GALAXY FUND /DE/, 497, 2000-03-22

GALAXY FUND /DE/
497, 2000-03-22

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<PAGE>

[Front cover page]
The Galaxy Fund

Prospectus

February 28, 2000

Galaxy Money Market Fund
Galaxy U.S. Treasury Fund
Galaxy Tax-Exempt Fund
Galaxy Short-Term Bond Fund
Galaxy Intermediate Government Income Fund
Galaxy High Quality Bond Fund
Galaxy Rhode Island Municipal Bond Fund
Galaxy Asset Allocation Fund
Galaxy Growth and Income Fund
Galaxy International Equity Fund

BKB Shares

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved any shares of these Funds or determined if this
prospectus is accurate or complete. Anyone who tells you otherwise is committing
a crime.

<PAGE>

<TABLE>
<CAPTION>
Contents
<S> <C>
1 Risk/return summary
1 Introduction
3 Galaxy Money Market Fund
7 Galaxy U.S. Treasury Fund
10 Galaxy Tax-Exempt Fund
14 Galaxy Short-Term Bond Fund
20 Galaxy Intermediate Government Income Fund
26 Galaxy High Quality Bond Fund
31 Galaxy Rhode Island Municipal Bond Fund
36 Galaxy Asset Allocation Fund
42 Galaxy Growth and Income Fund
47 Galaxy International Equity Fund
52 Additional information about risk
54 Fund management
55 How to invest in the Funds
55 How sales charges work
59 Buying, selling and exchanging BKB Shares
60 How to buy BKB Shares
61 How to sell BKB Shares
62 Exchange privilege
63 Other transaction policies
64 Dividends, distributions and taxes
67 Galaxy investor programs
69 How to reach Galaxy
70 Financial highlights
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

INTRODUCTION

This prospectus describes the BKB Shares of the Galaxy Money Market Fund,
Galaxy U.S. Treasury Fund, Galaxy Tax-Exempt Fund, Galaxy Short-Term Bond
Fund, Galaxy Intermediate Government Income Fund, Galaxy High Quality Bond
Fund, Galaxy Rhode Island Municipal Bond Fund, Galaxy Asset Allocation Fund,
Galaxy Growth and Income Fund and Galaxy International Equity Fund. BKB
Shares are offered through this prospectus without a sales charge (sometimes
called a front-end load) only to those shareholders of the Boston 1784 Funds
who are not eligible to receive Trust Shares of their corresponding Galaxy
Funds at the time the Boston 1784 Funds are reorganized into Galaxy. BKB
Shares of each Fund will convert into Retail A Shares of the same Fund on the
first anniversary of the closing of the reorganization of the Boston 1784
Funds into Galaxy, provided that prior thereto the Board of Trustees of
Galaxy has determined that such conversion is in the best interest of the
holders of BKB Shares. Because of this conversion feature, some information
is provided in this prospectus for Retail A Shares of the Funds. Retail A
Shares of the Funds are offered through separate prospectuses available from
Galaxy by calling the phone number on the back cover of this prospectus.
Prior to the date of this prospectus, the Funds had not offered BKB Shares.

On the following pages, you'll find important information about each Fund,
including:

- - the Fund's investment objective (sometimes called the Fund's goal) and the
main investment strategies used by the Fund's investment adviser in trying
to achieve that objective

- - the main risks associated with an investment in the Fund

- - the past performance of the Fund measured on both a year-by-year and
long-term basis

- - the fees and expenses that you will pay as an investor in the Fund.

THE FUNDS' INVESTMENT ADVISER

Fleet Investment Advisors Inc., which is referred to in this prospectus as the
Adviser, is the investment adviser for all of these Funds. The Adviser, an
indirect wholly-owned subsidiary of FleetBoston Financial Corporation, was
established in 1984 and has its main office at 75 State Street, Boston,
Massachusetts 02109. The Adviser also provides investment management and
advisory services to individual and institutional clients and manages the other
Galaxy investment portfolios. As of December 31, 1999, the Adviser managed over
$68 billion in assets.

AN INVESTMENT IN THE FUNDS ISN'T A FLEET BANK DEPOSIT AND IT ISN'T INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE GALAXY MONEY MARKET FUND, GALAXY U.S. TREASURY FUND AND
GALAXY TAX-EXEMPT FUND SEEK TO PRESERVE

<PAGE>

THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT'S POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUNDS. YOU COULD ALSO LOSE MONEY BY INVESTING IN ANY OF THE
OTHER FUNDS.

-2-
<PAGE>

Galaxy Money Market Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks as high a level of current income as is consistent with liquidity
and stability of principal.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund invests in a diversified portfolio of money market instruments,
including commercial paper, notes and bonds issued by U.S. corporations,
obligations issued by the U.S. Government and its agencies and
instrumentalities, and obligations issued by U.S. and foreign banks, such as
certificates of deposit. The Fund also invests in repurchase agreements backed
by U.S. Government obligations.

The Fund will only buy a security if it has the highest short-term rating from
at least two nationally recognized statistical rating organizations, or one such
rating if only one organization has rated the security. If the security is not
rated, it must be determined by the Adviser to be of comparable credit quality.

[Sidenote:]
MATURITY
The maturity of a security is the date when the issuer must repay the security's
entire principal amount to an investor, such as a fund.

[Sidenote:]
MONEY MARKET INSTRUMENTS

Money market instruments are short-term debt obligations issued by banks,
corporations, the U.S. Government and state and local governments. Money market
instruments purchased by the Galaxy money market funds must meet strict
requirements as to investment quality, maturity and diversification. The Galaxy
money market funds do not invest in securities with remaining maturities of more
than 397 days (subject to certain exceptions) and the average maturity of all
securities held by a particular Galaxy money market fund must be 90 days or
less. Each Galaxy money market fund tries to maintain its share price at $1.00
to protect your investment from loss.

-3-
<PAGE>

[Sidenote:]
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which a fund buys securities from a
seller (usually a bank or broker-dealer) who agrees to buy them back from the
fund on a certain date and at a certain price.

THE MAIN RISKS OF INVESTING IN THE FUND

While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:

- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.

- - REPURCHASE AGREEMENTS - Repurchase agreements carry the risk that the other
party may not fulfill its obligations under the agreement. This could cause
the value of your investment to decline.

- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.

- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.

HOW THE FUND HAS PERFORMED

The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that all
dividends and distributions are reinvested in the Fund. How the Fund has
performed in the past doesn't necessarily show how it will perform in the
future.

As of the date of this prospectus, the Fund had not offered BKB Shares to
investors. The returns below represent the returns for Retail A Shares of the
Fund which are offered in a separate prospectus. Retail A Shares and BKB Shares
of the Fund should have returns that are substantially the same because they
represent interests in the same portfolio securities and differ only to the
extent that they bear different expenses.

-4-
<PAGE>

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year.

[Sidenote:]
Best quarter:..... 1.96% for the quarter ending June 30, 1990
Worst quarter:.... 0.65% for the quarter ending September 30, 1993

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
for the periods ended December 31, 1999.

<TABLE>
<CAPTION>
1 year 5 years 10 years Since inception
<S> <C> <C> <C>
Retail A Shares 4.63% 4.92% 4.86% 5.50% (11/17/86)
</TABLE>

To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).

EXPENSES OF THE FUND

There are no sales charges when you buy or sell BKB Shares or Retail A Shares of
the Fund. The following table shows the expenses you may pay when you buy and
hold BKB Shares of the Fund. It is expected that your BKB Shares will
convert into Retail A Shares of the Fund on the first anniversary of the closing
of the reorganization of the Boston 1784 Funds into Galaxy, provided that
prior thereto the Board of Trustees of Galaxy has determined that such
conversion is in the best interest of the holders of BKB Shares. Because of
this conversion feature, information is also provided as to the expenses you
may pay when you buy and hold Retail A Shares of the Fund.

-5-
<PAGE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Distribution and Total Fund operating
Management fees service (12b-1) fees Other expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.40%(1) None 0.27% 0.67%(2)
Retail A Shares 0.40%(1) None 0.27% 0.67%(3)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.36%. This fee waiver may be revised or discontinued at
any time.
(2) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.63% until the later
of one year from the date of the reorganization or such time as the
Board of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.
(3) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.63%.

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:

- - you invest $10,000 for the periods shown

- - you reinvest all dividends and distributions in the Fund

- - you sell all your shares at the end of the periods shown

- - your investment has a 5% return each year

- - your BKB Shares convert into Retail A Shares after one year

- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $68 N/A N/A N/A
Retail A Shares $68 $214 $373 $835
</TABLE>

-6-
<PAGE>

Galaxy U.S. Treasury Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks current income with liquidity and stability of principal.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund invests primarily in securities issued or guaranteed by the U.S.
Treasury and certain U.S. Government agencies and instrumentalities that provide
income that is generally not subject to state income tax. Under normal
circumstances, the Fund invests at least 65% of its total assets in money market
instruments issued by the U.S. Treasury, including bills, notes and bonds.

[Sidenote:]
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations are among the safest of all investments because they
are backed by the "full faith and credit" of the U.S. Government.

THE MAIN RISKS OF INVESTING IN THE FUND

While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:

- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.

- - CREDIT RISK - Although U.S. Government securities, particularly U.S.
Treasury securities, have historically involved little credit risk, if an
issuer fails to pay interest or repay principal, the value of your
investment could decline.

- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.

HOW THE FUND HAS PERFORMED

The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that all
dividends and distributions

-7-
<PAGE>

are reinvested in the Fund. How the Fund has performed in the past doesn't
necessarily show how it will perform in the future.

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year.

[Sidenote:]

Best quarter: 1.28% for the quarter ending June 30, 1995
Worst quarter: 0.65% for the quarter ending June 30, 1993

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
for the periods ended December 31, 1999.

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C>
Retail A Shares 4.20% 4.63% 4.27% (1/22/91)
</TABLE>

To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).

EXPENSES OF THE FUND

-8-
<PAGE>

on the first anniversary of the closing of the reorganization of the Boston
1784 Funds into Galaxy, provided that prior thereto the Board of Trustees of
Galaxy has determined that such conversion is in the best interest of the
holders of BKB Shares. Because of this conversion feature, information is
also provided as to the expenses you may pay when you buy and hold Retail A
Shares of the Fund.

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.38% None 0.25% 0.63%(1)
Retail A Shares 0.38% None 0.25% 0.63%
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.63% until the later of
one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:

- - you invest $10,000 for the periods shown

- - you reinvest all dividends and distributions in the Fund

- - you sell all your shares at the end of the periods shown

- - your investment has a 5% return each year

- - your BKB Shares convert into Retail A Shares after one year

- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $64 N/A N/A N/A
Retail A Shares $64 $202 $351 $786
</TABLE>

-9-
<PAGE>

Galaxy Tax-Exempt Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks as high a level of current interest income exempt from federal
income tax as is consistent with stability of principal.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund normally invests at least 80% of its total assets in municipal
securities, which are securities issued by state and local governments and other
political or public bodies or agencies and that pay interest which is exempt
from regular federal income tax. Under normal conditions, the Fund will invest
no more than 20% of its total assets in taxable obligations, such as U.S.
Government obligations, money market instruments and repurchase agreements.

Municipal securities purchased by the Fund may include general obligation
securities, revenue securities and private activity bonds. The interest on
private activity bonds may be subject to the federal alternative minimum tax.
Investments in private activity bonds will not be treated as investments in
municipal securities for purposes of the 80% requirement stated above.

The Fund will only buy a security if it has one of the two highest short-term
ratings from at least two nationally recognized statistical rating
organizations, or one such rating if only one organization has rated the
security. If the security is not rated, it must be determined by the Adviser to
be of comparable credit quality.

[Sidenote:]
MUNICIPAL SECURITIES
State and local governments issue municipal securities to raise money to finance
public works, to repay outstanding obligations, to raise funds for general
operating expenses and to make loans to other public institutions. Some
municipal securities, known as private activity bonds, are issued to finance
projects for private companies. Municipal securities, which can be issued as
bonds, notes or commercial paper, usually have fixed interest rates, although
some have interest rates that change from time to time.

-10-
<PAGE>

[Sidenote:]
TYPES OF MUNICIPAL SECURITIES
GENERAL OBLIGATION SECURITIES are secured by the issuer's full faith, credit and
taxing power. REVENUE OBLIGATION SECURITIES are usually payable only from
revenues derived from specific facilities or revenue sources. PRIVATE ACTIVITY
BONDS are usually revenue obligations since they are typically payable by the
private user of the facilities financed by the bonds.

[Sidenote:]
DEBT OBLIGATIONS
When a fund buys a debt obligation such as a bond, it is in effect lending money
to the company, government or other entity that issued the bond. In return, the
issuer has an obligation to make regular interest payments and to repay the
original amount of the loan on a given date, known as the maturity date. A bond
MATURES when it reaches its maturity date. Bonds usually have fixed interest
rates, although some have rates that fluctuate based on market conditions and
other factors.

THE MAIN RISKS OF INVESTING IN THE FUND

While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:

- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.

- - CREDIT RISK - Although credit risk is very low because the Fund only
invests in high quality obligations, if an issuer fails to pay interest or
repay principal, the value of your investment could decline. The ability of
a state or local government issuer to make payments can be affected by many
factors, including economic conditions, the flow of tax revenues and
changes in the level of federal, state or local aid.

- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.

HOW THE FUND HAS PERFORMED

-11-
<PAGE>

[Sidenote:]
AVERAGE WEIGHTED MATURITY
Average weighted maturity gives you the average time until all debt obligations
in a fund come due or MATURE. It is calculated by averaging the time to maturity
of all debt obligations held by a fund with each maturity "weighted" according
to the percentage of assets it represents.

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year.

