GALAXY FUND /DE/, 497, 1997-10-03

GALAXY FUND /DE/
497, 1997-10-03

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<PAGE> 1

THE GALAXY FUND
("GALAXY")

RETAIL A SHARES AND RETAIL B SHARES OF THE
EQUITY VALUE FUND, EQUITY GROWTH FUND,
EQUITY INCOME FUND, INTERNATIONAL EQUITY FUND,
SMALL COMPANY EQUITY FUND, ASSET ALLOCATION FUND,
SMALL CAP VALUE FUND AND GROWTH AND INCOME FUND

SUPPLEMENT DATED OCTOBER 6, 1997 TO
PROSPECTUS DATED FEBRUARY 28, 1997

HOW TO PURCHASE SHARES

1. The first paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on page 31 of the Prospectus is amended and restated to read as follows:

"The public offering price for Retail A Shares of the Funds is the sum
of the net asset value of the Retail A Shares purchased plus any applicable
front-end sales charge. The sales charge assessed is as follows:

<TABLE>
<CAPTION>
REALLOWANCE
TOTAL SALES CHARGE TO DEALERS
---------------------------------- ------------
AS A % OF AS A % OF AS A % OF
OFFERING PRICE NET ASSET OFFERING PRICE
AMOUNT OF TRANSACTION PER SHARE VALUE PER SHARE PER SHARE
----------------------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000.................. 3.75 3.90 3.25
$50,000 but less than $100,000..... 3.50 3.63 3.00
$100,000 but less than $250,000.... 3.00 3.09 2.50
$250,000 but less than $500,000.... 2.50 2.56 2.00
$500,000 and more.................. 0.00* 0.00* 0.00
</TABLE>

- ------------
* There is no initial sales charge on purchases of $500,000 or more of Retail A
Shares; however, a contingent deferred sales charge of 1.00% will be imposed on
the lesser of the offering price or the net asset value of the shares on the
redemption date for shares redeemed within one year after purchase."

2. The sixth paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on page 31 of the Prospectus is amended and restated to read as follows:

"In certain situations or for certain individuals, the front-end sales
charge for Retail A Shares of the Funds may be waived either because of the
nature of the investor or the reduced sales effort required to attract such
investments. In order to receive the sales charge waiver, an investor must
explain the status of his or her investment at the time of purchase. No
sales charge is assessed on purchases of Retail A Shares of the Funds by
the following categories of investors or in the following types of
transactions:

- reinvestment of dividends and distributions;

- purchases by any retirement account, including but not limited to
SIMPLE, IRA, SEP, Keogh and Roth accounts;
<PAGE> 2

- purchases by persons who were beneficial owners of shares of the Funds
or any of the other portfolios offered by Galaxy or any other funds
advised by Fleet or its affiliates before December 1, 1995;

- purchases by directors, officers and employees of broker-dealers
having agreements with FD Distributors pertaining to the sale of
Retail A Shares to the extent permitted by such organizations;

- investors who purchase pursuant to a "wrap fee" program offered by any
broker-dealer or other financial institution or financial planning
organization;

- purchases made with redemption proceeds from another mutual fund
complex on which a front-end or back-end sales charge has been paid,
provided the purchase is made within 60 days after the redemption;

- purchases by current and retired members of Galaxy's Board of Trustees
and members of their immediate families;

- purchases by officers, directors, employees and retirees of Fleet
Financial Group, Inc. and any of its affiliates and members of their
immediate families;

- purchases by officers, directors, employees and retirees of First Data
Corporation and any of its affiliates and members of their immediate
families;

- purchases by persons who are also plan participants in any employee
benefit plan which is the record or beneficial holder of Trust Shares
of the Funds or any of the other portfolios offered by Galaxy; and

- any purchase pursuant to the Reinstatement Privilege described below."

3. The last paragraph entitled "Exemptions from the Contingent Deferred
Sales Charge" under the heading "Applicable Sales Charge--Retail B Shares" on
pages 32-33 of the Prospectus is amended by adding the following sentence at the
end of the paragraph:

"In addition to the foregoing exemptions, no contingent deferred sales
charge will be imposed on redemptions made pursuant to the Systematic
Withdrawal Plan, subject to the limitations set forth under "Investor
Programs--Automatic Investment Program and Systematic Withdrawal Plan"
below."

INVESTOR PROGRAMS

1. The last sentence of the second full paragraph under the heading
"Automatic Investment Program and Systematic Withdrawal Plan" on page 37 of the
Prospectus is deleted and the following three sentences are added in its place:

"No contingent deferred sales charge will be assessed on redemptions
of Retail B Shares made through the Systematic Withdrawal Plan that do not
exceed 12% of an account's net asset value on an annualized basis. For
example, monthly, quarterly and semi-annual Systematic Withdrawal Plan
redemptions of Retail B Shares will not be subject to the contingent
deferred sales charge if they do not exceed 1%, 3% and 6%, respectively, of
an account's net asset value on the redemption date. Systematic Withdrawal
Plan redemptions of Retail B Shares in excess of this limit are still
subject to the applicable contingent deferred sales charge."

2
<PAGE> 3

* * *

SUPPLEMENT DATED SEPTEMBER 4, 1997 TO
PROSPECTUS DATED FEBRUARY 28, 1997

INVESTMENT OBJECTIVES AND POLICIES

1. The last sentence in the second full paragraph under the heading
"International Equity Fund" on pages 16-17 of the Prospectus is amended and
restated to read as follows:

"Under normal market and economic conditions, no more than 20% of the
Fund's net assets will be invested in the aggregate in the securities of
issuers located in countries with emerging economies or emerging securities
markets."

2. The first sentence of the fourth paragraph under the heading "Small Cap
Value Fund" on page 18 of the Prospectus and the first sentence of the fourth
paragraph under the heading "Growth and Income Fund" on pages 18-19 of the
Prospectus are each amended and restated to read as follows:

"The Fund may invest up to 20% of its total assets in securities of
foreign issuers which are freely traded on United States securities
exchanges or in the over-the-counter market in the form of ADRs, EDRs and
GDRs."

3
<PAGE> 4

THE GALAXY FUND
("GALAXY")

RETAIL A SHARES AND RETAIL B SHARES OF THE
TAX-EXEMPT BOND FUND, NEW YORK MUNICIPAL
BOND FUND, CONNECTICUT MUNICIPAL BOND FUND,
MASSACHUSETTS MUNICIPAL BOND FUND AND
RHODE ISLAND MUNICIPAL BOND FUND

SUPPLEMENT DATED OCTOBER 6, 1997 TO
PROSPECTUS DATED FEBRUARY 28, 1997

HOW TO PURCHASE SHARES

1. The first paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on pages 24-25 of the Prospectus is amended and restated to read as
follows:

<TABLE>
<CAPTION>
REALLOWANCE
TOTAL SALES CHARGE TO DEALERS
--------------------------------- -------------
AS A % OF AS A % OF AS A % OF
OFFERING PRICE NET ASSET OFFERING PRICE
AMOUNT OF TRANSACTION PER SHARE VALUE PER SHARE PER SHARE
------------------------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000.................... 3.75 3.90 3.25
$50,000 but less than $100,000....... 3.50 3.63 3.00
$100,000 but less than $250,000...... 3.00 3.09 2.50
$250,000 but less than $500,000...... 2.50 2.56 2.00
$500,000 and more.................... 0.00* 0.00* 0.00
</TABLE>

2. The sixth paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on pages 24-25 of the Prospectus is amended and restated to read as
follows:

- reinvestment of dividends and distributions;

- purchases by any retirement account, including but not limited to
SIMPLE, IRA, SEP, Keogh and Roth accounts;
<PAGE> 5

- purchases by directors, officers and employees of broker-dealers
having agreements with FD Distributors pertaining to the sale of
Retail A Shares to the extent permitted by such organizations;

- investors who purchase pursuant to a "wrap fee" program offered by any
broker-dealer or other financial institution or financial planning
organization;

- purchases by current and retired members of Galaxy's Board of Trustees
and members of their immediate families;

- purchases by officers, directors, employees and retirees of Fleet
Financial Group, Inc. and any of its affiliates and members of their
immediate families;

- purchases by officers, directors, employees and retirees of First Data
Corporation and any of its affiliates and members of their immediate
families;

- purchases by persons who are also plan participants in any employee
benefit plan which is the record or beneficial holder of Trust Shares
of any of the portfolios offered by Galaxy; and

- any purchase pursuant to the Reinstatement Privilege described below."

3. The last paragraph entitled "Exemptions from the Contingent Deferred
Sales Charge" under the heading "Applicable Sales Charge--Retail B Shares" on
pages 26-27 of the Prospectus is amended by adding the following sentence at the
end of the paragraph:

INVESTOR PROGRAMS

1. The last sentence of the second full paragraph under the heading
"Automatic Investment Program and Systematic Withdrawal Plan" on page 30 of the
Prospectus is deleted and the following three sentences are added in its place:

FN-584 (10/97)
<PAGE> 6

THE GALAXY FUND
("GALAXY")

RETAIL A SHARES OF THE
RHODE ISLAND MUNICIPAL BOND FUND

SUPPLEMENT DATED OCTOBER 6, 1997 TO
PROSPECTUS DATED FEBRUARY 28, 1997

HOW TO PURCHASE AND REDEEM SHARES

1. The first paragraph under the heading "Applicable Sales Charge" on pages
14-15 of the Prospectus is amended and restated to read as follows:

"The public offering price for Retail A Shares of the Fund is the sum
of the net asset value of the Retail A Shares purchased plus any applicable
front-end sales charge. The sales charge assessed is as follows:

<TABLE>
<CAPTION>
REALLOWANCE
TOTAL SALES CHARGE TO DEALERS
---------------------------------- -------------
AS A % OF AS A % OF AS A % OF
OFFERING PRICE NET ASSET OFFERING PRICE
AMOUNT OF TRANSACTION PER SHARE VALUE PER SHARE PER SHARE
---------------------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000................. 3.75 3.90 3.25
$50,000 but less than $100,000.... 3.50 3.63 3.00
$100,000 but less than $250,000... 3.00 3.09 2.50
$250,000 but less than $500,000... 2.50 2.56 2.00
$500,000 and more................. 0.00* 0.00* 0.00
</TABLE>

2. The sixth paragraph under the heading "Applicable Sales Charge" on pages
14-15 of the Prospectus is amended and restated to read as follows:

"In certain situations or for certain individuals, the front-end sales
charge for Retail A Shares of the Fund may be waived either because of the
nature of the investor or the reduced sales effort required to attract such
investments. In order to receive the sales charge waiver, an investor must
explain the status of his or her investment at the time of purchase. No
sales charge is assessed on purchases of Retail A Shares of the Fund by the
following categories of investors or in the following types of
transactions:

- reinvestment of dividends and distributions;

- purchases by any retirement account, including but not limited to
SIMPLE, IRA, SEP, Keogh and Roth accounts;

- purchases by persons who were beneficial owners of shares of the Fund
or any of the other portfolios offered by Galaxy or any other funds
advised by Fleet or its affiliates before December 1, 1995;
<PAGE> 7

- purchases by directors, officers and employees of broker-dealers
having agreements with FD Distributors pertaining to the sale of
Retail A Shares to the extent permitted by such organizations;

- investors who purchase pursuant to a "wrap fee" program offered by any
broker-dealer or other financial institution or financial planning
organization;

- purchases by current and retired members of Galaxy's Board of Trustees
and members of their immediate families;

- purchases by officers, directors, employees and retirees of Fleet
Financial Group, Inc. and any of its affiliates and members of their
immediate families;

- purchases by officers, directors, employees and retirees of First Data
Corporation and any of its affiliates and members of their immediate
families;

- purchases by persons who are also plan participants in any employee
benefit plan which is the record or beneficial holder of Trust Shares
of any of the portfolios offered by Galaxy; and

- any purchase pursuant to the Reinstatement Privilege described below."

FN-585 (10/97)
<PAGE> 8

THE GALAXY FUND
("GALAXY")

RETAIL A SHARES AND RETAIL B SHARES OF THE
SHORT-TERM BOND FUND,
INTERMEDIATE GOVERNMENT INCOME FUND AND
HIGH QUALITY BOND FUND

SUPPLEMENT DATED OCTOBER 6, 1997 TO
PROSPECTUS DATED FEBRUARY 28, 1997

HOW TO PURCHASE SHARES

1. The first paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on pages 19-20 of the Prospectus is amended and restated to read as
follows:

<TABLE>
<CAPTION>
REALLOWANCE
TOTAL SALES CHARGE TO DEALERS
---------------------------------- -------------
AS A % OF AS A % OF AS A % OF
OFFERING PRICE NET ASSET OFFERING PRICE
AMOUNT OF TRANSACTION PER SHARE VALUE PER SHARE PER SHARE
------------------------------------ -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000................... 3.75 3.90 3.25
$50,000 but less than $100,000...... 3.50 3.63 3.00
$100,000 but less than $250,000..... 3.00 3.09 2.50
$250,000 but less than $500,000..... 2.50 2.56 2.00
$500,000 and more................... 0.00* 0.00* 0.00
</TABLE>

2. The sixth paragraph under the heading "Applicable Sales Charge--Retail A
Shares" on pages 19-20 of the Prospectus is amended and restated to read as
follows:

- reinvestment of dividends and distributions;

- purchases by any retirement account, including but not limited to
SIMPLE, IRA, SEP, Keogh and Roth accounts;

- purchases by directors, officers and employees of broker-dealers
having agreements with FD Distributors pertaining to the sale of
Retail A Shares to the extent permitted by such organizations;

- investors who purchase pursuant to a "wrap fee" program offered by any
broker-dealer or other financial institution or financial planning
organization;

- purchases by current and retired members of Galaxy's Board of Trustees
and members of their immediate families;

- purchases by officers, directors, employees and retirees of Fleet
Financial Group, Inc. and any of its affiliates and members of their
immediate families;

- purchases by officers, directors, employees and retirees of First Data
Corporation and any of its affiliates and members of their immediate
families;

- any purchase pursuant to the Reinstatement Privilege described below."

3. The last paragraph entitled "Exemptions from the Contingent Deferred
Sales Charge" under the heading "Applicable Sales Charge--Retail B Shares" on
page 21 of the Prospectus is amended by adding the following sentence at the end
of the paragraph:

INVESTOR PROGRAMS

1. The last sentence of the second full paragraph under the heading
"Automatic Investment Program and Systematic Withdrawal Plan" on page 25 of the
Prospectus is deleted and the following three sentences are added in its place:

FN-583 (10/97)
<PAGE> 10

RETAIL

THE GALAXY FUND

MONEY MARKET FUND

GOVERNMENT FUND

U.S. TREASURY FUND

TAX-EXEMPT FUND

CONNECTICUT MUNICIPAL MONEY MARKET FUND

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND

PROSPECTUS

FEBRUARY 28, 1997
(AS REVISED OCTOBER 6, 1997)
<PAGE> 11

================================================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE STATEMENTS OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS
OR BY FIRST DATA DISTRIBUTORS, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE FUNDS OR BY FIRST DATA DISTRIBUTORS, INC. IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
------------------

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
HIGHLIGHTS.................................... 3

EXPENSE SUMMARY............................... 5

FINANCIAL HIGHLIGHTS.......................... 7

INVESTMENT OBJECTIVES AND POLICIES............ 15
In General.................................. 15
Quality Requirements........................ 15
Money Market Fund........................... 15
Government Fund............................. 16
U.S. Treasury Fund.......................... 16
Tax-Exempt Fund............................. 16
Connecticut Municipal Money Market Fund..... 17
Massachusetts Municipal Money Market Fund... 18

INVESTMENTS, STRATEGIES AND RISKS............. 18
U.S. Government Obligations................. 18
Money Market Instruments.................... 19
Municipal Securities........................ 20
Tender Option Bonds......................... 21
Variable and Floating Rate Instruments...... 21
Repurchase and Reverse Repurchase
Agreements................................ 21
Securities Lending--Money Market and
Government Funds.......................... 22
Guaranteed Investment Contracts--Money
Market Fund............................... 22
Asset-Backed Securities--Money Market
Fund...................................... 22
Investment Company Securities--Tax-Exempt
Money Market Funds........................ 23
Other Investment Policies of the Tax-Exempt
Money Market Funds........................ 23
Certain Investment Policies of the U.S.
Treasury and Government Funds............. 24
Connecticut Investment Risks................ 24
Massachusetts Investment Risks.............. 25

INVESTMENT LIMITATIONS........................ 25

PRICING OF SHARES............................. 28

HOW TO PURCHASE AND REDEEM SHARES............. 29
Distributor................................. 29
Purchase of Shares.......................... 29
Purchase Procedures--Customers of
Institutions.............................. 29

<CAPTION>
PAGE
----
<S> <C>
Purchase Procedures--Direct Investors....... 30
Other Purchase Information.................. 31
Applicable Sales Charges--Retail B Shares... 31
Redemption of Shares........................ 33
Redemption Procedures--Customers of
Institutions.............................. 33
Redemption Procedures -- Direct Investors... 34
Other Redemption Information................ 35

INVESTOR PROGRAMS............................. 35
Exchange Privilege.......................... 35
Retirement Plans............................ 37
Automatic Investment Program and Systematic
Withdrawal Plan........................... 37
College Investment Program.................. 38
Checkwriting................................ 38
Direct Deposit Program...................... 38

INFORMATION SERVICES.......................... 39
Galaxy Information Center--24 Hour
Information Service....................... 39
Voice Response System....................... 39
Galaxy Shareholder Services................. 39

DIVIDENDS AND DISTRIBUTIONS................... 39

TAXES......................................... 40
Federal..................................... 40
State and Local............................. 41
Miscellaneous............................... 42

MANAGEMENT OF THE FUNDS....................... 42
Investment Adviser.......................... 42
Authority to Act as Investment Adviser...... 43
Administrator............................... 43

DESCRIPTION OF GALAXY AND ITS SHARES.......... 44
Shareholder Services Plan................... 45
Distribution and Services Plan.............. 45
Affiliate Agreement for Sub-Account
Services.................................. 46

CUSTODIAN AND TRANSFER AGENT.................. 46

EXPENSES...................................... 46

PERFORMANCE AND YIELD INFORMATION............. 47

MISCELLANEOUS................................. 48
</TABLE>

================================================================================
<PAGE> 12

THE GALAXY FUND

<TABLE>
<S> <C>
4400 Computer Drive For an application and information regarding
Westboro, Massachusetts 01581-5108 purchases, redemptions, exchanges and other
shareholder services or, for current
performance, call 1-800-628-0414.
</TABLE>

The Galaxy Fund ("Galaxy") is an open-end management investment company.
This Prospectus relates to six separate money market portfolios (individually, a
"Fund," collectively, the "Funds") offered to investors by Galaxy, each having
its own investment objective and policies:

The MONEY MARKET FUND'S investment objective is to seek as high a level of
current income as is consistent with liquidity and stability of principal. The
Fund invests in "money market" instruments with remaining maturities of one year
or less, such as domestic and foreign bank certificates of deposit, bankers'
acceptances and commercial paper (including variable and floating rate
obligations) in addition to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, and repurchase agreements
relating to such obligations.

The GOVERNMENT FUND'S investment objective is to seek as high a level of
current income as is consistent with liquidity and stability of principal. The
Fund invests in obligations with remaining maturities of one year or less which
are issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such obligations.

The U.S. TREASURY FUND'S investment objective is to seek current income with
liquidity and stability of principal. The Fund invests in securities with
remaining maturities of one year or less which are issued or guaranteed as to
principal and interest by the U.S. Government or by agencies or
instrumentalities thereof, the interest income from which generally will not be
subject to state income tax by reason of current federal law. The Fund invests
at least 65% of its total assets in direct U.S. Government obligations.

