Fund (the "Fund") intends to engage in business
as a separate series of Winthrop Opportunity Funds (the "Company"), which is an
open-end management investment company registered as such under the Investment
Company Act of 1940 (the "Act"). The Company intends to employ Donaldson, Lufkin
& Jenrette Securities Corporation and/or others as the principal underwriter and
distributor (the "Distributor") of the Class B shares of the Fund pursuant to a
written distribution agreement and desires to adopt a plan of distribution
pursuant to Rule 12b-1 under the Act to assist in the distribution of Class B
shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of Class B
shares of the Fund consisting of (i) an asset-based sales charge of up to .75 of
1% of the average daily net assets of the Class B shares of the Fund and (ii) a
service fee of up to .25 of 1% of the average daily net assets of the Class B
shares of the Fund. Such Payments as shall be approved by the Board shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class B shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing personnel
(including

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class B shares according to the ratio of the
sales of Class B shares to the total sales of the Fund's shares over the Fund's
fiscal year or such other allocation method approved by the Trustees.

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of voting on such termination, or
by a vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.

<PAGE>

EXHIBIT 15i

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
WINTHROP MUNICIPAL TRUST FUND
CLASS A SHARES

The Winthrop Municipal Trust Fund (the "Fund") intends to engage in
business as a separate series of Winthrop Focus Funds (the "Company"), which is
an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Company intends to employ
Donaldson, Lufkin & Jenrette Securities Corporation and/or others as the
principal underwriter and distributor (the "Distributor") of the Class A shares
of the Fund pursuant to a written distribution agreement and desires to adopt a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of Class A shares of the Fund.

<PAGE>

7. To the extent any activity is covered by Section 2 and is also an
activity which the Company may pay for on behalf of the Fund without regard to
the existence

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

<PAGE>

EXHIBIT 15j

PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE WINTHROP MUNICIPAL TRUST FUND
CLASS B SHARES

The Winthrop Municipal Fund (the "Fund") intends to engage in business as a
separate series of Winthrop Opportunity Funds (the "Company"), which is an
open-end management investment company registered as such under the Investment
Company Act of 1940 (the "Act"). The Company intends to employ Donaldson, Lufkin
& Jenrette Securities Corporation and/or others as the principal underwriter and
distributor (the "Distributor") of the Class B shares of the Fund pursuant to a
written distribution agreement and desires to adopt a plan of distribution
pursuant to Rule 12b-1 under the Act to assist in the distribution of Class B
shares of the Fund.

The Board of Trustees (the "Board") of the Company having determined that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Company hereby adopts a
compensation type plan of distribution for the Fund's Class B shares (the
"Plan") pursuant to Rule 12b-1 under the Act on the following terms and
conditions:

1. The Company is hereby authorized to pay to the Distributor as
compensation for its services, distribution payments (the "Payments") in
connection with the distribution of Class B shares of the Fund an aggregate
amount not to exceed 1.0% per year of the average daily net assets of Class B
shares of the Fund consisting of (i) an asset-based sales charge of up to .75 of
1% of the average daily net assets of the Class B shares of the Fund and (ii) a
service fee of up to .25 of 1% of the average daily net assets of the Class B
shares of the Fund. Such Payments as shall be approved by the Board shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine.

2. Payments may be made by the Company under this Plan for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of Class B shares of the Fund. The scope of the
foregoing shall be interpreted by the Board from time to time including the
selection of those activities for which payment can be made whose decision shall
be conclusive. Without in any way limiting the discretion of the Board, the
following activities are hereby declared to be primarily intended to result in
the sale of Class B shares of the Fund: advertising the Fund either alone or
together with other funds; compensating underwriters, dealers, brokers, banks
and other selling entities and sales and marketing personnel of any of them for
sales of Class B shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing personnel
(including

<PAGE>

3. Amounts paid to the Distributor by the Fund under the Plan will not be
used to pay the distribution expenses incurred with respect to any other class
of shares of the Fund except that distribution expenses attributable to the Fund
as a whole will be allocated to the Class B shares according to the ratio of the
sales of Class B shares to the total sales of the Fund's shares over the Fund's
fiscal year or such other allocation method approved by the Trustees.

<PAGE>

9. While the Plan is in effect, the selection and nomination of the
Trustees who are not "interested persons" of the Company will be committed to
the discretion of such disinterested Trustees.

10. This Plan may be terminated at any time by a vote of the Trustees who
are not interested persons of the Company and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, cast
in person at a meeting called for the purposes of voting on such termination, or
by a vote of at least a majority of the outstanding voting securities of the
Class B shares of the Fund.

11. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the outstanding voting securities" of the Class B shares of the
Fund shall mean the vote, at the annual or a special meeting of the holders of
Class A shares of the Fund duly called the lesser of (a) 67% or more of the
voting securities of the Class B shares of the Fund present at such meeting, if
the holders of more than 50% of the outstanding voting securities of the Class B
shares of the Fund are present or represented by proxy or (b) more than 50% of
the outstanding voting securities of the Class B shares of the Fund.