[Sidenote:]

Best quarter: 1.41% for the quarter ending December 31, 1990
Worst quarter: 0.45% for the quarter ending September 30, 1993

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
for the periods ended December 31, 1999.

<TABLE>
<CAPTION>
1 year 5 years 10 years Since inception
<S> <C> <C> <C>
Retail A Shares 2.59% 2.87% 3.07% 3.43% (6/23/88)
</TABLE>

To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).

[Sidenote:]
TAX-EQUIVALENT YIELD
One way to understand the tax advantages of a tax-exempt fund is to compare its
after-tax return to that of a taxable investment. For example, suppose a taxable
fund pays a return of 10%. If you're in the 36% federal income tax bracket, the
fund's return after taxes is 6.4%. When a tax-exempt fund pays a return of 10%,
you don't pay tax. So if you're in the 36% tax bracket, that's the equivalent of
earning about 15.6% on a taxable fund. If you're in a low tax bracket, however,
it may not be helpful to invest in a tax-exempt fund if you can achieve a higher
after-tax return from a taxable investment.

EXPENSES OF THE FUND

-12-
<PAGE>

Galaxy, provided that prior thereto the Board of Trustees of Galaxy has
determined that such conversion is in the best interest of the holders of BKB
Shares. Because of this conversion feature, information is also provided as
to the expenses you may pay when you buy and hold Retail A Shares of the Fund.

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.40%(1) None 0.22%(1) 0.62%(2)
Retail A Shares 0.40%(1) None 0.22% 0.62%(3)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.37%. Affiliates of the Adviser are waiving a portion
of the shareholder servicing fees (that are included in Other expenses)
with respect to BKB Shares so that Other expenses for BKB Shares are
expected to be 0.15%. These fee waivers may be revised or discontinued at
any time.
(2) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.52% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into Retail A
Shares.
(3) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.59%.

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:

- - you invest $10,000 for the periods shown o you reinvest all dividends and
distributions in the Fund

- - you sell all your shares at the end of the periods shown

- - your investment has a 5% return each year o your BKB Shares convert into
Retail A Shares after one year

- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $63 N/A N/A N/A
Retail A Shares $63 $199 $346 $774
</TABLE>

-13-
<PAGE>

Galaxy Short-Term Bond Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks a high level of current income consistent with preservation of
capital.

[Sidenote:]
PRESERVATION OF CAPITAL
Preservation of capital means protecting the amount of money you invest in a
fund. If a fund seeks to preserve capital, it will try to maintain a relatively
stable share price so your investment is protected.

[Sidenote:]
DEBT OBLIGATIONS
When a fund buys a debt obligation such as a bond, it is in effect lending
money to the company, government or other entity that issued the bond. In
return, the issuer has an obligation to make regular interest payments and to
repay the original amount of the loan on a given date, known as the maturity
date. A bond MATURES when it reaches its maturity date. Bonds usually have
fixed interest rates, although some have rates that fluctuate based on market
conditions and other factors.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund invests primarily in debt obligations of U.S. and foreign corporations,
including bonds and notes, and in debt obligations issued or guaranteed by the
U.S. Government and its agencies or instrumentalities or by foreign governments
or their political subdivisions and instrumentalities. It also invests in
asset-backed and mortgage-backed securities and in money market instruments,
such as commercial paper and the obligations of U.S. and foreign banks. The Fund
normally invests at least 65% of its total assets in bonds and debentures.

In selecting portfolio securities for the Fund, the Adviser monitors and
evaluates economic trends. It establishes duration targets, ranges of interest
payments on bonds of various maturities and determines the appropriate
allocation of the Fund's assets among various market sectors.

Nearly all Fund investments will be of investment grade quality. These are
securities which have one of the top four ratings assigned by Standard & Poor's
Ratings Group (S&P) or Moody's Investors Service, Inc. (Moody's), or are unrated
securities determined by the Adviser to be of comparable quality. Under normal
market conditions, the Fund will invest at least 65% of its total assets in
securities that have one of the top three ratings assigned by S&P or Moody's, or
unrated securities determined by the Adviser to be of comparable quality.
Occasionally, the rating of a security held by the Fund may be downgraded to
below investment grade. If that happens, the Fund doesn't have to sell the
security unless the Adviser determines that under the circumstances the security
is no longer an appropriate investment for the Fund. However, the Fund will sell
promptly any securities that are not rated investment grade by either S&P or
Moody's if the securities exceed 5% of the Fund's net assets.

The Fund's average weighted maturity will be less than three years under normal
circumstances.

-14-
<PAGE>

The Fund will sell a portfolio security when, as a result of changes in the
economy or the performance of the security or other circumstances, the Adviser
believes that holding the security is no longer consistent with the Fund's
investment objective.

[Sidenote:]
DURATION
Duration is an approximate measure of the price sensitivity of a fund to changes
in interest rates. Unlike maturity which measures only the time until final
payment, duration gives you the average time it takes to receive all expected
cash flows (including interest payments, prepayments and final payments) on the
debt obligations held by a fund.

The Fund may trade its investments frequently in trying to achieve its
investment goal.

THE MAIN RISKS OF INVESTING IN THE FUND

All mutual funds are affected by changes in the economy and swings in investment
markets. These can occur within or outside the U.S. or worldwide, and may affect
only particular companies or industries.

In addition, the Fund carries the following main risks:

- - INTEREST RATE RISK - The prices of debt securities generally tend to move
in the opposite direction to interest rates. When rates are rising, the
prices of debt securities tend to fall.

-15-
<PAGE>

When rates are falling, the prices of debt securities tend to rise.
Generally, the longer the time until maturity, the more sensitive the price
of a debt security is to interest rate changes.

- - CREDIT RISK - The value of debt securities also depends on the ability of
issuers to make principal and interest payments. If an issuer can't meet
its payment obligations or if its credit rating is lowered, the value of
its debt securities may fall. Debt securities which have the lowest of the
top four ratings assigned by S&P or Moody's are considered to have
speculative characteristics. Changes in the economy are more likely to
affect the ability of the issuers of these securities to make payments of
principal and interest than is the case with higher-rated securities.

- - PREPAYMENT/EXTENSION RISK - Changes in interest rates may cause certain
debt securities held by the Fund, particularly asset-backed and
mortgage-backed securities, to be paid off much sooner or later than
expected, which could adversely affect the Fund's value. In the event that
a security is paid off sooner than expected because of a decline in
interest rates, the Fund may be unable to recoup all of its initial
investment and may also suffer from having to reinvest in lower-yielding
securities. In the event of a later than expected payment because of a rise
in interest rates, the value of the obligation will decrease and the Fund
may suffer from the inability to invest in higher-yielding securities.

- - FREQUENT TRADING - Frequent trading of investments usually increases the
chance that the Fund will pay investors short-term capital gains. These
gains are taxable at higher rates than long-term capital gains. Frequent
trading could also mean higher brokerage commissions and other transaction
costs, which could reduce the Fund's returns.

HOW THE FUND HAS PERFORMED

-16-
<PAGE>

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year. The figures don't include any sales charges that
investors pay when buying or selling Retail A Shares of the Fund. If sales
charges were included, the returns would be lower.

[Sidenote:]

Best quarter: 4.14% for the quarter ending September 30, 1992
Worst quarter: -0.66% for the quarter ending June 30, 1994

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
(after taking into account any sales charges) for the periods ended December 31,
1999, as compared to a broad-based market index. The returns for Retail A Shares
of the Fund for periods prior to December 1, 1995 have been restated to include
the effect of the maximum 3.75% front-end sales charge which went into effect on
that date.

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares -1.49% 4.83% 4.49% (12/30/91)
Lehman Brothers One to 2.90% 6.47% 5.54% (since 12/31/91)
Three Year Government Bond
Index
</TABLE>

For current yield information, please call 1-877-BUY-GALAXY (1-877-289-4252).

[Sidenote:]
The Lehman Brothers One to Three Year Government Bond Index is an unmanaged
index which tracks the performance of short-term U.S. Government bonds.

-17-
<PAGE>

FEES AND EXPENSES OF THE FUND

The following table shows the fees and expenses you may pay when you buy and
hold BKB Shares of the Fund. It is expected that your BKB Shares will convert
into Retail A Shares of the Fund on the first anniversary of the closing of
the reorganization of the Boston 1784 Funds into Galaxy, provided that prior
thereto the Board of Trustees of Galaxy has determined that such conversion
is in the best interest of the holders of BKB Shares. Because of this
conversion feature, information is also provided as to the fees and expenses
you may pay when you buy and hold Retail A Shares of the Fund.

Shareholder fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum sales charge (load) on Maximum deferred sales charge
purchases shown as a % of the (load) shown as a % of the offering
offering price price or sale price, whichever is less
<S> <C> <C>
BKB Shares None None

Retail A Shares 3.75%(1) None(2)
</TABLE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Distribution Total Fund
Management and service Other operating
fees (12b-1) fees expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75%(3) None 0.38%(3) 1.13%(4)

Retail A Shares 0.75%(3) None 0.40% 1.15%(5)
</TABLE>

* The expenses in the table show the expenses for BKB Shares of the Fund and
Retail A Shares following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
-- How sales charges work."
(3) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.55%. Affiliates of the Adviser are waiving a portion
of the shareholder servicing fees (that are included in Other expenses)
with respect to BKB Shares so that Other expenses for BKB Shares are
expected to be 0.23%. These fee waivers may be revised or discontinued at
any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.78% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.
(5) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.95%.

-18-
<PAGE>

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:
- - you invest $10,000 for the periods shown
- - you reinvest all dividends and distributions in the Fund
- - you sell all your shares at the end of the periods shown
- - your investment has a 5% return each year
- - your BKB Shares convert into Retail A Shares after one year
- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $115 N/A N/A N/A
Retail A Shares $488 $727 $984 $1,720
</TABLE>

[Sidenote:]
PORTFOLIO MANAGER
The Adviser's Taxable Fixed Income Strategy Committee is responsible for the
day-to-day management of the Fund's investment portfolio. The Committee has
managed the Fund since October of 1999.

-19-
<PAGE>

Galaxy Intermediate Government Income Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks the highest level of current income consistent with prudent risk
of capital.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund normally invests at least 65% of its total assets in debt obligations
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities. It also invests in debt obligations of U.S. corporations,
asset-backed and mortgage-backed securities and money market instruments, such
as commercial paper and obligations of U.S. banks and U.S. branches of foreign
banks.

In selecting portfolio securities for the Fund, the Adviser monitors and
evaluates economic trends. It establishes duration targets, ranges of interest
rates on bonds of various maturities and determines the appropriate allocation
of the Fund's investments among various market sectors.

Nearly all Fund investments will be of investment grade quality and will have
one of the top three ratings assigned by Standard & Poor's Ratings Group ("S&P")
or Moody's Investors Service, Inc. ("Moody's"), or will be unrated securities
determined by the Adviser to be of comparable quality. Occasionally, the rating
of a security held by the Fund may be downgraded to below the minimum required
rating. If that happens, the Fund doesn't have to sell the security unless the
Adviser determines that under the circumstances the security is no longer an
appropriate investment for the Fund. However, the Fund will sell promptly any
securities that are not rated investment grade by either S&P or Moody's if the
securities exceed 5% of the Fund's net assets.

The Fund's average weighted maturity will be between three and ten years under
normal circumstances.

-20-
<PAGE>

[Sidenote:]
U.S. GOVERNMENT OBLIGATIONS
U.S. Government obligations are debt obligations issued or guaranteed by the
U.S. Government or one of its agencies or instrumentalities. U.S. Government
obligations generally have less credit risk than other debt obligations.

The Fund may trade its investments frequently in trying to achieve its
investment goal.

THE MAIN RISKS OF INVESTING IN THE FUND

In addition, the Fund carries the following main risks:

- - INTEREST RATE RISK - The prices of debt securities generally tend to move
in the opposite direction to interest rates. When rates are rising, the
prices of debt securities tend to fall. When rates are falling, the prices
of debt securities tend to rise. Generally, the longer the time until
maturity, the more sensitive the price of a debt security is to interest
rate changes.

- - FREQUENT TRADING - Frequent trading of instruments usually increases the
chance that the Fund will pay investors short-term capital gains. These
gains are taxable at higher rates than long-term capital gains. Frequent
trading could also mean higher brokerage commissions and other transaction
costs, which could reduce the Fund's returns.

-21-
<PAGE>

HOW THE FUND HAS PERFORMED

Retail A Shares of the Fund were first issued during the fiscal year ended
October 31, 1992. The returns for Retail A Shares of the Fund for prior periods
represent the returns for Trust Shares of the Fund which also are offered in a
separate prospectus. Prior to November 1, 1993, the returns for Retail A Shares
and Trust Shares of the Fund were the same because each class of shares had the
same expenses.

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

[Sidenote:]

Best quarter: 6.13% for the quarter ending September 30, 1992
Worst quarter: -2.90% for the quarter ending March, 1994

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
(after taking into account any sales charges) for the periods ended December 31,
1999, as compared to broad-based market indices. The returns for Retail A Shares
of the Fund for periods prior to December 1, 1995 have been restated to include
the effect of the maximum 3.75% front-end sales charge which went into effect on
that date.

-22-
<PAGE>

<TABLE>
<CAPTION>
1 year 5 years 10 years Since inception
<S> <C> <C> <C> <C>
Retail A Shares -5.66% 5.35% 5.67% 6.28% (9/1/88)
Lehman Brothers Intermediate
Government/
Corporate Bond Index 0.39% 7.10% 7.26% 7.74% (since 9/1/88)
Lehman Brothers Aggregate Bond Index -0.82% 7.73% 7.70% 8.34% (since 9/1/88)
</TABLE>

For current yield information, please call 1-877-BUY-GALAXY (1-877-289-4252).