The TAX-EXEMPT FUND'S investment objective is to seek as high a level of
current interest income exempt from federal income tax as is consistent with
stability of principal. The Fund invests substantially all of its assets in high
quality debt obligations issued by or on behalf of states, territories, and
possessions of the United States, the District of Columbia, and their
authorities, agencies, instrumentalities, and political subdivisions, the
interest on which, in the opinion of bond counsel or counsel to the issuer, is
exempt from federal income tax ("Municipal Securities"). The Fund's portfolio
securities will generally have remaining maturities of not more than one year.

The CONNECTICUT MUNICIPAL MONEY MARKET FUND'S investment objective is to
provide current income exempt from federal regular income tax and the
Connecticut state income tax on individuals, trusts and estates, consistent with
relative stability of principal and liquidity. The Fund invests primarily in
Connecticut Municipal Securities (as defined below), including securities of
states, territories and possessions of the United States which are not issued by
or on behalf of Connecticut or its political subdivisions and financing
authorities, but which are exempt from the Connecticut state income tax on
individuals, trusts and estates (the "CSIT"). The Fund's portfolio securities
will generally have remaining maturities of not more than thirteen months. The
Fund is a non-diversified investment portfolio under the Investment Company Act
of 1940, as amended (the "1940 Act").

The MASSACHUSETTS MUNICIPAL MONEY MARKET FUND'S investment objective is to
provide current income exempt from federal regular income tax and the income
taxes imposed by the Commonwealth of Massachusetts, consistent with relative
stability of principal and liquidity. The Fund invests primarily in
Massachusetts Municipal Securities (as defined below), including securities of
states, territories and possessions of the United States which are not issued by
or on behalf of Massachusetts or its political subdivisions and financing
authorities, but which are exempt from income taxes imposed by the Commonwealth
of Massachusetts. The Fund's portfolio securities will generally have remaining
maturities of not more than thirteen months. The Fund is a non-diversified
investment portfolio under the 1940 Act.

THE CONNECTICUT MUNICIPAL MONEY MARKET FUND AND THE MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND ARE CONCENTRATED IN SECURITIES ISSUED BY, OR ENTITIES WITHIN,
THE STATE OF CONNECTICUT AND THE COMMONWEALTH OF MASSACHUSETTS, RESPECTIVELY,
AND EACH SUCH FUND MAY INVEST A SIGNIFICANT PERCENTAGE OF ITS ASSETS IN A SINGLE
ISSUER. THEREFORE, INVESTMENT IN THESE FUNDS MAY BE RISKIER THAN AN INVESTMENT
IN OTHER TYPES OF MONEY MARKET FUNDS.
<PAGE> 13

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY FLEET FINANCIAL GROUP, INC. OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., OR ANY FLEET BANK. SHARES OF THE FUNDS ARE NOT
FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS OR OTHER FACTORS SO THAT SHARES
OF THE FUNDS, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED. THERE IS NO ASSURANCE THAT THE FUNDS WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

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.

This Prospectus describes (i) Retail A Shares in the Money Market,
Government, U.S. Treasury and Tax-Exempt Funds, (ii) Retail B Shares in the
Money Market Fund, and (iii) Shares in the Connecticut Municipal Money Market
and Massachusetts Municipal Money Market Funds (which presently issue only one
series of shares). Such Retail A Shares, Retail B Shares and Shares are referred
to herein collectively as "Retail Shares." Retail Shares are offered to
customers ("Customers") of FIS Securities, Inc., Fleet Brokerage Securities,
Inc., Fleet Securities, Inc., Fleet Enterprises,Inc., Fleet Financial Group,
Inc., its affiliates, their correspondent banks, and other qualified banks,
savings and loan associations and broker/dealers ("Institutions"). Retail Shares
may also be purchased directly by individuals, corporations or other entities,
who submit a purchase application to Galaxy, purchasing either for their own
accounts or for the accounts of others ("Direct Investors"). Retail B Shares in
the Money Market Fund bear distribution fees, and are assessed a contingent
deferred sales charge upon redemption.

Galaxy is also authorized to issue an additional series of shares ("Trust
Shares") in the Money Market, Government, U.S. Treasury and Tax-Exempt Funds,
which are offered under a separate prospectus primarily to investors maintaining
qualified accounts at bank and trust institutions, including institutions
affiliated with Fleet Financial Group, Inc., and with respect to each Fund
except the Tax-Exempt Fund, to participants in employer-sponsored defined
contribution plans. Retail A Shares, Retail B Shares and Trust Shares in a Fund
represent equal pro rata interests in the Fund, except that they bear different
expenses and charges. See "Financial Highlights," "Management of the Funds" and
"Description of Galaxy and Its Shares" herein.

Each of the Funds is advised by Fleet Investment Advisors Inc. and
sponsored and distributed by First Data Distributors, Inc., which is
unaffiliated with Fleet Investment Advisors Inc. and its parent, Fleet Financial
Group, Inc., and affiliates.

This Prospectus sets forth concisely the information about the Funds that a
prospective investor should consider before investing. Investors should read
this Prospectus and retain it for future reference. Additional information about
the Funds, contained in the respective Statements of Additional Information
relating to the Funds and dated February 28, 1997 (as revised October 6, 1997
with respect to the Statement of Additional Information pertaining to the Money
Market, Government, U.S. Treasury and Tax-Exempt Funds), has been filed with the
Securities and Exchange Commission. The current Statements of Additional
Information are available upon request without charge by contacting Galaxy at
its telephone numbers or address shown above. The Statements of Additional
Information, as they may be amended from time to time, are incorporated by
reference in their entireties into this Prospectus.
------------------------------

FEBRUARY 28, 1997
(AS REVISED OCTOBER 6, 1997)

2
<PAGE> 14

HIGHLIGHTS

Q: What is The Galaxy Fund?

A: Galaxy is an open-end management investment company (commonly known as a
mutual fund) that offers investors the opportunity to invest in different
investment portfolios having separate investment objectives and policies. This
Prospectus describes six of Galaxy's money market funds: THE MONEY MARKET FUND,
GOVERNMENT FUND, U.S. TREASURY FUND, TAX-EXEMPT FUND, CONNECTICUT MUNICIPAL
MONEY MARKET FUND AND MASSACHUSETTS MUNICIPAL MONEY MARKET FUND. See "Investment
Objectives and Policies" and "Investments, Strategies and Risks." Prospectuses
for Galaxy's INSTITUTIONAL TREASURY MONEY MARKET, EQUITY VALUE, EQUITY GROWTH,
EQUITY INCOME, INTERNATIONAL EQUITY, SMALL COMPANY EQUITY, ASSET ALLOCATION,
SMALL CAP VALUE, GROWTH AND INCOME, SHORT-TERM BOND, INTERMEDIATE GOVERNMENT
INCOME, HIGH QUALITY BOND, CORPORATE BOND, TAX-EXEMPT BOND, NEW YORK MUNICIPAL
BOND, CONNECTICUT MUNICIPAL BOND, MASSACHUSETTS MUNICIPAL BOND AND RHODE ISLAND
MUNICIPAL BOND FUNDS may be obtained by calling 1-800-628-0414.

Q: Who advises the Funds?

A: The Funds are advised by Fleet Investment Advisors Inc. ("Fleet"), an
indirect wholly-owned subsidiary of Fleet Financial Group, Inc. Fleet Financial
Group, Inc. is a financial services company with total assets as of December 31,
1996 of approximately $85 billion. See "Management of the Funds--Investment
Adviser."

Q: What advantages do the Funds offer?

A: The Funds offer investors the opportunity to invest in a variety of
professionally managed investment portfolios without having to become involved
with the detailed accounting and safekeeping procedures normally associated with
direct investments in securities. The Funds also offer the economic advantages
of block trading in portfolio securities and the availability of a family of
twenty-four mutual funds should your investment goals change.

Q: How to buy and redeem shares?

A: The Funds are distributed by First Data Distributors, Inc. Retail Shares
may be purchased on behalf of customers ("Customers") of FIS Securities, Inc.,
Fleet Brokerage Securities, Inc., Fleet Securities, Inc., Fleet Enterprises,
Inc., Fleet Financial Group, Inc., its affiliates, their correspondent banks and
other qualified banks, savings and loan associations and broker/dealers
("Institutions"). Retail Shares may also be sold to individuals, corporations or
other entities, who submit a purchase application to Galaxy, purchasing either
for their own accounts or for the accounts of others ("Direct Investors").
Retail B Shares of the Money Market Fund carry higher operating expenses than
other Retail Shares and may not be appropriate for investors that do not plan to
exchange into Retail B Shares of certain of Galaxy's non-money market
portfolios. Retail B Shares are also subject to a contingent deferred sales
charge. Six years after the date of purchase, Retail B Shares of the Money
Market Fund will automatically convert to Retail A Shares. Purchase and
redemption information for both Direct Investors and Customers is provided below
under "How to Purchase and Redeem Shares." Except as provided below under
"Investor Programs", the minimum initial investment for Direct Investors and the
minimum initial aggregate investment for Institutions purchasing on behalf of
their Customers is $2,500. The minimum investment for subsequent purchases is
$100. There are no minimum investment requirements for investors participating
in the Automatic Investment Program described below. Institutions may require
Customers to maintain certain minimum investments in Retail Shares of the Funds.

3
<PAGE> 15

Q: When are dividends paid?

A: Dividends from net investment income of each Fund are declared daily and
paid monthly. Net realized capital gains of each Fund, if any, are distributed
at least annually. See "Dividends and Distributions."

Q:What potential risks are presented by the Funds' investment practices?

A: The Tax-Exempt Fund, Connecticut Municipal Money Market Fund and
Massachusetts Municipal Money Market Fund invest primarily in Municipal
Securities, Connecticut Municipal Securities and Massachusetts Municipal
Securities, respectively. The achievement of the investment objective of each of
these Funds is dependent upon the ability of the issuers of such Municipal
Securities to meet their continuing obligations for the payment of principal and
interest. In addition, because the Connecticut Municipal Money Market and
Massachusetts Municipal Money Market Funds are non-diversified, their investment
returns may be dependent upon the performance of a smaller number or particular
type of securities relative to a diversified portfolio. Each Fund (other than
the Money Market Fund) may purchase eligible securities on a "when-issued" basis
and the Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds may purchase eligible securities on a "delayed settlement" basis.
In addition, the Tax-Exempt, Connecticut Municipal Money Market and
Massachusetts Municipal Money Market Funds may acquire "stand-by commitments"
with respect to Municipal Securities held in their portfolios. The value of a
Fund's portfolio securities will generally vary inversely with changes in
prevailing interest rates. See "Investment Objectives and Policies" and
"Investments, Strategies and Risks".

Q: What shareholder privileges are offered by the Funds?

A: Investors may exchange Retail A Shares of the Money Market, Government,
Tax-Exempt and U.S. Treasury Funds and Shares of the Connecticut Municipal Money
Market and Massachusetts Municipal Money Market Funds having a value of at least
$100 for Retail A Shares of any other portfolio offered by Galaxy or otherwise
advised by Fleet or its affiliates in which the investor has an existing
account. Retail B Shares of the Money Market Fund may be exchanged for Retail B
Shares of certain of Galaxy's non-money market portfolios. Galaxy offers
Individual Retirement Accounts ("IRAs"), which can be established by contacting
Galaxy's distributor. Retail Shares are also available for purchase through
Simplified Employee Pension Plan ("SEP"), Multi-Employee Retirement Plan
("MERP") and Keogh Plan accounts, which can be established directly with Fleet
Brokerage Securities, Inc. or its affiliates. Galaxy also offers an Automatic
Investment Program which allows Direct Investors to automatically invest in
Retail Shares of the Funds on a monthly or quarterly basis as well as other
shareholder privileges. See "Investor Programs."

4
<PAGE> 16

EXPENSE SUMMARY

Set forth below is a summary of (i) the shareholder transaction expenses
imposed by each Fund with respect to its Retail A Shares and/or Retail B Shares,
and (ii) the operating expenses for Retail A Shares and/or Retail B Shares of
each Fund. Shareholder Transaction Expenses are charges you pay when buying or
selling shares of the Funds. Annual Fund Operating Expenses are paid out of each
Fund's assets and include fees for portfolio management, maintenance of
shareholder accounts, general Fund administration, accounting and other
services. Examples based on the table are also shown.

<TABLE>
<CAPTION>
MONEY MONEY GOVERN- U.S. TAX- CONNECTICUT
MARKET MARKET MENT TREASURY EXEMPT MUNICIPAL MASSACHUSETTS
FUND FUND FUND FUND FUND MONEY MUNICIPAL
(RETAIL (RETAIL (RETAIL (RETAIL (RETAIL MARKET MONEY MARKET
A B A A A FUND FUND
SHAREHOLDER TRANSACTION EXPENSES SHARES) SHARES) SHARES) SHARES) SHARES) (SHARES) (SHARES)
- ------------------------------------- ------- ------- ------- -------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum Front-End Sales Charge
Imposed on Purchases (as a
percentage of offering price)...... None None None None None None None
Maximum Deferred Sales Charge (as a
percentage of offering price)...... None 5.00%(1) None None None None None
Sales Charge Imposed on Reinvested
Dividends.......................... None None None None None None None
Redemption Fees(2)................... None None None None None None None
Exchange Fees........................ None None None None None None None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
- -------------------------------------
Advisory Fees........................ .40% .40% .40% .40% .40% .40% .40%
12b-1 Fees........................... None .75%(3) None None None None None
Other Expenses (After Fee Waivers and
Expense Reimbursements)............ .39% .29% .36% .31% .28% .22% .22%
---- ---- ---- ---- ---- ---- ----
Total Fund Operating Expenses (After
Fee Waivers and Expense
Reimbursements).................... .79% 1.44% .76% .71% .68% .62% .62%
==== ==== ==== ==== ==== ==== ====
</TABLE>

- ------------
(1) This amount applies to redemptions during the first year. The charge
decreases to 4.00%, 3.00%, 3.00%, 2.00% and 1.00% for redemptions made
during the second though sixth years, respectively. Retail B Shares
automatically convert to Retail A Shares after six years. See "How to
Purchase and Redeem Shares--Applicable Sales Charge--Retail B Shares."

(2) Direct Investors are charged a $5.00 fee if redemption proceeds are paid by
wire.

(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the rules of the National
Association of Securities Dealers, Inc.

5
<PAGE> 17

EXAMPLE: YOU WOULD PAY THE FOLLOWING EXPENSES ON A $1,000 INVESTMENT, ASSUMING
(1) A 5% ANNUAL RETURN, AND (2) REDEMPTION OF YOUR INVESTMENT AT THE END OF THE
FOLLOWING PERIODS:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Fund (Retail A Shares).......................... $ 8 $25 $43 $ 96
Money Market Fund (Retail B Shares) Assuming complete
redemption at end of period(1)............................. $ 64 $76 $43 $ 96(2)
Assuming no redemption..................................... $ 14 $46 $77 $136(2)
Government Fund (Retail A Shares)............................ $ 8 $24 $41 $ 92
U.S. Treasury Fund (Retail A Shares)......................... $ 7 $22 $39 $ 86
Tax-Exempt Fund (Retail A Shares)............................ $ 7 $21 $37 $ 83
Connecticut Municipal Money Market Fund (Shares)............. $ 6 $19 $34 $ 76
Massachusetts Municipal Money Market Fund (Shares)........... $ 6 $19 $34 $ 76
</TABLE>

- ------------
(1) Assumes the deduction of the maximum applicable contingent deferred sales
charge.
(2) Based on the conversion of Retail B Shares to Retail A Shares after six
years.

The Expense Summary and Example are intended to assist investors in
understanding the costs and expenses that an investor in the Funds bears
directly or indirectly. The information contained in the Expense Summary and
Example with respect to Retail A Shares of the Money Market, Government, U.S.
Treasury and Tax-Exempt Funds and Shares of the Connecticut Municipal Money
Market and Massachusetts Municipal Money Market Funds is based on expenses
incurred by the Funds during the last fiscal year, restated to reflect the
expenses which each Fund expects to incur during the current fiscal year on its
Retail Shares. The information contained in the Expense Summary and Example with
respect to Retail B Shares of the Money Market Fund is based on expenses the
Fund expects to incur during the current fiscal year with respect to such
Shares. Without voluntary fee waivers and/or expense reimbursements by Fleet,
Other Expenses would be .29%, .32% and .43% and Total Fund Operating Expenses
would be .69%, .72% and .83% for Retail A Shares/Shares of the Tax-Exempt Fund,
Connecticut Municipal Money Market Fund and Massachusetts Municipal Money Market
Fund, respectively, and Other Expenses would be .54% and Total Fund Operating
Expenses would be 1.69% for Retail B Shares of the Money Market Fund. For more
complete descriptions of these costs and expenses, see "Management of the Funds"
and "Description of Galaxy and Its Shares" in this Prospectus, and the financial
statements and notes incorporated by reference into the respective Statements of
Additional Information relating to the Funds. Any fees that are charged by
affiliates of Fleet or any other Institution directly to their Customer account
for services related to an investment in Retail Shares of the Funds are in
addition to and not reflected in the fees and expenses described above.

THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES AND RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN.

6
<PAGE> 18

FINANCIAL HIGHLIGHTS

Prior to November 1, 1994, each of the Money Market, Government, U.S.
Treasury and Tax-Exempt Funds offered a single series of shares. As of such
date, the existing series of shares was designated as Retail Shares (now
designated Retail A Shares), and each of these Funds began offering a new series
of shares designated as Trust Shares. This Prospectus describes the Retail A
Shares of these Funds and the Retail B Shares of the Money Market Fund. Trust
Shares in these Funds are offered under a separate prospectus. Retail A Shares,
Retail B Shares and Trust Shares in a Fund represent equal pro rata interests in
the Fund, except that (i) Retail A Shares of a Fund bear the expenses incurred
under Galaxy's Shareholder Services Plan at an annual rate of up to .10% of the
average daily net asset value of the Fund's outstanding Retail A Shares, (ii)
Retail B Shares of the Money Market Fund are subject to a contingent deferred
sales charge and bear the expenses incurred under Galaxy's Distribution and
Services Plan at an annual rate of up to .75% of the average daily net asset
value of such Fund's outstanding Retail B Shares, and (iii) Retail A Shares,
Retail B Shares and Trust Shares bear differing transfer agency expenses. See
"Management of the Funds" and "Description of Galaxy and Its Shares."

The financial highlights presented below for the Money Market, Government,
U.S. Treasury and Tax-Exempt Funds have been audited by Coopers & Lybrand
L.L.P., Galaxy's independent accountants, whose report is contained in Galaxy's
Annual Report to Shareholders relating to the Funds for the fiscal year ended
October 31, 1996 (the "Annual Report"). Such financial highlights should be read
in conjunction with the financial statements contained in the Annual Report and
incorporated by reference into the Statement of Additional Information relating
to these Funds. During the periods shown, Retail B Shares were not offered by
the Money Market Fund. More information about the performance of each of these
Funds is also contained in the Annual Report, which may be obtained without
charge by contacting Galaxy at its telephone numbers or address provided above.

7
<PAGE> 19

MONEY MARKET FUND
(FOR A SHARE(1) OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,(1)
--------------------------------------------------------------------------------------------------
1996 1995
------- ------
RETAIL A RETAIL
SHARES SHARES 1994 1993 1992 1991 1990 1989 1988
---------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- -------- -------- -------- -------- -------- --------
Income from Investment
Operations:
Net investment
income(3,4)......... 0.05 0.05 0.03 0.03 0.04 0.06 0.08 0.09 0.07
Net realized and
unrealized
gain (loss) on
investments......... -- -- -- -- -- -- -- -- --
---------- -------- -------- -------- -------- -------- -------- -------- --------
Total from
Investment
Operations:..... 0.05 0.05 0.03 0.03 0.04 0.06 0.08 0.09 0.07
---------- -------- -------- -------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net
investment income... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07)
Dividends from net
realized
capital gains(5).... -- -- -- -- -- -- -- -- --
---------- -------- -------- -------- -------- -------- -------- -------- --------
Total Dividends... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07)
---------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in net
asset value........... -- -- -- -- -- -- -- -- --
---------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End
of Period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ======== ======== ======== ======== ========
Total Return(6)........ 4.78% 5.23% 3.35% 2.78% 4.07% 6.40% 8.11% 9.09% 7.08%
Ratios/Supplemental
Data:
Net Assets, End of
Period (000's)...... $1,592,312 $580,762 $797,399 $577,558 $590,911 $415,541 $444,303 $410,121 $210,712
Ratios to average net
assets:
Net investment income
including
reimbursement/waiver... 4.67% 5.12% 3.38% 2.74% 3.74% 6.24% 7.82% 8.73% 6.92%
Operating expenses
including
reimbursement/waiver... 0.77% 0.74% 0.64% 0.63% 0.58% 0.59% 0.59% 0.58% 0.59%
Operating expenses
excluding
reimbursement/waiver... 0.80% 0.76% 0.64% 0.63% 0.58% 0.59% 0.59% 0.59% 0.59%

PERIOD
ENDED
OCTOBER 31,
1987(1,2)
-----------
<S> <<C>
Net Asset Value,
Beginning of
Period................ $ 1.00
--------
Income from Investment
Operations:
Net investment
income(3,4)......... 0.06
Net realized and
unrealized
gain (loss) on
investments......... --
--------
Total from
Investment
Operations:..... 0.06
--------
Less Dividends:
Dividends from net
investment income... (0.06)
Dividends from net
realized
capital gains(5).... --
--------
Total Dividends... (0.06)
--------
Net increase (decrease)
in net
asset value........... --
--------
Net Asset Value, End
of Period........... $ 1.00
========
Total Return(6)........ 6.09%(7)
Ratios/Supplemental
Data:
Net Assets, End of
Period (000's)...... $ 192,400
Ratios to average net
assets:
Net investment income
including
reimbursement/waiver... 6.27%(8)
Operating expenses
including
reimbursement/waiver... 0.52%(8)
Operating expenses
excluding
reimbursement/waiver... 0.57%(8)
</TABLE>

- ------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) The Fund commenced operations on November 17, 1986.
(3) Net investment income per share before reimbursement/waiver of fees by Fleet
and/or the Fund's administrator for the year ended October 31, 1989 and the
period ended October 31, 1987 was $0.09 and $0.06, respectively.
(4) Net investment income per share for Retail Shares before
reimbursement/waiver of fees by Fleet and/or the Fund's administrator for
the fiscal years ended October 31, 1996 and 1995 was $0.05 and $0.05,
respectively.
(5) Represents less than $0.01 per share for the years 1992 and 1987.
(6) Total return for 1994 includes the effect of the voluntary capital
contribution of $1.6 million from Fleet in order to partially offset losses
realized on the sale of certain securities held by the Fund. Without this
capital contribution, the total return would have been 3.35%.
(7) Not Annualized.
(8) Annualized.

8
<PAGE> 20

GOVERNMENT FUND
(FOR A SHARE(1) OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,(1)
------------------------------------------------------------------------------------------------
1996 1995
------- -------
RETAIL A RETAIL
SHARES SHARES 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from
Investment Operations:
Net investment
income(3,4)......... 0.05 0.05 0.03 0.03 0.04 0.06 0.08 0.09 0.07
Net realized and
unrealized gain
(loss) on
investments......... -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from
Investment
Operations:... 0.05 0.05 0.03 0.03 0.04 0.06 0.08 0.09 0.07
-------- -------- -------- -------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net
investment income... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07)
Dividends from net
realized capital
gains(5)............ -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total
Dividends..... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in
net asset value....... -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ======== ========
Total Return(6)........ 4.72% 5.20% 3.49% 2.83% 4.19% 6.25% 8.10% 8.82% 6.91%
Ratios/Supplemental
Data:
Net Assets, End of
Period (000's)...... $326,411 $320,795 $759,106 $685,304 $636,338 $436,232 $335,443 $303,181 $141,545
Ratios to average net
assets:
Net investment income
including
reimbursement/waiver... 4.62% 5.11% 3.36% 2.79% 3.67% 6.05% 7.80% 8.59% 6.73%
Operating expenses
including
reimbursement/waiver... 0.75% 0.73% 0.54% 0.55% 0.53% 0.56% 0.56% 0.60% 0.60%
Operating expenses
excluding
reimbursement/waiver... 0.76% 0.74% 0.54% 0.55% 0.53% 0.56% 0.57% 0.61% 0.60%

PERIOD
ENDED
OCTOBER 31,
1987(1,2)
-----------
<S> <C<C>
Net Asset Value,
Beginning of Period... $ 1.00
Income from
Investment Operations:
Net investment
income(3,4)......... 0.06
Net realized and
unrealized gain
(loss) on
investments......... --
--------
Total from
Investment
Operations:... 0.06
--------
Less Dividends:
Dividends from net
investment income... (0.06)
Dividends from net
realized capital
gains(5)............ --
--------
Total
Dividends..... (0.06)
--------
Net increase (decrease)
in
net asset value....... --
--------
Net Asset Value, End of
Period................ $ 1.00
========
Total Return(6)........ 6.08%(7)
Ratios/Supplemental
Data:
Net Assets, End of
Period (000's)...... $ 178,100
Ratios to average net
assets:
Net investment income
including
reimbursement/waiver... 6.38%(8)
Operating expenses
including
reimbursement/waiver... 0.53%(8)
Operating expenses
excluding
reimbursement/waiver... 0.57%(8)
</TABLE>

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

(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) The Fund commenced operations on November 17, 1986.
(3) Net investment income per share before reimbursement/waiver of fees by Fleet
and/or the Fund's administrator for the fiscal years ended October 31, 1990
and 1989 and the period ended October 31, 1987 was $0.08, $0.09 and $0.06,
respectively.
(4) Net investment income per share for Retail Shares before
reimbursement/waiver of fees by Fleet and/or the Fund's administrator for
the fiscal years ended October 31, 1996 and 1995 was $0.05 and $0.05,
respectively.
(5) Represents less than $0.01 per share for years 1992, 1990, 1989, 1988 and
1987.
(6) Total return for 1994 includes the effect of the voluntary capital
contribution of $2.3 million from Fleet in order to partially offset losses
realized on the sale of certain securities held by the Fund. Without this
capital contribution, the total return would have been 3.49%.
(7) Not Annualized.
(8) Annualized.

9
<PAGE> 21

U.S. TREASURY FUND
(FOR A SHARE(1) OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,(1)
----------------------------------------------------
1996 1995 PERIOD
-------- -------- ENDED
RETAIL A RETAIL OCTOBER 31,
SHARES SHARES 1994 1993 1992 1991(1,2)
-------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(3).................. 0.05 0.05 0.03 0.03 0.04 0.04
Net realized and unrealized gain (loss) on
investments............................. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total from Investment
Operations:...................... 0.05 0.05 0.03 0.03 0.04 0.04
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income...... (0.05) (0.05) (0.03) (0.03) (0.04) (0.04)
Dividends from net realized capital
gains................................... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total Dividends.................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.04)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset
value..................................... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return(4)............................. 4.63% 4.99% 3.30% 2.75% 3.69% 4.51%(5)
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......... $443,230 $318,621 $466,993 $447,960 $482,416 $ 170,177
Ratios to average net assets:
Net investment income including
reimbursement/waiver.................... 4.53% 4.90% 3.24% 2.71% 3.51% 4.26%(6)
Operating expenses including
reimbursement/waiver.................... 0.69% 0.73% 0.56% 0.55% 0.49% 0.27%(6)
Operating expenses excluding
reimbursement/waiver.................... 0.69% 0.73% 0.56% 0.55% 0.57% 0.65%(6)
</TABLE>

- ------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated Retail Shares (now
designated Retail A Shares) and the Fund began issuing a second series of
shares designated as Trust Shares.
(2) The Fund commenced operations on January 22, 1991.
(3) Net investment income per share before waiver of fees by Fleet and/or the
Fund's administrator for the year ended October 31, 1992 and the period
ended October 31, 1991 was $0.04 and $0.04, respectively.
(4) Total return for 1994 includes the effect of the voluntary capital
contribution of $1 million from Fleet in order to partially offset losses
realized on the sale of certain securities held by the Fund. Without this
capital contribution, the total return would have been 3.30%.
(5) Not Annualized.
(6) Annualized.

10
<PAGE> 22

TAX-EXEMPT FUND
(FOR A SHARE(1) OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,(1)
-------------------------------------------------------------------------------------
1996 1995 PERIOD
-------- -------- ENDED
RETAIL A RETAIL OCTOBER 31,
SHARES SHARES 1994 1993 1992 1991 1990 1989 1988(1,2)
-------- -------- -------- -------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- -------- -------
Income from Investment
Operations:
Net investment
income(3,4).............. 0.03 0.03 0.02 0.02 0.03 0.04 0.05 0.06 0.02
Net realized and unrealized
gain (loss) on
investments.............. -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------
Total from Investment
Operations:.......... 0.03 0.03 0.02 0.02 0.03 0.04 0.05 0.06 0.02
-------- -------- -------- -------- -------- -------- -------- -------- -------
Less Dividends:
Dividends from net
investment income........ (0.03) (0.03) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.02)
Dividends from net realized
capital gains............ -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------
Total Dividends:....... (0.03) (0.03) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.02)
-------- -------- -------- -------- -------- -------- -------- -------- -------
Net increase (decrease) in
net asset value............ -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------
Net Asset Value, End of
Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ======== =======
Total Return................. 2.82% 3.16% 2.24% 1.93% 2.71% 4.51% 5.51% 5.96% 1.90%(5)
Ratios/Supplemental Data:
Net Assets, End of Period
(000's).................. $117,548 $127,056 $271,050 $301,399 $223,173 $194,098 $119,377 $131,358 $41,319
Ratios to average net assets:
Net investment income
including
reimbursement/waiver..... 2.78% 3.12% 2.12% 1.92% 2.64% 4.37% 5.37% 5.82% 5.42%(6)
Operating expenses
including
reimbursement/waiver..... 0.68% 0.68% 0.58% 0.59% 0.57% 0.60% 0.60% 0.58% 0.32%(6)
Operating expenses
excluding
reimbursement/waiver..... 0.69% 0.71% 0.58% 0.59% 0.57% 0.60% 0.61% 0.61% 0.72%(6)
</TABLE>

- ------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) The Fund commenced operations on June 23, 1988.
(3) Net investment income per share before reimbursement/waiver of fees by Fleet
and/or the Fund's administrator for the fiscal years ended October 31, 1990
and 1989 and the period ended October 31, 1988 was $0.05, $0.06 and $0.02,
respectively.
(4) Net investment income per share for Retail Shares before
reimbursement/waiver of fees by Fleet and/or the Fund's administrator for
the fiscal year ended October 31, 1996 and 1995 was $0.03, and $0.03,
respectively.
(5) Not Annualized.
(6) Annualized.

11
<PAGE> 23

The Connecticut Municipal Money Market Fund and Massachusetts Municipal
Money Market Fund commenced operations on October 4, 1993 and October 5, 1993,
respectively, as separate investment portfolios (the "Predecessor Connecticut
Fund" and the "Predecessor Massachusetts Fund," respectively, and collectively,
the "Predecessor Funds") of The Shawmut Funds, which was organized as a
Massachusetts business trust. On December 4, 1995, these Predecessor Funds were
reorganized as new investment portfolios of Galaxy. Prior to the reorganization,
the Predecessor Connecticut Fund offered and sold two series of shares of
beneficial interest, Investment Shares and Trust Shares. The shareholders of
both series received the same series of shares in the Connecticut Municipal
Money Market Fund in connection with the reorganization. Unlike the Trust
Shares, the Investment Shares of the Predecessor Connecticut Fund were similar
to the Shares of the Connecticut Municipal Money Market Fund. Accordingly, the
Trust Shares of the Predecessor Connecticut Fund have been excluded from the
financial highlights. Prior to the reorganization, the Predecessor Massachusetts
Fund offered and sold shares of beneficial interest that were similar to Shares
of the Massachusetts Municipal Money Market Fund.

The financial highlights presented below set forth certain information
concerning (i) the investment results of the Shares of the Connecticut Municipal
Money Market and Massachusetts Municipal Money Market Funds for the fiscal year
ended October 31, 1996 and (ii) the investment results of Investment Shares of
the Predecessor Funds (the series that is similar to the Shares of the
Connecticut Municipal Money Market and Massachusetts Municipal Money Market
Funds) for the fiscal years ended October 31, 1995 and October 31, 1994 and the
fiscal period ended October 31, 1993. The information about the Connecticut
Municipal Money Market and Massachusetts Municipal Money Market Funds for the
fiscal year ended October 31, 1996 has been audited by Coopers & Lybrand L.L.P.,
Galaxy's independent accountants, whose report is contained in Galaxy's Annual
Report to Shareholders relating to the Funds dated October 31, 1996 (the "Annual
Report"). The information about the Predecessor Connecticut Municipal Money
Market and Predecessor Massachusetts Municipal Money Market Funds for the fiscal
years ended October 31, 1995 and October 31, 1994 and the fiscal period ended
October 31, 1993 was audited by Price Waterhouse LLP, independent accountants
for the Predecessor Funds, whose report is contained in The Shawmut Funds'
Annual Report to Shareholders for the fiscal year ended October 31, 1995 (the
"Shawmut Annual Report"). The financial highlights should be read in conjunction
with the financial statements and notes thereto contained in the Annual Report
and the Shawmut Annual Report and incorporated by reference into the Statement
of Additional Information relating to the Connecticut Municipal Money Market and
Massachusetts Municipal Money Market Funds. More information about the
performance of the Funds is contained in the Annual Report which may be obtained
without charge by contacting Galaxy at its telephone numbers or address provided
above.

12
<PAGE> 24

CONNECTICUT MUNICIPAL MONEY MARKET FUND(1)
(FOR A SHARE(2) OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
YEAR ENDED OCTOBER 31, ENDED
---------------------------- OCTOBER 31,
1996(2) 1995 1994 1993(1)
-------- ------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------
Income from Investment Operations
Net investment income(3,4,5).................................. 0.03 0.03 0.02 --
Net realized and unrealized gain (loss) on investments........ -- -- -- --
-------- ------- ------- ------
Total from Investment Operations:(3)...................... 0.03 0.03 0.02 --
Less Dividends:
Dividends from net investment income(3)....................... (0.03) (0.03) (0.02) --
Dividends from net realized gains............................. -- -- -- --
-------- ------- ------- ------
Total Dividends:(3)....................................... (0.03) (0.03) (0.02) --
Net increase (decrease) in net asset value.................... -- -- -- --
-------- ------- ------- ------
Net Asset Value, End of Period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======
Total Return(6)........................................... 2.83% 2.94% 1.83% 0.14%(7)
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............................. $110,544 $71,472 $80,663 $ 6,582
Ratios to average net assets:
Net investment income including reimbursement/waiver.......... 2.79% 2.88% 1.99% 2.12%(8)
Operating expenses including reimbursement/waiver............. 0.64% 0.82% 0.78% 0.36%(8)
Operating expenses excluding reimbursement/waiver............. 0.73% 1.29% 1.50% 5.82%(8)
</TABLE>

- ------------
(1) The Fund commenced operations on October 4, 1993 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds.
(2) On December 4, 1995, the Predecessor Fund was reorganized as a new portfolio
of Galaxy with a single series of shares. Prior to the reorganization, the
Predecessor Fund offered and sold two series of shares, Investment Shares
and Trust Shares. In connection with the reorganization, the predecessor
shareholders exchanged shares of each series for Shares in the Galaxy
Connecticut Municipal Money Market Fund.
(3) Represents less than $0.01 per share for year 1993.
(4) Net investment income per share before reimbursement/waiver of fees by Fleet
and/or other parties for the fiscal year ended October 31, 1996 was $0.03.
(5) Net investment income per share before reimbursement/waiver of fees by other
parties for the year ended October 31, 1995 and 1994 and the period ended
October 31, 1993 was $0.03, $0.01 and $0.00, respectively, (unaudited).
(6) Calculation does not include sales charge for Investment Shares of the
Predecessor Fund.
(7) Not Annualized.
(8) Annualized.

13
<PAGE> 25

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND(1)
(FOR A SHARE(2) OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
PERIOD
YEAR ENDED OCTOBER 31, ENDED
--------------------------- OCTOBER 31,
1996(2) 1995(2) 1994(2) 1993(1,2)
------- ------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations
Net investment income(4,5,6)................................... 0.03 0.03 0.02 --
Net realized gain and unrealized (loss) on investments......... -- -- -- --
-------- ------- ------- ------
Total from Investment Operations:(4)....................... 0.03 0.03 0.02 --
-------- ------- ------- ------
Less Dividends:
Dividends from net investment income(4)........................ (0.03) (0.03) (0.02) --
Dividends from net realized gains.............................. -- -- -- --
-------- ------- ------- ------
Total Dividends:(4)........................................ (0.03) (0.03) (0.02) --
-------- ------- ------- ------
Net increase (decrease) in net asset value..................... -- -- -- --
-------- ------- ------- ------
Net Asset Value, End of Period................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======
Total Return............................................... 2.83% 3.21% 1.99% 0.12%(7)
Ratios/Supplemental Data:
Net Assets, End of Period (000's).............................. $47,066 $40,326 $31,516 $ 1,237
Ratios to average net assets:
Net investment income including reimbursement/waiver........... 2.78% 3.16% 2.00% 2.75%(8)
Operating expenses including reimbursement/waiver.............. 0.62% 0.57% 0.53% 0.11%(8)
Operating expenses excluding reimbursement/waiver.............. 0.83% 1.06% 1.21% 35.42%(8)
</TABLE>

- ------------
(1) The Fund commenced operations on October 5, 1993 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds.
(2) The Fund sold its shares without class designation.
(3) On December 4, 1995, the Predecessor Fund was reorganized as a new portfolio
of Galaxy. Prior to the reorganization, the Predecessor Fund offered and
sold one series of shares. In connection with the reorganization, the
shareholders of the Predecessor Fund exchanged shares for Shares in the
Fund.
(4) Represents less than $0.01 per share for year 1993.
(5) Net investment income per share before reimbursement/waiver of fees by other
parties for the period ended October 31, 1993 was $0.03.
(6) Net investment income per share before reimbursement/waiver of fees by other
parties for the fiscal year ended October 31, 1995 and 1994 and period ended
October 31, 1993 was $0.03, $0.01 and ($0.01), respectively (unaudited).
(7) Not Annualized.
(8) Annualized.

14
<PAGE> 26

INVESTMENT OBJECTIVES AND POLICIES

IN GENERAL

Fleet will use its best efforts to achieve each Fund's investment
objective, although such achievement cannot be assured. The investment objective
of a Fund may not be changed without the approval of the holders of a majority
of its outstanding Shares (as defined under "Miscellaneous"). Except as noted
herein under "Tax-Exempt Fund," "Connecticut Municipal Money Market Fund" and
"Massachusetts Municipal Money Market Fund" and below under "Investment
Limitations," a Fund's investment policies may be changed without shareholder
approval. An investor should not consider an investment in the Funds to be a
complete investment program. Each Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less in an effort to maintain a stable net
asset value per share of $1.00. The value of the Funds' portfolio securities
will generally vary inversely with changes in prevailing interest rates.

QUALITY REQUIREMENTS

Each Fund will purchase only those instruments which meet the applicable
quality requirements described below. The Money Market Fund will not purchase a
security (other than a U.S. Government security) unless the security or the
issuer with respect to comparable securities (i) is rated by at least two
nationally recognized statistical rating organizations ("Rating Agencies") (such
as Standard & Poor's Ratings Group ("S&P"), Moody's Investors Service, Inc.
("Moody's") or Fitch Investors Services, L.P. ("Fitch")) in the highest category
for short-term debt securities, (ii) is rated by the only Rating Agency that has
issued a rating with respect to such security or issuer in such Rating Agency's
highest category for short-term debt, or (iii) if not rated, the security is
determined to be of comparable quality. The Tax-Exempt Fund, Connecticut
Municipal Money Market Fund and Massachusetts Municipal Money Market Fund
(collectively, the "Tax-Exempt Money Market Funds") will not purchase a security
(other than a U.S. Government security) unless the security (i) is rated by at
least two such Rating Agencies in one of the two highest categories for short-
term debt securities, (ii) is rated by the only Rating Agency that has assigned
a rating with respect to such security in one of such Rating Agency's two
highest categories for short-term debt, or (iii) if not rated, the security is
determined to be of comparable quality. These rating categories are determined
without regard to sub-categories and gradations. The Funds will follow
applicable regulations in determining whether a security rated by more than one
Rating Agency can be treated as being in the highest or, with respect to the
Tax-Exempt Money Market Funds one of the two highest, short-term rating
categories. See "Investment Limitations" below.