[Sidenote:]

The Lehman Brothers Intermediate Government/Corporate Bond Index is an unmanaged
index which tracks the performance of intermediate-term U.S. Government and
corporate bonds.

[Sidenote:]
The Lehman Brothers Aggregate Bond Index is an unmanaged index made up of the
Lehman Brothers Government/Corporate Bond Index, its Mortgage Backed Securities
Index and its Asset Backed Securities Index.

FEES AND EXPENSES OF THE FUND

The following table shows the fees and expenses you may pay when you buy and
hold BKB Shares of the Fund. It is expected that your BKB Shares will convert
into Retail A Shares of the Fund on the first anniversary of the closing of
the reorganization of the Boston 1784 Funds into Galaxy, provided that the
Board of Trustees of Galaxy has determined that such conversion is in the
best interest of the holders of BKB Shares. Because of this conversion
feature, information is also provided as to the fees and expenses you may pay
when you buy and hold Retail A Shares of the Fund.

Shareholders fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum sales charge (load) on Maximum deferred sales charge
purchases shown as a % of the (load) shown as a % of the offering
offering price price or sale price, whichever is less
<S> <C> <C>
BKB Shares None None

Retail A Shares 3.75%(1) None(2)
</TABLE>

-23-
<PAGE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Management fees Distribution and Other expenses Total Fund operating
service (12b-1) fees expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75%(3) None 0.33%(3) 1.08%(4)

Retail A Shares 0.75%(3) None 0.38% 1.13%(5)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A Shares
of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
-- How sales charges work."
(3) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.55%. Affiliates of the Adviser are waiving a portion
of the shareholder servicing fees (that are included in Other expenses)
with respect to BKB Shares so that Other expenses for BKB Shares are
expected to be 0.25%. These fee waivers may be revised or discontinued at
any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total
Fund operating expenses for BKB Shares of the Fund to 0.80% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.
(5) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.93%.

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:

- - you invest $10,000 for the periods shown

- - you reinvest all dividends and distributions in the Fund

- - you sell all your shares at the end of the periods shown

- - your investment has a 5% return each year

- - your BKB Shares convert into Retail A Shares after one year

- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $110 N/A N/A N/A
Retail A Shares $486 $721 $974 $1,698
</TABLE>

-24-
<PAGE>

[Sidenote:]
PORTFOLIO MANAGER
The Fund's portfolio manager is Marie M. Schofield, CFA, a Senior Vice President
of the Adviser. She's primarily responsible for the day-to-day management of the
Fund's investment portfolio. Ms. Schofield, who has over 20 years of investment
experience, has been with the Adviser since 1990 and served as a Vice President
and Manager of Fixed Income Investments until February 1999. She has managed the
Fund since December 1996.

-25-
<PAGE>

Galaxy High Quality Bond Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks a high level of current income consistent with prudent risk of
capital.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund invests primarily in obligations issued or guaranteed by the U.S.
Government, its agencies and instrumentalities, as well as in corporate debt
obligations such as notes and bonds. The Fund also invests in asset-backed and
mortgage-backed securities and in money market instruments, such as commercial
paper and bank obligations.

Nearly all Fund investments will be of investment grade quality. These are
securities which have one of the top four ratings assigned by Standard & Poor's
Ratings Group (S&P) or Moody's Investors Service, Inc. (Moody's), or are unrated
securities determined by the Adviser to be of comparable quality. Under normal
market conditions, the Fund will invest at least 65% of its total assets in high
quality securities that have one of the top two ratings assigned by S&P or
Moody's, or unrated securities determined by the Adviser to be of comparable
quality. High quality securities tend to pay less income than lower-rated
securities. Occasionally, the rating of a security held by the Fund may be
downgraded to below investment grade. If that happens, the Fund doesn't have to
sell the security unless the Adviser determines that under the circumstances the
security is no longer an appropriate investment for the Fund. However, the Fund
will sell promptly any securities that are not rated investment grade by either
S&P or Moody's if the securities exceed 5% of the Fund's net assets.

The Fund's average weighted maturity will vary from time to time depending on
current market and economic conditions and the Adviser's assessment of probable
changes in interest rates.

The Fund may trade its investments frequently in trying to achieve its
investment goal.

-26-
<PAGE>

THE MAIN RISKS OF INVESTING IN THE FUND

In addition, the Fund carries the following main risks:

HOW THE FUND HAS PERFORMED

-27-
<PAGE>

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year, thereby giving some indication of the risk of
investing in the Fund. The figures don't include any sales charges that
investors pay when buying or selling Retail A Shares of the Fund. If sales
charges were included, the returns would be lower.

[Sidenote:]

Best quarter: 7.54% for the quarter ending June 30, 1995
Worst quarter: -3.85% for the quarter ending March 31, 1994

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares -7.71% 6.22% 6.44% (12/14/90)
Lehman Brothers
Intermediate Government/
Corporate Bond Index 0.39% 7.10% 7.15% (since 11/30/90)
</TABLE>

For current yield information, please call 1-877-BUY-GALAXY (1-877-289-4252).

-28-
<PAGE>

[Sidenote:]
The Lehman Brothers Intermediate Government/Corporate Bond Index is an unmanaged
index which tracks the performance of intermediate-term U.S. Government and
corporate bonds.

FEES AND EXPENSES OF THE FUND

Shareholder fees (fees paid directly from your investment)

<TABLE>
<CAPTION>
Maximum sales charge (load) on Maximum deferred sales charge
purchases shown as a % of the (load) shown as a % of the offering
offering price price or sale price, whichever is less
<S> <C> <C>
BKB Shares None None
Retail A Shares 3.75%(1) None(2)
</TABLE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Distribution and Other Total Fund operating
Management fees service (12b-1) fees expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75%(3) None 0.36%(3) 1.11%(4)
Retail A Shares 0.75%(3) None 0.41% 1.16%(5)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A Shares
of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
-- How sales charges work."
(3) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.55%. Affiliates of the Adviser are waiving a portion
of the shareholder servicing fees (that are included in Other expenses)
with respect to BKB Shares so that Other expenses for BKB Shares are
expected to be 0.25%. These fee waivers may be revised or discontinued
at any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.80% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.
(5) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.96%.

-29-
<PAGE>

EXAMPLE

This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:

- - you invest $10,000 for the periods shown

- - you reinvest all dividends and distributions in the Fund

- - you sell all your shares at the end of the periods shown

- - your investment has a 5% return each year

- - your BKB Shares convert into Retail A Shares after one year

- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $113 N/A N/A N/A
Retail A Shares $489 $730 $989 $1,731
</TABLE>

-30-
<PAGE>

Galaxy Rhode Island Municipal Bond Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks as high a level of current interest income exempt from federal
income tax and, to the extent possible, from Rhode Island personal income tax,
as is consistent with relative stability of principal.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund normally invests at least 80% of its total assets in municipal
securities that pay interest which is exempt from regular federal income tax,
and at least 65% of its total assets in Rhode Island municipal securities, which
are securities issued by the State of Rhode Island and other government issuers
and that pay interest which is exempt from both federal income tax and Rhode
Island personal income tax. Under normal conditions, the Fund will invest no
more than 20% of its total assets in taxable obligations, such as U.S.
Government obligations, money market instruments and repurchase agreements.

In selecting portfolio securities for the Fund, the Adviser evaluates the
suitability of available bonds according to such factors as creditworthiness,
maturity, liquidity and interest rates. It also determines the appropriate
allocation of the Fund's assets among various issuers and industry sectors.

Nearly all of the Fund's investments will be of investment grade quality.
These are securities which have one of the top four ratings assigned by
Standard & Poor's Ratings Group (S&P) or Moody's Investors Service, Inc.
(Moody's), or are unrated securities determined by the Adviser to be of
comparable quality. Under normal market conditions, the Fund will invest at
least 65% of its total assets in securities that have one of the top three
ratings assigned by S&P or Moody's, or unrated securities determined by the
Adviser to be of comparable quality. Occasionally, the rating of a security
held by the Fund may be downgraded to below investment grade. If that
happens, the Fund doesn't have to sell the security unless the Adviser
determines that under the circumstances the security is no longer an
appropriate investment for the Fund. However, the Fund will sell promptly any
securities that are not rated investment grade by either S&P or Moody's if
the securities exceed 5% of the Fund's net assets.

The Fund's average weighted maturity will vary from time to time depending on
economic and market conditions and the Adviser's assessment of probable changes
in interest rates.

-31-
<PAGE>

THE MAIN RISKS OF INVESTING IN THE FUND

All mutual funds are affected by changes in the economy and swings in investment
markets.

In addition, the Fund carries the following main risks:

- - INTEREST RATE RISK - The prices of debt securities, including municipal
securities, tend to move in the opposite direction to interest rates. When
rates are rising, the prices of debt securities tend to fall. When rates
are falling, the prices of debt securities tend to rise. Generally, the
longer the time until maturity, the more sensitive the price of a debt
security is to interest rate changes.

- - CREDIT RISK - The value of debt securities, including municipal securities,
also depends on the ability of issuers to make principal and interest
payments. If an issuer can't meet its payment obligations or if its credit
rating is lowered, the value of its debt securities will fall. Debt
securities which have the lowest of the top four ratings assigned by S&P or
Moody's have speculative characteristics. Changes in the economy are more
likely to affect the ability of issuers of these securities to make
payments of principal and interest than is the case with higher-rated
securities. The ability of a state or local government issuer to make
payments can be affected by many factors, including economic conditions,
the flow of tax revenues and changes in the level of federal, state or
local aid. Some municipal obligations are payable only from limited revenue
sources or by private entities.

- - PREPAYMENT/EXTENSION RISK - Changes in interest rates may cause certain
municipal securities held by the Fund to be paid off much sooner or later
than expected, which could adversely affect the Fund's value. In the event
that a security is paid off sooner than expected because of a decline in
interest rates, the Fund may be unable to recoup all of its initial
investment and may also suffer from having to reinvest in lower-yielding
securities. In the event of a later than expected payment because of a rise
in interest rates, the value of the obligation will decrease and the Fund
may suffer from the inability to invest in higher-yielding securities.

- - LACK OF DIVERSIFICATION - The Fund is not diversified, which means that it
can invest a large percentage of its assets in a small number of issuers.
As a result, a change in the value of any one investment held by the Fund
may affect the overall value of the Fund more than it would affect a
diversified fund which holds more investments.

- - SINGLE STATE RISK - Because the Fund invests primarily in Rhode Island
municipal securities, it is likely to be especially susceptible to
economic, political and regulatory events that affect Rhode Island. Other
considerations affecting the Fund's investments in Rhode Island municipal
securities are summarized in the Statement of Additional Information.

-32-
<PAGE>

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

[Sidenote:]

Best quarter: 4.90% for the quarter ending March 31, 1995
Worst quarter: -1.90% for the quarter ending June 30, 1999

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A
Shares (after taking into account any sales charges) for the periods ended
December 31, 1999, as compared to a broad-based market index. The returns for
Retail A Shares of the Fund for periods prior to December 1, 1995 have been
restated to include the effect of the maximum 3.75% front-end sales charge
which went into effect on that date.

-33-

<PAGE>

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares -6.39% 4.96% 4.96% (12/20/94)
Lehman Brothers
Municipal Bond
Index -2.06% 6.91% 6.91% (since 12/31/94)
</TABLE>

[Sidenote:]
The Lehman Brothers Municipal Bond Index is an unmanaged index which tracks the
performance of municipal bonds.

FEES AND EXPENSES OF THE FUND

Shareholder fees (fees paid directly from your investment)

<TABLE>
<CAPTION>
Maximum sales charge Maximum deferred
(load) on purchases sales charge (load)
shown as a % of the shown as a % of the
offering price offering price or sale
price, whichever is less
<S> <C> <C>
BKB Shares None None
Retail A Shares 3.75%(1) None(2)
</TABLE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Total
Fund
operating
Management fees Distribution Other expenses
(12b-1) fees expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75%(3) None 0.19% 0.94%(4)
Retail A Shares 0.75%(3) None 0.19% 0.94%(5)
</TABLE>

-34-

<PAGE>

* The expenses in the table show the expenses for BKB Shares and Retail A Shares
of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Share into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in Funds - How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
- How sales charges work."
(3) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.55%. This fee waiver may be revised or discontinued
at any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 0.74% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.
(5) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 0.74%.

EXAMPLE

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $96 N/A N/A N/A
Retail A Shares $467 $663 $876 $1,486
</TABLE>

[Sidenote:]
PORTFOLIO MANAGER
The Adviser's Tax-Exempt Investment Policy Committee is responsible for the
day-to-day management of the Fund's investment portfolio. The Committee has
managed the Fund since 1996.

-35-

<PAGE>

Galaxy Asset Allocation Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks a high total return by providing both a current level of income
that is greater than that provided by the popular stock market averages, as well
as long-term growth in the value of the Fund's assets.

[Sidenote:]
CURRENT INCOME
Current income includes both dividends from stocks and interest income from
fixed income securities, after deducting Fund expenses.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund aims to provide income that is higher than the average income provided
by stocks included in the popular stock market averages. The Adviser interprets
this to mean the Dow Jones Industrial Average of 30 major companies and the
Standard & Poor's 500 Composite Stock Price Index (commonly referred to as the
S&P 500). Due to the Fund's expenses, however, net income paid to you may be
less than that. The Fund also seeks long-term growth in the value of its assets.
The Adviser attempts to achieve these goals and reduce risk by allocating the
Fund's assets among short-term debt securities, common stocks, preferred stocks
and bonds.

The Fund seeks a mix of stocks and bonds that will produce both income and
long-term capital growth. This mix will change from time to time as a result of
economic and market conditions. However, the Fund keeps at least 25% of its
total assets in fixed income investments, including debt securities and
preferred stocks, at all times.

Debt securities purchased by the Fund will be of investment grade quality,
which means that they will have one of the top four ratings assigned by
Standard & Poor's Ratings Group (S&P) or Moody's Investors Service, Inc.
(Moody's) or will be unrated securities determined by the Adviser to be of
comparable quality. Occasionally, the rating of a security held by the Fund
may be downgraded to below investment grade. If that happens, the Fund
doesn't have to sell the security unless the Adviser determines that under
the circumstances the security is no longer an appropriate investment for the
Fund. However, the Fund will sell promptly any securities that are not rated
investment grade by either S&P or Moody's if the securities exceed 5% of the
Fund's net assets.

-36-
<PAGE>

In selecting portfolio securities for the Fund, the Adviser's investment policy
committee develops an economic outlook and sets guidelines for the industries
and sectors in which the Fund should invest. In selecting equity securities, the
Adviser favors stocks with long-term growth potential that are expected to
outperform their peers over time. The Adviser also forecasts the direction and
degree of change in long-term interest rates to help in the selection of fixed
income securities.

The Fund will sell a security when, as a result of changes in the economy, the
Adviser determines it appropriate to revise the allocation of the Fund's assets
between stocks and bonds. A security may also be sold as a result of a
deterioration in the performance of the security or in the financial condition
of the issuer of the security.

The Fund may trade its investments frequently in trying to achieve its
investment goal.

The following tables show the fees and expenses you may pay when you buy and
hold BKB Shares of the Fund. It is expected that your BKB Shares will convert
into Retail A Shares of the Fund on the first anniversary of the closing of
the reorganization of the Boston 1784 Funds into Galaxy, provided that proir
thereto the Board of Trustees of Galaxy has determined that such conversion
is in the best interest of the holders of BKB shares. Because of this
conversion feature, information is also provided as to the fees and expenses
you may pay when you buy and hold Retail A Shares of the Fund.

THE MAIN RISKS OF INVESTING IN THE FUND

Changes in the U.S. or foreign economies can cause the value of stocks and other
investments held by the Fund to fall. Stock prices may decline over short or
extended periods. Stock markets tend to move in cycles, with periods of rising
prices and periods of falling prices.

The value of your investment in the Fund will go up and down with the value of
the investments which the Fund holds. The Fund's investments may not perform as
well as other investments, even in times of rising markets.

In addition, the Fund carries the following main risks:

- - INTEREST RATE RISK - The value of fixed income investments such as bonds
are affected by movements in interest rates. Bond prices tend to fall when
interest rates rise and to rise when interest rates fall.
- - CREDIT RISK - The value of fixed income investments also depends on the
ability of an issuer to make principal and interest payments. If an issuer
can't meet its payment obligations or if its credit rating is lowered, the
value of its securities will decline. Debt securities which have the lowest
of the top four ratings assigned by S&P or Moody's have speculative
characteristics. Changes in the economy are more likely to affect the
ability of the issuers of these securities to make payments of principal
and interest than is the case with higher-rated securities.
- - PREPAYMENT/EXTENSION RISK - Changes in interest rates may cause certain
fixed income investments held by the Fund to be paid off much sooner or
later than expected, which could adversely affect the Fund's value. In the
event that a security is paid off sooner than expected because of a decline
in interest rates, the Fund may be unable to recoup all of its initial
investment and may also suffer from having to reinvest in lower-yielding
securities. In the event of a later than expected payment because of a rise
in interest rates, the value of the

-37-

<PAGE>

obligation will decrease and the Fund may suffer from the inability to
invest in higher-yielding securities.
- - PORTFOLIO COMPOSITION - The level of risk could increase if a larger
percentage of the Fund is invested in one particular asset class, such as
stocks or bonds. However, asset allocation funds are generally less
volatile than portfolios that contain only stocks.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
- - FREQUENT TRADING - Frequent trading of investments usually increases the
chance that the Fund will pay investors short-term capital gains. These
gains are taxable at higher rates than long-term capital gains. Frequent
trading could also mean higher brokerage commissions and other transaction
costs, which could reduce the Fund's returns.

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

[Sidenote:]

Best quarter: 11.74% for the quarter ending December 31, 1998
Worst quarter: -3.80% for the quarter ending September 30, 1998

-38-
<PAGE>

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

The table shows the average annual total returns for the Fund's Retail A Shares
(after taking into account any sales charges) for the periods ended December 31,
1999, as compared to broad-based market indices. The returns for Retail A Shares
of the Fund for periods prior to December 1, 1995 have been restated to include
the effect of the maximum 3.75% front-end sales charge which went into effect on
that date.

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares 3.22% 16.89% 11.86% (12/30/91)
S&P 500 21.03% 28.54% 19.69% (since 12/31/91)
DJIA 27.29% 27.10% 20.26% (since 12/31/91)
</TABLE>

[Sidenote:]
The S&P 500 is an unmanaged index that tracks the performance of 500 widely held
common stocks listed on the New York Stock Exchange, the American Stock Exchange
and NASDAQ. The S&P 500 is heavily weighted with the stocks of large companies.

[Sidenote:]
The Dow Jones Industrial Average (DJIA) is an unmanaged price-weighted average
based on the "price only" performance of 30 blue chip stocks.

FEES AND EXPENSES OF THE FUND

-39-

<PAGE>

Shareholder fees (fees paid directly from your investment)

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Total
Distribution Fund
Management and service Other operating
fees (12b-1) fees expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75% None 0.49%(3) 1.24%(4)
Retail A Shares 0.75% None 0.54% 1.29%
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available to certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the
Funds - How sales charges work."
(3) Affiliates of the Adviser are waiving a portion of the shareholder
servicing fees (that are included in Other expenses) with respect to
BKB Shares so that Other expenses for BKB Shares are expected to be
0.21%. This fee waiver may be revised or discontinued at any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total
Fund operating expenses of BKB Shares of the Fund to 0.96% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.

EXAMPLE

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

-40-

<PAGE>

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C>
BKB Shares $126 N/A N/A N/A
Retail A Shares $501 $769 $1,056 $1,873
</TABLE>

[Sidenote:]
PORTFOLIO MANAGERS
The Fund's portfolio managers are Donald Jones, a Vice President of the Adviser
since 1991, and David Lindsay, CFA, a Senior Vice President of the Adviser since
1992. They are primarily responsible for the day-to-day management of the Fund's
investment portfolio. Mr. Jones has managed the equity portion of the Fund's
portfolio, including determining the allocation of the Fund's assets between
equities and fixed income investments, since May of 1995. He has been with the
Adviser and its predecessors since 1977. Mr. Lindsay has managed the fixed
income portion of the Fund since January of 1997. He has been with the Adviser
and its predecessors since 1986.

-41-

<PAGE>

Galaxy Growth and Income Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks to provide a relatively high total return through long-term
capital appreciation and current income.

[Sidenote:]
CURRENT INCOME
Current income includes both dividends from stocks and interest income from
fixed income securities, after deducting Fund expenses.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund normally invests at least 65% of its total assets in the common stocks
of U.S. companies with large market capitalizations (generally over $2 billion)
that the Adviser believes offer above-average growth and dividends. The Adviser
focuses on stocks which are believed to be attractively priced relative to
expectations for the future performance of the issuing company. The Adviser also
seeks a current yield greater than that of the S&P 500, although not all Fund
investments will pay dividends.

The Fund will sell a portfolio security when, as a result of changes in the
economy, the Adviser believes that holding the security is no longer consistent
with the Fund's investment objective. A security may also be sold as a result of
a deterioration in the performance of the security or in the financial condition
of the issuer of the security.

[Sidenote:]
MARKET CAPITALIZATION
A company's market capitalization is the price of a share of its stock,
multiplied by the number of shares held by investors.

THE MAIN RISKS OF INVESTING IN THE FUND

In addition, the Fund carries the following main risk:

-42-

<PAGE>

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The Fund began operations on December 14, 1992 as a separate portfolio (the
Predecessor Fund) of The Shawmut Funds. 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 two classes of shares, Investment Shares
(which were first offered on February 12, 1993) and Trust Shares (which were
first offered on December 14, 1992), that were similar to the Fund's Retail A
Shares and Trust Shares. In connection with the reorganization, shareholders of
the Predecessor Fund exchanged their Investment Shares and Trust Shares for
Retail A Shares and Trust Shares of the Fund. The returns for periods prior to
December 4, 1995 are for Investment Shares of the Predecessor Fund.

-43-
<PAGE>

[Sidenote:]

Best quarter: 20.66% for the quarter ending December 31, 1998
Worst quarter: -13.50% for the quarter ending September 30, 1998

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares 2.83% 18.98% 15.90% (2/12/93)
S&P 500 21.03% 28.54% 21.65% (since 1/31/93)
</TABLE>

FEES AND EXPENSES OF THE FUND

-44-

<PAGE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Total
Distribution Fund
Management and service Other operating
fees (12b-1) fees expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.75% None 0.47%(3) 1.22%(4)
Retail A Shares 0.75% None 0.61%(3) 1.36%(5)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
- How sales charges work."
(3) Affiliates of the Adviser are waiving a portion of the shareholder servicing
fees (that are included in Other expenses) with respect to BKB Shares and
Retail A Shares so that Other expenses are expected to be 0.17% for BKB
Shares and 0.53% for Retail A Shares.
(4) Affiliates of the Adviser have agreed to waive shareholder servicing fees
in such amounts as are necessary to limit the Total Fund operating expenses
for BKB Shares of the Fund to 0.92% until the later of one year from the
date of the reorganization or such time as the Board of Trustees of Galaxy
votes on the conversion of BKB Shares into Retail A Shares.
(5) Total Fund operating expenses for Retail A Shares after the waiver of
shareholder servicing fees by affiliates of the Adviser are expected to be
1.28%.

EXAMPLE

-45-

<PAGE>

- - your BKB Shares convert into Retail A Shares after one year
- - the Fund's operating expenses remain the same.

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $124 N/A N/A N/A
Retail A Shares $508 $790 $1,092 $1,949
</TABLE>

[Sidenote:]
PORTFOLIO MANAGER
The Fund's portfolio manager is Gregory M. Miller, a Vice President of the
Adviser since 1996. He's been primarily responsible for the day-to-day
management of the Fund's investment portfolio since July 1998. Before that, Mr.
Miller assisted his predecessor in managing the Fund for seven years. He joined
the Adviser in 1985.

-46-

<PAGE>

Galaxy International Equity Fund

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

THE FUND'S MAIN INVESTMENT STRATEGIES

The Fund normally invests at least 75% of its total assets in the equity
securities of foreign issuers. At all times, the Fund's assets will be invested
in companies located in at least three different foreign countries. Normally, no
more than 20% of the Fund's total assets will be invested in companies located
in countries with emerging economies or emerging securities markets. The Fund
emphasizes larger established companies, although it may invest in companies of
any size. The Fund may engage in transactions for the purpose of hedging its
portfolio, such as options, futures and foreign currencies.

The Sub-Adviser's investment process begins with a fundamental analysis of
companies, including both bottom-up and top-down factors. Bottom-up analysis
includes a thorough understanding of a company's prospects as reflected in
operating cash flow, including industry cycle, capital requirements, growth
opportunities and financial structure. Discussions with company management are
an important element of this analysis and give the Sub-Adviser an opportunity
to test its assumptions against management's near-term and long-term
objectives. Top-down factors are incorporated into the Sub-Adviser's analysis
of a company. For example, the Sub-Adviser considers how interest rates and
currency may impact prospective cash flow and earnings. Country and market
risks, both of which are critically important, are embodied in interest rates,
which are the basis for risk-adjusting the Sub-Adviser's return expectations
for individual companies. In this way, the Sub-Adviser arrives at a
risk-adjusted return potential for each company analyzed, which then gives the
Sub-Adviser the basis for comparing investment opportunities across developed
emerging markets.

The Fund will sell a security if the stock has achieved its performance
objective, if fundamentals change performance expectations, or if
alternative investments provide potentially more attractive returns.

[Sidenote:]
SUB-ADVISER
The Adviser has appointed Oechsle International Advisors, LLC as Sub-Adviser to
assist it in the day-to-day management of the Fund's investment portfolio.

THE MAIN RISKS OF INVESTING IN THE FUND

Changes in the U.S. or foreign economies can cause the value of stocks and other
investments held by the Fund to fall. Stock prices may decline over short or
extended periods. U.S. and foreign stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices.

-47-
<PAGE>

In addition, the Fund carries the following main risks:

- - FOREIGN INVESTMENTS - Foreign investments may be riskier than U.S.
investments because of factors such as foreign government restrictions,
changes in currency exchange rates, incomplete financial information about
the issuers of securities, and political or economic instability. Foreign
stocks may be more volatile and less liquid than U.S. stocks.
- - EMERGING MARKETS - The risks associated with foreign investments are
heightened when investing in emerging markets. The governments and
economies of emerging market countries feature greater instability than
those of more developed countries. Such investments tend to fluctuate in
price more widely and to be less liquid than other foreign investments.
- - COUNTRY RISK - The Fund may invest 25% or more of its assets in the
securities of companies located in one country. When the Fund invests a
high percentage of its assets in a particular country, the Fund will be
especially susceptible to factors affecting that country.
- - CURRENCY EXCHANGE - Although the Fund usually makes investments that are
sold in foreign currencies, it values its holdings in U.S. dollars. If the
U.S. dollar rises compared to a foreign currency, the Fund loses on the
currency exchange.
- - HEDGING - The Fund may invest in derivatives, such as options, futures and
foreign currencies, to hedge against market risk or the currency risk of
its foreign investments. There's no guarantee hedging will always work. It
can also prevent the Fund from making a gain if markets move in the
opposite direction to the hedge.

- - SELECTION OF INVESTMENTS - The Adviser and Sub-Adviser evaluate the risks
and rewards presented by all securities purchased by the Fund and how they
advance the Fund's investment objective. It's possible, however, that these
evaluations will prove to be inaccurate.