Determinations of comparable quality shall be made in accordance with
procedures established by the Board of Trustees. Generally, if a security has
not been rated by a Rating Agency, Fleet will acquire the security if it
determines that the security is of comparable quality to securities that have
received the requisite ratings. For example, with respect to the Connecticut
Municipal Money Market and Massachusetts Municipal Money Market Funds, Fleet
will generally treat Connecticut Municipal Securities or Massachusetts Municipal
Securities, as the case may be, as eligible portfolio securities if the issuer
has received long-term bond ratings within the two highest rating categories by
a Rating Agency with respect to other bond issues. Fleet also considers other
relevant information in its evaluation of unrated short-term securities.

MONEY MARKET FUND

The Money Market Fund's investment objective is to seek as high a level of
current income as is consistent with liquidity and stability of principal. The
Fund seeks to achieve its objective by investing in

15
<PAGE> 27

"money market" instruments that are determined by Fleet to present minimal
credit risk and meet certain rating criteria. Instruments that may be purchased
by the Money Market Fund include obligations of domestic and foreign banks
(including negotiable certificates of deposit, non-negotiable time deposits,
savings deposits, and bankers' acceptances); commercial paper (including
variable and floating rate notes); obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; and repurchase agreements issued
by financial institutions such as banks and broker/dealers. These instruments
have remaining maturities of one year or less (except for certain variable and
floating rate notes and securities underlying certain repurchase agreements).
For more information, including applicable quality requirements, see "Quality
Requirements" above and "Investments, Strategies and Risks" below.

GOVERNMENT FUND

The Government Fund's investment objective is to seek as high a level of
current income as is consistent with liquidity and stability of principal. The
Fund seeks to achieve its objective by investing in obligations issued or
guaranteed as to payment of principal and interest by the U.S. Government, its
agencies or instrumentalities, and repurchase agreements relating to such
obligations. These instruments have remaining maturities of one year or less
(except for certain variable and floating rate notes and securities underlying
certain repurchase agreements). See "Investments, Strategies and Risks" below.

U.S. TREASURY FUND

The U.S. Treasury Fund's investment objective is to seek current income
with liquidity and stability of principal. The Fund seeks to achieve its
objective by investing in those securities issued or guaranteed as to principal
and interest by the U.S. Government or by agencies or instrumentalities thereof,
the interest income from which generally will not be subject to state income tax
by reason of current federal law. Such instruments may include, but are not
limited to, securities issued by the U.S. Treasury and by certain government
agencies or instrumentalities such as the Federal Home Loan Banks, Federal Farm
Credit Banks and the Student Loan Marketing Association. The Fund invests at
least 65% of its total assets in direct U.S. Government obligations.
Shareholders residing in a particular state that has an income tax law should
determine through consultation with their own tax advisers whether such interest
income, when distributed by the Fund, will be considered by the state to have
retained exempt status and whether the Fund's capital gain and other income, if
any, when so distributed will be subject to the state's income tax. See "Taxes."

Due to state income tax considerations, the Fund will not invest in other
securities, such as repurchase agreements and reverse repurchase agreements,
except under extraordinary circumstances such as when appropriate U.S.
Government obligations are unavailable.

Portfolio securities held by the Fund have remaining maturities of one year
or less (with certain exceptions). The Fund may also invest in certain variable
and floating rate instruments as described under "Investments, Strategies and
Risks--Money Market Instruments." For more information, including applicable
quality requirements, see "Quality Requirements" above and "Investments,
Strategies and Risks" below.

TAX-EXEMPT FUND

The Tax-Exempt Fund's investment objective is to seek as high a level of
current interest income exempt from federal income tax as is consistent with
stability of principal by investing substantially all of its assets in Municipal
Securities that present minimal credit risk and meet the rating criteria
described above under

16
<PAGE> 28

"Quality Requirements." The Fund is designed for investors in higher tax
brackets who are seeking a relatively high amount of tax-free income with
stability of principal and less price volatility than would normally be
associated with intermediate-term and longer-term Municipal Securities.

As a matter of fundamental policy that cannot be changed without the
requisite consent of the Fund's shareholders, the Fund will invest, except
during temporary defensive periods, at least 80% of its assets in Municipal
Securities. However, the Fund may from time to time, during temporary defensive
periods, hold uninvested cash reserves or invest in taxable obligations in such
proportions as, in Fleet's opinion, prevailing market or economic conditions
warrant. Uninvested cash reserves will not earn income. Such taxable instruments
may include (i) obligations of the U.S. Treasury; (ii) obligations of agencies
or instrumentalities of the U.S. Government; (iii) "money market" instruments
such as certificates of deposit, commercial paper, or bankers' acceptances; (iv)
repurchase agreements collateralized by U.S. Government obligations or other
"money market" instruments; or (v) securities issued by other investment
companies that invest in high quality, short-term Municipal Securities. For more
information including applicable quality requirements, see "Quality
Requirements" above and "Investments, Strategies and Risks" below.

In seeking to achieve its investment objective, the Tax-Exempt Fund may
invest in "private activity bonds" (see "Investments, Strategies and
Risks--Municipal Securities"), the interest on which may be subject to the
federal alternative minimum tax. Investments in such securities, however, will
not be treated as investments in Municipal Securities for purposes of the 80%
requirement mentioned above and, under normal market conditions, will not exceed
20% of the Fund's total assets when added together with any taxable investments
held by the Fund.

CONNECTICUT MUNICIPAL MONEY MARKET FUND

The Connecticut Municipal Money Market Fund's investment objective is to
provide current income exempt from federal regular income tax and the CSIT,
consistent with stability of principal and liquidity. The Fund attempts to
achieve this objective by investing in a portfolio of Connecticut Municipal
Securities (as defined below) with remaining maturities of thirteen months or
less at the time of purchase. As a matter of fundamental policy that cannot be
changed without shareholder approval, the Fund invests its assets so that at
least 80% of its annual interest income is exempt from federal regular income
tax or at least 80% of the total value of its assets is invested in obligations
the interest income from which is exempt from federal regular income tax.

Under normal circumstances, at least 65% of the value of the Fund's assets
will be invested in debt obligations issued by or on behalf of the State of
Connecticut, its political subdivisions, or public instrumentalities, state or
local authorities, districts or similar public entities created under
Connecticut law, and obligations of territories and possessions of the United
States and any political sub-division or financing authority of any of these,
the interest income from which is, in the opinion of qualified legal counsel,
exempt from both federal regular income tax and the CSIT ("Connecticut Municipal
Securities"). Examples of Connecticut Municipal Securities include, but are not
limited to, municipal commercial paper and other short-term notes; variable rate
demand notes; municipal bonds (including bonds having remaining maturities of
less than thirteen months without demand features); and tender option bonds. See
"Investments, Strategies and Risks" below.

From time to time on a temporary basis, when Fleet determines that market
conditions call for a temporary defensive posture, the Fund may invest in
short-term non-Connecticut municipal tax-exempt obligations or other taxable,
temporary investments. All temporary investments will satisfy the same credit

17
<PAGE> 29

quality standards as Connecticut Municipal Securities. See "Quality
Requirements" above. Temporary investments include: investments in other mutual
funds; notes issued by or on behalf of municipal or corporate issuers;
marketable obligations issued or guaranteed by the U.S. Government, its
agencies, or instrumentalities; other debt securities; commercial paper;
certificates of deposit of banks; and repurchase agreements. Although the Fund
is permitted to make taxable, temporary investments, there is no current
intention of generating income subject to federal regular income tax or the
CSIT.

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND

The Massachusetts Municipal Money Market Fund's investment objective is to
provide current income exempt from federal regular income tax and the income
taxes imposed by the Commonwealth of Massachusetts, consistent with stability of
principal and liquidity. The Fund attempts to achieve this objective by
investing in a portfolio of Massachusetts Municipal Securities (as defined
below) with remaining maturities of thirteen months or less at the time of
purchase. As a matter of fundamental policy that cannot be changed without
shareholder approval, the Fund invests its assets so that at least 80% of its
annual interest income is exempt from federal regular income tax or at least 80%
of the total value of its assets are invested in obligations the interest income
from which is exempt from federal regular income tax.

Under normal circumstances, at least 65% of the value of the Fund's assets
will be invested in debt obligations issued by or on behalf of the Commonwealth
of Massachusetts and its political subdivisions and financing authorities, and
obligations of other states, territories and possessions of the United States,
including the District of Columbia, and any political sub-division, or financing
authority of any of these, the interest income from which is, in the opinion of
qualified legal counsel, exempt from federal regular income tax and the income
taxes imposed by the Commonwealth of Massachusetts upon non-corporate taxpayers
("Massachusetts Municipal Securities"). Examples of Massachusetts Municipal
Securities include, but are not limited to, municipal commercial paper and other
short-term notes; variable rate demand notes; municipal bonds (including bonds
having remaining maturities of less than thirteen months without demand
features); and tender option bonds. See "Investments, Strategies and Risks"
below.

From time to time on a temporary basis, when Fleet determines that market
conditions call for a temporary defensive posture, the Fund may invest in
short-term non-Massachusetts municipal tax-exempt obligations or other taxable,
temporary investments. All temporary investments will satisfy the same credit
quality standards as Massachusetts Municipal Securities. See "Quality
Requirements" above. For a description of the types of temporary investments
permitted to be made by the Fund, see "Connecticut Municipal Money Market Fund"
above. Although the Fund is permitted to make taxable, temporary investments,
there is no current intention of generating income subject to federal regular
income tax or the income taxes imposed by the Commonwealth of Massachusetts.

INVESTMENTS, STRATEGIES AND RISKS

U.S. GOVERNMENT OBLIGATIONS

Obligations issued or guaranteed by the U.S. Government, its agencies and
instrumentalities include U.S. Treasury securities, which differ only in their
interest rates, maturities and time of issuance: Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one to
ten years; and Treasury Bonds generally have initial maturities of more than 10
years. Obligations of certain agencies and instrumentalities of the U.S.
Government, such as the Government National Mortgage Association, are

18
<PAGE> 30

supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal Home Loan Banks, are supported by the right of the issuer
to borrow from the Treasury; others, such as those of the Federal National
Mortgage Association, are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; still others, such as those of
the Student Loan Marketing Association, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored instrumentalities if it
is not obligated to do so by law. Some U.S. Government obligations may be issued
as variable or floating rate instruments.

Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal.
However, due to fluctuations in interest rates, the market value of such
securities may vary during the period a shareholder owns Retail Shares of the
Funds.

MONEY MARKET INSTRUMENTS

"Money Market" instruments include bank obligations and commercial paper.

Bank obligations include bankers' acceptances, negotiable certificates of
deposit, and non-negotiable time deposits issued for a definite period of time
and earning a specified return by a U.S. bank that is a member of the Federal
Reserve System or is insured by the Federal Deposit Insurance Corporation
("FDIC"), or by a savings and loan association or savings bank that is insured
by the FDIC. Bank obligations also include U.S. dollar-denominated obligations
of foreign branches of U.S. banks or of U.S. branches of foreign banks, all of
the same type as domestic bank obligations. Investments in bank obligations are
limited to the obligations of financial institutions having more than $1 billion
in total assets at the time of purchase. Investments in non-negotiable time
deposits are limited to no more than 5% of the Money Market Fund's total assets
at the time of purchase.

Domestic and foreign banks are subject to extensive but different
government regulations which may limit the amount and types of their loans and
the interest rates that may be charged. In addition, the profitability of the
banking industry is largely dependent upon the availability and cost of funds to
finance lending operations and the quality of underlying bank assets.

Investments in obligations of foreign branches of U.S. banks and of U.S.
branches of foreign banks may subject a Fund to additional investment risks,
including future political and economic developments, the possible imposition of
withholding taxes on interest income, possible seizure or nationalization of
foreign deposits, the possible establishment of exchange controls, or the
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest on such obligations. In addition, foreign
branches of U.S. banks and U.S. branches of foreign banks may be subject to less
stringent reserve requirements and to different accounting, auditing, reporting,
and recordkeeping standards than those applicable to domestic branches of U.S.
banks. Investments in the obligations of U.S. branches of foreign banks or
foreign branches of U.S. banks will be made only when Fleet believes that the
credit risk with respect to the instrument is minimal.

Commercial paper may include securities issued by corporations without
registration under the Securities Act of 1933, as amended, (the "1933 Act") in
reliance on the so-called "private placement" exemption in Section 4(2)
("Section 4(2) Paper"). Section 4(2) Paper is restricted as to disposition under
the federal securities laws in that any resale must similarly be made in an
exempt transaction. Section 4(2) Paper is normally resold to other institutional
investors through or with the assistance of investment dealers which make a
market in Section 4(2) Paper, thus providing liquidity. The Money Market and
each Tax-Exempt Money Market Fund may also purchase Rule 144A securities. See
"Investment Limitations" below.

19
<PAGE> 31

MUNICIPAL SECURITIES

Municipal Securities are generally issued to finance public works, such as
airports, bridges, highways, housing, health-related entities,
transportation-related projects, educational programs, water and pollution
control, and sewer works. They are also issued to repay outstanding obligations,
to raise funds for general operating expenses, and to make loans to other public
institutions and for other facilities. Municipal Securities include private
activity bonds issued by or on behalf of public authorities to provide financing
aid to acquire sites or construct and equip facilities for privately or publicly
owned corporations. The availability of this financing encourages these
corporations to locate within the sponsoring communities and thereby increases
local employment.

The two principal classifications of Municipal Securities that may be held
by the Tax-Exempt Money Market Funds are "general obligation" securities and
"revenue" securities. General obligation securities are secured by the issuer's
pledge of its full faith, credit, and taxing power for the payment of principal
and interest. Revenue securities are payable only from the revenues derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source such as the
user of the facility being financed. Private activity bonds are in most cases
revenue securities and are not payable from the unrestricted revenues of the
issuer. Consequently, the credit quality of private activity revenue bonds is
usually directly related to the credit standing of the corporate user of the
facility involved.

The Funds' portfolios may also include "moral obligation" securities, which
are normally issued by special-purpose public authorities. If the issuer of
moral obligation securities is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment, but not a legal obligation, of the state or municipality which
created the issuer. There is no limitation on the amount of moral obligation
securities that may be held by the Funds.

Municipal Securities may include variable rate demand notes, which are
long-term Municipal Securities that have variable or floating interest rates and
provide a Fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at par. The
interest rate may float or be adjusted at regular intervals (ranging from daily
to annually), and is normally based on an applicable interest index or another
published interest rate or interest rate index. Most variable rate demand notes
allow a Fund to demand the repurchase of the security on not more than seven
days prior notice. Other notes only permit a Fund to tender the security at the
time of each interest rate adjustment or at other fixed intervals. The
Tax-Exempt Money Market Funds treat variable rate demand notes as maturing on
the later of the date of the next interest rate adjustment or the date on which
a Fund may next tender the security for repurchase.

Municipal Securities purchased by the Tax-Exempt Money Market Funds in some
cases may be insured as to the timely payment of principal and interest. There
is no guarantee, however, that the insurer will meet its obligations in the
event of a default in payment by the issuer. In other cases, Municipal
Securities may be backed by letters of credit or guarantees issued by domestic
or foreign banks or other financial institutions which are not subject to
federal deposit insurance. Adverse developments affecting the banking industry
generally or a particular bank or financial institution that has provided its
credit or guarantee with respect to a Municipal Security held by a Tax-Exempt
Money Market Fund, including a change in the credit quality of any such bank or
financial institution, could result in a loss to the Fund and adversely affect
the value of its shares. As described above under "Money Market Instruments,"
letters of credit and guarantees issued by foreign banks and financial
institutions involve certain risks in addition to those of similar instruments
issued by domestic banks and financial institutions.

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TENDER OPTION BONDS

The Tax-Exempt Money Market Funds may purchase tender option bonds and
similar securities. A tender option bond generally has a long maturity and bears
interest at a fixed rate substantially higher than prevailing short-term
tax-exempt rates, and is coupled with an agreement by a third party, such as a
bank, broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, usually upon not more than
seven days notice or at periodic intervals, to tender their securities to the
institution and receive the face value of the securities. In providing the
option, the financial institution receives a fee that reduces the fixed rate of
the underlying bond and results in a Fund effectively receiving a demand
obligation that bears interest at the prevailing short-term tax-exempt rate.
Fleet will monitor, on an ongoing basis, the creditworthiness of the issuer of
the tender option bond, the financial institution providing the option, and any
custodian holding the underlying long-term bond. The bankruptcy, receivership,
or default of any of the parties to the tender option bond will adversely affect
the quality and marketability of the security.

VARIABLE AND FLOATING RATE INSTRUMENTS

Securities purchased by the Funds may include variable and floating rate
instruments. Variable rate instruments provide for periodic adjustments in the
interest rate. Floating rate instruments provide for automatic adjustment of the
interest rate whenever some other specified interest rate changes. Some variable
and floating rate obligations are direct lending arrangements between the
purchaser and the issuer and there may be no active secondary market. However,
in the case of variable and floating rate obligations with a demand feature, a
Fund may demand payment of principal and accrued interest at a time specified in
the instrument or may resell the instrument to a third party. In the event an
issuer of a variable or floating rate obligation defaulted on its payment
obligation, a Fund might be unable to dispose of the note because of the absence
of a secondary market and could, for this or other reasons, suffer a loss to the
extent of the default. Variable or floating rate instruments acquired by the
Government and U.S. Treasury Funds are similar in form, but, because they would
be issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, may have a more active secondary market. Substantial holdings
of variable and floating rate instruments could reduce portfolio liquidity.

REPURCHASE AND REVERSE REPURCHASE AGREEMENTS

Each Fund, except the U.S. Treasury Fund, may purchase portfolio securities
subject to the seller's agreement to repurchase them at a mutually specified
date and price ("repurchase agreements"). Repurchase agreements will only be
entered into with financial institutions such as banks and broker/dealers that
are deemed to be creditworthy by Fleet under guidelines approved by Galaxy's
Board of Trustees. No Fund will enter into repurchase agreements with Fleet or
any of its affiliates. Unless a repurchase agreement has a remaining maturity of
seven days or less or may be terminated on demand upon notice of seven days or
less, the repurchase agreement will be considered an illiquid security and will
be subject to the 10% limit described in Investment Limitations Nos. 5 and 8
under "Investment Limitations" below with respect to the Money Market,
Government, U.S. Treasury and Tax-Exempt Funds, and to the 10% limit described
under "Investment Limitations" below with respect to the Connecticut Municipal
Money Market and Massachusetts Municipal Money Market Funds.

The seller under a repurchase agreement will be required to maintain the
value of the securities which are subject to the agreement and held by a Fund at
not less than the agreed upon repurchase price. If the seller defaulted on its
repurchase obligation, the Fund holding such obligation would suffer a loss to
the extent that the proceeds from a sale of the underlying securities (including
accrued interest) were less than the

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repurchase price (including accrued interest) under the agreement. In the event
that such a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by a Fund might be delayed pending court action.
Income on repurchase agreements is taxable. The Tax-Exempt Fund's investments in
repurchase agreements will be, under normal market conditions, subject to such
Fund's 20% overall limit on taxable obligations.