[Sidenote:]
DERIVATIVES
A derivative is an investment whose value is based on or DERIVED from the
performance of other securities or interest or currency exchange rates or
indices. Derivatives are considered to carry a higher degree of risk than other
types of securities.

HOW THE FUND HAS PERFORMED

The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that all
dividends and distributions

-48-
<PAGE>

are reinvested in the Fund. How the Fund has performed in the past doesn't
necessarily show how it will perform in the future.

YEAR-BY-YEAR TOTAL RETURNS-CALENDAR YEARS

[Sidenote:]

Best quarter: 24.36% for the quarter ending December 31, 1999
Worst quarter: -14.61% for the quarter ending September 30, 1998

[bar chart goes here]

AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
1 year 5 years Since inception
<S> <C> <C> <C>
Retail A Shares 35.80% 17.97% 14.06% (12/30/91)
MSCI EAFE Index 26.96% 12.83% 10.94% (since 12/31/91)
</TABLE>

-49-
<PAGE>

[Sidenote:]
The Morgan Stanley Capital International Europe, Australasia and Far East (MSCI
EAFE) Index is an unmanaged index which tracks the performance of selected
equity securities in Europe, Australia and the Far East.

FEES AND EXPENSES OF THE FUND

The following tables show the fees and expenses you may pay when you buy and
hold BKB Shares of the Fund. It is expected that your BKB Shares will convert
into Retail A Shares of the Fund on the first anniversary of the closing of
the reorganization of the Boston 1784 Funds into Galaxy, provided that prior
thereto the Board of Trustees of Galaxy has determined that such conversion
is in the best interest of the holders of BKB Shares. Because of this
conversion feature, information is also provided as to the fees and expenses
you may pay when you buy and hold Retail A Shares of the Fund.

Shareholder fees (fees paid directly from your investments)
<TABLE>
<CAPTION>
Maximum sales charge Maximum deferred
(load) on purchases sales charge (load)
shown as a % of the shown as a % of the
offering price offering price or sale
price, whichever is less
<S> <C> <C>
BKB Shares None None
Retail A Shares 3.75%(1) None(2)
</TABLE>

Annual Fund operating expenses (expenses deducted from the Fund's assets)*

<TABLE>
<CAPTION>
Total
Distribution Fund
Management and service Other operating
fees (12b-1) fees expenses expenses
<S> <C> <C> <C> <C>
BKB Shares 0.87%(3) None 0.51%(3) 1.38%(4)
Retail A Shares 0.87%(3) None 0.71% 1.58%(5)
</TABLE>

* The expenses in the table show the expenses for BKB Shares and Retail A
Shares of the Fund following the reorganization.

(1) There will be no sales charge imposed on the conversion of BKB Shares into
Retail A Shares. Reduced sales charges may be available for certain other
investors in Retail A Shares. See "How to invest in the Funds How sales
charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Funds
- How sales charges work."
(3) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.64%. Affiliates of the Adviser are waiving a portion
of the shareholder servicing fees (that are included in Other expenses)
with respect to BKB Shares so that Other expenses for BKB Shares are
expected to be 0.46%. These fee waivers may be revised or discontinued at
any time.
(4) The Adviser and/or its affiliates have agreed to waive shareholder
servicing fees in such amounts as are necessary to limit the Total Fund
operating expenses for BKB Shares of the Fund to 1.10% until the later
of one year from the date of the reorganization or such time as the Board
of Trustees of Galaxy votes on the conversion of BKB Shares into
Retail A Shares.

-50-
<PAGE>

(5) Total Fund operating expenses for Retail A Shares after the waiver of
Management fees by the Adviser are expected to be 1.35%.

EXAMPLE

Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
BKB Shares $140 $NA $NA $NA
Retail A Shares $530 $855 $1,203 $2,183
</TABLE>

[Sidenote:]
PORTFOLIO MANAGERS
The Fund's portfolio managers are Singleton Dewey Keesler, Jr. and Kathleen
Harris, CFA. They're primarily responsible for the day-to-day management of the
Fund's investment portfolio. Mr. Keesler is Chief Investment Officer and
portfolio manager/research analyst with the Sub-Adviser. He has been associated
with the Sub-Adviser and its predecessor since 1986. Ms. Harris has been a
portfolio manager at the Sub-Adviser and its predecessor since January of 1995.
She was previously portfolio manager and investment director for the State of
Wisconsin Investment Board. Mr. Keesler and Ms. Harris have co-managed the Fund
since August of 1996.

-51-

<PAGE>

ADDITIONAL INFORMATION ABOUT RISK

The main risks associated with an investment in each of the Galaxy Funds have
been described above. The following supplements that discussion.

TEMPORARY DEFENSIVE POSITIONS

Each Fund may temporarily hold up to 100% of its total assets in investments
that are not part of its principal investment strategy to try to avoid losses
during unfavorable market conditions.

For the Money Market Fund, U.S. Treasury Fund, Tax-Exempt Fund and Rhode Island
Municipal Bond Fund, these investments may include cash (which will not earn any
income) and, in the case of the Tax-Exempt Fund and Rhode Island Municipal Bond
Fund, taxable investments, such as money market instruments and debt securities
issued or guaranteed by the U.S. Government or its agencies, in excess of 20% of
each Fund's total assets.

The Short-Term Bond Fund, Intermediate Government Income Fund and High Quality
Bond Fund may hold uninvested cash and invest without limit in money market
instruments, including short-term U.S. Government securities.

For the Asset Allocation Fund, Growth and Income Fund and International Equity
Fund, these investments may include cash, money market instruments, debt
securities issued or guaranteed by the U.S. Government or its agencies and, in
the case of the International Equity Fund, foreign money market instruments,
debt securities of foreign national governments and their agencies, and the
securities of U.S. issuers.

These strategies could prevent a Fund from achieving its investment objective
and could reduce the Fund's return and affect its performance during a market
upswing.

OTHER TYPES OF INVESTMENTS

This prospectus describes each Fund's main investment strategies and the
particular types of securities in which each Fund mainly invests. Each Fund may,
from time to time, pursue other investment strategies and make other types of
investments in support of its overall investment goal. These supplemental
investment strategies, which are not considered to be main investment strategies
of the Funds - and the risks involved - are described in detail in the Statement
of Additional Information (SAI) which is referred to on the back cover of this
prospectus.

-52-

<PAGE>

YEAR 2000 RISKS

Over the past several years, the Adviser and the Funds' other major service
providers expended considerable time and money in addressing the computer and
technology problems associated with the transition to the Year 2000. As a result
of those efforts, the Funds did not experience any material disruptions in their
operations as a result of the transition to the 21st century. The Adviser and
the Funds' other major service providers are continuing to monitor the Year 2000
or Y2K problem, however, and there can be no assurances that there will be no
adverse impact to the Funds as a result of future computer-related Y2K
difficulties.

-53-

<PAGE>

FUND MANAGEMENT

ADVISER

The Adviser, subject to the general supervision of Galaxy's Board of Trustees,
manages each Fund in accordance with its investment objective and policies,
makes decisions with respect to and places orders for all purchases and sales of
its portfolio securities, and maintains related records.

The management fees paid to the Adviser by the Funds during the last fiscal year
are set forth below.

<TABLE>
<CAPTION>
Fund Management fee as a
% of average net assets
<S> <C>
Money Market 0.36%
U.S. Treasury 0.39%
Tax-Exempt 0.40%
Short-Term Bond 0.55%
Intermediate Government Income 0.55%
High Quality Bond 0.55%
Rhode Island Municipal Bond 0.35%
Asset Allocation 0.75%
Growth and Income 0.75%
International Equity 0.64%
</TABLE>

SUB-ADVISER

The Adviser has delegated some of its advisory responsibilities with respect to
the International Equity Fund to Oechsle International Advisors, LLC as
Sub-Adviser. The Sub-Adviser determines which securities will be purchased,
retained or sold for the Fund, places orders for the Fund and provides the
Adviser with information on international investment and economic developments.
The Adviser assists and consults with the Sub-Adviser as to the Fund's
investment program, approves the list of foreign countries recommended by the
Sub-Adviser for investment and manages the Fund's daily cash position. The
Sub-Adviser's fees are paid by the Adviser.

The Sub-Adviser has its main office at One International Place, Boston,
Massachusetts 02210. The Sub-Adviser is the successor to Oechsle International
Advisors, L.P., an international investment firm founded in 1986. At December
31, 1999, the Sub-Adviser had discretionary

-54-

<PAGE>

management authority over approximately $19.1 billion in assets. The Adviser's
parent company, FleetBoston Financial Corporation, owns an interest in the
Sub-Adviser.

ALLOCATION OF ORDERS FOR PORTFOLIO SECURITIES

The Adviser (and Sub-Adviser for the International Equity Fund) may allocate
orders for the purchase and sale of portfolio securities to certain financial
institutions, including those that are affiliated with the Adviser or
Sub-Adviser or that have sold shares of the Funds, to the extent permitted by
law or by order of the Securities and Exchange Commission. The Adviser and
Sub-Adviser will allocate orders to such institutions only if they believe that
the quality of the transaction and the commission are comparable to what they
would be with other qualified brokerage firms.

HOW TO INVEST IN THE FUNDS

Each of the Funds offers BKB Shares only to those shareholders of the Boston
1784 Funds who are not eligible to receive Trust Shares of their corresponding
Galaxy Fund at the time the Boston 1784 Funds are reorganized into Galaxy. It is
expected that BKB Shares of each Fund will convert into Retail A Shares of the
same Fund on the first anniversary of the closing of the reorganization of the
Boston 1784 Funds into Galaxy, provided that prior thereto Galaxy's Board of
Trustees has determined that such conversion is in the best interest of the
holders of BKB Shares. Because of this conversion feature, some information is
provided in this prospectus for Retail A Shares of the Funds. The Funds offer
Retail A Shares through a separate prospectus.

HOW SALES CHARGES WORK

There is no sales charge (sometimes called a front-end load) when you acquire
BKB Shares in connection with the reorganization of the Boston 1784 Funds into
Galaxy, when you buy additional BKB Shares or when your BKB Shares convert into
Retail A Shares. Retail A Shares of each Fund, except the Money Market Fund,
U.S. Treasury Fund and Tax-Exempt Fund (referred to as the Money Market Funds),
are sold with a sales charge. However, holders of BKB Shares may purchase Retail
A Shares of any of the Funds without incurring the sales charge otherwise
applicable on the purchase of Retail A Shares of certain of the Galaxy Funds.
When these Retail A Shares are purchased, you must tell your investment
professional or Galaxy's distributor that you qualify for a sales load waiver.

[Sidenote:]
NET ASSET VALUE
The price you pay for your shares is based on the net asset value per share
(NAV). It's the value of a Fund's assets attributable to BKB Shares or Retail A
Shares, minus the value of the Fund's

-55-

<PAGE>

liabilities attributable to BKB Shares or Retail A Shares, divided by the number
of BKB Shares or Retail A Shares held by investors.

RETAIL A SHARES

The table below shows the sales charge applicable to Retail A Shares of the
Funds, except the Money Market Funds which are sold without a sales charge. The
offering price for Retail A Shares is the NAV of the shares purchased, plus any
applicable sales charge.

<TABLE>
<CAPTION>
Total sales charge

As a % of the offering price As a % of
Amount of your investment per share your investment
<S> <C> <C>
Less than $50,000 3.75% 3.90%
$50,000 but less than $100,000 3.50% 3.63%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 and over 0.00%(1) 0.00%(1)
</TABLE>

(1) There is no front-end sales charge on investments in Retail A Shares of
$500,000 or more. However, if a shareholder sells the shares within one
year after buying them, a contingent deferred sales charge (sometimes
called a back-end load or CDSC) of 1% of the offering price or 1% of the
net asset value of the shares, whichever is less, will be charged unless
the shares were sold because of the death or disability of the shareholder.
However, Galaxy will waive the 1% CDSC the first time you sell shares
during this one-year period. If you reinvest the proceeds of this sale
within one year, the waiver of the CDSC won't apply to any sale of shares
purchased with such reinvested proceeds.

Galaxy's distributor may, from time to time, implement programs under which a
broker-dealer's sales force may be eligible to win nominal awards for certain
sales efforts. If any such program is made available to any broker-dealer, it
will be made available to all broker-dealers on the same terms. Payments made
under such programs are made by Galaxy's distributor out of its own assets and
not out of the assets of the Funds. These programs will not change the price of
Retail A Shares or the amount that the Funds will receive from such sales.

Certain affiliates of the Adviser may, at their own expense, provide additional
compensation to affiliated broker-dealers whose customers purchase significant
amounts of Retail A Shares of one or more Funds and to unaffiliated
broker-dealers whose customers purchase Retail A Shares

-56-
<PAGE>

of one or more of the Funds. Such compensation will not represent an additional
expense to the Funds or their shareholders, since it will be paid from the
assets of the Adviser's affiliates.

There's no sales charge on purchases of Retail A Shares if:

- - You buy shares by reinvesting dividends and distributions.
- - You were a Galaxy shareholder before December 1, 1995.
- - You buy shares for a 401(k) or SIMPLE IRA retirement account.
- - You buy shares for any retirement account provided that you held Retail A
Shares in a retirement account prior to January 1, 1999.
- - You buy shares for any retirement account and your total cumulative Retail
A Share retirement account balance was $30,000 or more between January 1,
1999 and June 30, 1999.
- - You buy shares with money from another Galaxy Fund on which you've already
paid a sales charge (as long as you buy the new shares within 90 days after
selling your other shares).
- - You previously paid a sales charge for the shares of another mutual fund
company (as long as you buy the Galaxy shares within 60 days of selling
your other shares).
- - You're an investment professional who places trades for your clients and
charges them a fee
- - You buy shares under an all-inclusive fee program (sometimes called a
"wrap fee program") offered by a broker-dealer or other financial
institution.
- - You were a shareholder of the Boston 1784 Funds on the date when the Boston
1784 Funds were reorganized into Galaxy.