The Money Market and Government Funds may also borrow funds for temporary
purposes by selling portfolio securities to financial institutions such as banks
and broker/dealers and agreeing to repurchase them at a mutually specified date
and price ("reverse repurchase agreements"). A reverse repurchase agreement
involves the risk that the market value of the securities sold by a Fund may
decline below the repurchase price. A Fund would pay interest on amounts
obtained pursuant to a reverse repurchase agreement.

SECURITIES LENDING--MONEY MARKET AND GOVERNMENT FUNDS

The Money Market and Government Funds may lend their portfolio securities
to financial institutions such as banks and broker/dealers in accordance with
their investment limitations. Such loans would involve risks of delay in
receiving additional collateral or in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. Any portfolio securities purchased with cash collateral would also
be subject to possible depreciation. Loans will generally be short-term, and
will be made only to borrowers deemed by Fleet to be of good standing and only
when, in Fleet's judgment, the income to be earned from the loan justifies the
attendant risks. The Funds currently intend to limit the lending of their
portfolio securities so that, at any given time, securities loaned by a Fund
represent not more than one-third of the value of its total assets.

GUARANTEED INVESTMENT CONTRACTS--MONEY MARKET FUND

The Money Market Fund may invest in guaranteed investment contracts
("GICs") issued by United States insurance companies. Pursuant to such
contracts, the Fund makes cash contributions to a deposit fund of the insurance
company's general account. The insurance company then credits to the Fund
payments at negotiated, floating or fixed interest rates. A GIC is a general
obligation of the issuing insurance company and not a separate account. The
purchase price paid for a GIC becomes part of the general assets of the
insurance company, and the contract is paid from the company's general assets.
The Fund will only purchase GICs that are issued or guaranteed by insurance
companies that at the time of purchase are rated in accordance with the
applicable quality requirements described above under "Quality Requirements."
GICs are considered illiquid securities and will be subject to the Fund's 10%
limitation on illiquid investments, unless there is an active and substantial
secondary market for the particular instrument and market quotations are readily
available.

ASSET-BACKED SECURITIES--MONEY MARKET FUND

The Money Market Fund may purchase asset-backed securities which represent
a participation in, or are secured by and payable from, a stream of payments
generated by particular assets, most often a pool of assets similar to one
another, such as motor vehicle receivables and credit card receivables. The Fund
will only purchase asset-backed securities that meet the applicable quality
requirements described above under "Quality Requirements." See "Asset-Backed
Securities" in the Statement of Additional Information.

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INVESTMENT COMPANY SECURITIES--TAX-EXEMPT MONEY MARKET FUNDS

The Tax-Exempt Money Market Funds may invest in securities issued by other
investment companies limited, with respect to the Tax-Exempt Fund, to open-end
investment companies that invest in high quality, short-term Municipal
Securities, that meet the applicable quality requirements described above under
"Quality Requirements" and that determine their net asset value per share based
on the amortized cost or penny-rounding method. Investments in other investment
companies will cause a Fund (and, indirectly, the Fund's shareholders) to bear
proportionately the costs incurred in connection with the investment companies'
operations. Such securities may be acquired by a Fund within the limits
prescribed by the 1940 Act. Each Fund currently intends to limit its investments
in other investment companies so that, as determined immediately after a
securities purchase is made: (a) not more than 5% of the value of its total
assets will be invested in the securities of any one investment company; (b) not
more than 10% of the value of its total assets will be invested in the aggregate
in securities of investment companies as a group; and (c) not more than 3% of
the outstanding voting stock of any one investment company will be owned by the
Fund. A Fund will invest in other investment companies primarily for the purpose
of investing its short-term cash which has not as yet been invested in other
portfolio instruments. However, from time to time, on a temporary basis, the
Connecticut Municipal Money Market Fund and Massachusetts Municipal Money Market
Fund may invest exclusively in one other investment company managed similarly to
the particular Fund.

OTHER INVESTMENT POLICIES OF THE TAX-EXEMPT MONEY MARKET FUNDS

Each of the Tax-Exempt Money Market Funds may purchase Municipal Securities
on a "when-issued" basis. The Connecticut Municipal Money Market and
Massachusetts Municipal Money Market Funds may also purchase Municipal
Securities on a "delayed settlement" basis. When-issued transactions, which
involve a commitment by a Fund to purchase particular securities with payment
and delivery taking place at a future date (perhaps one or two months later)
permit the Fund to lock in a price or yield on a security it intends to
purchase, regardless of future changes in interest rates. Delayed settlement
describes settlement of a securities transaction in the secondary market
sometime in the future. When-issued and delayed settlement transactions involve
the risk, however, that the yield or price obtained in a transaction may be less
favorable than the yield or price available in the market when the securities
delivery takes place. It is expected that, absent unusual market conditions,
commitments by the Fund to purchase securities on a when-issued or delayed
settlement basis will not exceed 25% of the value of its total assets. These
transactions will not be entered into for speculative purposes, but only in
furtherance of a Fund's investment objective.

In addition, each of the Tax-Exempt Money Market Funds may acquire
"stand-by commitments" with respect to Municipal Securities held by it. Under a
stand-by commitment, a dealer agrees to purchase at a Fund's option specified
Municipal Securities at a specified price. Each Fund will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes. Stand-by commitments
acquired by a Fund would be valued at zero in determining the Fund's net asset
value. The default or bankruptcy of a securities dealer giving such a commitment
would not affect the quality of the Municipal Securities purchased by a Fund.
However, without a stand-by commitment, these securities could be more difficult
to sell. A Fund will enter into stand-by commitments only with those dealers
whose credit Fleet believes to be of high quality.

Although the Tax-Exempt Fund does not presently intend to do so on a
regular basis, it may invest more than 25% of its total assets in Municipal
Securities the interest on which is paid solely from revenues of similar
projects. To the extent that the Fund invests 25% or more of its total assets in
Municipal Securities payable

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<PAGE> 35

from revenues on similar projects, the Fund will be subject to the peculiar
risks presented by such projects to a greater extent than it would be if its
assets were not so invested.

The Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds are non-diversified investment portfolios. As such, there is no
limit on the percentage of assets which can be invested in any single issuer. An
investment in one of these Funds, therefore, will entail greater risk than would
exist in a diversified investment portfolio because the higher percentage of
investments among fewer issuers may result in greater fluctuation in the total
market value of the Fund's portfolio. Any economic, political, or regulatory
developments affecting the value of the securities in a Fund's portfolio will
have a greater impact on the total value of the portfolio than would be the case
if the portfolio was diversified among more issuers. The Connecticut Municipal
Money Market and Massachusetts Municipal Money Market Funds intend to comply
with Subchapter M of the Internal Revenue Code. This undertaking requires that
at the end of each quarter of a Fund's taxable year, with regard to at least 50%
of its total assets, no more than 5% of its total assets are invested in the
securities of a single issuer; beyond that, no more than 25% of its total assets
are invested in the securities of a single issuer.

CERTAIN INVESTMENT POLICIES OF THE U.S. TREASURY AND GOVERNMENT FUNDS

The U.S. Treasury and Government Funds may purchase securities on a
"when-issued" basis, as described under "Other Investment Policies of the
Tax-Exempt Money Market Funds."

CONNECTICUT INVESTMENT RISKS

Yields on Connecticut Municipal Securities that may be purchased by the
Connecticut Municipal Money Market Fund depend on a variety of factors,
including: the general conditions of the short-term municipal note market and of
the municipal bond market; the size and maturity of the particular offering; the
maturity of the obligations; and the rating of the issue. Further, any adverse
economic conditions or developments affecting the State of Connecticut or its
municipalities could impact the Fund's portfolio. The ability of the Connecticut
Municipal Money Market Fund to achieve its investment objective also depends on
the continuing ability of the issuers of Connecticut Municipal Securities and
demand features, or the issuers or guarantors of either, to meet their
obligations for the payment of interest and principal when due.

Investing in Connecticut Municipal Securities which meet the Connecticut
Municipal Money Market Fund's quality standards may not be possible if the State
of Connecticut or its municipalities do not maintain their current credit
ratings. An expanded discussion of the current economic risks associated with
the purchase of Connecticut Municipal Securities is contained in the Statement
of Additional Information.

The State of Connecticut and various of its municipalities are challenged
by financial difficulties. For the four fiscal years ended June 30, 1991, the
General Fund experienced operating deficits but, for the six fiscal years ended
June 30, 1997, the General Fund recorded operating surpluses. General Fund
expenditures and revenues are budgeted to be approximately $9,550,000,000 and
$9,700,000,000 for the 1997-98 and 1998-99 fiscal years, respectively. The
State's budgeted expenditures have more than doubled from approximately
$4,300,000,000 for the 1986-1987 fiscal year to approximately $9,700,000,000 for
the 1998-99 fiscal year. In 1991, legislation was enacted by the State
authorizing the State Treasurer to issue Economic Recovery Notes to fund the
General Fund's accumulated deficit. The notes were to be payable no later than
June 30, 1996, but payment of the remaining notes scheduled to occur during the
1995-96 fiscal year was rescheduled to be made over the four fiscal years ending
June 30, 1999. As a result of recurring budgetary problems, Connecticut's
general obligation bonds were downgraded by S&P from AA+ to AA in April 1990
and, in September 1991, to AA-; by Moody's from Aa1 to Aa in April 1990; and by
Fitch from AA+ to AA in March 1995.

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<PAGE> 36

Certain Connecticut municipalities have experienced severe fiscal
difficulties and have reported operating and accumulated deficits in recent
years. The most notable of them is the City of Bridgeport, which filed a
bankruptcy petition on June 7, 1991. The State opposed the petition. The United
States Bankruptcy Court for the District of Connecticut held that Bridgeport had
authority to file such a petition but that its petition should be dismissed on
the grounds that Bridgeport was not insolvent when the petition was filed.
Regional economic difficulties, reductions in revenues, and increased expenses
could lead to further fiscal problems for the State and its political
subdivisions, authorities, and agencies. This could result in declines in the
value of their outstanding obligations, increases in their future borrowing
costs, and impairment of their ability to pay debt service on their obligations.

MASSACHUSETTS INVESTMENT RISKS

The Massachusetts Municipal Money Market Fund's ability to achieve its
investment objective depends on the ability of issuers of Massachusetts
Municipal Securities to meet their continuing obligations to pay principal and
interest. Since the Fund invests primarily in Massachusetts Municipal
Securities, the value of the Fund's Shares may be especially affected by factors
pertaining to the economy of Massachusetts and other factors specifically
affecting the ability of issuers of Massachusetts Municipal Securities to meet
their obligations. As a result, the value of the Fund's Shares may fluctuate
more widely than the value of shares of a portfolio investing in securities of
issuers in a number of different states. The ability of Massachusetts and its
political subdivisions to meet their obligations will depend primarily on the
availability of tax and other revenues to those governments and on their fiscal
conditions generally. The amount of tax and other revenues available to
governmental issuers of Massachusetts Municipal Securities may be affected from
time to time by economic, political and demographic conditions within
Massachusetts. In addition, constitutional or statutory restrictions may limit a
government's power to raise revenues or increase taxes. The availability of
federal, state and local aid to an issuer of Massachusetts Municipal Securities
may also affect that issuer's ability to meet it's obligations. Payments of
principal and interest on limited obligation bonds will depend on the economic
condition of the facility or specific revenue source from whose revenues the
payments will be made, which in turn could be affected by economic, political
and demographic conditions in Massachusetts or a particular locality. Any
reduction in the actual or perceived ability of an issuer of Massachusetts
Municipal Securities to meet its obligations (including a reduction in the
rating of its outstanding securities) would likely affect adversely the market
value and marketability of its obligations and could affect adversely the values
of other Massachusetts Municipal Securities as well.

INVESTMENT LIMITATIONS

The following investment limitations are matters of fundamental policy and
may not be changed with respect to a Fund without the affirmative vote of the
holders of a majority of its outstanding shares (as defined under
"Miscellaneous"). Other investment limitations that also cannot be changed
without such a vote of shareholders are contained in the respective Statements
of Additional Information under "Investment Objectives and Policies."

The Money Market, Government, U.S. Treasury and Tax-Exempt Funds may not:

1. Make loans, except that (i) each Fund may purchase or hold debt
instruments in accordance with its investment objective and policies, (ii)
each Fund, except the U.S. Treasury Fund, may enter into repurchase
agreements with respect to portfolio securities, and (iii) the Money Market
and Government Funds may lend portfolio securities against collateral
consisting of cash or securities that are consistent

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<PAGE> 37

with the Fund's permitted investments, where the value of the collateral is
equal at all times to at least 100% of the value of the securities loaned.

2. Invest in obligations having remaining maturities in excess of one
year, except that certain variable and floating rate instruments and
securities subject to repurchase agreements may bear longer maturities
(provided certain provisions are met).

3. Purchase securities of any one issuer, other than U.S. Government
obligations, if immediately after such purchase more than 5% of the value
of its total assets would be invested in the securities of such issuer (the
"5% limitation"), except that up to 25% of the value of its total assets
may be invested without regard to this limitation.

In addition, the Tax-Exempt Fund may not:

4. Borrow money or issue senior securities, except that the Fund may
borrow from banks for temporary purposes, and then in amounts not in excess
of 10% of the value of its total assets at the time of such borrowing; or
mortgage, pledge, or hypothecate any assets except in connection with any
such borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of its total assets at the time of
such borrowing. The Fund will not purchase any portfolio securities while
borrowings in excess of 5% of its total assets are outstanding.

5. Knowingly invest more than 10% of the value of its total assets in
illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days and other securities which are not
readily marketable.

6. Purchase any securities that would cause 25% or more of the value
of its total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry; provided, however, that there is no
limitation with respect to securities issued or guaranteed by the United
States, any state or territory, any possession of the U.S. Government, the
District of Columbia, or any of their authorities, agencies,
instrumentalities, or political subdivisions.

In addition, the Money Market, Government and U.S. Treasury Funds may not:

7. Borrow money or issue senior securities, except from domestic banks
for temporary purposes and then in amounts not in excess of 10% of the
value of a Fund's total assets at the time of such borrowing (provided that
the Money Market and Government Funds may borrow pursuant to reverse
repurchase agreements in accordance with their investment policies and in
amounts not in excess of 10% of the value of their respective total assets
at the time of such borrowing); or mortgage, pledge, or hypothecate any
assets except in connection with any such borrowing and in amounts not in
excess of the lesser of the dollar amounts borrowed or 10% of the value of
a Fund's total assets at the time of such borrowing. A Fund will not
purchase securities while borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding.

8. Invest more than 10% of the value of a Fund's total assets in
illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess
of seven days, restricted securities, non-negotiable time deposits and
other securities which are not readily marketable.

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<PAGE> 38

In addition, the Municipal Money Market and Massachusetts Municipal Money
Market Funds may not:

9. Borrow money directly or pledge securities except, under certain
circumstances, each Fund may borrow up to one-third of the value of its
total assets and pledge up to 10% of the value of its total assets to
secure such borrowings.

The following investment limitation with respect to the Municipal Money
Market and Massachusetts Municipal Money Market Funds may be changed by Galaxy's
Board of Trustees without shareholder approval (shareholders will be notified
before any material change in this limitation becomes effective):

10. The Connecticut Municipal Money Market and Massachusetts Municipal
Money Market Funds will not invest more than 5% of their respective total
assets in industrial development bonds or other Municipal Securities when
the payment of principal and interest is the responsibility of companies
(or guarantors, where applicable) with less than three years of continuous
operations, including the operation of any predecessor.

The Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds may purchase restricted securities, which are any securities in
which a Fund may otherwise invest pursuant to its investment objective and
policies but which are subject to restrictions on resale under federal
securities laws. Certain restricted securities may be considered liquid pursuant
to guidelines established by the Board of Trustees. To the extent restricted
securities are deemed illiquid, each Fund will limit their purchase, together
with other securities considered to be illiquid, to 10% of its net assets.

In addition to the foregoing limitations, (a) the Money Market, Government
and U.S. Treasury Funds may not purchase securities that would cause 25% or more
of the value of a Fund's total assets at the time of purchase to be invested in
the securities of one or more issuers conducting their principal business
activities in the same industry; provided, however, that (i) there is no
limitation with respect to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or, with respect to the Money
Market Fund by domestic banks or by U.S. branches of foreign banks that are
subject to the same regulation as domestic banks; (ii) with respect to the Money
Market Fund, wholly-owned finance companies will be considered to be in the
industries of their parents if their activities are primarily related to
financing the activities of the parents; and (iii) with respect to the Money
Market Fund, utilities will be classified according to their services (for
example, gas, gas transmission, electric and gas, electric and telephone each
will be considered a separate industry); and (b) the Connecticut Municipal Money
Market and Massachusetts Municipal Money Market Funds may not purchase
securities that would cause 25% or more of the value of a Fund's total assets at
the time of purchase to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry; provided,
however, that there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government, any state, territory or possession of the
U.S. Government, the District of Columbia, or any of their authorities,
agencies, instrumentalities or political subdivisions.

With respect to Investment Limitation No 3. above, (a) a security is
considered to be issued by the governmental entity or entities whose assets and
revenues back the security, or, with respect to a private activity bond that is
backed only by the assets and revenues of a non-governmental user, such non-
governmental user; (b) in certain circumstances, the guarantor of a guaranteed
security may also be considered to be an issuer in connection with such
guarantee; and (c) securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (including securities backed by the full faith and
credit of the United States) are deemed to be U.S. Government obligations.

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<PAGE> 39

With respect to Investment Limitation No. 7 above, each of the Money Market
and Government Funds intends to limit any borrowings, including reverse
repurchase agreements, to not more than 10% of the value of its total assets at
the time of such borrowing.

With respect to Investment Limitation No. 5 and 8 above, each of the Money
Market, Government, U.S. Treasury and Tax-Exempt Funds intends to limit its
investments in illiquid securities to not more than 10% of the value of its
total assets.

If a percentage limitation is satisfied at the time of investment, a later
increase in such percentage resulting from a change in the value of a Fund's
portfolio securities will not constitute a violation of the limitation.

Each Fund may follow non-fundamental operating policies that are more
restrictive than its fundamental investment limitations, as set forth in this
Prospectus and the respective Statements of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the 1940 Act. In particular, each Fund will comply with the
various requirements of Rule 2a-7 under the 1940 Act which regulates money
market mutual funds. In accordance with Rule 2a-7, the Money Market Fund is
subject to the 5% limitation contained in Investment Limitation No. 3 above as
to all of its assets; however in accordance with such Rule, the Money Market
Fund will be able to invest more than 5% (but no more than 25%) of its total
assets in the securities of a single issuer for a period of up to three business
days after the purchase thereof, provided that the Fund may not hold more than
one such investment at any one time. Subject to Investment Limitation No. 2
above, each Fund will determine the effective maturity of its respective
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by Rating Agencies, according to Rule 2a-7.
Except with respect to Investment Limitation No. 2 above, a Fund may change
these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.

The Securities and Exchange Commission ("SEC") has adopted Rule 144A which
allows for a broader institutional trading market for securities otherwise
subject to restrictions on resale to the general public. Rule 144A establishes a
"safe harbor" from the registration requirements of the 1933 Act for resales of
certain securities to qualified institutional buyers. A Fund's investment in
Rule 144A securities could have the effect of increasing the level of
illiquidity of the Fund during any period that qualified institutional buyers
were no longer interested in purchasing these securities. For purposes of each
Fund's 10% limitation on purchases of illiquid instruments described above, Rule
144A securities will not be considered to be illiquid if Fleet has determined,
in accordance with guidelines established by the Board of Trustees, that an
adequate trading market exists for such securities.

PRICING OF SHARES

Net asset value per Share of each Fund is determined as of 11:00 a.m.
(Eastern Time) and the close of regular trading hours on the New York Stock
Exchange (the "Exchange"), currently 4:00 p.m. (Eastern Time), on each day the
Exchange is open. Currently, the holidays which Galaxy observes are New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value per Share for purposes of
pricing sales and redemptions is calculated separately for each series of Shares
of a Fund by dividing the value of all securities and other assets attributable
to a particular series of Shares of the Fund, less the liabilities attributable
to Shares of that series of the Fund, by the number of outstanding Shares of
that series of the Fund.