DISCOUNT PLANS

You may have the sales charges on purchases of Retail A Shares reduced or waived
completely through the discount plans described below:

- - RIGHTS OF ACCUMULATION - You can add the value of any Retail A Shares that
you already own in any Galaxy Fund that charges a sales load to your next
investment in Retail A Shares for purposes of calculating the sales charge.
- - LETTER OF INTENT - You can purchase Retail A Shares of any Galaxy Fund that
charges a sales load over a 13-month period and receive the same sales
charge as if all of the shares had been purchased at the same time. To
participate, complete the Letter of Intent section on the account
application. Galaxy's administrator will hold in escrow Retail A Shares
equal to 5% of the amount you indicate in the Letter of Intent for payment
of a higher sales charge if you don't purchase the full amount indicated in
the Letter of Intent. See the SAI for more information on this escrow
feature.

-57-
<PAGE>

- - REINVESTMENT PRIVILEGE - You can reinvest some or all of the money that you
receive when selling Retail A Shares of the Funds in Retail A Shares of any
Galaxy Fund within 90 days without paying a sales charge.
- - GROUP SALES - If you belong to a qualified group with 50,000 or more
members, you can buy Retail A Shares at a reduced sales charge, based on
the number of qualified group members.

[Sidenote:]

SALES CHARGE WAIVERS/DISCOUNT PLANS
Ask your investment professional or Galaxy's distributor, or consult the SAI,
for other instances in which the sales load on Retail A Shares is waived. When
you buy your shares, you must tell your investment professional or Galaxy's
distributor that you qualify for a sales load waiver or that you want to take
advantage of any of the discount plans. See the SAI for additional requirements
that apply to the discount plans. To contact Galaxy's distributor, call
1-877-BUY-GALAXY (1-877-289-4252).

SHAREHOLDER SERVICE FEES

BKB Shares of the Funds can pay shareholder service fees at an annual rate of up
to 0.50% of each Fund's BKB Share assets. The Money Market Funds do not intend
to pay more than 0.10%, the Short-Term Bond, Intermediate Government Income,
High Quality Bond and Rhode Island Municipal Bond Funds do not intend to pay
more than 0.15% and the Asset Allocation, Growth and Income and International
Equity Funds do not intend to pay more than 0.30%, respectively, in shareholder
service fees with respect to BKB Shares during the current fiscal year.

Retail A Shares of the Funds can pay shareholder service fees at an annual rate
of up to 0.50% of each Fund's Retail A Share assets. The Money Market Funds do
not intend to pay more than 0.10%, the Short-Term Bond, Intermediate Government
Income, High Quality Bond and Rhode Island Municipal Bond Funds do not intend to
pay more than 0.15% and the Asset Allocation, Growth and Income and
International Equity Funds do not intend to pay more than 0.30%, respectively,
in shareholder service fees with respect to Retail A Shares during the current
fiscal year.

CONVERSION OF BKB SHARES INTO RETAIL A SHARES

BKB Shares of a Fund will convert into Retail A Shares of the same Fund on the
first anniversary of the reorganization of the Boston 1784 Funds into Galaxy,
provided that prior thereto the Board of Trustees of Galaxy has determined that
such conversion is in the best interest of the holders of BKB Shares. The
conversion of BKB Shares to Retail A Shares will

-58-

<PAGE>

take place at NAV, so that the value of the Retail A Shares you receive in the
conversion will be the same as the value of your BKB Shares that were converted.

BUYING, SELLING AND EXCHANGING BKB SHARES

BKB Shares of the Funds are available for purchase only by those shareholders
who received BKB Shares in connection with the reorganization of the Boston 1784
Funds into Galaxy.

[Sidenote]:
MINIMUM INVESTMENT AMOUNT
You can make additional investments in your BKB Share account for as little as
$100.

Usually, you must keep at least $250 in your account. If your account falls
below $250 because you sell or exchange shares, Galaxy may redeem your shares
and close your account. Galaxy will give you 60 days' notice in writing before
closing your account.

You may buy and sell BKB Shares of the Funds on any day that the Funds are open
for business, which is any day that the New York Stock Exchange is open. The New
York Stock Exchange is generally open for trading every Monday through Friday,
except for national holidays.

The price at which you buy shares is the NAV next determined after your order
is accepted. The price at which you sell shares is the NAV next determined,
after receipt of your order in proper form as described below. NAV is
determined on each day the New York Stock Exchange is open for trading as of
11:00 a.m. Eastern time (for the Money Market Funds only) and at the close of
regular trading that day (usually 4:00 p.m. Eastern time) for each Fund,
including the Money Market Funds.

The Money Market Funds' assets are valued at amortized cost, which is
approximately equal to market value. For each of the other Funds, if market
prices are readily available for securities owned by a Fund, they're valued at
those prices. If market prices are not readily available for some securities,
they are valued at fair value under the supervision of Galaxy's Board of
Trustees.

Sometimes, the price of a security trading on a foreign stock exchange may be
affected by events that happen after that exchange closes. If this happens, the
fair value of the security may be determined using other factors and may not
reflect the security's last quoted price. In addition, foreign securities may
trade on days when shares of the Funds are not priced. As a result, the net
asset value per share of a Fund holding these securities may change on days when
you won't be able to buy or sell Fund shares.

-59-
<PAGE>

HOW TO BUY BKB SHARES

You can buy shares through your financial institution or directly from Galaxy's
distributor by calling 1-877-BUY-GALAXY (1-877-289-4252). A broker or agent who
places orders on your behalf may charge you a separate fee for their services.

BUYING BY MAIL

To make additional investments, send a check made payable to each Fund in which
you want to invest to:

The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520

You must include with your check one of the following:

- - The detachable form that's included with your Galaxy statement or your
confirmation of a prior transaction
- - A letter stating the amount of your investment, the name of the Fund you
want to invest in, and your account number.

If your check is returned because of insufficient funds, Galaxy will cancel your
order.

BUYING BY WIRE
To make an additional investment by wire, send U.S. funds through the Federal
Reserve System to Fleet National Bank as agent for Galaxy's distributor. You
should wire money and registration instructions to:

Fleet National Bank
75 State Street
Boston, MA 02109
ABA #0110-0013-8
DDA #79673-5702
Ref: The Galaxy Fund
(Account number)
(Account registration)

-60-

<PAGE>

Your financial institution may charge you a fee for sending funds by wire.

CUSTOMERS OF FINANCIAL INSTITUTIONS
If you are a customer of a financial institution such as a bank, savings and
loan association or broker-dealer, including a financial institution affiliated
with the Adviser, you should place your order through your financial
institution. Your financial institution is responsible for sending your order to
Galaxy's distributor and wiring the money to Galaxy's custodian. For details,
please contact your financial institution.

HOW TO SELL BKB SHARES

You can sell your shares in several ways: by mail, by telephone, by wire, or
through your financial institution.

SELLING BY MAIL
Send your request in writing to:

The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520

You must include the following:
- - The name of the Fund
- - The number of shares or the dollar amount you want to sell
- - Your account number
- - Your Social Security number or tax identification number
- - The signatures of each registered owner of the account (the signatures must
match the names on the account registration).

Additional documents may be required for certain types of shareholders, such as
corporations, partnerships, executors, trustees, administrators or guardians.

[Sidenote:]

SIGNATURE GUARANTEES
When selling your shares by mail or by phone, you must have your signature
guaranteed if:
- - you're selling shares worth more than $50,000,
- - you want Galaxy to send your money to an address other than the address on
your account, unless your assets are transferred to a successor
custodian,
- - you want Galaxy to send your money to the address on your account that's
changed within the last 30 days, or

-61-

<PAGE>

- - you want Galaxy to make the check payable to someone else.

Your signature must be guaranteed by a bank that's a member of the FDIC, a trust
company, a member firm of a national securities exchange or any other eligible
institution. A notarized signature is not sufficient.

SELLING BY PHONE
You can sell shares by calling Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) unless you tell Galaxy in writing that you don't want this
privilege. If you have difficulty getting through to Galaxy because of unusual
market conditions, consider selling your shares by mail or wire.

SELLING BY WIRE
Notify Galaxy's distributor by phone or wire that you wish to sell shares and
have the sale proceeds wired to your account at any financial institution in the
U.S. To be eligible to use this privilege, you must notify Galaxy in writing
(with a signature guarantee). Your sale proceeds must be more than $1,000.

The sale proceeds must be paid to the same bank and account you named in your
written instructions.

CUSTOMERS OF FINANCIAL INSTITUTIONS
Please contact your financial institution for information on how to sell your
shares. The financial institution is responsible for sending your order to
Galaxy's distributor and for crediting your account with the proceeds. Galaxy
doesn't charge a fee for wiring sale proceeds to your financial institution, but
your financial institution may charge you a fee.

EXCHANGE PRIVILEGE

Shareholders may exchange BKB Shares of a Fund having a value of at least $100
for BKB Shares of any other Galaxy Fund. Shareholders won't pay a sales charge
for exchanging BKB Shares.

TO EXCHANGE SHARES:
- - call Galaxy's distributor or use the InvestConnect toll-free voice response
line at 1-877-BUY-GALAXY (1-877-289-4252)

-62-
<PAGE>

- - send your request in writing to:

The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520

- - ask your financial institution.

Galaxy doesn't charge any fee for making exchanges but your financial
institution might do so. You are generally limited to three exchanges per year.
Galaxy may change or cancel the exchange privilege with 60 days' advance written
notice to shareholders.

OTHER TRANSACTION POLICIES

If Galaxy doesn't receive full payment for your order to buy shares within three
business days of the order date, Galaxy won't accept your order. Galaxy will
advise you if this happens and return any payment it may eventually receive. You
can only invest in shares of the Funds that are legally available in your state.

Galaxy may refuse any order to buy shares. Galaxy doesn't issue a certificate
when you buy shares but it does keep a record of shares issued to investors.

Galaxy may refuse your order to sell or exchange shares by wire or telephone if
it believes it is advisable to do so. Galaxy or its distributor may change or
cancel the procedures for selling or exchanging shares by wire or telephone at
any time without notice.

If you sell or exchange shares by telephone, you may be responsible for any
fraudulent telephone orders as long as Galaxy has taken reasonable precautions
to verify your identity, such as requesting information about the way in which
your account is registered or about recent transactions in your account.

Galaxy normally pays you cash when you sell your shares, but it has the right to
deliver securities owned by a Fund instead of cash. When you sell these
securities, you'll pay brokerage charges.

Sales proceeds are normally sent to you within three business days but Galaxy
reserves the right to send sales proceeds within seven days if sending proceeds
earlier could adversely affect a Fund.

-63-

<PAGE>

If any shares that you're selling are part of an investment you've paid for with
a personal check, Galaxy will delay sending your sales proceeds until the check
clears, which can take up to 15 days from the purchase date.

Galaxy reserves the right to vary or waive any minimum investment requirements.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Money Market Fund and each of the Short-Term Bond Fund, Intermediate
Government Income Fund, High Quality Bond Fund and Rhode Island Municipal Bond
Fund declares dividends from net investment income daily and pays them monthly.
The Money Market Fund and U.S. Treasury Fund expect that all, or substantially
all, of their distributions will consist of ordinary income. It is expected that
the annual distributions of the Short-Term Bond Fund, Intermediate Government
Income and High Quality Bond Funds will normally - but not always - consist
primarily of ordinary income rather than capital gains. It is expected that the
annual distributions of the Tax-Exempt Fund and Rhode Island Municipal Bond Fund
will be mainly income dividends.

The Asset Allocation Fund and Growth and Income Fund pay any dividends from net
investment income each quarter. The International Equity Fund pays any dividends
from net investment income annually. It's expected that the annual distributions
of these Funds will normally -- but not always -- consist primarily of capital
gains rather than ordinary income.

Each of the Funds pays any realized capital gains at least once annually,
although the Money Market Funds do not expect to realize net long-term capital
gains. Dividends and distributions are paid in cash unless you indicate in a
letter to Galaxy that you want to have dividends and distributions reinvested in
additional shares.

FEDERAL TAXES

MONEY MARKET, U.S. TREASURY, SHORT-TERM BOND, INTERMEDIATE GOVERNMENT INCOME,
HIGH QUALITY BOND, ASSET ALLOCATION, GROWTH AND INCOME AND INTERNATIONAL EQUITY
FUNDS

Each Fund contemplates declaring as dividends each year all or substantially all
of its taxable income, including its net capital gain (the excess of long-term
capital gain over short-term capital loss). Distributions attributable to the
net capital gain of a Fund will be taxable to you as long-term capital gain,
regardless of how long you have held your shares. Other Fund distributions will
generally be taxable as ordinary income. You will be subject to income tax on
these distributions regardless of whether they are paid in cash or reinvested in
additional shares. You will be notified annually of the tax status of
distributions to you.

-64-
<PAGE>

You should note that if you purchase shares just before a distribution, the
purchase price will reflect the amount of the upcoming distribution, but you
will be taxed on the entire amount of the distribution received, even though, as
an economic matter, the distribution simply constitutes a return of capital.
This is known as "buying into a dividend."

You will recognize taxable gain or loss on a sale, exchange or redemption of
your shares, including an exchange for shares of another Fund, based on the
difference between your tax basis in the shares and the amount you receive for
them. (To aid in computing your tax basis, you generally should retain your
account statements for the periods during which you held shares.) Generally,
this gain or loss will be long-term or short-term depending on whether your
holding period for the shares exceeds 12 months, except that any loss realized
on shares held for six months or less will be treated as a long-term capital
loss to the extent of any capital gain dividends that were received on the
shares. If you receive an exempt-interest dividend with respect to any share and
the shares is held by you for six months or less, any loss on the sale or
exchange of the share will be disallowed to the extent of such dividend amount.