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<PAGE> 40

The assets in each Fund are valued based upon the amortized cost method.
Pursuant to this method, a security is valued by reference to a Fund's
acquisition cost as adjusted for amortization of premium or accretion of
discount, regardless of the impact of fluctuating interest rates on the market
value of the security. Although Galaxy seeks to maintain the net asset value per
Share of each Fund at $1.00, there can be no assurance that a Fund's net asset
value per share will not vary.

HOW TO PURCHASE AND REDEEM SHARES

DISTRIBUTOR

Shares in the Funds are sold on a continuous basis by Galaxy's distributor,
First Data Distributors, Inc. ("FD Distributors"), a wholly-owned subsidiary of
First Data Investor Services Group, Inc. ("FDISG"). FD Distributors is a
registered broker/dealer with principal offices located at 4400 Computer Drive,
Westboro, Massachusetts 01581-5108.

PURCHASE OF SHARES

Investments in Retail Shares of the Funds (other than Retail B Shares of
the Money Market Fund) are not subject to any sales charge. Investments in
Retail B Shares of the Money Market Fund are subject to a back-end sales charge.
This back-end sales charge declines over time and is known as a "contingent
deferred sales charge." See "Applicable Sales Charge--Retail B Shares" below.
Retail B Shares of the Money Market Fund have higher operating expenses than
Retail A Shares of the Fund and may not be appropriate for investors that do not
plan to exchange into Retail B Shares of certain of Galaxy's non-money market
portfolios.

FD Distributors has established several procedures to enable different
types of investors to purchase Retail Shares of the Funds. Retail Shares may be
purchased by FIS Securities, Inc., Fleet Brokerage Securities, Inc., Fleet
Securities, Inc., Fleet Enterprises, Inc., Fleet Financial Group, Inc., its
affiliates, their correspondent banks and other qualified banks, saving and loan
associations and broker/dealers ("Institutions") on behalf of their customers
("Customers"). Retail Shares may also be purchased by individuals, corporations
or other entities, who submit a purchase application to Galaxy, purchasing
directly for their own accounts or for the accounts of others ("Direct
Investors"). Purchases may take place only on days on which FD Distributors,
Galaxy's custodian and Galaxy's transfer agent are open for business ("Business
Days"). If an Institution accepts a purchase order from a Customer on a
non-Business Day, the order will not be executed until it is received and
accepted by FD Distributors on a Business Day in accordance with FD
Distributors' procedures.

PURCHASE PROCEDURES--CUSTOMERS OF INSTITUTIONS

Purchase orders for Retail Shares are placed by Customers of Institutions
through their Institution. The Institution is responsible for transmitting
Customer purchase orders to FD Distributors and for wiring required funds in
payment to Galaxy's custodian on a timely basis. FD Distributors is responsible
for transmitting such orders to Galaxy's transfer agent for execution. Retail
Shares purchased by Institutions on behalf of their Customers will normally be
held of record by the Institutions and beneficial ownership of Retail Shares
will be recorded by the Institutions and reflected in the account statements
provided to their Customers. Galaxy's transfer agent may establish an account of
record for each Customer of an Institution reflecting beneficial ownership of
Retail Shares. Depending on the terms of the arrangement between a particular
Institution and

29
<PAGE> 41

Galaxy's transfer agent, confirmations of Retail Share purchases and redemptions
and pertinent account statements will either be sent by Galaxy's transfer agent
directly to a Customer with a copy to the Institution, or will be furnished
directly to the Customer by the Institution. Other procedures for the purchase
of Retail Shares established by Institutions in connection with the requirements
of their Customer accounts may apply. Customers wishing to purchase Retail
Shares through their Institution should contact such entity directly for
appropriate purchase instructions.

PURCHASE PROCEDURES--DIRECT INVESTORS

Purchases by Mail. Retail Shares may be purchased by completing a purchase
application and mailing it, together with a check payable to each Fund in which
a Direct Investor wishes to invest, to:

The Galaxy Fund
P.O. Box 5108
4400 Computer Drive
Westboro, MA 01581-5108

All purchase orders placed by mail must be accompanied by a purchase
application. Applications may be obtained by calling FD Distributors at
1-800-628-0414.

Subsequent investments in an existing account in any Fund may be made at
any time by sending a check for a minimum of $100 payable to the Fund in which
the additional investment is being made to Galaxy at the address above along
with either (a) the detachable form that regularly accompanies confirmation of a
prior transaction, (b) a subsequent order form that may be obtained from FD
Distributors, or (c) a letter stating the amount of the investment, the name of
the Fund and the account number in which the investment is to be made. If a
Direct Investor's check does not clear, the purchase will be cancelled.

Purchases by Wire. Direct Investors may also purchase Retail Shares by
arranging to transmit federal funds by wire to Fleet Bank of Massachusetts, N.A.
as agent for First Data Investor Services Group, Inc. ("FDISG"), Galaxy's
transfer agent. Prior to making any purchase by wire, a Direct Investor must
telephone FD Distributors at 1-800-628-0414 to place an order and to obtain
instructions. Federal funds and registration instructions should be wired
through the Federal Reserve System to:

Fleet Bank of Massachusetts, N.A.
75 State Street
Boston, MA 02109
ABA #0110-0013-8
DDA #79673-5702
Ref: The Galaxy Fund
[Shareholder Name]
[Shareholder Account Number]

Direct Investors making initial investments by wire must promptly complete
a purchase application and forward it to The Galaxy Fund, P.O. Box 5108, 4400
Computer Drive, Westboro, Massachusetts 01581-5108. Applications may be obtained
by calling FD Distributors at 1-800-628-0414. Redemptions will not be processed
until the application in proper form has been received by FD Distributors.
Direct Investors making subsequent investments by wire should follow the
instructions above.

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<PAGE> 42

OTHER PURCHASE INFORMATION

Investment Minimums. Except as provided in "Investor Programs" below, the
minimum initial investment by a Direct Investor, or initial aggregate investment
by an Institution investing on behalf of its Customers, is $2,500. The minimum
investment for subsequent purchases is $100. The minimum investment requirement
with respect to IRAs, SEPs, MERPs and Keogh Plans (see below under "Retirement
Plans") is $500 (including spousal IRA accounts). There are no minimum
investment requirements for Direct Investors participating in the Automatic
Investment Program described below. Customers may agree with a particular
Institution to varying minimum initial and minimum subsequent purchase
requirements with respect to their accounts.

Galaxy reserves the right to reject any purchase order, in whole or in
part, or to waive any minimum investment requirement. The issuance of Retail
Shares to Direct Investors and Institutions is recorded on the books of Galaxy
and share certificates will not be issued.

Effective Time of Purchases. A purchase order for Retail Shares in a Fund
received and accepted by FD Distributors by 11:00 a.m. (Eastern Time) on a
Business Day will be executed at the net asset value per share next determined
after receipt of the order and will receive the dividend declared on the day of
purchase if Galaxy's custodian receives the purchase price in federal funds or
other immediately available funds by 11:00 a.m. (Eastern Time) that day.
Purchase orders received after 11:00 a.m. (Eastern Time) and prior to 4:00 p.m.
(Eastern Time) on a Business Day for which such funds have been received by 4:00
p.m. will be effective as of 4:00 p.m., and investors will begin receiving
dividends the following day. Purchase orders made by Direct Investors are not
effective until the amount to be invested has been converted to federal funds.
In those cases in which a Direct Investor pays for Retail Shares by check,
federal funds will generally become available two Business Days after a purchase
order is received. In certain circumstances, Galaxy may not require that amounts
invested by Institutions on behalf of their Customers be converted into federal
funds. If an Institution accepts a purchase order from a Customer on a
non-Business Day, the order will not be executed until it is received and
accepted by FD Distributors on a Business Day in accordance with the above
procedures.

APPLICABLE SALES CHARGES--RETAIL B SHARES

The public offering price for Retail B Shares of the Money Market Fund is
the net asset value of the Retail B Shares purchased. Although Direct Investors
and Customers pay no front-end sales charge on purchases of Retail B Shares,
such Shares are subject to a contingent deferred sales charge at the rates set
forth below if they are redeemed within six years of purchase. Securities
dealers, brokers, financial institutions and other industry professionals will
receive commissions from FD Distributors in connection with sales of Retail B
Shares. These commissions may be different than the reallowances or placement
fees paid to dealers in connection with sales of Retail A Shares of Galaxy's
non-money market portfolios. Certain affiliates of Fleet may, at their own
expense, provide additional compensation to Fleet Enterprises, Inc., a
broker-dealer affiliate of Fleet, whose customers purchase significant amounts
of Retail B Shares of the Fund. Such compensation will not represent an
additional expense to the Fund or its shareholders, since it will be paid from
the assets of Fleet's affiliates. The contingent deferred sales charge on Retail
B Shares is based on the lesser of the offering price or the net asset value of
the Shares on the redemption date. As a result, no sales charge is imposed on
any increase in the principal value of a Direct Investor's or Customer's Retail
B Shares. In addition, a contingent deferred sales charge will not be assessed
on Retail B Shares purchased through reinvestment of dividends or capital gains
distributions.

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<PAGE> 43

The amount of any contingent deferred sales charge Direct Investors and
Customers must pay depends on the number of years that elapse between the
purchase date and the date such Retail B Shares are redeemed. Solely for
purposes of this determination, all payments during a month will be aggregated
and deemed to have been made on the first day of the month.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
(AS A PERCENTAGE OF
NUMBER OF YEARS DOLLAR AMOUNT SUBJECT
ELAPSED SINCE PURCHASE TO THE CHARGE)
- --------------------------------------------------------------------------- ---------------------
<S> <C>
Less than one.............................................................. 5.00%
More than one but less than two............................................ 4.00%
More than two but less than three.......................................... 3.00%
More than three but less than four......................................... 3.00%
More than four but less than five.......................................... 2.00%
More than five but less than six........................................... 1.00%
After six.................................................................. None
</TABLE>

When a Direct Investor or Customer redeems his or her Retail B Shares, the
redemption request is processed to minimize the amount of the contingent
deferred sales charge that will be charged. Retail B Shares are redeemed first
from those shares that are not subject to a contingent deferred sales charge
(i.e., Retail B Shares that were acquired through reinvestment of dividends or
distributions or that qualify for other deferred sales charge exemptions) and
after that from the Retail B Shares that have been held the longest.

The proceeds from the contingent deferred sales charge that a Direct
Investor or Customer may pay upon redemption go to FD Distributors, which may
use such amounts to defray the expenses associated with the distribution-related
services involved in selling Retail B Shares.

Exemptions from the Contingent Deferred Sales Charge. Certain types of
redemptions may also qualify for an exemption from the contingent deferred sales
charge. To receive exemptions (i), (vi) or (viii) listed below, a Direct
Investor or Customer must explain the status of his or her redemption at the
time Retail B Shares are redeemed. The contingent deferred sales charge with
respect to Retail B Shares is not assessed on: (i) exchanges described under
"Investor Programs--Exchange Privilege" below; (ii) redemptions in connection
with required (or, in some cases, discretionary) distributions to participants
or beneficiaries of an employee pension, profit-sharing or other trust or
qualified retirement or Keogh plan, individual retirement account or custodial
account maintained pursuant to Section 403(b)(7) of the Internal Revenue Code of
1986, as amended (the "Code"); (iii) redemptions in connection with required
(or, in some cases, discretionary) distributions to participants in qualified
retirement or Keogh plans, individual retirement accounts or custodial accounts
maintained pursuant to Section 403(b)(7) of the Code due to death, disability or
the attainment of a specified age; (iv) redemptions effected pursuant to the
Money Market Fund's right to liquidate a shareholder's account if the aggregate
net asset value of Retail B Shares held in the account is less than the minimum
account size; (v) redemptions in connection with the combination of the Money
Market Fund with any other investment company registered under the 1940 Act by
merger, acquisition of assets, or by any other transaction; (vi) redemptions in
connection with the death or disability of a shareholder; (vii) redemptions
resulting from a tax-free return of an excess contribution pursuant to Section
408(d)(4) or (5) of the Code; or (viii) any redemption of Retail B Shares held
by Direct Investors or Customers, provided the Direct Investor or Customer was
the beneficial owner of shares of the Money Market Fund (or

32
<PAGE> 44

any of the other portfolios offered by Galaxy or otherwise advised by Fleet or
its affiliates) before December 1, 1995. In addition to the foregoing
exemptions, no contingent deferred sales charge will be imposed on redemptions
made pursuant to the Systematic Withdrawal Plan, subject to the limitations set
forth under "Investor Programs--Automatic Investment Program and Systematic
Withdrawal Plan" below.

Six years after purchase, Retail B Shares of the Money Market Fund will
convert automatically to Retail A Shares of the Fund. The purpose of the
conversion is to relieve a holder of Retail B Shares of the higher ongoing
expenses charged to those Shares. The conversion from Retail B Shares to Retail
A Shares takes place at net asset value, as a result of which a Direct Investor
or Customer receives dollar-for-dollar the same value of Retail A Shares as he
or she had of Retail B Shares. The conversion occurs six years after the
beginning of the calendar month in which the Shares are purchased. Upon
conversion, an investor would hold Retail A Shares subject to the operating
expenses for Retail A Shares.

Retail B Shares of the Money Market Fund acquired through a reinvestment of
dividends or distributions are also converted at the earlier of two dates--six
years after the beginning of the calendar month in which the reinvestment
occurred or the date of conversion of the most recently purchased Retail B
Shares that were not acquired through reinvestment of dividends or
distributions. For example, if a Direct Investor or Customer makes a one-time
purchase of Retail B Shares of the Fund, and subsequently acquires additional
Retail B Shares of the Fund only through reinvestment of dividends and/or
distributions, all of such Direct Investor's or Customer's Retail B Shares in
the Fund, including those acquired through reinvestment, will convert to Retail
A Shares of the Fund on the same date.

REDEMPTION OF SHARES

Redemption orders are effected at the net asset per share next determined
after receipt of the order by FD Distributors, except that proceeds from the
redemption of Retail B Shares in the Money Market Fund will be reduced by the
amount of any applicable contingent deferred sales charge. When redeeming Retail
Shares in the Money Market Fund, Customers of Institutions and Direct Investors
should indicate whether they are redeeming Retail A Shares or Retail B Shares in
the Fund. If a Customer or Direct Investor owns both Retail A Shares and Retail
B Shares in the Money Market Fund, the Retail A Shares will be redeemed first
unless the Customer or Direct Investor indicates otherwise. Galaxy reserves the
right to transmit redemption proceeds within seven days after receiving the
redemption order if, in its judgment, an earlier payment could adversely affect
a Fund.

REDEMPTION PROCEDURES--CUSTOMERS OF INSTITUTIONS

Customers of Institutions may redeem all or part of their Retail Shares in
accordance with procedures governing their accounts at Institutions. It is the
responsibility of the Institutions to transmit redemption orders to FD
Distributors and credit their Customers' accounts with the redemption proceeds
on a timely basis. No charge for wiring redemption payments to Institutions is
imposed by Galaxy, although Institutions may charge a Customer's account for
redemption services. Information relating to such redemption services and
charges, if any, is available from the Institutions.

Direct Investors may redeem all or part of their Retail Shares in
accordance with any of the procedures described below.

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<PAGE> 45

REDEMPTION PROCEDURES--DIRECT INVESTORS

Redemption by Mail. Retail Shares may be redeemed by a Direct Investor by
submitting a written request for redemption to:

The Galaxy Fund
P.O. Box 5108
4400 Computer Drive
Westboro, MA 01581-5108

A written redemption request must (i) state the name of the Fund and the
number and series, if applicable, of Retail Shares to be redeemed, (ii) identify
the shareholder account number and tax identification number, and (iii) be
signed by each registered owner exactly as the shares are registered. A
redemption request for an amount in excess of $50,000, or for any amount where
(i) the proceeds are to be sent elsewhere than the address of record (excluding
the transfer of assets to a successor custodian), (ii) the proceeds are to be
sent to an address of record which has changed in the preceding 90 days, or
(iii) the check is to be made payable to someone other than the registered
owner(s), must be accompanied by signature guarantees. The guarantor of a
signature must be a bank which is a member of the FDIC, a trust company, a
member firm of a national securities exchange or any other eligible guarantor
institution. FD Distributors will not accept guarantees from notaries public. FD
Distributors may require additional supporting documents for redemptions made by
corporations, executors, administrators, trustees and guardians. A redemption
request will not be deemed to be properly received until FD Distributors
receives all required documents in proper form. The Funds ordinarily will make
payment for Retail Shares redeemed by mail within three Business Days after
proper receipt by FD Distributors of the redemption request. Questions with
respect to the proper form for redemption requests should be directed to FD
Distributors at 1-800-628-0414.

Redemption by Telephone. Direct Investors may redeem Retail Shares by
calling 1-800-628-0414 and instructing FD Distributors to mail a check for
redemption proceeds of up to $50,000 to the address of record. A redemption
request for an amount in excess of $50,000 or for any amount where (i) the
proceeds are to be sent elsewhere than the address of record (excluding the
transfer of assets to a successor custodian), (ii) the proceeds are to be sent
to an address of record which has changed in the preceding 90 days, or (iii) the
check is to be made payable to someone other than the registered owner(s), must
be accompanied by signature guarantees. See "Redemption by Mail" above for
details regarding signature guarantees.

Redemption by Wire. Direct Investors who have so indicated on the
application, or have subsequently arranged in writing to do so, may redeem
Retail Shares by instructing FD Distributors by wire or telephone to wire
redemption proceeds of $1,000 or more directly to a Direct Investor's account at
any commercial bank in the United States. FD Distributors charges a $5.00 fee
for each wire redemption and the fee is deducted from the redemption proceeds.
The redemption proceeds must be paid to the same bank and account as designated
on the application or in written instructions subsequently received by FD
Distributors.

Direct Investors may request that Retail Shares be redeemed and redemption
proceeds be wired on the same day if telephone redemption instructions are
received by FD Distributors by 11:00 a.m. (Eastern Time) on the day of
redemption. Retail Shares redeemed and wired on the same day will not receive
the dividend declared on the day of redemption. Redemption requests made after
11:00 a.m. (Eastern Time) will receive the dividend declared on the day of
redemption, and redemption proceeds will be wired the following Business Day. To
request redemption of Retail Shares by wire, Direct Investors should call FD
Distributors at 1-800-628-0414.

34
<PAGE> 46

In order to arrange for redemption by wire or telephone after an account
has been opened or to change the bank or account designated to receive
redemption proceeds, a written request must be sent to Galaxy at the address
listed above under "Redemption by Mail." Such requests must be signed by the
investor and accompanied by a signature guarantee (see "Redemption by Mail"
above for details regarding signature guarantees). Further documentation may be
requested from corporations, executors, administrators, trustees, or guardians.
If, due to temporary adverse conditions, Direct Investors are unable to effect
telephone transactions, Direct Investors are encouraged to follow the procedures
for transactions by wire or mail which are described above.

Galaxy reserves the right to refuse a wire or telephone redemption if it
believes it is advisable to do so. Procedures for redeeming Retail Shares by
wire or telephone may be modified or terminated at any time by Galaxy or FD
Distributors. In attempting to confirm that telephone instructions are genuine,
Galaxy will use such procedures as are considered reasonable, including
recording those instructions and requesting information as to account
registration (such as the name in which an account is registered, the account
number, recent transactions in the account, and the account holder's social
security number, address and/or bank). If Galaxy fails to follow established
procedures for the authenticity of telephone instructions, it may be liable for
losses due to unauthorized or fraudulent telephone transactions.

No redemption by a Direct Investor in any Fund will be processed until
Galaxy has received a completed application with respect to the Direct
Investor's account.

If any portion of the Retail Shares to be redeemed represents an investment
made by personal check, Galaxy reserves the right to delay payment of proceeds
until FD Distributors is reasonably satisfied that the check has been collected,
which could take up to 15 days from the purchase date. A Direct Investor who
anticipates the need for more immediate access to his or her investment should
purchase Retail Shares by federal funds or bank wire or by certified or
cashier's check. Banks normally impose a charge in connection with the use of
bank wires, as well as certified checks, cashier's checks and federal funds.