The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.

A Fund's dividends that are paid to its corporate shareholders and are
attributable to qualifying dividends the Fund receives from U.S. corporations
may be eligible, in the hands of the corporate shareholders, for the corporate
dividends-received deduction, subject to certain holding period requirements and
debt financing limitations.

It is expected that the International Equity Fund will be subject to foreign
withholding taxes with respect to dividends or interest received from sources in
foreign countries. The Fund may make an election to treat a proportionate amount
of these taxes as constituting a distribution to each shareholder, which would
allow each shareholder either (1) to credit this proportionate amount of taxes
against U.S. federal income tax liability or (2) to take this amount as an
itemized deduction.

TAX-EXEMPT AND RHODE ISLAND MUNICIPAL BOND FUNDS

Distributions by these Funds will generally consist of dividends derived from
interest earned on exempt securities, and these "exempt-interest dividends" will
be exempt income for shareholders for federal income tax purposes. It is
possible depending upon a Fund's investments, that a portion of the Fund's
distributions could be taxable to shareholders as ordinary income or capital
gains. The Tax-Exempt Fund does not expect that this will be the case.

If you receive an exempt-interest dividend with respect to any share and the
share is held by you for six months or less, any loss on the sale or exchange of
the share will be disallowed to the extent of such dividend amount.

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<PAGE>

You should note that a portion of the exempt-interest dividends paid by one or
both of these Funds may constitute an item of tax preference for purposes of
determining federal alternative minimum tax liability. Exempt-interest dividends
will also be considered along with other adjusted gross income in determining
whether any Social Security or railroad retirement payments received by you are
subject to federal income taxes.

STATE AND LOCAL TAXES

Shareholders may also be subject to state and local taxes on distributions,
redemptions and exchanges. State income taxes may not apply however to the
portions of a Fund's distributions, if any, that are attributable to interest
on U.S. Government securities or on securities of a particular state, its
agencies or municipalities. The Rhode Island Municipal Bond Fund intends to
comply with certain state and/or local tax requirements so that its income
and dividends will be exempt from Rhode Island state or local taxes described
above in the description for such Fund. Dividends, if any, derived from
interest on securities other than the Rhode Island municipal securities in
which the Rhode Island Municipal Bond Fund primarily invests will be subject
to tax in the State of Rhode Island.

MISCELLANEOUS

The foregoing is only a summary of certain tax considerations under current law,
which may be subject to change in the future. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.

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<PAGE>

GALAXY INVESTOR PROGRAMS

RETIREMENT PLANS

BKB Shares of the Funds (except for the Tax-Exempt Fund and Rhode Island
Muncipal Bond Fund) are available for purchase in connection with any of
the following retirement plans:

- - Individual Retirement Arrangements (IRAs), including Traditional, Roth,
Rollover and Education IRAs.
- - Simplified Employee Pension Plans (SEPs).
- - Keogh money purchase and profit sharing plans.
- - Salary reduction retirement plans set up by employers for their employees,
which are qualified under Section 401(k) and 403(b) of the Internal Revenue
Code.
- - SIMPLE IRA plans which are qualified under Section 408(p) of the Internal
Revenue Code.

For information about eligibility requirements and other matters concerning
these plans and to obtain an application, call Galaxy's distributor at
1-877-BUY-GALAXY (1-877-289-4252).

OTHER PROGRAMS

It's also easy to buy or sell BKB Shares of the Funds by using one of the
programs described below. Just tell Galaxy the amount and how frequently you
want to buy or sell shares and Galaxy does the rest. For further information on
any of these programs, call Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) or your financial institution.

AUTOMATIC INVESTMENT PROGRAM

You can make automatic investments from your bank account every month or every
quarter. You can choose to make your investment on any day of the month or
quarter. The minimum investment is $50 a month or $150 a quarter except for
Education IRAs, in which case the minimum investment is $40 a month or $125 per
quarter.

PAYROLL DEDUCTION PROGRAM

You can make regular investments from your paycheck. The minimum investment is
$25 per pay period. Send a completed Galaxy Payroll Deduction Application to
your employer's payroll department. They'll arrange to have your investment
deducted from your paycheck.

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<PAGE>

COLLEGE INVESTMENT PROGRAM

The minimum for initial and additional investments through the College
Investment Program is $100 unless you participate in the Automatic Investment
Program, in which case the minimum for initial and additional investments is
$50. You can also save for college by opening an Education IRA. The minimum for
initial and additional investments in an Education IRA is $100 unless you
participate in the Automatic Investment Program, in which case the minimum for
initial and additional investments is $40.

DIRECT DEPOSIT PROGRAM

This program lets you deposit your social security payments in your Fund account
automatically. There's no minimum deposit. You can cancel the program by
notifying the Social Security Administration in writing.

SYSTEMATIC WITHDRAWAL PLAN

You can make regular withdrawals from your investment account every month, every
quarter, every six months or once a year. You need a minimum account balance of
$10,000 to participate in the plan.

You may cancel your participation in any of these programs, other than the
Direct Deposit Program, by writing to Galaxy at:

The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520

Please allow at least five days for the cancellation to be processed.

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<PAGE>

HOW TO REACH GALAXY

THROUGH YOUR FINANCIAL INSTITUTION

Your financial institution can help you buy, sell or exchange shares and can
answer questions about your account.

GALAXY SHAREHOLDER SERVICES

Call Galaxy's distributor at 1-877-BUY-GALAXY (1-877-289-4252), Monday through
Friday, 8 a.m. to 6 p.m. (Eastern time), for help from a Galaxy representative.

INVESTCONNECT

InvestConnect is Galaxy's shareholder voice response system. Call
1-877-BUY-GALAXY (1-877-289-4252) from any touch-tone phone for automated access
to account information and current Fund prices and performance, or to place
orders to sell or exchange shares. It's available 24 hours a day, seven days a
week.

If you live outside the United States, you can contact Galaxy by calling
1-508-871-4121.

THE INTERNET

Please visit Galaxy's Web site at: www.galaxyfunds.com

[Sidenote:]

HEARING IMPAIRED

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

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FINANCIAL HIGHLIGHTS

The financial highlights tables shown below will help you understand the
financial performance for the Funds' Retail A Shares for the past five years (or
the period since a particular Fund began operations). Certain information
reflects the financial performance of a single Retail A Share. The total returns
in the tables represent the rate that an investor would have earned (or lost) on
an investment in Retail A Shares of each Fund, assuming all dividends and
distributions were reinvested. The information for the fiscal year ended October
31, 1999 has been audited by Ernst & Young LLP, independent auditors, whose
report, along with the Funds' financial statements, are included in the Funds'
Annual Reports and are incorporated by reference into the SAI. The Annual
Reports and SAI are available free of charge upon request. The information for
the fiscal years ended October 31, 1995, 1996, 1997 and 1998 was audited by
Galaxy's former auditors, PricewaterhouseCoopers LLP. During the periods shown,
the Funds did not offer BKB Shares. Actual investment results for BKB Shares may
be different.

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<PAGE>

Galaxy Money Market Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
FOR THE YEAR ENDING OCTOBER 31,
------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ----- -----
Income from investment operations:

Net investment income(1)............ 0.04 0.05 0.05 0.05 0.05
------ ------ ------ ----- -----
Less dividends:
Dividends from net investment
income .................. (0.04) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ----- -----
Net increase (decrease) in net asset
value ............................ -- -- -- -- --

Net asset value, end of period ..... $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ----- -----
------ ------ ------ ----- -----

Total return ....................... 4.54% 5.04% 4.93% 4.78% 5.23%

Ratios/supplemental data:
Net assets, end of period (000's) $2,434,662 $2,139,213 $1,877,889 $1,159,312 $580,762

Ratios to average net assets:
Net investment income including
reimbursement/ waiver ............ 4.45% 4.94% 4.85% 4.67% 5.12%
Operating expenses including
reimbursement/waiver .......... 0.65% 0.67% 0.69% 0.77% 0.74%
Operating expenses excluding
reimbursement/waiver .......... 0.69% 0.71% 0.73% 0.80% 0.76%
</TABLE>

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

(1) Net investment income per share for Retail A Shares before reimbursement/
waiver of fees by the Adviser and/or the Fund's administrator for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.04, $0.05,
$0.05, $0.05 and $0.05, respectively.

-71-

<PAGE>

Galaxy U.S. Treasury Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
FOR THE YEAR ENDING OCTOBER 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- ------- -------- -------
Income from investment operations:
Net investment income(1)....... 0.04 0.05 0.05 0.05 0.05
--------- -------- ------- -------- -------
Less dividends:
Dividends from net investment
income...................... (0.04) (0.05) (0.05) (0.05) (0.05)
--------- -------- ------- -------- -------
Net increase (decrease) in net
asset value.................... -- -- -- -- --
--------- -------- ------- -------- -------
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- ------- -------- -------
--------- -------- ------- -------- -------

Total return..................... 4.14% 4.73% 4.67% 4.63% 4.99%
Ratios/supplemental data:
Net assets, end of period (000's) $584,364 $559,053 $585,969 $443,230 $318,621
Ratios to average net assets:
Net investment income including
reimbursement/ waiver....... 4.06% 4.63% 4.58% 4.53% 4.90%
Operating expenses including
reimbursement/waiver........ 0.67% 0.68% 0.69% 0.69% 0.73%
Operating expenses excluding
reimbursement/waiver....... 0.67% 0.68% 0.70% 0.69% 0.73%
</TABLE>

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

(1) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.04,
$0.05, $0.05, $0.05 and $0.05, respectively.

-72-
<PAGE>

Galaxy Tax-Exempt Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
FOR THE YEAR ENDING OCTOBER 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares
--------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- ------- -------- -------
Income from investment operations:
Net investment income(1)....... 0.02 0.03 0.03 0.03 0.03
--------- -------- ------- -------- -------
Less dividends:
Dividends from net investment
income...................... (0.02) (0.03) (0.03) (0.03) (0.03)
--------- -------- ------- -------- -------
Net increase (decrease) in net --
asset value.................... -- -- -- -- --
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- ------- -------- -------
--------- -------- ------- -------- -------

Total return..................... 2.53% 2.89% 2.95% 2.82% 3.16%
Ratios/supplemental data:
Net assets, end of period (000's) $160,057 $164,340 $151,907 $117,548 $127,056
Ratios to average net assets:
Net investment income including
reimbursement/ waiver....... 2.51% 2.85% 2.92% 2.78% 3.12%
Operating expenses including
reimbursement/waiver........ 0.66% 0.67% 0.68% 0.68% 0.68%
Operating expenses excluding
reimbursement/waiver........ 0.66% 0.67% 0.69% 0.69% 0.71%
</TABLE>

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

(1) Net investment income per share for Retail A Shares before reimbursement/
waiver of fees by the Adviser and/or the Fund's administrator for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.02, $0.03, $0.03,
$0.03 and $0.03, respectively.

-73-
<PAGE>

Galaxy Short-Term Bond Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
FOR THE YEAR ENDING OCTOBER 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------ ------ ------
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................. $10.10 $10.01 $ 9.99 $ 10.06 $ 9.73
-------- -------- -------- ------- --------
Income from investment operations:
Net investment income(1)....................... 0.49 0.51 0.53 0.52 0.55
-------- -------- -------- ------- --------
Net realized and unrealized gain (loss) on investments (0.25) 0.11 0.02 (0.07) 0.33
-------- -------- -------- ------- --------
Total from investment operations..................... 0.24 0.62 0.55 0.45 0.88
-------- -------- -------- ------- --------
Less dividends:
Dividends from net investment income........... (0.48) (0.53) (0.53) (0.52) (0.55)
-------- -------- -------- ------- --------
Total dividends...................................... (0.48) (0.53) (0.53) (0.52) (0.55)
-------- -------- -------- ------- --------
Net increase (decrease) in net asset value........... (0.24) 0.09 0.02 (0.07) 0.33
-------- -------- -------- ------- --------
Net asset value, end of period....................... $9.86 $ 10.10 $ 10.01 $ 9.99 $10.06
-------- -------- -------- ------- --------
-------- -------- -------- ------- --------
Total return(2) 2.43% 6.42% 5.64% 4.63% 9.28%
Ratios/supplemental data:
Net assets, end of period (000's).............. $24,653 $29,067 $27,961 $33,388 $31,542
Ratios to average net assets:
Net investment income including reimbursement/waiver 4.86% 5.07% 5.29% 5.22% 5.54%
Operating expenses including reimbursement/waiver 1.10% 1.11% 1.00% 1.11% 0.99%
Operating expenses excluding reimbursement/waiver 1.30% 1.31% 1.21% 1.35% 1.32%
Portfolio turnover rate.............................. 151% 133% 173% 214% 289%
</TABLE>

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

(1) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.47, $0.49, $0.51,
$0.50 and $0.52, respectively.
(2) Calculation does not include the effect of any sales charge.

-74-
<PAGE>

Galaxy Intermediate Government Income Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
For the year ending October 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $10.50 $10.18 $ 10.06 $ 10.28 $ 9.68
------- ------- ------- ------- --------
Income from investment operations:
Net investment income(1)............... 0.54 0.57 0.59 0.57 0.61
------- ------- ------- ------- --------
Net realized and unrealized
gain (loss) on investments (0.65) 0.34 0.12 (0.22) 0.60
------- ------- ------- ------- --------
Total from investment operations............. (0.11) 0.91 0.71 0.35 1.21
------- ------- ------- ------- --------
Less dividends:
Dividends from net investment income... (0.53) (0.59) (0.59) (0.57) (0.61)
------- ------- ------- ------- --------
Total dividends.............................. (0.53) (0.59) (0.59) (0.57) (0.61)
------- ------- ------- ------- --------
Net increase (decrease) in net asset value... (0.64) 0.32 0.12 (0.22) 0.60
------- ------- ------- ------- --------
Net asset value, end of period............... $9.86 $ 10.50 $ 10.18 $ 10.06 $ 10.28
------- ------- ------- ------- --------
------- ------- ------- ------- --------
Total return(2).............................. (1.11)% 9.22% 7.33% 3.58% 12.85%
Ratios/supplemental data:
Net assets, end of period (000's)...... $56,454 $66,865 $65,626 $79,741 $79,558
Ratios to average net assets:
Net investment income including reimbursement/waiver 5.28% 5.49% 5.90% 5.69% 6.10%
Operating expenses including reimbursement/waiver 0.97% 1.01% 1.02% 1.04% 1.02%
Operating expenses excluding reimbursement/waiver 1.17% 1.21% 1.22% 1.24% 1.26%
Portfolio turnover rate...................... 184% 205% 128% 235% 145%
</TABLE>

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

(1) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.52, $0.55, $0.57,
$0.55 and $0.58, respectively.
(2) Calculation does not include the effect of any sales charge.

-75-
<PAGE>

Galaxy High Quality Bond Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
For the year ending October 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------ ------ ------
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $11.20 $10.70 $ 10.47 $ 10.63 $ 9.54
------ ------ ------- ------- -------
Income from investment operations:
Net investment income(1)............... 0.57 0.58 0.60 0.59 0.62
Net realized and unrealized gain (loss)
on investments.................... (0.86) 0.50 0.23 (0.16) 1.09
------ ------- -------- -------- --------
Total from investment operations............. (0.29) 1.08 0.83 0.43 1.71
------ ------ -------- -------- --------
Less dividends:
Dividends from net investment income... (0.57) (0.58) (0.60) (0.59) (0.62)
Dividends from net realized capital gains (0.09) -- -- -- --
Total dividends.............................. (0.66) (0.58) (0.60) (0.59) (0.62)
------ ------ -------- -------- --------
Net increase (decrease) in net asset value... (0.95) 0.50 0.23 (0.16) 1.09
------ ------ -------- -------- --------
Net asset value, end of period............... $10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.63
------ ------ -------- -------- --------
------ ------ -------- -------- --------
Total return(2) (2.66) 10.35% 8.22% 4.24% 18.46%
Ratios/supplemental data:
Net assets, end of period (000's)...... $42,906 $45,879 $27,950 $30,984 $30,093
Ratios to average net assets:
Net investment income including
reimbursement/waiver 5.32% 5.30% 5.73% 5.66% 6.16%
Operating expenses including
Reimbursement/waiver.............. 0.99% 1.00% 1.01% 1.07% 1.02%
Operating expenses excluding
Reimbursement/waiver.............. 1.20% 1.20% 1.21% 1.28% 1.26%
Portfolio turnover rate...................... 226% 253% 182% 163% 110%
</TABLE>

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

(1) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.55, $0.56, $0.58,
$0.57 and $0.59, respectively.
(2) Calculation does not include the effect of any sales charge.

-76-
<PAGE>

Galaxy Rhode Island Municipal Bond Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
For the year ending October 31,
---------------------------------------------------------------------------
1999 1998 1997 1996 For the period ending
Retail Retail Retail Retail October 31,1995(1)
A Shares A Shares A Shares A Shares Retail A Shares
-------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $11.18 $10.91 $ 10.65 $ 10.67 $ 10.00
------ ------ -------- --------- --------
Income from investment operations:
Net investment income(2)................... 0.48 0.50 0.48 0.51 0.44
Net realized and unrealized gain
on investments........................... (0.77) 0.29 0.32 0.03 0.67
------ ---- ---------- -------- ---------

Total from investment operations.............. (0.29) 0.79 0.80 0.54 1.11
------ ---- ---------- --------- ---------

Less dividends:
Dividends from net investment
income................................... (0.48) (0.50) (0.50) (0.51) (0.44)
Dividends from net realized capital gains.. (0.05) (0.02) (0.04) (0.05) ---
------ -------- ----------- --------- ---------
Total dividends............................... (0.53) (0.52) (0.54) (0.56) (0.44)
------ -------- ---------- --------- ---------

Net increase (decrease) in net asset
value.................................... (0.82) 0.27 0.26 (0.02) 0.67
------ ------ ---------- ---------- ----------
Net asset value, end of period................ $10.36 $ 11.18 $ 10.91 $ 10.65 $ 10.67
------ ------ ---------- ---------- ----------
------ ------ ---------- ---------- ----------
Total return(3) (2.73)% 7.35% 7.78% 5.22% 11.29%(4)
Ratios/supplemental data:
Net assets, end of period (000's).......... $19,833 $ 20,210 $ 17,134 $ 14,900 $ 10,850
Ratios to average net assets:
Net investment income including
Reimbursement/waiver..................... 4.41% 4.52% 4.50% 4.78% 5.13%(5)
Operating expenses including
Reimbursement/waiver..................... 0.80% 0.81% 0.83% 0.77% 0.40%(5)
Operating expenses excluding
Reimbursement/waiver..................... 1.20% 1.23% 1.34% 1.34% 2.25%(5)
Portfolio turnover rate....................... 34% 41% 19% 13% 34%(4)
</TABLE>

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

(1) The Fund commenced operations on December 20, 1994.

-77-
<PAGE>

(2) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997 and 1996 and for the
period ended October 31, 1995 was $0.44 $0.45, $0.43, $0.45 and $0.28,
respectively.
(3) Calculation does not include the effect of any sales charge.
(4) Not annualized.
(5) Annualized.

-78-

<PAGE>

Galaxy Asset Allocation Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
For the year ending October 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------ ------ ------
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.................. $ 16.95 $ 16.46 $ 14.52 $ 12.82 $ 10.67
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income(1)............. 0.37 0.38 0.40 0.30 0.30
Net realized and unrealized gain
(loss) on investments............ 1.21 1.72 2.43 1.83 2.16
---- -------- -------- -------- --------
Total from investment operations.......... 1.58 2.10 2.83 2.13 2.46
---- -------- -------- -------- --------
Less dividends:
Dividends from net investment
income........................... (0.36) (0.40) (0.38) (0.30) (0.31)
Dividends from net realized capital
gains............................ (0.43) (1.21) (0.51) (0.13) --
------ -------- -------- -------- --------
Total dividends........................... (0.79) (1.61) (0.89) (0.43) (0.31)
------ -------- -------- -------- --------
Net increase (decrease) in net asset
value............................ 0.79 0.49 1.94 1.70 2.15
------ -------- -------- -------- --------
Net asset value, end of period............ $ 17.74 $ 16.95 $ 16.46 $ 14.52 $ 12.82
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(2)........................... 9.53% 13.85% 20.23% 16.92% 23.42%
Ratios/supplemental data:
Net assets, end of period (000's).... $389,077 $323,498 $177,239 $116,852 $76,368
Ratios to average net assets:
Net investment income including
Reimbursement/waiver............. 2.11% 2.43% 2.66% 2.29% 2.52%
Operating expenses including
Reimbursement/waiver............. 1.32% 1.33% 1.37% 1.42% 1.48%
Operating expenses excluding
Reimbursement/waiver............. 1.32% 1.33% 1.37% 1.42% 1.50%
Portfolio turnover rate................... 135% 108% 58% 48% 41%
</TABLE>

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

(1) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.37, $0.38, $0.40,
$0.30 and $0.30, respectively.
(2) Calculation does not include the effect of any sales charge.

-79-
<PAGE>
Galaxy Growth and Income Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
For the year ending October 31,
---------------------------------------------------------------------
1999 1998 1997 1996(1) 1995
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period....................... $14.87 $ 16.24 $ 13.78 $ 12.35 $ 11.15
------ -------- -------- -------- --------
Income from investment operations:
Net investment income(2).................. 0.08(4) 0.12 0.18 0.21 0.24
Net realized and unrealized gain on
investments............................... 2.02 1.32 3.67 2.16 1.70
-------- -------- -------- -------- --------

Total from investment operations............... 2.10 1.44 3.85 2.37 1.94
-------- -------- -------- -------- --------
Less dividends:
Dividends from net investment
income................................ (0.08) (0.13) (0.20) (0.21) (0.25)
Dividends from net realized gains......... (0.91) (2.68) (1.19) (0.73) (0.49)
-------- -------- -------- -------- --------
Total dividends........................... (0.99) (2.81) (1.39) (0.94) (0.74)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value..... 1.11 (1.37) 2.46 1.43 1.20
-------- -------- -------- -------- --------
Net asset value, end of period................. $15.98 $14.87 $ 16.24 $ 13.78 $ 12.35
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(3)................................ 14.56% 9.93% 30.10% 20.25% 18.52%
Ratios/supplemental data:
Net assets, end of period (000's)......... $232,110 $214,110 $141,884 $77,776 $51,078
Ratios to average net assets:
Net investment income including
Reimbursement/waiver.................. 0.53% 0.75% 1.18% 1.65% 2.10%
Operating expenses including
Reimbursement/waiver.................. 1.28% 1.28% 1.27% 1.34% 1.32%
Operating expenses excluding
Reimbursement/waiver.................. 1.38% 1.35% 1.45% 1.45% 1.77%
Portfolio turnover rate........................ 20% 38% 93% 59% 51%
</TABLE>
- ------------------------------

(1) The Fund commenced operations on December 14, 1992 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds. The Predecessor
Fund began offering Investment Shares on February 12, 1993. 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 two
series of shares, Investment Shares and Trust Shares, that were similar to
the Fund's Retail A Shares and Trust Shares, respectively. In connection
with the reorganization, shareholders of the Predecessor Fund exchanged
Investment Shares and Trust Shares for Retail A Shares and Trust Shares,
respectively, in the Fund.

-80-
<PAGE>

(2) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.07, $0.10, $0.18,
$0.19 and $0.22 respectively.
(3) Calculation does not include the effect of any sales charge.
(4) The selected per share data was calculated using the weighted average
shares outstanding method for the year.

-81-
<PAGE>

Galaxy International Equity Fund
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail Retail Retail Retail Retail
A Shares A Shares A Shares A Shares A Shares
-------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $16.75 $ 15.18 $ 13.94 $ 12.92 $ 13.20
------ -------- -------- -------- --------
Income from investment operations:
Net investment income(2)............... 0.01(1) 0.07 0.01 0.11 0.11
Net realized and unrealized gain
(loss) on investments.............. 4.72 1.93 2.09 1.27 (0.21)
---- -------- -------- -------- ---------
Total from investment operations............ 4.73 2.00 2.10 1.38 (0.10)
---- -------- -------- -------- --------
Less dividends:
Dividends from net investment
income............................. (0.05) (0.07) (0.18) (0.12) (0.02)
Dividends from net realized capital
gains.............................. (0.57) (0.36) (0.68) (0.24) (0.16)
------ --------- -------- -------- --------
Total dividends............................. (0.62) (0.43) (0.86) (0.36) (0.18)
------ --------- -------- -------- --------
Net increase (decrease) in net asset value.. 4.11 1.57 1.24 1.02 (0.28)
------ --------- -------- -------- --------
Net asset value, end of period.............. $20.86 $ 16.75 $ 15.18 $ 13.94 $ 12.92
------ --------- -------- -------- --------
------ --------- -------- -------- --------
Total return(3)............................. 29.04% 13.64% 15.88% 10.86% (0.64)%
Ratios/supplemental data:
Net assets, end of period (000's)...... $89,327 $66,541 $56,592 $35,144 $30,104
Ratios to average net assets:
Net investment income including
reimbursement/waiver............... 0.03% 0.39% 0.03% 0.78% 0.84%
Operating expenses including
reimbursement/waiver............... 1.48% 1.48% 1.60% 1.70% 1.76%
Operating expenses excluding
reimbursement/waiver............... 1.73% 1.73% 1.85% 1.98% 2.03%
Portfolio turnover rate..................... 45% 49% 45% 146% 48%
</TABLE>

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

(1) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(2) Net investment income (loss) per share before reimbursement/waiver of fees
by the Adviser and/or the Fund's administrator for Retail A Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $(0.04),
$0.03, $(0.01), $0.07 and $0.08, respectively.
(3) Calculation does not include the effect of any sales charge.

-82-

<PAGE>
[Back Cover Page]

Where to find more information

You'll find more information about the Funds in the following documents:

ANNUAL AND SEMI-ANNUAL REPORTS
Galaxy's annual and semi-annual reports contain more information about each Fund
and a discussion about the market conditions and investment strategies that had
a significant effect on each Fund's performance during the last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains detailed information about the Funds and their policies. By
law, it's incorporated by reference into (considered to be part of) this
prospectus.

You can get a free copy of these documents, request other information about the
Funds and make shareholder inquiries by calling Galaxy at 1-877-BUY-GALAXY
(1-877-289-4252) or by writing to:

The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520

If you buy your shares through a financial institution, you may contact your
institution for more information.

You can write to the Securities and Exchange Commission (SEC) Public Reference
Section and ask them to mail you information about the Funds, including the SAI.
They'll charge you a fee for this service. You can also visit the SEC Public
Reference Room and copy the documents while you're there. For information about
the operation of the Public Reference Room, call the SEC.

Public Reference Section of the SEC Washington, DC 20549-0102 1-202-942-8090.

Reports and other information about the Funds are also available on the EDGAR
Database on the SEC's Web site at http://www.sec.gov. Copies of this information
may also be obtained, after paying a duplicating fee, by electronic request to
SEC's e-mail address at [email protected].

Galaxy's Investment Company Act File No. is 811-4636.

PROGAL BKB (3/00)