OTHER REDEMPTION INFORMATION

Galaxy reserves the right to redeem accounts (other than retirement plan
accounts) involuntarily, upon 60 days' written notice, if the account's net
asset value falls below $250 as a result of redemptions. In addition, if an
investor has agreed with a particular Institution to maintain a minimum balance
in his or her account at the Institution with respect to Retail Shares of a
Fund, and the balance in such account falls below that minimum, the Customer may
be obliged by the Institution to redeem all of his or her Retail Shares.

Galaxy may redeem Retail Shares involuntarily or make payment for
redemption in securities if it appears appropriate to do so in light of Galaxy's
responsibilities under the 1940 Act. See the respective Statements of Additional
Information under "Net Asset Value" or "Net Asset Value--Municipal Money Market
and Massachusetts Municipal Money Market Funds" for examples of when such
redemptions might be appropriate.

INVESTOR PROGRAMS

EXCHANGE PRIVILEGE

Direct Investors and Customers of Institutions may, after appropriate prior
authorization, exchange Retail A Shares (Shares in the case of the Connecticut
Municipal Money Market and Massachusetts

35
<PAGE> 47

Municipal Money Market Funds) in a Fund having a value of at least $100 for
Retail A Shares in any of the other Funds or portfolios offered by Galaxy or
otherwise advised by Fleet or its affiliates in which the Direct Investor or
Customer maintains an existing account, provided that such other shares may
legally be sold in the state of the investor's residence. Direct Investors and
Customers of Institutions may exchange Retail B Shares in the Money Market Fund
for Retail B Shares in Galaxy's Short-Term Bond, High Quality Bond, Tax Exempt
Bond, Equity Value, Equity Growth, Small Company Equity, Asset Allocation, and
Growth and Income Funds in which the Direct Investor or Customer maintains an
existing account, provided that the Retail B Shares acquired in the exchange may
legally be sold in the state of the investor's residence.

Unless an exception applies, a front-end sales charge will be charged in
connection with exchanges of Retail A Shares of a Fund for Retail A Shares of
Galaxy's non-money market portfolios. Retail B Shares may be exchanged without
the payment of any contingent deferred sales charge at the time the exchange is
made. In determining the holding period for calculating the contingent deferred
sales charge payable on redemptions of Retail B Shares, the holding period of
the Retail B Shares originally held will be added to the holding period of the
Retail B Shares acquired through exchange.

The minimum initial investment to establish a new account in another
eligible Fund by exchange, except for the Institutional Treasury Money Market
Fund, is $2,500 unless, with respect to Direct Investors, at the time of the
exchange the Direct Investor elects, with respect to the Fund into which the
exchange is being made, to participate in the Automatic Investment Program
described below, in which event there is no minimum initial investment
requirement, or in the College Investment Program described below, in which
event the minimum initial investment is generally $100. The minimum initial
investment to establish an account by exchange in the Institutional Treasury
Money Market Fund is $2 million.

An exchange involves a redemption of all or a portion of the Retail Shares
of a Fund and the investment of the redemption proceeds in Retail Shares of
another Fund or portfolio offered by Galaxy or, with respect to Retail A Shares,
otherwise advised by Fleet or its affiliates. The redemption will be made at the
per share net asset value next determined after the exchange request is
received. The Retail Shares of a Fund or portfolio to be acquired will be
purchased at the net asset value per Share next determined after acceptance of
the exchange request, plus any applicable sales charge.

Investors may find the exchange privilege useful if their investment
objectives or market outlook should change after they invest in any of the
Funds. For further information regarding Galaxy's exchange privilege, Direct
Investors should call FD Distributors at 1-800-628-0414. Customers of
Institutions should call their Institution for such information. Customers
exercising the exchange privilege into other eligible Funds should request and
review the prospectuses for these Funds prior to making an exchange. Telephone
1-800-628-0414 for a prospectus or to make an exchange. See "How to Purchase and
Redeem Shares--Redemption Procedures--Direct Investors--Redemption by Wire"
above for a description of Galaxy's policy regarding telephone instructions.

In order to prevent abuse of this privilege to the disadvantage of other
shareholders, Galaxy reserves the right to terminate the exchange privilege of
any shareholder who requests more than three exchanges a year. Galaxy will
determine whether to do so based on a consideration of both the number of
exchanges that any particular shareholder or group of shareholders has requested
and the time period over which their exchange requests have been made, together
with the level of expense to Galaxy which will result from effecting additional
exchange requests. The exchange privilege may be modified or terminated at any
time. At least 60 days' notice of any material modification or termination will
be given to shareholders except where notice is not required under the
regulations of the SEC.

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<PAGE> 48

Galaxy does not charge any exchange fee. Institutions may charge such fees
with respect to either all exchange requests or with respect to any request
which exceeds the permissible number of free exchanges during a particular
period. Customers of Institutions should contact their respective Institutions
for applicable information.

For federal income tax purposes, an exchange of Shares is a taxable event
and, accordingly, a capital gain or loss may be realized by an investor. Before
making an exchange request, a Customer or Direct investor should consult a tax
or other financial adviser to determine the tax consequences.

RETIREMENT PLANS

Retail Shares of the Funds, other than the Tax-Exempt Money Market Funds,
are available for purchase in connection with the following tax-deferred
prototype retirement plans:

Individual Retirement Accounts ("IRAs") (including "rollovers" from
existing retirement plans), a retirement-savings vehicle for qualifying
individuals. The minimum initial investment for an IRA account is $500
(including a spousal account).

Simplified Employee Pension Plans ("SEPs"), a form of retirement plan for
sole proprietors, partnerships and corporations. The minimum initial investment
for a SEP account is $500.

Multi-Employee Retirement Plans ("MERPs"), a retirement vehicle established
by employers for their employees which is qualified under Sections 401(k) and
403(b) of the Internal Revenue Code. The minimum initial investment for a MERP
is $500.

Keogh Plans, a retirement vehicle for self-employed individuals. The
minimum initial investment for a Keogh Plan is $500.

Investors purchasing Retail Shares pursuant to a retirement plan are not
subject to the minimum investment provisions described above under "How to
Purchase and Redeem Shares--Other Purchase Information." Detailed information
concerning eligibility, service fees and other matters related to these plans,
and the form of application, is available from FD Distributors (call
1-800-628-0414) with respect to IRAs, SEPs and Keogh Plans and from Fleet
Brokerage Securities, Inc. (call 1-800-221-8210) with respect to MERPs.

AUTOMATIC INVESTMENT PROGRAM AND SYSTEMATIC WITHDRAWAL PLAN

The Automatic Investment Program permits a Direct Investor to purchase
Retail Shares (minimum of $50 per transaction) each month or each quarter.
Provided a Direct Investor's financial institution allows automatic withdrawals,
Retail Shares are purchased by transferring funds from a Direct Investor's
checking, bank money market, NOW or savings account designated by the Direct
Investor. The account designated will be debited in the specified amount and
Retail Shares will be purchased on a monthly or quarterly basis, on any Business
Day designated by a Direct Investor. If the designated day falls on a weekend or
holiday, the purchase will be made on the Business Day closest to the designated
day. Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated.

The Systematic Withdrawal Plan permits a Direct Investor to automatically
redeem Retail Shares on a monthly, quarterly, semi-annual, or annual basis on
any Business Day designated by a Direct Investor, if the account has a starting
value of at least $10,000. If the designated day falls on a weekend or holiday,
the redemption will be made on the Business Day closest to the designated day.
Proceeds of the redemption will

37
<PAGE> 49

be sent to the shareholder's address of record or financial institution within
three Business Days of the redemption. If redemptions exceed purchases and
dividends, the number of shares in the account will be reduced. Investors may
terminate the Systematic Withdrawal Plan at any time upon written notice to the
Transfer Agent (but not less than five days before a payment date). No
contingent deferred sales charge will be assessed on redemptions of Retail B
Shares of the Money Market Fund made through the Systematic Withdrawal Plan that
do not exceed 12% of an account's net asset value on an annualized basis. For
example, monthly, quarterly and semi-annual Systematic Withdrawal Plan
redemptions of Retail B Shares will not be subject to the contingent deferred
sales charge if they do not exceed 1%, 3% and 6%, respectively, of an account's
net asset value on the redemption date. Systematic Withdrawal Plan redemptions
of Retail B Shares in excess of this limit are still subject to the applicable
contingent deferred sales charge.

COLLEGE INVESTMENT PROGRAM

The College Investment Program (the "College Program") permits an investor
to open an account with Galaxy and purchase Retail Shares of a Fund with a
minimum amount of $100 for initial or subsequent investments, except that if the
investor purchases Retail Shares through the Automatic Investment Program, the
minimum per transaction is $50. The College Program is designed to assist
investors who want to finance a college savings plan. See "Investor
Programs--Automatic Investment Program and Systematic Withdrawal Plan" for
information on the Automatic Investment Program. Galaxy reserves the right to
redeem accounts participating in the College Program involuntarily, upon 60
days' written notice, if the account's net asset value falls below the
applicable minimum initial investment as a result of redemptions. See "How to
Purchase and Redeem Shares--Other Redemption Information" above for further
information.

Investors in the College Program will receive consolidated monthly
statements of their accounts. Detailed information concerning College Program
accounts and applications may be obtained from FD Distributors (call
1-800-628-0414).

CHECKWRITING

Checkwriting is available for Direct Investors. A charge for use of the
checkwriting privilege may be imposed by Galaxy. There is no limit to the number
of checks a Direct Investor may write per month in an amount per check of $250
or more. To obtain checks, a Direct Investor must complete the signature card
that accompanies the account application. To establish this checkwriting service
after opening an account in a Fund, Direct Investors must contact FD
Distributors by telephone (1-800-628-0414) or mail to obtain a signature card. A
signature guarantee may be required. A Direct Investor will receive the daily
dividends declared on the Retail Shares to be redeemed up to the day that a
check is presented to the Custodian for payment. Upon 30 days' written notice to
Direct Investors, the checkwriting privilege may be modified or terminated. An
account in a Fund may not be closed by writing a check.

DIRECT DEPOSIT PROGRAM

Direct Investors receiving social security benefits are eligible for the
Direct Deposit Program. This Program enables a Direct Investor to purchase
Retail Shares of a Fund by having social security payments automatically
deposited into his or her Fund account. There is no minimum deposit requirement.
For instructions on how to enroll in the Direct Deposit Program, Direct
Investors should call FD Distributors at 1-800-628-0414. Death or legal
incapacity will terminate a Direct Investor's participation in the Program. A
Direct Investor may elect at any time to terminate his or her participation by
notifying in writing the Social

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Security Administration. Further, Galaxy may terminate a Direct Investor's
participation upon 30 days' notice to the Direct Investor.

INFORMATION SERVICES

GALAXY INFORMATION CENTER--24 HOUR INFORMATION SERVICE

The Galaxy Information Center provides Fund performance and investment
information 24 hours a day, 7 days a week. To access the Galaxy Information
Center just call 1-800-628-0414.

VOICE RESPONSE SYSTEM

The Voice Response System provides Direct Investors automated access to
Fund and account information as well as the ability to make telephone exchanges
and redemptions. These transactions are subject to the terms and conditions
described under Investor Programs. To access the Voice Response System, just
call 1-800-FOR-GLXY (367-4599) from any touch-tone telephone and follow the
recorded instructions.

GALAXY SHAREHOLDER SERVICES

For account information and recent exchange transactions, Direct Investors
can call Galaxy Shareholder Services Monday through Friday, between the hours of
9:00 a.m. to 5:00 p.m. (Eastern Time) at 1-800-628-0414.

Galaxy also offers a TDD service for the hearing impaired. Just call
1-800-696-6515, 24 hours a day, 7 days a week.

Direct Investors residing outside the United States can contact Galaxy by
calling 1-508-855-5237.

The Funds' yields reflect any fee waivers in effect, represent past
performance and will vary. If fee waivers are in effect and fees are not waived,
yields would be reduced. Past performance is no guarantee of future results.
Current yield refers to income earned by a Fund's investments over a 7-day
period. It is then annualized and stated as a percentage of the investment.
Effective yield is the same as current yield except that it assumes the income
earned by an investment in a Fund will be reinvested. An investment in any one
of the Funds is neither insured nor guaranteed by the U.S. Government nor is
there any assurance the Funds will be able to maintain a stable net asset value
of $1.00 per share.

DIVIDENDS AND DISTRIBUTIONS

The net investment income of each Fund is declared daily as a dividend to
the persons who are shareholders of the respective Funds immediately after the
11:00 a.m. pricing of shares on the day of declaration. Net investment income
for dividend purposes is determined separately for each series of Shares of a
Fund and consists of all accrued income, whether taxable or tax-exempt, plus
discount earned on the Fund's assets attributable to each series of Shares, less
amortization of premium on such assets and accrued expenses attributable to each
series of Shares of the Fund. None of the Funds expect to realize net capital
gains. However, if any such gains are realized, they will be paid out to
shareholders no less frequently than annually.

Dividends are paid monthly within five Business Days after the end of each
calendar month or within five Business Days after a shareholder's complete
redemption of Retail Shares in a Fund. Institutions, unless they request
otherwise, will automatically receive dividends and distributions in cash.
Institutions may pay

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dividends to Customers in cash or reinvest such cash distributions in additional
Shares. Direct Investors will have the option as provided on the application of
electing to (a) automatically receive dividends and distributions in additional
Retail Shares of the same series of a Fund at the net asset value of such Retail
Shares on the payment date or (b) receive dividends and distributions in cash.
Any revocation of such election must be made in writing to Galaxy's transfer
agent (see "Custodian and Transfer Agent" below) and will become effective with
respect to dividends paid after its receipt.

TAXES

FEDERAL

In General. Each of the Funds qualified during its last taxable year and
intends to continue to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). Such qualification
relieves each Fund of liability for federal income taxes to the extent its
earnings are distributed in accordance with the Code.

Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that each Fund distribute to its
shareholders an amount equal to at least the sum of 90% of its investment
company taxable income and 90% of its tax-exempt interest income, if any, net of
certain deductions for such year. In general, a Fund's investment company
taxable income will be its taxable income (including interest) subject to
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year. The Money Market, Government and U.S. Treasury Funds intend to distribute
substantially all of their respective investment company taxable income and net
tax-exempt income each year. Such dividends will be taxable as ordinary income
to each Fund's shareholders who are not currently exempt from federal income
taxes, whether such income is received in cash or reinvested in additional
Retail Shares (federal income taxes for distributions to an IRA or a qualified
retirement plan are deferred under the Code.) Because all of each Fund's net
investment income is expected to be derived from earned interest, it is
anticipated that no part of any distribution will be eligible for the dividends
received deduction for corporations.

Dividends declared in October, November or December of any year that are
payable to shareholders of record on a specified date in such months will be
deemed to have been received by shareholders and paid by a Fund on December 31
of such year if such dividends are actually paid during January of the following
year.

The Tax-Exempt Money Market Funds. It is the policy of each Tax-Exempt
Money Market Fund to pay dividends with respect to each taxable year equal to at
least the sum of 90% of its net exempt-interest income and 90% of its investment
company taxable income, if any. Dividends derived from exempt-interest income
("exempt-interest dividends") may be treated by a Fund's shareholders as items
of interest excludable from their gross income under Section 103(a) of the Code,
unless, under the circumstances applicable to a particular shareholder,
exclusion would be disallowed. (See the respective Statements of Additional
Information under "Additional Information Concerning Taxes.")

If a Tax-Exempt Money Market Fund should hold certain "private activity
bonds" issued after August 7, 1986, shareholders must include, as an item of tax
preference, the portion of dividends paid by the Fund that is attributable to
interest on such bonds in their federal alternative minimum taxable income for
purposes of determining liability, if any, for the 26% to 28% alternative
minimum tax for individuals and the 20% alternative minimum tax and the
environmental tax applicable to corporations. Corporate shareholders must also
take all exempt-interest dividends into account in determining certain
adjustments for federal alternative

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<PAGE> 52

minimum and environmental tax purposes. Shareholders receiving Social Security
benefits should note that all exempt-interest dividends will be taken into
account in determining the taxability of such benefits.

Dividends from a Tax-Exempt Money Market Fund which are derived from
taxable income or from long-term or short-term capital gains will be subject to
federal income tax, whether such dividends are paid in the form of cash or
additional Retail Shares of the Fund.

STATE AND LOCAL

Exempt-interest dividends and other distributions paid by the Tax-Exempt
Money Market Funds may be taxable to shareholders under state or local law as
dividend income, even though all or a portion of such distributions may be
derived from interest on tax-exempt obligations which, if realized directly,
would be exempt from such income taxes.

Dividends paid by the Connecticut Municipal Money Market Fund that qualify
as exempt-interest dividends for federal income tax purposes will not be subject
to the Connecticut personal income tax on individuals, trusts and estates, to
the extent that they are derived from Connecticut Municipal Securities. Other
Fund dividends and distributions, whether received in cash or additional Shares,
are subject to this tax, except that capital gain dividends derived from
obligations issued by or on behalf of the State of Connecticut, its political
subdivisions, or public instrumentalities, state or local authorities, districts
or similar public entities created under Connecticut law are not subject to the
tax. Dividends and distributions paid by the Fund that constitute items of tax
preference for purposes of the federal alternative minimum tax, other than any
derived from Connecticut Municipal Securities, could cause liability for the net
Connecticut minimum tax, applicable to investors subject to the Connecticut
personal income tax who are required to pay the federal alternative minimum tax.

Dividends paid by the Connecticut Municipal Money Market Fund, including
those that qualify as exempt-interest dividends for federal income tax purposes,
are taxable for purposes of the Connecticut Corporation Business Tax; however,
70% (100% if the investor owns at least 20% of the total voting power and value
of the Fund's Shares) of amounts that are treated as dividends and not as
exempt-interest dividends or capital gain dividends for federal income tax
purposes are deductible for purposes of this tax, but no deduction is allowed
for expenses related thereto. Shares of the Fund are not subject to property tax
by the State of Connecticut or its political subdivisions.

Distributions by the Massachusetts Municipal Money Market Fund to its
shareholders are exempt from Massachusetts personal income taxation to the
extent they are derived from (and designated by the Fund as being derived from)
(i) interest on Massachusetts Municipal Securities, or (ii) capital gains
realized by the Fund from the sale of certain Massachusetts Municipal
Securities. Distributions from the Fund's other net investment income and
short-term capital gains will be taxable as ordinary income. Distributions from
the Fund's net long-term capital gains will be taxable as long-term capital
gains regardless of how long the shareholder has owned Fund Shares. The tax
treatment of distributions is the same whether distributions are paid in cash or
in additional Shares of the Fund. Distributions by the Fund to corporate
shareholders, including exempt-interest dividends, may be subject to
Massachusetts corporate excise tax.

The U.S. Treasury Fund is structured to provide shareholders, to the extent
permissible by federal and state law, with income that is exempt or excluded
from taxation at the state and local level. Many states, by statute, judicial
decision or administrative action, have taken the position that dividends of a
regulated investment company, such as the Fund, that are attributable to
interest on direct U.S. Treasury obligations or obligations of certain U.S.
Government agencies, are the functional equivalent of interest from such
obligations and are, therefore, exempt from state and local income taxes.

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<PAGE> 53

Shareholders should consult their own tax advisers about the status of
distributions from the Fund in their own state.

MISCELLANEOUS

The foregoing summarizes some of the important tax considerations generally
affecting the Funds and their shareholders and is not intended as a substitute
for careful tax planning. Accordingly, potential investors in the Funds should
consult their tax advisers with specific reference to their own tax situation.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made each year.

MANAGEMENT OF THE FUNDS

The business and affairs of the Funds are managed under the direction of
Galaxy's Board of Trustees. The Funds' Statements of Additional Information
contain the names of and general background information concerning the Trustees.

INVESTMENT ADVISER

Fleet, with principal offices at 75 State Street, Boston, Massachusetts
02109, serves as the investment adviser to the Funds. Fleet is an indirect
wholly-owned subsidiary of Fleet Financial Group, Inc., a registered bank
holding company with total assets at December 31, 1996 of $85 billion. Fleet,
which commenced operations in 1984, also provides investment management and
advisory services to individual and institutional clients and manages the other
portfolios of Galaxy: the Institutional Treasury Money Market, Equity Value,
Equity Growth, Equity Income, International Equity, Small Company Equity, Asset
Allocation, Small Cap Value, Growth and Income, Short-Term Bond, Intermediate
Government Income, High Quality Bond, Corporate Bond, Tax-Exempt Bond, New York
Municipal Bond, Municipal Bond, Massachusetts Municipal Bond and Rhode Island
Municipal Bond Funds.

Subject to the general supervision of Galaxy's Board of Trustees, Fleet
manages the Funds, makes decisions with respect to and places orders for all
purchases and sales of their portfolio securities and maintains related records.

For the services provided and expenses assumed, Fleet is entitled to
receive advisory fees, computed daily and paid monthly, at the following annual
rates: with respect to the Money Market, Government and Tax-Exempt Funds, .40%
of the average daily net assets of each Fund, and with respect to the U.S.
Treasury, Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds, .40% of the first $750,000,000 of average daily net assets of each
Fund plus .35% of the average daily net assets of each Fund in excess of
$750,000,000. Fleet may from time to time, in its discretion, waive advisory
fees payable by the Funds in order to help maintain a competitive expense
ratios, and may from time to time allocate a portion of its advisory fees to
Fleet Bank or other subsidiaries of Fleet Financial Group, Inc. in consideration
for administrative and shareholder support services which they provide to
beneficial shareholders. Fleet has advised Galaxy that, with respect to the
Money Market, Government and Tax-Exempt Funds, Fleet intends to waive advisory
fees payable to it by each Fund in an amount equal to 0.05% of the average daily
net assets of each Fund to the extent that a Fund's net assets exceed
$750,000,000. For the fiscal year ended October 31, 1996, Fleet received
advisory fees (after fee waivers) at the effective annual rates of .37%, .39%,
.40% and .40% of the average daily net assets of the Money Market Fund,
Government Fund, Tax-Exempt Fund and U.S. Treasury Fund, respectively. For the
period from December 4, 1995 through October 31, 1996, Fleet received advisory
fees at the effective annual rates of .40% of the average daily net assets of
each of the

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<PAGE> 54

Connecticut Municipal Money Market Fund and Massachusetts Municipal Money Market
Fund. In addition to the fee waivers, during the fiscal year ended October 31,
1996, Fleet also reimbursed the Funds for certain operating expenses, which
reimbursement may be revised or discontinued at any time.

The Predecessor Connecticut Municipal Money Market and Predecessor
Massachusetts Municipal Money Market Funds bore advisory fees during the period
from November 1, 1995 through December 3, 1995 pursuant to the investment
advisory agreement then in effect with Shawmut Bank, N.A., their former adviser,
at the effective annual rate of .50% of each such Predecessor Funds' average
daily net assets.

AUTHORITY TO ACT AS INVESTMENT ADVISER

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956, as amended, or any bank
or non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing, underwriting, selling or distributing securities such as Retail
Shares of the Funds, but such banking laws and regulations do not prohibit such
a bank holding company or affiliate from acting as investment adviser, transfer
agent, or custodian to such an investment company or from purchasing shares of
such a company as agent for and upon the order of customers. Fleet, the
custodian and Institutions that are banks or bank affiliates are subject to such
banking laws and regulations.

Should legislative, judicial, or administrative action prohibit or restrict
the activities of such companies in connection with their services to the Funds,
Galaxy might be required to alter materially or discontinue its arrangements
with such companies and change its method of operations. It is not anticipated,
however, that any resulting change in the Funds' method of operations would
affect a Fund's net asset value per share or result in financial loss to any
shareholder.

ADMINISTRATOR

First Data Investor Services Group, Inc. ("FDISG") located at 4400 Computer
Drive, Westboro, Massachusetts 01581-5108, serves as the Funds' administrator.
FDISG is a wholly-owned subsidiary of First Data Corporation.

FDISG generally assists the Funds in their administration and operation.
FDISG also serves as administrator to the other portfolios of Galaxy. Effective
September 5, 1996, for the services provided to the Funds, FDISG is entitled to
receive administration fees, computed daily and paid monthly, at the annual rate
of .09% of the first $2.5 billion of combined average daily net assets of the
Funds and the other portfolios offered by Galaxy (collectively, the
"Portfolios"), .085% of the next $2.5 billion of combined average daily net
assets and .075% of combined average daily net assets over $5 billion. Prior to
September 5, 1996, for the services provided to the Funds, FDISG was entitled to
receive administration fees, computed daily and paid monthly, at the annual rate
of .09% of the first $2.5 billion of the combined average daily net assets of
the Portfolios, .085% of the next $2.5 billion of combined average daily net
assets and .08% of combined average daily net assets over $5 billion. In
addition, FDISG also receives a separate annual fee from each Portfolio for
certain fund accounting services. From time to time, FDISG may waive voluntarily
all or a portion of the administration fee payable to it by the Funds. For the
fiscal year ended October 31, 1996, the Money Market, Government, Tax-Exempt and
U.S. Treasury Funds paid FDISG administration fees at the effective annual rate
of .085% of each Fund's average daily net assets. For the period from December
4, 1995 through

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<PAGE> 55

October 31, 1996, the Municipal Money Market and Massachusetts Municipal Money
Market Funds paid FDISG administration fees at the effective annual rate of
.085% of each Fund's average daily net assets.

The Predecessor Connecticut Municipal Money Market and Predecessor
Massachusetts Municipal Money Market Funds bore administration fees during the
period from November 1, 1995 through December 3, 1995 pursuant to the
administration agreement then in effect with Federated Administrative Services,
their prior administrator, at the effective annual rate of .15% of each such
Predecessor Fund's average daily net assets.

DESCRIPTION OF GALAXY AND ITS SHARES

Galaxy was organized as a Massachusetts business trust on March 31, 1986.
Galaxy's Declaration of Trust authorizes the Board of Trustees to classify or
reclassify any unissued shares into one or more classes or series of shares.
Pursuant to such authority, the Board of Trustees has authorized the issuance of
an unlimited number of shares in each series in the Funds as follows: Class A
Shares (Retail A Shares), Class A--Special Series 1 Shares (Trust Shares) and
Class A--Special Series 2 Shares (Retail B Shares), each series representing
interests in the Money Market Fund; Class B Shares (Retail A Shares) and Class
B--Special Series 1 Shares (Trust Shares), both series representing interests in
the Government Fund; Class E Shares (Retail A Shares) and Class E--Special
Series 1 Shares (Trust Shares), both series representing interests in the
Tax-Exempt Fund; Class F Shares (Retail A Shares) and Class F--Special Series 1
Shares (Trust Shares), both series representing interests in the U.S. Treasury
Fund; Class V Shares, representing interests in the Municipal Money Market Fund;
and Class W Shares, representing interests in the Massachusetts Municipal Money
Market Fund. Each Fund (other than the Municipal Money Market and Massachusetts
Municipal Money Market Funds) is classified as a diversified company under the
1940 Act. The Board of Trustees has also authorized the issuance of additional
classes and series of shares representing interests in other portfolios of
Galaxy. For information regarding Trust Shares of the Money Market, Government,
U.S. Treasury and Tax-Exempt Funds and these other portfolios, which are offered
through separate prospectuses, contact FD Distributors at 1-800-628-0414.

Shares of each series in the Money Market, Government, U.S. Treasury and
Tax-Exempt Funds bear their pro rata portion of all operating expenses paid by a
particular Fund except as follows: Holders of a Fund's Retail A Shares bear the
fees that are paid to Institutions under Galaxy's Shareholder Services Plan
described below and holders of Retail B Shares of the Money Market Fund bear the
fees that are paid under Galaxy's Distribution and Services Plan described
below. Currently, these payments are not made with respect to a Fund's Trust
Shares. In addition, shares of each series in a Fund bear differing transfer
agency expenses. Standardized yield quotations are computed separately for each
series of shares. The difference in the expenses paid by the respective series
will affect their performance.

Each share of Galaxy (irrespective of series designation) has a par value
of $.001, represents an equal proportionate interest in the related Fund with
other Shares of the same class, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to such Fund as
are declared in the discretion of Galaxy's Board of Trustees.

Shareholders are entitled to one vote for each full share held, and
fractional votes for fractional shares held, and will vote in the aggregate and
not by class or series, except as otherwise expressly required by law or when
the Board of Trustees determines that the matter to be voted on affects only the
interests of shareholders of a particular class or series.

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Galaxy is not required under Massachusetts law to hold annual shareholder
meetings and intends to do so only if required by the 1940 Act. Shareholders
have the right to remove Trustees.

SHAREHOLDER SERVICES PLAN

Galaxy has adopted a Shareholder Services Plan pursuant to which Galaxy
intends to enter into servicing agreements with Institutions (including Fleet
Bank and its affiliates). Pursuant to such servicing agreements, Institutions
will render certain administrative and support services to Customers who are the
beneficial owners of Retail A Shares (Shares of the Municipal Money Market and
Massachusetts Municipal Money Market Funds) in consideration for payment of up
to .25% (on an annualized basis) of the average daily net asset value of Retail
A Shares of a Fund beneficially owned by such Customers. Services under the
Shareholder Services Plan may include: aggregating and processing purchase and
redemption requests and placing net purchase and redemption orders with FD
Distributors; processing dividend payments from a Fund; providing Customers with
information as to their positions in Retail A Shares; providing sub-accounting
with respect to Retail A Shares or the information necessary for sub-accounting;
and providing periodic mailings to Customers. Such services are intended to
supplement the services provided by FDISG as administrator and transfer agent,
and are described more fully in the Statements of Additional Information under
"Shareholder Services Plan."

Although the Shareholder Services Plan has been approved with respect to
Retail A Shares of the Funds (Shares of the Connecticut Municipal Money Market
and Massachusetts Municipal Money Market Funds) and Trust Shares of the Money
Market, Government, U.S. Treasury and Tax-Exempt Funds, as of the date of this
Prospectus, Galaxy intends to enter servicing agreements under the Shareholder
Services Plan only with respect to Retail A Shares of each Fund, and to limit
the payment under these servicing agreements for each Fund to no more than .10%
(on an annualized basis) of the average daily net asset value of the Retail A
Shares of the Fund beneficially owned by Customers of Institutions. Galaxy
understands that Institutions may charge fees to their Customers who are the
beneficial owners of Retail A Shares in connection with their accounts with such
Institutions. Any such fees would be in addition to any amounts which may be
received by an Institution under the Shareholder Services Plan. Under the terms
of each servicing agreement entered into with Galaxy, Institutions are required
to provide to their Customers a schedule of any fees that they may charge in
connection with Customer investments in Retail A Shares.

DISTRIBUTION AND SERVICES PLAN

Galaxy has adopted a Distribution and Services Plan pursuant to Rule 12b-1
under the 1940 Act with respect to Retail B Shares of the Money Market Fund.
Under the Distribution and Services Plan, Galaxy may pay (a) FD Distributors or
another person for expenses and activities intended to result in the sale of
Retail B Shares, including the payment of commissions to broker-dealers and
other industry professionals who sell Retail B Shares and the direct or indirect
cost of financing such payments, (b) Institutions for shareholder liaison
services, which means personal services for holders of Retail B Shares and/or
the maintenance of shareholder accounts, such as responding to customer
inquiries and providing information on accounts, and (c) Institutions for
administrative support services, which include but are not limited to (i)
transfer agent and sub-transfer agent services for beneficial owners of Retail B
Shares; (ii) aggregating and processing purchase and redemption orders; (iii)
providing beneficial owners with statements showing their positions in Retail B
Shares; (iv) processing dividend payments; (v) providing sub-accounting services
for Retail B Shares held beneficially; (vi) forwarding shareholder
communications, such as proxies, shareholder reports, dividend and

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<PAGE> 57

tax notices, and updating prospectuses to beneficial owners; and (vii)
receiving, translating and transmitting proxies executed by beneficial owners.

Under the Distribution and Services Plan for Retail B Shares, payments by
Galaxy (i) for distribution expenses may not exceed the annualized rate of .65%
of the average daily net assets attributable to the Money Market Fund's
outstanding Retail B Shares, and (ii) to an Institution for shareholder liaison
services and/or administrative support services may not exceed the annual rates
of .25% and .25%, respectively, of the average daily net assets attributable to
the Money Market Fund's outstanding Retail B Shares which are owned of record or
beneficially by that Institution's Customers for whom the Institution is the
dealer of record or shareholder of record or with whom it has a servicing
relationship. As of the date of this Prospectus, Galaxy intends to limit the
Money Market Fund's payments for shareholder liaison and administrative support
services under the Plan to an aggregate fee of not more than .10% (on an
annualized basis) of the average daily net asset value of Retail B Shares owned
of record or beneficially by Customers of Institutions.

AFFILIATE AGREEMENT FOR SUB-ACCOUNT SERVICES

FDISG has entered into an agreement with Fleet Bank, an affiliate of Fleet,
pursuant to which Fleet Bank will perform certain sub-account and administrative
functions ("Sub-Account Services") on a per-account basis with respect to Trust
Shares of the Money Market, Government and U.S. Treasury Funds held by defined
contribution plans, including maintaining records reflecting separately with
respect to each plan participant's sub-account all purchases and redemptions of
Trust Shares and the dollar value of Trust Shares in each sub-account; crediting
to each participant's sub-account all dividends and distributions with respect
to that sub-account; and transmitting to each participant a periodic statement
regarding the sub-account as well as any proxy materials, reports and other
material Fund communications. Fleet Bank is compensated by FDISG for the
Sub-Account Services and in connection therewith the transfer agency fees
payable by Trust Shares of the Money Market, Government and U.S. Treasury Funds
to FDISG have been increased by an amount equal to these fees. In substance,
therefore, the holders of Trust Shares of these Funds indirectly bear these
fees.

CUSTODIAN AND TRANSFER AGENT

The Chase Manhattan Bank, located at 1 Chase Manhattan Plaza, New York, New
York 10081, a wholly-owned subsidiary of The Chase Manhattan Corporation, serves
as custodian of the Funds' assets, and First Data Investor Services Group, Inc.
("FDISG"), a wholly-owned subsidiary of First Data Corporation, serves as
Galaxy's transfer and dividend disbursing agent. Services performed by both
entities for the Funds are described in the Statement of Additional Information.
Communications to FDISG should be directed to FDISG at P.O. Box 5108, 4400
Computer Drive, Westboro, Massachusetts 01581-5108.

EXPENSES

Except as noted below, Fleet and FDISG bear all expenses in connection with
the performance of their advisory and administrative services for the Funds.
Galaxy bears the expenses incurred in the Funds' operations. Such expenses
include taxes; interest; fees (including fees paid to its Trustees and officers
who are not affiliated with FDISG); SEC fees; state securities qualification
fees; costs of preparing and printing prospectuses for regulatory purposes and
for distribution to shareholders; advisory, administration, shareholder
servicing, Rule 12b-1 distribution, fund accounting and custody fees; charges of
the transfer agent and dividend disbursing agent; certain insurance premiums;
outside auditing and legal expenses; cost of

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independent pricing services; costs of shareholder reports and meetings; and any
extraordinary expenses. The Funds also pay for any brokerage fees and
commissions in connection with the purchase of portfolio securities.

PERFORMANCE AND YIELD INFORMATION

From time to time, in advertisements or in reports to shareholders, the
yields of the Funds, as a measure of their performance, may be quoted and
compared to those of other mutual funds with similar investment objectives and
to other relevant indexes or to rankings prepared by independent services or
other financial or industry publications that monitor the performance of mutual
funds. For example, such data is reported in national financial publications
such as Donoghue's Money Fund Report(R), a widely recognized independent
publication that monitors the performance of mutual funds. Also, the Funds'
yield data may be reported in national financial publications including, but not
limited to, Money Magazine, Forbes, Barron's, The Wall Street Journal, and The
New York Times, or in publications of a local or regional nature. The taxable
money market Funds' performance may also be compared to the average yields
reported by the Bank Rate Monitor for money market deposit accounts offered by
the 50 leading banks and thrift institutions in the top five standard
metropolitan statistical areas. The performance will be calculated separately
for Trust Shares, Retail A Shares and/or Retail B Shares of the Money Market,
Government, U.S. Treasury and Tax-Exempt Funds.

The yields of the Funds will refer to the income generated over a seven-day
period identified in the advertisement. This income is annualized, i.e., the
income during a particular week is assumed to be generated each week over a
52-week period, and is shown as a percentage of the investment. Each Fund may
also advertise the "effective yield" which is calculated similarly but, when
annualized, the income from an investment in the Funds is assumed to be
reinvested. Consequently, the "effective yield" will be slightly higher because
of the compounding effect of the assumed reinvestment. Also, each of the
Tax-Exempt Money Market Funds may from time to time advertise a "tax-equivalent
yield" to demonstrate the level of taxable yield necessary to produce an
after-tax yield equivalent to that achieved by the Fund. The "tax-equivalent
yield" will be computed by dividing the tax-exempt portion of a Fund's yield by
a denominator consisting of one minus a stated federal income tax rate and
adding the product to that portion, if any, of the Fund's yield which is not
tax-exempt.

In addition, the U.S. Treasury Fund may calculate a "state flow through
yield" which shows the level of taxable yield needed to produce an after-tax
yield equivalent to a particular state's tax-exempt yield achieved by the Fund.
The "state flow through yield" refers to that portion of income which is derived
from interest income on direct obligations of the U.S. Government, its agencies
or instrumentalities and which qualifies for exemption from state taxes. The
yield calculation assumes that 100% of the interest income is exempt from state
personal income tax. A "state flow through yield" will be computed by dividing
the tax-exempt portion of the Fund's yield by a denominator consisting of one
minus a stated income tax rate. For illustrative purposes, state flow through
yields assume the payment of state income tax rates of 3%, 7% or 11%.

The Funds' yields will fluctuate and any quotation of yield should not be
considered as representative of future performance of the Funds. Since yields
fluctuate, yield data cannot necessarily be used to compare an investment in a
Fund's shares with bank deposits, savings accounts and similar investment
alternatives which often provide an agreed or guaranteed fixed yield for a
stated period of time. Shareholders should remember that performance is
generally a function of the kind and quality of the instruments held in a
portfolio, portfolio maturity, operating expenses, and market conditions. Any
fees charged directly by Institutions to accounts of Customers that have
invested in Retail Shares of a Fund will not be included in calculations of
yield.

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The portfolio managers of the Funds and other investment professionals may
from time to time discuss in advertising, sales literature or other material,
including periodic publications, various topics of interest to shareholders and
prospective investors. The topics may include but are not limited to the
advantages and disadvantages of investing in tax-deferred and taxable
investments; Fund performance and how such performance may compare to various
market indices; shareholder profiles and hypothetical investor scenarios; the
economy; the financial and capital markets; investment strategies and
techniques; investment products; and tax, retirement and investment planning.

MISCELLANEOUS

Shareholders will receive unaudited semi-annual reports describing the
Funds' investment operations and annual financial statements audited by
independent certified public accountants.

As used in this Prospectus, a "vote of the holders of a majority of the
outstanding Shares" of Galaxy, a particular Fund or a particular series of
shares means, with respect to the approval of an investment advisory agreement,
a distribution plan or a change in an investment objective or fundamental
investment policy, the affirmative vote of the holders of the lesser of (a) more
than 50% of the outstanding shares of Galaxy, such Fund or such series of
shares, or (b) 67% or more of the shares of Galaxy, such Fund or such series of
shares present at a meeting if more than 50% of the outstanding shares of
Galaxy, such Fund or such series of shares are represented at the meeting in
person or by proxy.